South Orange County Blog from Bob Phillips

Boomerang buyers making a comeback

Boomerang buyers making a comeback

 By JEFF COLLINS / ORANGE COUNTY REGISTER

Andreea Stucker thought she made a good investment when she bought a Huntington Beach condo with her boyfriend in December 2005.

But then she and her boyfriend split up. He moved out just as the housing market crashed, leaving Stucker broken hearted and broke.

Boomerang-2
Here’s a breakdown of waiting periods for boomerang buyers who lost their homes due to a foreclosure or a related event:

Foreclosure:

  • Seven years for a government-backed Fannie Mae or Freddie Mac loan.
  • Three years for a Federal Housing Administration (FHA) loan.
  • One to two years for a FHA loan if there were extenuating circumstances (such as illness or death of a wage earner).

Short sale:

  • Seven years for Fannie Mae or Freddie Mac with less than 10 percent down.
  • Four years for Fannie Mae or Freddie Mac with 10 percent down.
  • Two years for Fannie Mae or Freddie Mac with 20 percent down.
  • Three years for an FHA loan.

Deed in lieu of foreclosure:

  • Seven years for Fannie Mae or Freddie Mac with less than 10 percent down.
  • Four years for Fannie Mae or Freddie Mac with 10 percent down.
  • Two years for Fannie Mae or Freddie Mac with 20 percent down.
  • Three years for FHA.
  • One to two years for FHA loan with extenuating circumstances.

Source: Fannie Mae, Department of Housing and Urban Development

 With her own income down at least 60 percent, the real estate agent was unable to make the $4,400-a-month mortgage payments on her own, even after taking in room-mates.

“I begged the bank for over seven months to grant me a loan modification to reduce my payments, because I was rapidly going through my savings,” Stucker, 34, recalled. “I ended up completing a short sale on my home, and my credit took a huge hit.”

Three years later, Stucker has mended both her heart and her credit score. She has a new husband and, “miraculously,” a new house.

Stucker is among the emerging ranks of boomerang buyers — people who bounce back from foreclosures or short sales to become homeowners again.

Generally, buyers must wait at least three years after a foreclosure or short sale to qualify for a government-backed Federal Housing Administration mortgage. It can take seven years to get a conventional loan backed by Fannie Mae or Freddie Mac.

It’s been 4 1/2 years since the foreclosure crisis peaked, and real estate industry observers say they have seen boomerang buyers gradually returning to the Orange County market for at least a year.

“I think over three-fourths of these folks will take a stab at the comeback trail,” said Paul Scheper, division manager for Greenlight Financial in Irvine. “Even though some are coming off a bitter experience, most will be looking to regain the American Dream.”

Three to five people who went through a foreclosure or short sale show up each month at homeownership courses offered in Santa Ana and Irvine by the Consumer Credit Counseling Service of Orange County,or up to 20 percent of the attendees, said Sahara Garcia, the agency’s director of education. She first noticed the boomerangers in late 2011.

“They’re out there,” Garcia said.

Kicked when you’re down

After 3 ½ years, Stucker still cries at the memory of losing her Huntington Beach condo.

She and her ex-boyfriend paid $613,000 with no money down for a two-level condo with cathedral ceilings and skylights, two bedrooms, two bathrooms and a spacious loft less than two miles from the beach.

They spent $40,000 more installing granite countertops, hardwood and travertine floors, new bathroom vanities recessed lighting and other upgrades.

But it turns out that the real estate game isn’t just about location, location, location. It’s also about timing.

By December 2005, Orange County home sales had just headed into a three-year nose dive. Home prices soon would follow.

Stucker’s income as a real estate agent dropped. Her boyfriend moved out after five months. Eventually, she depleted $29,000 in savings, then quit making house payments.

Unable to get a loan modification she could live with, Stucker sold the condo in May 2009 for $425,000 — $188,000 less than what she owed on two mortgages.

Her credit score went from 798 in December 2005 to the low 500s by May 2009.

“It was probably nine months that I fought for that home,” Stucker said. “I loved my house, and I wanted to stay.”

In hindsight, she says she should have cut her losses before dipping into her savings. But she kept thinking the market would turn around, and she’d be able to afford the home again.

“It’s like getting kicked when you’re down,” Stucker recalled. “You’re going through this awful breakup with this person you thought you had a future with, (and) your income is crap even though you’re working full time. … It was tough.”

Road to redemption

More than 33,000 Orange County households now potentially could qualify for an FHA loan because it’s been three years since their short sale or foreclosure. In the nation as a whole, more than 3.4 million households have completed the minimum waiting period.

But many people still do not have the money or sufficient credit to get a loan.

Natalie Lohrenz, the Credit Counseling Service’s director of development and counseling, said there are two types of foreclosed homeowners.

Those who had a bad loan they couldn’t afford. And those whose finances got nuked.

The first type couldn’t make their house payments, but still had enough income to stay on top of their other bills.

The second – because they went through a divorce, illness, job loss or business reversal – basically ended up with nothing, and trashed their credit across the board.

Stucker fits the first category, and her story serves as an example of how people can recover from a housing market wipe out.

She followed this approach: She paid her homeowner association dues. She paid her bills. She kept credit cards and car payments current.

When Stucker went from homeowner to renter, she could show the landlord everything apart from the mortgage was paid on time.

From then on, she kept her nose to the grindstone and kept paying her bills.

“Eventually, enough time passed, and I didn’t have any 60- or 90- or 180-days late on my credit,” she said. “Right before the two-year mark, I checked my credit for something else. … It had gone up more than 100 points.”

By October, after Stucker married, she and her new husband had saved enough to get an FHA loan on a four-bedroom, 2,500-square-foot house in south Huntington Beach. They paid $625,000 with 3 ½ percent down.

Her credit score is back up to 720.

Her new home needs work. She and her husband repainted the home inside and out, removed 11 trees and fixed a leaky pool. They did much of the work themselves.

Because of the experience, Stucker thinks she’s a better real estate agent.

Clients going through their own short sales worry they’ll never be able to buy a home again. She knows what they’re going through, emotionally and financially, and shares her experience.

“In retrospect, it was a mistake to buy a house with no money down at the height of the market. But who knew it was the height of the market?” Stucker said. “(But) no matter how far you’ve fallen, there’s always up. There’s always the possibility that you can own again.” ( End of the Register’s article.)

As the years have passed it has become much easier to either refinance if your home is “underwater”, ( Assuming you want to stay in the home.) or, to short sell the house to get out from under a disastrous situation.

I am thoroughly trained and experienced as a distressed property specialist. If you, or someone you know, is having difficulty deciding on options, I am here to assist in such decision making.  Give me a call or shoot me an email.

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Existing Home Sales Rise As Home Inventory Shrinks

Posted in Housing Analysis by southorangecounty on February 28, 2013

Existing Home Sales Numbers ReleasedHome sales rose for the 11th consecutive month according to the National Association of REALTORS® Existing Home Sales Report for January.

This is the first time this has occurred since the period between July of 2005 and May of 2006.

National Average Home Price Up Over 12% Annually

The national average home price in January was $173,600, which is 12.3 percent higher than for January 2012. 

Calculated on a seasonally-adjusted annual basis, Existing Home Sales data is compiled using completed sales of single family homes, condominium units and co-ops.

January’s existing home sales rose by 0.4 percent to 4.92 million sales nationally as compared to December’s revised annual rate of 4.90 million sales nationally.

National sales of existing homes increased by 9.1 percent as compared to January 2012.

Regional Home Sales Support Housing Recovery

Regional home sales for January suggest more good news for housing markets. Seasonally- adjusted annual home sales rose in all regions of the U.S. except in the West, while median home prices rose for all regions.

Northeast: Home sales were up by 4.8 percent in January to 650,000 sales, which is 12.1 percent more homes sold than for January 2012. The median home price rose by 2.4 percent from January 2012 to $230,500.

Midwest: Annual home sales in January increased by 3.6 percent to 1.16 million; this is 17.2 percent higher than for January 2012. The median home price in the Midwest rose to $131,800, an increase of 8.6 percent as compared to January 2012.

South: Home sales were up by 1 percent to 1.96 million sales in January; this represents a 14.0 percent increase in annual sales as compared to one year ago. The average home price for the South was $152,100, an increase of 13.4 percent over January 2012.

West: Home sales fell by 5.7 percent to an annual rate of $1.15 million. This represents a 5.7 percent decrease in sales from one year ago. The median home price in January was $239,800 and was 26.6 percent above the region’s median sale price for January 2012.

A falling inventory of homes for sale may be holding back buyers; the inventory of homes for sale fell to a 4.2 month supply from December’s 4.5 month supply of homes. A 6-month supply of homes is considered average.

Home Prices May Rise Quickly

While the spring home buying season will likely see more homes come on the market in South Orange County and the surrounding area , economists caution that home prices could rise faster than expected due to increasing demand. A seller’s market could be in the making.

Mortgage rates also appear to be rising; now may be your best time for gaining the advantage of relatively low home prices and mortgage rates.

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Is Downsizing The Next Big Trend In Homes?

Posted in Real Estate Trends by southorangecounty on February 27, 2013

Z Glass Micro Dwelling by Tumbleweed Tiny House CompanyThe real estate market has started to recover from the downturn over the last few years in many areas of the country, and more people are thinking about buying a new place to live.

With this new energy in home buying, an interesting trend seems to be developing.  

Instead of going for larger homes, which was an overwhelming trend in years past, many people are choosing micro-dwellings.

What is a micro-dwelling?

There are a number of different styles of micro dwellings being built.  This is a relatively new concept for homes in the United States and individual creativity abounds in this space.

The most common factor in micro-dwellings are their size. They tend to be less than 500 square feet of living space.

Some densely populated metropolitan areas like San Francisco and New York City are planning apartments as small as approximately 300 square feet!

Think this shrinking of real estate space applies only to multi-family dwellings?

Think again. You can also find tiny single-family homes — some of which are even portable.

If you’re still not convinced, read on to discover a few of the factors drawing buyers to smaller living spaces.

A lower price tag – The cost of these homes can be significantly less than that of standard homes, which means you may not have a large mortgage over your head for the next 30 years.

More free time – A smaller house means less cleaning. Who isn’t on board with that idea?

Less clutter – If your home is less than 500 square feet, you have to get rid of everything you don’t absolutely need.

Mobility – Many of these tiny homes are equipped with wheels or built-on trailers, so moving is no longer the stressful and expensive undertaking it used to be. Simply close the door and go!

Smaller is greener – It makes sense that if your home is smaller, you will automatically reduce your energy consumption, which means more money in your pocket every month and a smaller carbon footprint.

Micro-living might not be for everyone.  It does offer an option for those who are just starting out, those who love to travel, or those nearing retirement.

And even if you don’t opt for the smallest living space, reducing energy usage and saving money are ideas most anyone can take to the bank.

Photo Credit: Tumbleweed Tiny Homes

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Fed Considers Future of Quantitative Easing

Posted in Federal Reserve by southorangecounty on February 26, 2013

Fed Minutes ReleasedThe Federal Open Market Committee (FOMC) released minutes from its January meeting last Wednesday, as it generally does three weeks following the most recent meeting.  

The FOMC is a committee within the Federal Reserve System tasked with overseeing the purchase and sale of US Treasury securities by the Fed.

The Federal Reserve makes key decisions regarding interest rates and looks to this committee for advice on how and when to take action.

The Future Of Quantitative Easing

One of the main topices that Fed leaders discussed was the future of its ongoing program of quantitative easing (QE).

Currently, the Fed plans to continue its monthly purchase of treasury bonds and mortgage-backed securities (MBS) with the objective of keeping the inflation rate at or below 2 percent.

The Fed plans to phase out quantitative easing when the national unemployment rate reaches 6.5 percent.

Fed leaders opposed to current quantitative easing brought up concerns about risk exposure to the Fed as it continues acquiring large quantities of bonds and mortgage-backed securities.

Other concerns included the potential for negative impact on financial markets if the Fed sustains its current policy of quantitative easing.

The Risk Of Inflation Creates Pause

Inflationary risks were also cited as a reason for re-evaluating the current policy for quantitative easing.

As the fed continues to purchase more and more mortgage-backed securities to keep interest rates down, a higher potential risk for inflationary pressure results.

Rising inflation rates would cause mortgage rates to worsen.

FOMC members concerned about current policy for quantitative easing suggested that the Fed should prepare to vary the timing of its purchases according to economic conditions rather than committing to scheduled purchases of specific amounts of bonds and mortgage-backed securities.

The next Federal Open Market Committee meeting is scheduled for March 19-20, 2013.

 

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What’s Ahead For Mortgage Rates This Week: February 25th, 2013

Posted in mortgage rates by southorangecounty on February 25, 2013

What's Ahead This WeekA quiet past week in economic news caused mortgage rates to worsen slightly.

This week, however, will be packed with economic reports which may have an impact on interest rates going forward.

Freddie Mac reported that the average rate for a 30-year fixed rate mortgage rose by 3 basis points from 3.53 percent to 3.56 percent with borrowers paying 0.8 in discount points and all of their closing costs.

The average rate for a 15-year fixed rate mortgage was unchanged from last week at 2.77 percent with borrowers paying 0.8 in discount points and all of their closing costs.

In other economic news, the Consumer Price Index (CPI) for January fell slightly to 0.0 percent as compared to Wall Street expectations of 0.1 percent and December’s reading of 0.1 percent.

The Core CPI, which measures consumer prices exclusive of volatile food and energy sectors, was 0.3 percent for January and surpassed analyst expectations of 0.2 percent and December’s reading of 0.1 percent.

Inflation Remains Low

These readings remain well below the 2.5 percent inflation level cited by the Fed as cause for concern.

According to the Department of Commerce, Housing Starts for January fell to 890,000 from December’s 954,000 and below Wall Street projections of 910,000.

These seasonally adjusted and annualized numbers are obtained from a sample of 844 builders selected from 17,000 newly permitted building sites.

Falling construction rates could further affect low supplies of homes reported in some areas; as demand for homes increase, home prices and mortgage rates can be expected to rise.

Full Economic Calendar This Week

This week’s economic news schedule is full; Treasury auctions are scheduled for Monday, Tuesday and Wednesday. New Home Sales will be released Tuesday.

Fed Chairman Ben Bernanke is set to testify before Congress on Tuesday and Wednesday.

Wednesday’s news includes the Pending Home Sales Index and Durable Orders.

Thursday’s news includes the preliminary GDP report for Q4 2012, the Chicago Purchasing Managers Index, and weekly jobless claims.

Friday brings Personal Income and Core Personal Expenditures (CPE).

Consumer Sentiment, the ISM Index and Construction Spending round out the week’s economic news.

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Why some homeowners are turning down free money

Why some homeowners are turning down free money

By Becky Quick of Fortune Magazine,  February 15, 2013

 Borrowers who are still smarting from the mortgage crisis are passing up some real deals and missing out on real cash.

Businessman offering money
American homeowners are in the midst of a hot and heavy love affair with low interest rates. But not every courtship has a happy ending. As the final days of 2012 slipped away, Lisa Price made her client an offer she thought he couldn’t refuse. Her client — we’ll call him John Doe — was paying a rate of 6.616% on his $435,000 mortgage, with 25 years left to go. Price, a mortgage banker for Quicken Loans, offered to refinance his loan at 4.125%, keeping the 25-year payout time.
The deal would have knocked his monthly payments down to $3,383, a savings of $630 a month. Closing costs were minimal and would have been recouped through the savings within four months of signing. And with the streamlined process she proposed, it would have required very little paperwork and wasn’t contingent on any appraisal valuation. It seemed like a no-brainer. But John Doe said no thanks. “It didn’t make any sense,” says a stunned Price, reflecting on the rejection. “Usually when I call someone with a deal like that they’re really excited.”
It’s typically pretty easy for mortgage brokers to give away money, and indeed, refinancing activity has skyrocketed as interest rates plummeted in recent years. The one group of homeowners who didn’t participate in the refi boom — those whose home prices tanked, leaving them without enough equity in their home to qualify for refinancing — are now eligible to restructure their loans thanks to a new government program.
But as Quicken Loans and other mortgage originators have learned, it can be surprisingly difficult to persuade some of these people to take sweet deals like the one above, even when the government is greasing the skids. The first government assistance programs after the housing bubble burst offered to help homeowners only after they stopped paying their mortgages.
But a later program — the Home Affordable Refinance Program (HARP) — was designed specifically to help out those underwater homeowners still paying their mortgages on time by giving them access to the low rates so many others are enjoying. HARP has been refined several times since its inception in 2010, and every version of the plan has made it easier for homeowners to qualify. But getting the word out hasn’t been easy. Quicken and other mortgage originators have aggressively tried to let homeowners who qualify know about the program. “We get their home number, the business number, their e-mail, we express-mail packages to their house so it looks serious,” says Dan Gilbert, founder and chairman of Quicken.
“We leave messages; we tell them, ‘Go look up HARP on Google and you’ll see it’s real.’ We don’t quit.” And yet almost half of these homeowners don’t respond. “If you would have told me all the facts about how this works before, I would have predicted we’d get 80% to 85%,” Gilbert marvels. Ultimately, Quicken says, only about 25% of the homeowners who qualify for HARP actually end up refinancing.
And that’s the shame of it all. HARP is a smart program. It rewards good behavior — those who have continued to pay their mortgages — while lending a helping hand to those who could really use it. And it attempts to even the playing field by giving more Americans fair access to the low interest rates enjoyed by big businesses and the wealthy.
This program is also good for the economy, as consumers spend much of the money they save on their mortgage payments. So how do the government and mortgage originators convince the public to take advantage of a program that can truly help many who need it?
It’s the classic lesson of once bitten, twice shy. Wounds from all those no-money-down loans and balloon payments have yet to heal for the homeowners bitten when the housing bubble burst. Others still feel the sting of paying hundreds for appraisals in an attempt to refinance, only to be spurned when their homes were valued at less than they owed on the mortgage.
It may be hard for those consumers to trust again anytime soon. But for those with the courage to give it another go, love might actually be better the second time around.

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Will You Need Private Mortgage Insurance on Your Mortgage Loan?

Posted in Mortgage Guidelines by southorangecounty on February 22, 2013

Private Mortgage Insurance

 

Have you heard the term Private Mortgage Insurance (PMI) when looking to finance real estate?

You may be wondering what PMI is and how you know when you need to purchase it.

These answers can be hard to find among all the real estate jargon you might be hearing lately.

Below is the short version of what you need to know.

What is Private Mortgage Insurance?

Private Mortgage Insurance is an insurance premium required by some lenders to offset the risk of a borrower defaulting on their home loan.

When you put down less than 20 percent of the real estate’s purchase price, the lender will generally require that PMI is added to the loan.

It is usually added into the monthly mortgage payment until the equity position in the real estate reaches 20 percent. However, there may be other options available in your area.

Under the current law, PMI will be canceled automatically when you reach 22 percent equity in your home, if you are current on your payments.

If you aren’t current, the lender may not be required to cancel the mortgage insurance because the loan is considered high-risk.

After getting caught up on your payments, the PMI will likely be cancelled. Any money that you have overpaid must be refunded to you within 45 days.

What if Your Real Estate Increases in Value?

With a conventional loan, it may take as many as 15 years of a 30-year loan to pay your balance down 20 percent making the minimum monthly payment.

But, if property values in your area rise, you might be able to cancel the PMI sooner.

Some lenders may be willing to consider the new value of your home to determine the equity in your home.

You may, however, be responsible for any fees, like an appraisal, that are incurred to assess the new value of your property.

In the end, private mortgage insurance is likely a good option if you can’t afford a down payment of 20 percent of the purchase price.

Now May Be A Very Good Time To Take Action

With all of the activity happening the housing market, now may be the best time for you to purchase your new home. 

A smart next move would be speaking with a qualified home financing professional to learn which programs and down payment options are available in the South Orange County area. 

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5 Crime Questions to Ask Before You Buy a Home

5 Crime Questions to Ask Before You Buy a Home

Posted by Tara-Nicholle Nelson, a broker in San Francisco |  February 20, 2013
The list of question every buyer asks about the various properties during a house hunt is relatively predictable.  How many bedrooms does it have? Baths? Square footage? What are the HOA dues?  What’s the school district?

Then, we get more specific, personalizing the questions based on our own vision, aesthetics and lifestyle needs: Can that wall be moved?  Is there space for Grandma’s dining room table? Is there a shady spot for an orchid house in the backyard?

When it comes to crime, most of us simply don’t ask any questions at all, as (a) agents might be prohibited from doing much beyond pointing us to law enforcement sources, and (b) we tend to assume most neighborhoods are either ‘good’ or ‘bad,’ low-crime or not. The truth is never so black and white. Fortunately, technology has made it easy-peasy for us to get a deeper, more nuanced, and more usable understanding of the crime that takes place in our neighborhood-to-be, which in turn allows us to make smarter decisions about which home we buy and how we live in it, once we buy it, than we could have even ten years ago.

The key to tapping into this nuanced crime information is asking the right questions. Here’s a short list of the right questions to ask about crime before you buy a home.

1.  Do any offenders live nearby? In most states, Megan’s Law and similar provisions mandate that certain individuals with histories of criminal convictions must register their home addresses with local authorities, who in turn are required to make this information available to the public. Google “your city, your state Megan’s Law registry” to find sites where you can type in an address (like the address of the home you’re considering buying) and find a list of registered sex offenders in the area. Many of these sites will also offer you a map showing your address and the relative locations of the homes of the registered offenders.

The reality is that every neighborhood – even very upscale areas – has someone living in it who has committed a crime in the past, so don’t completely freak out if you happen to find someone in your neighborhood-to-be with a history of sex offenses. The utility of this information is that it empowers you and your children to recognize these dangers and to take care to avoid hazardous situations. That said, if you happen to have young children and notice that the Megan’s Law map has a halfway house with a dozen registered sex offenders living right next door to your target home, that information might change your decision about whether that property is the right one for you.

There is also power in following the path of the information you are given on these registry sites.  Many will surface information like what the registrants’ crimes were, when they happened, the registrants’ photos and more useful intelligence. This information can help you evaluate the degree to which you should be concerned before you buy.

2.  Was the home a drug lab?  You think your home’s former owner’s food or pet smells are toxic? That’s nothing compared to the truly unpleasant and health-impairing effects some have experienced after buying a home that turned out to have been a methamphetamine lab in a former life.  If the sellers know this about a home, they should certainly disclose it. Unfortunately, many of these homes end up sold by banks as foreclosures, or by estates, trusts, landlords or other corporate owners who don’t know the home’s past – or don’t have a legal obligation to disclose it.

Get the answer to this question to the best of your ability via this two-step process:
(a) talk with the neighbors – they often will reveal whether the house had a shady past, then
(b) search the federal Drug Enforcement Association’s Clandestine Laboratory Registry, here:  http://www.justice.gov/dea/clan-lab/clan-lab.shtml.

3.  What sorts of crimes happen in the area. Where and when do they happen?
Crime happens virtually everywhere. But the details of crime patterns vary widely in various neighborhoods. One side of town might be plagued with an overall low crime rate, but the crime that does happen tends to be violent crime after dark. While another neighborhood across town might have lots of car break-ins during the day while people are at work, but not much going on after residents get back home – and not much violent crime at all.

This sort of information can be highly useful to a buyer-to-be, as it can help you make decisions not just about whether or not to buy, but also about whether to park your car outside (or not), whether to get an alarm and where in a given neighborhood you might prefer your home to be (e.g., interior cul-de-sac vs. thoroughfare in the same area).

Trulia Crime Maps offer precisely this sort of nuanced information, allowing you to view your town and neighborhood’s crime rate in heat map format showing the relative violent and non-violent crimes that have taken place recently in different parts of town. It also provides information on crime trends, in terms of the frequency of criminal activity taking place at various hours of the day, and the most dangerous intersections in your town or area.  SpotCrime.com offers another angle on nuanced crime data, breaking down crime types with easy-to-scan icons and providing data for communities all over the country.

4.  What anti-crime features does – or can – the home have?  Review your disclosures and talk with the sellers (through your agent, of course) about what anti-crime features the home currently has. This will allow you to prepare for any upgrades, downgrades or changes you’ll want to make.  For example, if a home has security bars that were installed 3 decades ago, you might want to have them brought up to code with a fire release bar, or removed altogether.  Or, perhaps the sellers currently have the home wired for an alarm that can be armed, disarmed and video monitored remotely – if you want to continue that service, you’ll need to get that information and make the account change when you take over the other utilities and home services.

On the other hand, the home might not have any anti-crime features.  So, if there is a particular alarm or monitoring system you like, it is smart to check in with that provider before close of escrow to find out whether they can provide services to the new address and, if so, what it will cost and take to equip the home and start service up at closing.

5.  What does the neighborhood do to fight crime – and how can I help? Neighborhoods across the country fight and prevent crime the grassroots way, by maintaining strong connections between the home owners and neighbors who all have in common the desire to live and raise their families in a safe, secure, thriving place.  Don’t hesitate to ask your home’s seller and/or any neighbors you talk to about whether there are any neighborhood associations, neighborhood watch groups, email lists, social networks, regular meetings, block parties or other community connections in which you can actively participate.

ALL: Did you ever omit to ask a crime-related question about a home – and later come to regret it? Do tell.”  ( End of Tara’s article.)

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3 Common Myths About Real Estate Short Sales

3 Common Short Sale MythsThere is a lot of misleading and incorrect information about South Orange County real estate short sales.

Many people don’t have a clear understanding of the purpose of short sales or how they actually work.

Essentially, a short sale is when one sells their home for less than the balance remaining on the mortgage attached to the property.

The proceeds from the sale are used to repay a pre-negotiated portion of the balance to settle the debt.

A short sale can be a solution for homeowners who really need to sell their home but owe more on the mortgage than the home is worth.

Understanding the short sale process can help make the most out of a real estate sale.

Here are some common myths and why they are false:

A short sale damages one’s credit record as much as foreclosure

In many cases a short sale is less damaging to your credit record than a foreclosure. Some lenders may think that the short seller acted in a more responsible manner than simply walking away from the property.

Although the amount paid may have been less than the mortgage balance outstanding, the loan was settled with the lender. Opting for foreclosure is often seen as a lack of responsibility.

To qualify for a short sale one must be behind on payments

This might have been true in the past, but it’s not anymore.

You just need to be able to prove that you are in financial hardship, which could be due to death in the family, divorce, job loss, mortgage rate hike or even loss of property value.

After a short sale you can’t buy again for five to seven years

This may be true in some cases, but not all. In certain situations the waiting period can be reduced as low as two or three years before you are allowed to purchase another home.

It would be wise to speak with licensed real estate professional or home financing specialist to get the most current options in the marketplace.

Pass it on

These are just a few examples of commonly believed short sale myths. A clear understanding of the short sale and the benefits it  can provide, is important for financially strapped homeowners.

I am an experienced Certified Distressed Property Expert, ( C.D.P.E.) one of the most thoroughly trained designations available to a Realtor.

Feel free to pass this important information on to someone that you feel would benefit from it.  If you, or they, have additional questions about short sales, you might also check out my CDPE website: http://hosted.cdpe.com/south-o-c-short-sales or better yet, just shoot me an email ( BobPhillipsRE@gmail.com ) or give me a call/text: 949-887-5305

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Strong Builder Confidence May Signal Good Time To Buy New Homes

Posted in Housing Analysis by southorangecounty on February 20, 2013

Home Builder Confidence Strong

Many times real estate market experts point to the feelings of the nation’s home builders as a bell-weather signalling the health of the housing sector.

This month’s reading indicates that home builders are feeling pretty good.

The National Association of Home Builders / Wells Fargo Housing Market Index (HMI) for February changed by one point to 46 as compared to 47 for January’s reading. 

Over the last four months, HMI readings have stayed within a three-point range between 45 and 47, indicating a plateau after rising from 25 to 45 in 2012.

Housing Market Index Near Highest Levels Since 2006

The good news is that February’s reading remains near the HMI’s highest level since April 2006, when the HMI reading reached 51.

Some builders may be taking a wait-and-see stance in their confidence as high national unemployment rates and rising costs for building materials impact home buying ability and home prices.

Regional factors influencing builder confidence include difficulties in finding building sites and labor required for building new homes.

3 Important Categories Affect The Home Builders Index

The HMI is a seasonally-adjusted index comprised of three survey categories of home builder confidence.

Readings above 50 indicate that more builders are finding conditions good than bad within each category and overall:

  • Builder confidence in current new single-family home sales fell by one point to 51 in February, but sustained a positive rating.
  • Builder confidence in new single-family home sales over the next six months achieved a reading of 50 in February, up from 49 in January.
  • Builder confidence in foot-traffic in new single-family homes fell by four points from 36 in January to 32 in February.

February results for four regional categories consist of 3-month moving averages for new home sales: the Northeast gained 3 points to 39, The West gained 4 points to 55, the Midwest fell 2 points to 48 and the South fell by 2 points to 47.

With demand for homes increasing, home prices and mortgage rates are likely to rise during spring and summer as warmer weather brings out more potential buyers.

Check with your real estate and mortgage professional for the most updated market details in your area. 

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