Feb 24, 2009

License Rates? 20% of 2006 Volumes

Hello Neighbors,

We came across an interesting statistic tonight.

It's a true indicator of how this industry has shaken out. Those who are still in the business - or who are just jumping in - are clearly here for the long haul.

In 2006, the California Department of Real Estate was averaging 5,000 new licenses issued per month. 5,000 per month!

Now? The DRE is issuing 1,000 per month.

That's right. Those who were in it for the boom (and only to make money) have stopped entering this business.

We couldn't be happier.

- Jim


Feb 23, 2009

An Inside Look at Foreclosures - Video

Hello Neighbors,

Many thanks to Patty at HP for sending this video along:


I haven't been to the "Inland Empire" down South to look at real estate yet, but we experience exactly the same things up here in Northern California.

What happens to personal belongings when a home is foreclosed upon?

What happens to pools?

Watch this video and see. "Trash Outs" are something done on a regular basis - historically though, it's been in apartments and duplexes. Now the same processes are used with 4000+ square foot homes. Very sad.

Pools? If you are looking at bank owned property, and you see an empty pool - or a pool with only half the water - BE CAREFUL. Pools are designed to hold the weight of the water. When the water is gone, they can actually "pop". A good pool inspector is important.

Those mosquito eating fish? We see them all the time... placed in the pools by the county / city teams. In our area, the pools are actually located by overhead flight teams.

- Jim


Feb 20, 2009

Your Recovery Money - Where is it Going ?

Take a look at this!


Hello Neighbors,

Want to see the nearly 1100 page recovery bill signed into law?

Want to see how your $760,000,000,000.00+ is being spent by the federal government?

Take a look the Recovery.gov website noted above.

In an effort to be more transparent, the folks in Washington are making as much of this public as they can.

We'll see how it all ends up, but certainly applaud the effort.

A wonderful change from the previous few years.

Many thanks to our friend Laura from Chevron Energy Solutions for sending this our way.

- Jim


Feb 19, 2009

Mortgage Workout Programs - Found 'em !

Hello Neighbors,

CAR (California Association of Realtors) Legal has been working to identify and consolidate information from those major lenders who are helping home owners with their mortgage problems.

You can find all of the information here:


Who is included?

* Countrywide / Bank of America
* Citigroup / CitiMortgage
* JP Morgan Chase / Washington Mutual
* IndyMac
* Fannie Mae, Freddie Mac, ...and a bunch of others.

Here is the general overview from CAR Legal:

The following information is intended for REALTORS® and homeowners seeking information on existing mortgage workout programs. In general, the loan modification programs on the chart (see link below) and consumer information sheets (see links below) are intended for primary residences only.

For a lender comparison chart on existing mortgage workout programs, click here (revised 2/09). The chart is a compilation of programs offered by the larger lenders and government entities. If a specific lender or loan servicer is not on the chart, homeowners may wish to contact the lender or loan servicer to determine if a workout program is available.

Mortgage loan modifications typically are handled on a case-by-case basis. Homeowners having difficulty meeting their mortgage obligation or interested in finding out more about a loan modification program should start by contacting their lender. Prior to calling a lender or loan servicer, homeowners should have the following information available:

. Loan number
. Income information and documentation
. Most recent mortgage statement
. Bank statements
. Letter demonstrating financial hardship

PLEASE pass this information along to anyone you know in this situation.

Good luck.

- Jim


Stimulus Package: Do You Qualify for Mortgage Help?

Hello again Neighbors,

Many of you have asked.... and we've held our thoughts, since the final details really weren't clear yet.

As of yesterday votes, it looks like we are moving forward with the Stimulus Package. GOOD. VERY GOOD.

Here is a pretty good article from our friends at CNN. THANK YOU CNN!

- Jim


Mortgage help: Do you qualify?

President Obama's new real estate rescue plan offers two key possible benefits: More refinancing opportunities and greater chance for a loan modification.
By Les Christie, CNNMoney.com staff writer
Last Updated: February 18, 2009: 7:11 PM ET

NEW YORK (CNNMoney.com) -- The eagerly anticipated foreclosure prevention program unveiled Wednesday by President Obama targets 9 million borrowers for help - are you one of them? The $75 billion effort, dubbed the Homeowner Affordability and Stability Plan, boils down to two basic solutions: First, the government is aiming to help more homeowners refinance to take advantage of new low interest rates. Second, it provides incentives to lenders and servicers to restructure your mortgage to more affordable levels. Official guidelines won't be unveiled until March 4, but here's how to know whether you'll likely be able to take advantage of either of these options.

Help for those seeking refinancing
This part of the program targets borrowers who have kept current on their mortgages. Many of the homeowners in this group have been unable to lower their housing costs through refinancings because of falling home prices. Right now, if you're underwater on your mortgage, owing more than the home's market value, forget about qualifying for a refi. In fact, at least 20% equity in your home is now a must. The new guidelines should help. Even homeowners with debt that exceeds home value by 5% could be eligible. And there will be no prepayment penalties. The Administration estimates that this will enable up to 5 million homeowners to obtain lower interest rate mortgages.

Who's not eligible.
Homeowners whose property values have dipped severely, putting them underwater by more than 5% are out of luck. Those with "jumbo" mortgages also don't qualify - only those with "conforming' mortgages do. To be absolutely sure what kind of loan you have, you need to check with your servicer or lender after March 4. But in general, until the past year, loans above $417,000 were considered jumbo mortgages, and Fannie Mae and Freddie Mac were not allowed to buy and guarantee them. All borrowers will have to prove they have sufficient income to be able to keep up their loan payments, though what would be sufficient proof wasn't yet clear.

Mortgage modification help for at-risk borrowers
Homeowners in default or at risk of default may qualify for loan modifications, which restructure the terms of loans. Anyone with high combined mortgage debt compared to income or who is underwater may be eligible for a loan modification. Borrowers with high levels of other debt, such as car loans and credit card debt exceeding 55% of their incomes, may still qualify for a modification but they'll be required to accept debt counseling in a HUD-certified program. If you qualify, your servicer or lender will reduce your monthly mortgage payments to 31% of your gross income. The payment would stay there for five years and then gradually revert back to the conforming loan rates in place at the time. The reduction would come mostly through interest-rate reductions, though in some cases, principal reduction also would be an option. Borrowers would also receive incentive bonuses of up to $1,000 a year for five years for making payments on time. President Obama estimated 3 to 4 million homeowners could benefit from the new modification procedures.

Who's not eligible
Speculators, those who bought homes for investment purposes, do not qualify for help -- all homes must be owner/occupied.The program will also not reward homebuyers who were irresponsible in their borrowing. All applicants will be closely examined by lenders and those who acted unscrupulously by, for example, misrepresenting their incomes in no-doc loan applications, would not qualify. And, in order to protect taxpayers from excessive expenses, no loans will be modified unless it results in a net savings compared with the costs of foreclosing. Finally, rates would not be lowered below 2%. That will disqualify many borrowers who simply can't afford any reasonable mortgage payment because of illness, for example, or job loss. "[The plan] will not reward folks who bought homes they knew from the beginning they would never be able to afford," said Obama. "In short, this plan will not save every home." No mortgages for amounts above comforming loan limits would be eligible.

How Do Loan Fees Work?

Hello Neighbors,

Another video from our friends at Neighborly Financial.

John covers how loan fees work, and how shopping based on just the rate can be misleading:


John's work is helpful for me as well. I've never done a loan, and appreciate the insight. I hope you find it valuable as well!

Please do share around, and call John (916.799.4336) if you have any questions or would like to see what you qualify for.

- Jim


Feb 17, 2009

Getting Pre-Qualified for Loan, Here's a Video !!

Hello Neighbors,

Do you want to buy your first home, or investment property?

Do you need a loan to buy that home?

Do you have 4 minutes for a bit of education?

Well then... here you go!


Take a look at this video prepared by our financial partners. It's a simple "quick and dirty" look at income requirements, credit needs, and a few other key factors with getting a loan.

Take a look and let us know what you think!

...and many thanks to our friend John Graham.

- Jim


Feb 12, 2009

Foreclosures Not Yet on MLS - We Have a List !!

Hello Neighbors,

Very exciting. With sincere thanks to one of our "big hitter" business partners, we have a list of 41 bank owned (foreclosure) homes that are going to market soon - but aren't yet in MLS!

Want to be the first to scoop one of these homes up? CALL US. Believe it or not, sometimes homes sell before ever going on market... but only when you have someone in the foreclosure loop with access to new "inventory".

We've got it, and we can help you out!

Call me and I will grab one of our team members to help you out.

Darn fun this business,

- Jim


Feb 5, 2009

Foreclosures - The Third Wave

...is coming.

Neighborly has partnered with one of the top foreclosure listing agents in California, all of the US actually.

We had lunch with that team a couple of weeks ago. Nice group, VERY busy!

...and they are going to get busier.

The 3rd big wave of REO ("Real Estate Owned") foreclosure properties is going to hit the market in February and March. Why? That's the next big round of adjustments in those insanely bad adjustable rate mortgages written in the earlier part of this decade. As those rates jump up, people will be walking away from their homes.

Our partner has been told to "clear the decks" in anticipation of this influx. He's scrambling to get ready for the flood of inventory.

What does this mean to the buyer?

More inventory to choose from soon. Lower prices. More competition for the really good looking homes.

What does this mean to the seller?

More downward price pressure if you are trying to sell. Offers coming in at REO prices for your "regular" sale. Tough.

If you want some of the inventory lists as they become available, drop us an email. We are tracking spreadsheets of inventory with our broker partners.

Many thanks,

- Jim


Feb 2, 2009

Three Wonderful Ladies Join the Team !!

Hello Neighbors,

It's been a fantastic couple of weeks for us here on the Neighborly teams.

We have had a great deal of interest in the organization from folks in our own industry.

It seems we may be doing things right for our clients and our peers.

In all of these discussions, three ladies have shown they are Neighborly material, and have joined the team!

* Denise Fogel
* Marcy Lillman
* Tracy Tocher

These ladies have made the cut - they are ethical, genuinely concerned about the home owner, good with these complex processes, and eager to help the next Neighborly client.

As you know, we don't let just anyone in the door. The agent has to be someone special. Someone who is in this business for the right reasons. Denise, Marcy, and Tracy absolutely fit those molds, and we couldn't be more excited to have them on board.

Welcome ladies! We promise to do our best to support you.

- Jim


What does .5% in Interest Really Cost?

This note just in from our friends at CNN and Neighborly Financial:

Senate Republicans are likely to introduce a provision that would encourage lenders to offer a 30-year fixed rate mortgage at 4% for a limited period of time. The loans would only be available to credit-worthy home buyers and homeowners seeking to refinance.

The government would guarantee the loan for a number of years, an aide to McConnell told CNNMoney.com.

Senate Republican Conference Chairman Lamar Alexander, R-Tenn., said on the Senate floor Friday that the measure could involve not only a government guarantee but a subsidy as well.

"If today's prevailing rate were 5.2 or 5.3 percent ... the government would make up the difference."


What does is really mean?

For a $100,000 loan, over 30 years, your monthly bill will be:

* A 4.5% interest rate will cost $506.69 in principle and interest
* A 4.0% interest rate will cost $477.42 in principle and interest
* A 5.0% interest rate will cost $535.82 in principle and interest.


A few:

a) Rates go down AND up. If you are holding off on a purchase or re-fi, hoping for a rate that is just half a percent lower (to 4%), is saving an extra $29 per month worth the risk of missing these lower rates completely?

b) "Money" (loans) are at the cheapest they've ever been. This is an exciting time to buy or re-fi your existing home no matter if the rate is 4% or 5%. That's still the "cheapest money" in 40 years.

c) There are so many unknowns with the bailout and stimulus packages that we don't know where this is all going to end up. Be careful not to bet on a product (loan) that isn't there. In the corporate world, we called such a product "vaporware" (instead of "software").


- Jim


Help DPA Programs

How can we help the economy? Restore "DPA" or "Down Payment Assistance" programs. That's part of the findings by the Nehemiah organization - who provide funds for such programs.

Here's a blurb from that group:

Downpayment assistance (DPA) programs in the U.S. had a major beneficial impact on the economy last year, creating $38.6 billion in revenues, 235,000 jobs, and $4.6 billion in total tax revenues, according to an economic-impact study done by two well-respected California economists, Dr. Robert Waste and Dr. Robert Fountain.

Some highlights of their research:

* More than 200,000 new and existing homes were sold last year with DPA. (The research covered the 12 months from December 2007 through November 2008.) Roughly 40% of all loans originated by the Federal Housing Administration used DPA.
* Nehemiah's DPA program helped families purchase more than 78,000 new and existing homes last year. More than 25% of those sales were on foreclosed homes, effectively taking them off the market.
* About 40% of the borrowers were households headed by minorities and more than one-third were headed by females.
* Of 235,000 new jobs created last year, 195,000 came from new-home construction and the rest from new-home sales. DPA also accounted for $4.6 billion in total tax revenues last year.

Anything we can do to help the homeowner and the greater economy... let's do it!


Support H.R. 600

The Waste/Fountain Study supports the passage of H.R. 600 - FHA Seller-Financed Downpayment Reform Act of 2009, a bi-partisan bill introduced by Representative Al Green (D-TX). Reformed DPA will play a key role in generating homeownership at no cost to U.S. government or taxpayers, according to a Congressional Budget Office (CBO) report.

- Jim