South Orange County Blog from Bob Phillips

Non-HAMP Modifications Accounted for Two-Thirds of Loan Mods in February

Posted in Loan modifications, Real estate by southorangecounty on April 2, 2010

HOPE NOW announced Wednesday that its members completed an estimated 95,586 proprietary loan modifications in February 2010, which is almost double the 52,905 modifications completed under the government’s Home Affordable Modification Program (HAMP) during the same month.

Of the proprietary loan modifications completed in February, approximately 78 percent included a reduction of principal and interest payments. HOPE NOW’s data also showed that foreclosure starts and sales dropped 17 percent for the month, along with a 4 percent decrease in the number of 60-plus day delinquencies.

“Our data shows that mortgage servicers are continuing a strong effort on proprietary and HAMP modifications in the first two months of 2010,” said Faith Schwartz, executive director of HOPE NOW, the private sector alliance of mortgage servicers, investors, mortgage insurers and nonprofit counselors

However, with almost 4 million loans currently in default, Schwartz said HOPE NOW realizes that its work is not yet done. She said mortgage servicers and housing counselors have worked extremely hard through aggressive borrower outreach, and HOPE NOW remains determined to keep as many families as possible in their homes.

Meanwhile, doom & gloom bloggers continue to dismiss these significant facts, continuing to promote their fabrications that the Administration’s programs are a dismal failure – an absolute distortion of the reality that things are steadily getting better.

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The Federal Home Buyer Tax Credit Enters Its Home Stretch — 30 Days Left

Posted in Real estate, taxes by southorangecounty on April 1, 2010

Federal home buyer tax creditThere’s just 30 days remaining to use the federal home buyer tax credit.

The credit ranges up to $8,000 for first-time homebuyers, and up to $6,500 for existing homeworkers who have lived in their main home for 5 of the last 8 years.

Claiming the federal tax credit is a two-step process. First, you must be under contract for a new home on or before April 30, 2010.  Then, you must close on said home on or before June 30, 2010. 

There are no exceptions on the dates.

Timeline aside, homebuyers and the subject property must also meet minimum requirements in order to be tax credit-eligible:

  • You can’t purchase the home from a parent, spouse, or child
  • You can’t purchase the home from an entity in which the seller is a majority owner
  • You can’t acquire the home by gift or inheritance
  • Each buyer in the purchase must meet eligibility requirements
  • The home sale price may not exceed $800,000
  • Buyers may not earn more than $125,000 as single-filers; $225,000 as joint-filers

The complete eligibility checklist is published on the IRS website.  Or, if you find IRS-speak too difficult, make a phone call to your accountant.  Asking a tax professional’s advice on a tax-related matter is never a time-waster.

And lastly, don’t forget that if you’re claiming to federal tax credit for home buyers, it’s a tax credit and not a deduction.  This means that a tax filer who qualifies for the full $8,000 and for whom the “normal” federal tax liability is $8,000, will owe no federal taxes in 2010 to the IRS.

If you’re an active buyer , mark your calendar for April 30, 2010. It’s 30 days from now and, as the date gets closer, buyer traffic will increase. The likely result is higher home prices and more difficult negotiations.  The best time to act may be today.

Of course here in California we have an even better reason to act soon, as the Governor recently signed a bill giving the state’s homebuyers up to an additional $10,000 tax credit. For escrows that close between May 1st and June 30th, buyers MAY be eligible for up to $18,000 in total credits between the Federal and State’s programs. That is a BIG incentive to get off the fence!

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Case-Shiller Index – The California Version

Posted in Real estate by southorangecounty on March 31, 2010

Case-Shiller Monthly Change Dec 2009 - Jan 2010

A surprisingly strong rebound in California’s real estate market helped lift a key home price index for the eighth month in a row.

That’s good news for people who plan to sell their homes this spring. Prices are now up almost 4 percent from the bottom in May 2009, but still almost 30 percent below the May 2006 peak.

Prices rose 0.3 percent from December to January on a seasonally adjusted basis, according to the Standard & Poor’s/Case-Shiller 20-city home price index released Tuesday. Prices increased in 12 cities in the index.

The biggest monthly gain was in Los Angeles, where prices rose 1.8 percent from December. And real estate agents say there’s a distinct sense the worst of the downturn is over.

Buyers are “seeing that prices are creeping up,” said Tony Middleton, a real estate agent with ZIP Realty who concentrates on the San Fernando Valley. “They’re losing bids on homes and they have to bid again.”

Prices in San Diego, meanwhile, rose by almost 0.9 percent. Phoenix had the third-largest gain at 0.8 percent.

Compared with the same month last year, the 20-city index was off just 0.7 percent from last year at a reading of 146.32. That was the smallest decline in almost three years and in line with analysts’ expectations, according to Thomson Reuters.

Rising home prices also could boost consumer optimism. For most Americans, their home is their largest asset, so as values climb from the depths of the housing bust, homeowners feel wealthier and more comfortable spending. And, for homeowners who owe more on their mortgages than their properties are worth, rising prices rebuild equity.

Consumer confidence rebounded in March after a February plunge, according to a survey released Tuesday. The Conference Board’s Consumer Confidence Index rose to 52.5 in March, recovering about half of the nearly 11 points it lost in February.

Still, shoppers remain cautious and there are signs that last year’s housing rebound won’t last. Home sales sank during the winter, and government incentives that have propped up the market are ending.

Another reason for the positive news is simply that the Case-Shiller index measures a three-month average of home prices. So January’s report included November’s strong home sales.

However, bargain-hunting homebuyers continue to pack open houses in California, often facing off with investors for foreclosed homes.

“We’re seeing multiple offers in most of the markets here in the San Francisco Bay area,” said David Kerr, an agent with ZipRealty in Oakland, Calif. “People are getting off the fence.”

In February, bank-owned properties made up 44 percent of all resales in the state, according to MDA DataQuick. In Southern California, they accounted for more than half of resales.

With such high demand, supply is dwindling, driving prices higher.

Meanwhile, the state’s unemployment rate has flat-lined of late, and that’s made buyers more comfortable about purchasing a home than they were just six months ago, said Richard Green, director of the Lusk Center for Real Estate at the University of Southern California.

California home sales will likely get a boost in coming months thanks to a new serving of government stimulus.

Last week, state lawmakers enacted a tax credit of up to $10,000 for homebuyers that kicks in May 1. The state allotted $100 million for first-time buyers and another $100 million to anyone who buys a newly built home. California had a round of tax credits last year that proved to be popular; that program ended in July.

The latest incentive picks up where a federal first-time homebuyer tax credit of up to $8,000 is scheduled to leave off when it expires at the end of April. Should the Obama administration extend the federal tax break, that could give homebuyers in California even more reasons to buy.

Still, there remain pockets of weakness. Sales of homes priced above $500,000 are sluggish. And despite rising prices, more than one-third of all homeowners with a mortgage still owe more on their loans than their homes are worth, according to First American CoreLogic.

Among the cities showing monthly price declines in January, the biggest drop was in Portland, Ore., where prices fell 1.8 percent from December. Chicago and Seattle saw declines of 1.7 percent, while prices in Atlanta fell 1.5 percent.

LOS ANGELES — Courtesy of Huffingtonpost.com, 3-30-2010 – ALAN ZIBEL AND ALEX VEIGA

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Orange County median home price 5.6% too low?

Posted in home affordability, Real estate by southorangecounty on March 28, 2010


Economists at IHS Global Insight and PNC Financial conclude that Orange County homes were priced 5.6% too low in 2009’s fourth quarter.

Comparing local house-sale prices to historical real estate and economic trends, IHS-PNC estimates that Orange County homes were undervalued for the 7th consecutive quarter after being overvalued for the previous 20 quarters.

The latest 5.6% undervaluation — on par with the likes of Louisville, Ky.; Jefferson City, Mo.; Fairbanks and Abeline, Texas — was a roughly equal to the previous 5.5% in Q3. The current wave of Orange County undervaluation peaked at 11.4% in Q4 of 2008.

Also  in the IHS report

  • For historical memory sake, Orange County overvaluation peaked at 33% in 2006’s Q2.
  • Atlantic City, N.J., was the most overvalued nationally (33% too high) in Q4 2009.
  • One reason the undervaluation is shrinking locally is the rising price of homes sold. By IHS-PNC math, O.C. home pricing was up 6.4% in a year as 2009 ended — 3rd biggest gain among the 330 regions tracked nationwide.
  • The D.C. region had the largest Q4 price gain (+10.5%) while Las Vegas had the biggest loss (-19.4%).
  • The report concludes: “Two years of relentless house price depreciation finally ended in the summer of 2009. The second half of 2009 saw minimal changes in home prices, signaling stabilization at long last, if not yet recovery. … We ended 2009 with no extremely overvalued metros, a sharp contrast to 2005 when 52 metro areas were judged to be extremely overvalued.”

March 22nd, 2010, originally posted by Jon Lansner in the O.C. Register

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The HAMP Loan Modification Evaluator Tool and Questionnaire

Posted in home affordability, Loan modifications, Real estate by southorangecounty on March 28, 2010

The Administration’s Making Home Affordable Program has put a couple of great tools on their website that can help answer your questions about a possible Loan Modification. ( Part of HAMP – the Home Affordable Modification Program.)

There is an Evaluator Tool and a Questionnaire.

If you can no longer afford to make your monthly loan payments, you may qualify for a loan modification to make your monthly mortgage payment more affordable. Millions of borrowers who are current, but having difficulty making their payments and borrowers who have already missed one or more payments may be eligible.  To see if you may be Eligible fill out a brief questionnaire.  For the evaluator tool go here.

If you are having difficulty – you are not alone – check out some of these resources, for some solutions – and good luck!

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Some first time California home buyers seem poised to get $18,000 in tax credits.

Posted in Down payment assistance, home affordability, Real estate, taxes by southorangecounty on March 28, 2010

There is an interesting wrinkle with the new bill just signed by Governor Schwarzenegger, regarding tax credits for California home buyers – state bill AB 183.

Here is some language from that bill: “Requires buyers to close escrow between May 1 and Dec. 31 to qualify.” ( For an up to $10,000. tax credit.)

The interesting part of that is this: The Federal first time homebuyer tax credit of up to $8000. clearly states that “The credit is available for homes purchased after November 6, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, the home purchase qualifies provided it is completed by June 30, 2010.” ( From the Government’s Making Home Affordable website: http://www.federalhousingtaxcredit.com/glance.php )

So, if I read that correctly – and remember, I am NOT a qualified tax preparer, or attorney – that seems to suggest that if you are IN escrow before May 1st, 2010, and close escrow prior to July 1st, 2010, you might qualify to receive BOTH tax credits.

If you happen to be one of those fortunate California home buyers, and you seem to qualify, you should definitely look into this potential windfall.

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