California Association of Realtors Offers Job Loss Insurance

Hello Neighbors,

This is very cool.

At a time when employment is challenging - yet buying a home is absolutely the right thing to do (and timing couldn't be better), CAR is offering "First Time Buyer Insurance". I love it.

Take a look:

C.A.R.'s Housing Affordability Fund (C.A.R.H.A.F) has committed $1 million to support the Mortgage Protection Program - and the National Association of REALTOR another $420,000 - an insurance product that kicks in when the unexpected happens: job loss.

Your first-time buyers who enroll in the program can draw upon their mortgage protection policy in the event they lose their job after purchasing their home. Under the program, first-time buyers will be eligible to receive $1,500 per month for six months in the event of a job loss; co-buyers are eligible to receive $750 per month.

To be eligible for coverage, the home must be a principle resident in California and a first-time buyer is defined as someone who has not purchased a home in the past three years. While there are no caps on the applicant's income or the purchase prices of the home, the applicants are required to use a California REALTOR in their transaction; they cannot be self-employed or older than the age of 70. Consumers can apply for the program via their REALTOR.


It's new - so we haven't tried executing on the program yet... but if you want it, call me! We'll figure it out together!

Putting 2009 in the rear view mirror... Neighborly!

- Jim

www.NeighborlyGroup.com

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

Short Sale Process Help for Realtors

Hello Neighbors,

More evidence that sanity is returning to Real Estate!

Freddie Mac has thrown its weight behind helping us in the industry.

Thank you NAR (National Association of Realtors) for posting this update.

Short Sale transactions are the hardest escrow to conclude. Even when we have a Willing buyer, and a willing Seller - the Seller's lender will do a variety of evil things to kill the process. Only 25% of escrows on Short Sales are actually making it to COE (Close of Escrow). The other 75%? Who knows. Default (foreclosure), Loan Modification, or the Seller "catching up" are the other likely outcomes.

One of our least favorite actions is when the Short Sale lender comes after our wages. We can get through the entire negotiation process, inspection period, escrow .... and then have the lender say "by the way, we are cutting your commissions to ZERO". Yep. Working for free. Or - more realistically, since we've invested a great deal of time, energy, and our own funds - we are working for a loss. Now factor in that the majority of the houses on the market are short sales. Do the math, earnings risk is pretty high concern in this profession.

Why does this Freddie Mac news help?

We can now work with less fear of "Short Sale Earnings Theft". More confidence when showing Short Sale homes to Buyers. More faith that we can operate a business as a business - not as a collections agency.

We have more assurance that the industry is recovering, and some level of logic is returning to the key principles who drive this market. Stability is around the corner!


Freddie Mac Issues Written Short Sales Commission Policy

On August 20, 2009, Freddie Mac confirmed in writing that its servicers are not allowed to renegotiate short sales commissions. According to the policy, as a condition of the servicer’s acceptance of a short sale offer, servicers cannot renegotiate the sales commission below the amount agreed to by the real estate broker and the seller/borrower. However, if the negotiated commission exceeds 6 percent, servicers are required to limit it to 6 percent. This Freddie policy is consistent with Fannie Mae’s policy.

NAR has asked Freddie to establish an appeals process for cases when servicers refuse to comply with Freddie Mac’s policy.

Links to more in depth information can be found here:

Freddie Mac Single-Family Seller/Servicer Guide Bulletin 2009-22 (August 20, 2009)

http://www.freddiemac.com/sell/guide/bulletins/pdf/bll0922.pdf

Fannie Mae Short Sales Commissions Policy and Appeals Process

http://www.realtor.org/wps/wcm/connect/4fb4f4804e824cf0a6e8e696c79aa288/government_affairs_fannie_short_sales_policy.pdf?MOD=AJPERES&CACHEID=4fb4f4804e824cf0a6e8e696c79aa288

NAR’s Short Sales Website

http://www.realtor.org/realtors/basics_short_sales

Just another sign that logic is returning (if slowly).

- Jim

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

www.NeighborlyGroup.com

Wooo Whooo !! - Home Sales Up and Steady

Hello Neighbors,

The recovery is upon us!

(Note to self though - the rumored zillions of foreclosures still to hit the market could drive things down again... but when will those homes hit the market? I've been told "next month" for 11 months now...)

Thank you NAR (National Association of Realtors) for the updates posted below!

STRONG Gain in Existing-Home Sales Maintains Uptrend

Washington, August 21, 2009

For the first time in five years, existing-home sales have increased for four months in a row, according to the National Association of Realtors®.

Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 7.2 percent to a seasonally adjusted annual rate1 of 5.24 million units in July from a level of 4.89 million in June, and are 5.0 percent above the 4.99 million-unit pace in July 2008. The last time sales rose for four consecutive months was in June 2004, and the last time sales were higher than a year earlier was November 2005.
Lawrence Yun, NAR chief economist, said he is encouraged. “The housing market has decisively turned for the better. A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to higher sales,” he said.

The monthly sales gain was the largest on record for the total existing-home sales series dating back to 1999.

“Because price-to-income ratios have fallen below historical trends, there are more all-cash offers. In some recovering markets like San Diego, Las Vegas, Phoenix, and Orlando, the demand for foreclosed and lower priced homes has spiked, and a lack of inventory is becoming a common complaint,” Yun said.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.22 percent in July from 5.42 percent in June; the rate was 6.43 percent in July 2008.

An NAR practitioner survey showed first-time buyers purchased 30 percent of homes in July, and that distressed homes accounted for 31 percent of transactions.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said the first-time buyer tax credit is working. “In addition to first-time buyers, we’re also seeing increased activity by repeat buyers. While many entry-level buyers are focused on the discounted prices of distressed homes, they’re also freeing some existing owners to sell and make a move,” he said.

“Realtors® are the best resource for consumers in these changing market conditions because the transaction process has become more complex. Since it’s now taking longer to complete a home sale, first-time buyers who want to take advantage of the $8,000 tax credit should try to make contract offers by the end of September,” McMillan said. “Otherwise, they may miss the November 30 closing deadline.”

Total housing inventory at the end of July rose 7.3 percent to 4.09 million existing homes available for sale, which represents a 9.4-month supply2 at the current sales pace, which was unchanged from June because of the strong sales gain. Raw inventory totals are 10.6 percent lower than a year ago when the number of unsold homes was at a record.

The national median existing-home price3 for all housing types was $178,400 in July, which is 15.1 percent lower than July 2008. Distressed properties continue to weigh down the median price because they typically sell for 15 to 20 percent less than traditional homes.

Single-family home sales increased 6.5 percent to a seasonally adjusted annual rate of 4.61 million in July from a pace of 4.33 million in June, and are 5.0 percent higher than the 4.39 million-unit level in July 2008. The median existing single-family home price was $178,300 in July, which is 14.6 percent below a year ago.
Existing condominium and co-op sales jumped 12.5 percent to a seasonally adjusted annual rate of 630,000 units in July from 560,000 in June, and are 5.9 percent above the 595,000-unit level a year ago. The median existing condo price4 was $178,800 in July, down 18.9 percent from July 2008.

Regionally, existing-home sales in the Northeast surged 13.4 percent to an annual pace of 930,000 in July, and are 3.3 percent higher than July 2008. The median price in the Northeast was $236,700, down 15.0 percent from a year ago.

Existing-home sales in the Midwest jumped 10.9 percent in July to a level of 1.22 million and are 8.0 percent above a year ago. The median price in the Midwest was $157,200, which is 5.9 percent less than July 2008.

In the South, existing-home sales rose 7.1 percent to an annual pace of 1.95 million in July and are 5.4 percent higher than July 2008. The median price in the South was $164,500, down 7.1 percent from a year ago.

Existing-home sales in the West slipped 1.7 percent to an annual rate of 1.13 million in July, but are 1.8 percent above a year ago. The median price in the West was $202,300, which is 28.0 percent below July 2008.

Buyers, we are getting close to the "now or never" point.

- Jim

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

www.NeighborlyGroup.com

Folsom Treehouse Update (Out of Bankruptcy)

Hello Neighbors,

Another sign that things are stabilizing a bit. You've heard about this in the local news... some of the larger foreclosures / failures are getting bought up, like the Folsom Treehouse project.

This just in from the Sac Business Journal - thank you SBJ!


Folsom Project Bought out of Foreclosure

Aug 17, 2009 - The Sacramento Business Journal

A real estate investment firm said Monday it has acquired a 25-acre residential development in Folsom through foreclosure proceedings and plans to develop the property with new homes.

PCCP LLC, which has an office in Sacramento, will resume construction at the Folsom Treehouse master-planned community, located at Prairie City and Iron Point roads, in a partnership with Signature Properties. The company acquired the project last week. The property had been in possession of the Federal Deposit Insurance Corp. and United Commercial Bank, after the original loan of $22.5 million went into default last year. PCCP acquired a discounted note from the FDIC and United Commercial in March.

The development is made up of 291 finished lots, with 99 single-family lots, 164 condominium lots and 28 constructed or partially constructed homes.
The terms of the acquisition were not disclosed.

Company vice president Jim Galovan said PCCP, which focuses on recapitalizing distressed real estate, has targeted Folsom for investment in the past due to its strong job base anchored by the 7,000-employee Intel campus. The area currently has a low inventory of new homes, he said.


- Jim

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

HUD Homes, We Got 'em !!

Hello Neighbors!

It is with great enthusiasm that we announce our affiliation with HUD! After pushing for 11 months with their subcontractor, we now have keys! Yep, we can get into any HUD home in California, help you write offers ("Bids" in the HUD world), and get you into one of these homes.

What is a HUD Home?

A HUD Home is a single family home or other type of residence that is backed by the Federal Housing Administration / FHA (through "Mortgage Insurance" aka "MIP") and is now in foreclosure. Once a home backed by the FHA goes into foreclosure, it is deeded back to HUD by the lending mortgage company. This is how HUD "forecloses" on Mortgage Insurance when the Buyer defaults.

Why is this Important?

1) It's not rocket science. As more home owners default, the amount of "inventory" HUD will take back will grow.

2) HUD doesn't use the same MLS lockbox system that 99% of the homes for sale use. They have keys to the locks on the doors, that they issue to HUD approved Real Estate companies. A regular Realtor can't get in with a lockbox to a HUD home - they need the keys! We've Got Them !!

3) The purchase offer process is different with HUD homes. They don't use the normal contracts that we use for most transactions in California. They use their own on-line systems to make offers (bids) and to let the Buyers know where they stand. Real Estate companies can't submit offers on HUD homes unless they've been pre-approved by HUD and issued a special code (called a "NAID" number". We've got a NAID number and are ready to go!

Next steps?

Take a look at the items to the right. You will see a section on HUD Homes. You can review inventory (see what is on the market).

Call us and we can help you with a HUD home!

- Jim

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

Become a Fan in Facebook !!

Hello Neighbors,

Join us in Facebook!

Become a Fan of Neighborly Realty & Neighborly Financial today! We just added this within the last few minutes, so please excuse the lack of fans as we create this blog entry. We'll do better soon!

Neighborly Realty & Neighborly Financial on Facebook

Why Facebook?

It is a wonderful way to get real time information out quickly - specifically to those who want it, without intruding on your email!

Thanks Neighbors - and now fans!

- Jim

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

Are Appraisals Useless?

It sure looks that way.

Hello Neighbors,

It happened again yesterday. An appraisal came in on a great Granite Bay home (we are in escrow on) at roughly $46,000 below purchase price. Yep, that’s right. A HUGE gap between what we’ve agreed to pay and what the bank’s appraisers say it is worth.

Unfortunately, this is to be expected – but it sure makes this process difficult, and can really challenge the buyer / borrower confidence.

For me, it started in 2006. We had an appraisal come in at $6,000 below the agreed upon purchase price.

Since then, the appraisals have been close to worthless.

Remember – we do loans too. Every purchase loan or re-fi loan requires an appraisal. In the last year, we’ve had two different transactions that required 4 appraisals each !! Why? To account for appraiser fear and appraiser incompetence. Multiply 4 by the average appraisal price of $350 - $490 and you can see how hard this is on the buyers and borrowers. It’s awful.


Why is it happening?

1) Appraisers are afraid. Collusion between some appraisers and some lenders was the first step to this downturn, as far back as 2005 – 2006. So? Appraisers got scared and started getting overly conservative in their valuations. Of course, since the markets have continued to decline – the conservative nature of appraisers has only increased.

2) Appraisers aren’t able to talk to anyone relevant! As of May 1st 2009, appraisers aren’t allowed to discuss values directly with the parties involved in the transaction. That’s right – they go in blind without much data or insight on the specific property. It’s now illegal for us to talk to them. We do a ton of work making sure an offer is at the right market value – but aren’t allowed to discuss this research with the appraiser! Insane. Google this one – “HVCC legislation”. It will explain how the appraisal rules have changed, and the creation of these new “Appraisal Management Companies” (AMC’s).

3) Appraisers aren’t familiar with the area they are appraising. This one is the worst. Lenders used to be able to pick the appraisers they used. Not anymore. Obviously, lenders would choose local appraisers who knew the neighborhoods and areas well. Now? The appraiser may not even be from the same County in California! The example I gave of our $46,000 gap yesterday? The appraiser was from El Dorado Hills – that’s a County away from the property in question in Placer County’s Granite Bay. The appraiser used comps that were 50 years old, backed to Auburn-Folsom road, and sat under major power lines… with no adjustments. She was not at the slightest familiar with the different Granite Bay neighborhoods and nuances.

Also yesterday - I was sitting with 80 or 90 mortgage brokers at the monthly Sacramento Association of Realtors finance session. One lender shared a scary story…. Two appraisers from San Diego were flying up here to appraise 15 houses – during a 1 day trip. All for a bank. The appraisers were earning $150 per house. Wow. Out of the area appraisers, working for below market wages, and spending a few minutes per home. What does that tell you about this process?


In summary? Appraisals are very near worthless.

What is important is making sure you have confidence in the agent representing you, and making sure that person is doing a very thorough job of reviewing home values.

Want to talk more about appraisals, give me a call.

- Jim

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

Be Prepared - 45 Day and 60 Day Escrows

Hello Neighbors,

As we continue to recover from these crazy times, the Feds are creating new legislation at an alarming rate. These new rules are rolling out a bit too quickly - and without a thorough analysis of the impact to the consumer.

Don't get me wrong - the goals are important, and the steps needed. We simply need to know how to manage in these new environments.

One immediate impact, probably 45 day purchase escrows. 60 days are even on the horizon.

These changes impact purchase loans AND re-finance loans.

Why?

The two most important changes were rolled out on May 1st and early in July.

The first is called the "HVCC" or Home Valuation Code of Conduct. It dictates how people in these industries work with Appraisers. In short, we can't talk to them!

The second is a change to the Truth-In-Lending laws. These laws force new disclosures to borrowers if there is a change of 1/8th of a point in APR. ...and a 3 day "hold" period for the analysis of that new disclosure.

What does this last item mean?

Let's say interest rates change between your lock and your close of escrow. NOTE THAT THEY ALWAYS WILL since rates are based on the daily US bond markets!! You could end up reviewing and reviewing changes and changes for days.

More review, more 3 day wait periods = longer escrows. Please plan accordingly!

- NeighborlyJim

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

Where is the Bottom ?? How About HERE !!

Hello Neighbors,

My sincere apologies for the gap! It's been 4 weeks since a "fresh" blog post... lots going on in these crazy markets. So many changes with lenders (new Appraisal rules, new Truth-in-Lending rules, a pipeline so full that we are seeing 45 and 60 day escrows..)

It's just plain nutty right now.

But it does feel like we are at the bottom, and the Associated Press just put out this fine (and long) article on just that topic. Take a read below.

From a practical standpoint - we are still offering like crazy for Buyers at entry level price points (roughly below $200,000). Most of that inventory is now Short Sales. We've seen a drop in REOs (foreclosures).

Happily - we are starting to see "private party sales" again! That's the regular old sale we are all used to. Family to family. No extra banks or lenders involved. It's like 2005 and earlier...

Here's the AP article.

- NeighborlyJim

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

From our friends at the Associated Press - thanks AP for the great content and the good data points !!

Welcome to the bottom: Housing begins slow rebound

By ADRIAN SAINZ, DAVID TWIDDY, DANIEL WAGNER, ALEX VEIGA, Associated Press Writers Adrian Sainz, David Twiddy, Daniel Wagner, Alex Veiga, Associated Press Writers – Sun Aug 2, 5:26 am ET

It was — note the past tense — the worst housing recession anyone but survivors of the Great Depression can remember.

From the frenzied peak of the real estate boom in 2005-2006 to the recession's trough earlier this year, home resales fell 38 percent and sales of new homes tumbled 76 percent. Construction of homes and apartments skidded 79 percent. And for the first time in more than four decades of record keeping, home prices posted consecutive annual declines.

A staggering $4 trillion in home equity was wiped out, and millions of Americans lost their homes through foreclosure.

Now take a deep breath and exhale. The worst is over.

By every measure, except foreclosures, the housing market has stabilized and many areas are recovering, according to a spate of data released in the past two weeks. Nationwide, home resales in June are up 9 percent from January, on a seasonally adjusted basis. Sales of new homes have climbed 17 percent during the same period. And construction, while still anemic, has risen almost 20 percent since the beginning of the year.

Even home prices, down one third from the top, edged up in May, the first monthly increase since June 2006.

"The freefall is over," says Dean Baker of the Center for Economic and Policy Research.

The problem is that, Baker, like many economists, expects the housing market will "be bouncing around the bottom" for the second half of the year.

There are also real threats that could poison this budding recovery. The unemployment rate, which is 9.5 percent, is expected to surpass 10 percent, leaving even more homeowners unable to pay their mortgages. Mortgage rates could rise, making homeownership less affordable. And the federal tax credit for first-time homebuyers, which as lured many into the market, is set to expire on Nov. 30.

"As long as jobs are being lost, regardless of all the federal programs out there to help the borrowers, you're still going to have problems in the housing market," says Steve Cumbie, executive director of the Center for Real Estate Development at the University of North Carolina's Kenan-Flagler Business School.

True, but when you've got bidding wars for foreclosures in places like Las Vegas, Phoenix and Los Angeles, it's time to call the bottom.


The WEST

For years Las Vegas symbolized the boom, as mile after mile of desert gave way to three-bedroom homes and swimming pools. Then came the crash and it symbolized something else: a decade of speculation and excess.

Now, Las Vegas is one of the hottest housing markets in the region again. This city has always profited from others' misfortune, and the same can be said of the current housing market.

In Clark County, Nev., home to Sin City, one in every 11 homes had received at least one foreclosure-related notice in June, according to RealtyTrac. The glut of deeply discounted foreclosures has almost doubled sales activity for most of this year.

"In January the market was busy, and since that time, it's gone a little haywire," says Brad Snyder, an agent with ZipRealty in Las Vegas. "There's (sales) activity now that we haven't seen even since '04."

The situation is similar in California's Riverside, San Joaquin and San Bernardino counties, where one out of every 14 homes was in foreclosure.

After falling 18 percent in the second half of 2008, monthly home prices were flat in the first half of this year, on a seasonally adjusted basis, according to the National Association of Realtors.

Markets like these have seen a surge this year in all-cash buyers, many of them investors, scooping up the sharply discounted properties. It's not uncommon to see multiple offers on a single property, and that's helped slow the rate of price declines a little. The demand also has helped whittle down the inventory of homes for sale to the lowest level since the boom.

"We have seen such a steep decline in supply right now, that when a home comes on the market it's first day there could be seven or eight or 10 people there in a matter of hours," Snyder says.

To lure buyers away from foreclosures, homebuilders have slashed prices or are simply tearing down vacant homes. New home sales jumped almost 59 percent in the first half of the year, while construction in these grossly overbuilt markets slid 12 percent.

In the Pacific Northwest and states such as Utah, by contrast, housing markets are on a different timer than the rest of the West. Home sales and values held up better and longer while markets in the Southwest were already in decline. These markets also haven't seen as many foreclosures wreaking havoc with home prices.

States in the region: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, Wyoming

Data compares June vs. January and June 2008:

Home resales: down 1 percent, up 12 percent

Median price: $214,800, flat, down 25 percent

New home sales: up 59 percent, down 10 percent

New home construction: down 12 percent, down 42 percent

Mortgage delinquencies as of March: 12 percent

Regional outlook: The recession remains the region's wild card. Unemployment is at 10.2 percent in the West, but that could go higher if the economy worsens. If that happens, expect more foreclosures and a slower turnaround

Re-Finance Rule Changes – From 105%: Now up to 125% of Home Value !!

Hello Neighbors!

GREAT NEWS from our friends at CNN and CNNMoney! Thanks CNN Teams!

Government driven changes to the home financing markets continue to roll out, and we couldn’t be happier. Home owners can now refinance up to 125% of their home values. Fantastic news for owners underwater due to the huge market shifts we’ve seen since 2006.

Don’t let these rates pass you buy. Although they are no longer in the 4%s, we are still getting great rates in the 5%s. Those of you with adjustable or very bad 2nds can now take advantage of locking into the new lower rates even if we couldn’t help you just a month ago!

If you need help with a re-fi, CALL! You can start with Jim at 916.801.3940.

The full article from CNN is below:


NEW YORK (CNNMoney.com) -- The Obama administration is widening its mortgage refinancing program to allow more borrowers hit hard by falling home prices to take part.

Borrowers whose loans are now worth up to 125% of their home's value are now eligible to refinance their homes under the Obama foreclosure prevention plan announced in February. Previously, the limit was 105%.

"The president's Making Home Affordable plan is already helping far more than any previous foreclosure initiative and with today's announcement we will extend its reach still further," said Donovan.

How many more people will be drawn to the program now, however, remains a question, especially since mortgage rates are on the rise. Administration officials do not have an estimate.

Refinancings Slow to Ramp Up (don't be one of these owners and miss the opportunity!)

Some 20,000 loans have been refinanced so far, according to the Treasury Department.
The initiative waives the requirement that homeowners have at least 20% equity in their home, allowing them to take advantage of today's lower rates. Homeowners must still meet other criteria, including being current on their payments and having loans that are owned or backed by Fannie Mae or Freddie Mac. The administration has set up a Web site, www.makinghomeaffordable.gov, with more information.

Wednesday's expansion means those with homes worth $200,000 and mortgages as large as $250,000 can still qualify. Previously, these borrowers could not have loans exceeding $210,000.

The program, however, has been slow to ramp up. Borrowers have complained that banks are not approving their applications. The Mortgage Bankers Association last week slashed its 2009 forecast of originations because fewer refinancings were being done than they originally expected. The group said only 13,000 were done in the three months after the plan's launch

The administration has projected that 4 million to 5 million mortgage borrowers would be helped. A Treasury official Tuesday said that the figure applied to those who would be eligible, not necessarily those who would participate.

Administration officials do not have an updated figure of how many people would be eligible or participate now that the criteria has been widened.

The recent uptick in mortgage prices has blunted the plan's benefit, as well. The Federal Reserve has been buying mortgage-backed securities and long-term Treasurys in an effort to lower rates.

It worked for a while. Rates hit a low of 4.84% on April 28, but are now at 5.45%, according to HSH Associates.

Since mortgage rates have been in the 6% range in recent years, refinancing to the mid-5% range may not be worth it, said Keith Gumbinger, vice president at HSH Associates. A homeowner with a $200,000 mortgage at 6% would see a savings of about $64 a month if he refinanced at 5.5%, and that's before closing costs.
"Are interest rates low enough to warrant getting into the process?" he said.
The administration's announcement comes on the same day as an industry group reported that the demand for refinancing dropped 30% last week. In addition to higher rates, rising unemployment is contributing to the decline.

Borrowers with Freddie Mac loans who refinance through their current servicer can apply right away, but those who want to go through a different lender must wait until Oct. 1. Those with Fannie Mae mortgages must use their current lenders and wait until Sept. 1.

A second part of the program lets eligible borrowers who are in default -- or at risk -- lower their monthly payments to no more than 31% of their pre-tax income. This can help those who are not making as much at their jobs or who have monthly payments they can't handle. Homeowners, servicers and mortgage investors can receive incentives to entice them to participate in the program.

Banks have extended more than 200,000 trial modification offers, according to the Treasury Department. Homeowners must make three monthly payments on time before the modification is made permanent.


Call to start the re-fi process now!

- Jim

www.GoodCreditGreatLoan.com

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

How Quick Can We Sell? How About 3 Offers in 10 Hours?

Hello Neighbors,

WOW.

You use this site to keep up on the latest market activities. No spin, just good solid data.

Here is an example of how insane the markets are right now, from one of our own listings (in Marysville, CA).

We listed a house in Marysville for $79,800 at 11:00pm on Saturday the 20th. Within 10 hours, we had 3 written offers. We had more verbally promised offers, but those don't count (unless we see it in writing, it doesn’t exist).

Amazing market conditions if you are selling - and IF you are at the right price point.

Before going into escrow (roughly 7 days after listing) we had 13 very solid offers. Some were all cash. Most were above list price. 13 written offers.

Why?

Competition in the entry-level housing markets is incredible. Foreclosures continue to dry up. Short Sales continue to take forever - although some lenders are getting better.

Now What?

If you are a family and need to sell - we can get it done for you, and quickly AS LONG AS YOU PRICE ACCORDINGLY and you are in the "entry-level" price points. If you are at the very top of the high end market segments... we may not be able to sell. Those purchase dollars are still missing in action. Sorry Jan and Dave!

Wild times indeed.

- Jim

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

www.NeighborlyFinancial.blogspot.com

Join Us in Insider Pages!

Hello Neighbors,

If you need a hand, this site will show you a map of our main office.





Enjoy!

- Jim

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

www.CashOutoftheBayArea.com

www.TheBestRealEstateWebSiteEver.com

New Foreclosure Laws Take Effect in California Today

Hello Neighbors,

The real estate market continues to shift, with the help of legislation.

This just in from our friends at the Sac Bee (thank you Sacramento Bee)!

Foreclosure rates are going to continue to be low. GREAT for the homeowner! TOUGH for the first time Buyer who is still trying to get their hands on a bank owned property.

We have seen this in action on a daily basis. Here is today's example: I called on a listing today for a client on an Orangevale house that is on a probate sale. List price is $159,000. Surprisingly, the listing agent called me back! In MLS it says “no showings until June 16th” I called to get the OK to show tomorrow, and she told me she had 4 offers already – all above list price, sight unseen. WOW. But expected. That's the way the market is running right for first time Buyers. The competition is tough. It requires "clean offers" and QUICK action if you want to be a part.

Here's the article from the Sac Bee:

By Jim Wasserman
Published: Saturday, Jun. 13, 2009 - 12:00 am | Page 6B

After a severe economic storm of more than 365,000 California foreclosures since early 2007, the state's long-awaited 90-day foreclosure moratorium law goes into effect Monday.

But it doesn't mean foreclosures will stop.

Supporters acknowledge the state is likely to see thousands more foreclosures before the crisis subsides. The law, indeed, goes into effect as lenders are ramping up repossessions following expiration of earlier moratoriums, according to housing trackers.

But the California Foreclosure Prevention Act, passed as Assembly Bill X2 7 by lawmakers in February and signed by Gov. Arnold Schwarzenegger, raises a new hurdle in the foreclosure process.

Backers say it will make lenders try harder to keep borrowers in homes. Starting Monday, loan servicers must prove to the state they have comprehensive loan modification programs in place – or be denied rights to foreclose on their own schedules.

"You have voluntary programs that they don't have to do," said Assemblyman Ted Lieu, a Torrance Democrat who was the author of the bill. "This creates an enforcement mechanism to force them to do it. The hammer is the 90-day foreclosure moratorium, which they all hate."

The law will largely press lenders to follow the Obama administration's Making Home Affordable Program that began in March. That encourages lenders to cut interest rates or rewrite loans to 40-year terms to get payments below 38 percent of a borrower's monthly income. Other options include reducing principal and tacking missed payments to the back of the loan. Under the law, California officials also can encourage short sales or deeds in lieu – options in which banks accept less than owed – for borrowers who want to leave or don't qualify for modifications.
"The vast majority of large servicers should have no trouble complying. They have already complied with similar requirements at the federal level," said Dustin Hobbs, spokesman for the California Mortgage Bankers Association.

As the nation's first statewide moratorium law of its kind, according to Lieu, hopes are it will "slow down the rate of foreclosures."

"For some people there's not much that can be done," said the lawmaker. "But there are a fair number of people on the bubble … if they can get some assistance, they can stay in their home."

California Department of Corporations spokesman Mark Leyes said the state can't force or guarantee loan modifications. But the law is rooted in another state power that gives it leverage with lenders.

"What we do have control over is the legal process by which foreclosure is executed in this state," he said. Hence, adding 90 days to the process for those that don't comply.

Lieu said, "Not all banks are doing it at the same level. Some have good (modification efforts), some have bad ones and some have none."

Lenders have received widespread criticism for being overwhelmed by the foreclosure crisis and slow to rewrite loans despite receiving billions of dollars in federal assistance. Borrowers and nonprofit loan counseling agencies alike have complained of frustrating delays and snafus in the process.

On the front lines of the crisis it's easy to be wary about yet another new law or program.

"We're hopeful it will help, but in reality, time after time these things come out and the results are the same," said Pam Canada, executive director of the nonprofit counseling firm NeighborWorks Homeownership Center of Sacramento.

The new law represents a third evolution of California's response to a housing crisis that has severely damaged the economy and devastated local and state government budgets. In late 2007, Schwarzenegger entered into a voluntary agreement with subprime lenders to modify more loans.

Last summer, he signed Senate Bill 1137, which temporarily slowed banks' foreclosure machinery, making them work harder to contact borrowers and offer alternatives.
But foreclosures, while down in recent months, have continued in hard-hit California, especially in the capital region.

The region suffered almost 4,000 new foreclosures in January, February and March, and another 12,000 households are well behind on payments, according to Bay Area tracker ForeclosureRadar.

In summary, here's what will happen starting Monday:

• Lenders will submit applications to the state outlining their loan modification programs. That gives them a 30-day exemption from a moratorium.

• If the state OKs a lender's program, the firm is permanently exempt from the 90-day delay on foreclosures.

• If the state rejects the program as inadequate, a lender has 30 days to upgrade it and be reconsidered.

Leyes said consumers will be able to see a list of lenders that comply with the state's requirements by mid-July.

Thanks Neighbors (and Sac Bee),

- Jim

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

www.CashOutoftheBayArea.com

www.GoodCreditGreatLoan.com

Scratch Location, Location, Location - it's now PRICE, PRICE, PRICE

Hello Neighbors,

Interesting times.

Houses below the $250,000 price point are absolutely "flying off the shelves".

Property above the $600,000 price point? As "stale" as can be. Those properties are moving at a very, very slow pace. Often times sitting on the market for over a full year.

Why?

We see it every day – offering on homes below the $250,000 price point for several of our families – you MUST take immediate action to compete. We are now offering on homes – sight unseen – within a day or two of the home hitting the market. …and our completion? Doing EXACTLY the same thing. A properly priced home will have a dozen offers on it during the first few days on the market. It’s challenging, but it can be done. Of course, if your offer is complicated – and it is competing against “clean” offers – than you will lose. Do everything you can to structure a clean offer and you will have a shot at getting in a home now.

To validate what we are seeing, we looked to the NAR (National Association of Realtors) economics team for some insight. Take a look (and thank you NAR for the data!)

Record low mortgage interest rates boosted pending home sales for the third consecutive month, with some benefit now from the first-time buyer tax credit, according to the National Association of Realtors®.

The Pending Home Sales Index,1 a forward-looking indicator based on contracts signed in April, rose 6.7 percent to 90.3 from a reading of 84.6 in March, and is 3.2 percent above April 2008 when it was 87.5.

Lawrence Yun, NAR chief economist, said buyers are responding to very favorable market conditions. “Housing affordability conditions have been at historic highs, but now the $8,000 first-time buyer tax credit is beginning to impact the market,” he said. “Since first-time buyers must finalize their purchase by November 30 to get the credit, we expect greater activity in the months ahead, and that should spark more sales by repeat buyers.”

The Pending Home Sales Index in the Northeast shot up 32.6 percent to 78.9 in April and is 0.8 percent above a year ago. In the Midwest the index rose 9.8 percent to 90.4 and is 11.1 percent above April 2008. The index in the South slipped 0.2 percent to 93.0 in April but is 3.5 percent higher than a year ago. In the West the index rose 1.8 percent to 94.8 but is 2.9 percent below April 2008.

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said there are numerous buyer assistance programs around the country. “Some states are offering bridge loans that allow first-time buyers to use the tax credit for downpayment and closing costs, but there are many other local government and nonprofit programs available to buyers, depending on location,” he said.

“Just last week, HUD announced that qualifying buyers can use the tax credit for closing costs on FHA loans, to buy down the interest rate or make a larger downpayment. Buyers who are wondering about their options should contact a Realtor®, who can advise consumers on the housing assistance programs and resources available in a given area.”

NAR’s Housing Affordability Index2 is in record territory. The affordability index rose to 174.8 in April from an upwardly revised 171.9 in March, and was the second highest monthly reading on record after peaking at 176.9 in January of this year. The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income; tracking began in 1970.

A median-income family, earning $60,900, could afford a home costing $296,800 in April with a 20 percent downpayment, assuming 25 percent of gross income is devoted to mortgage principal and interest. Affordability conditions for first-time buyers with the same income and small downpayments are roughly 80 percent of that amount. The affordable price was well above the median existing single-family home price in April, which was $169,800.

Yun cautions that the reporting sample for pending home sales is smaller than that of existing-home sales, so it is subject to greater variability. “In addition, the relationship between contracts on pending home sales and closings on existing-home sales is taking longer than in the past for several reasons,” he said. “Mortgage processing time has increased, it is taking many months to close on those homes requiring short sales with lender approval, and some sales are falling through at the last moment.”

The total number of existing-home sales is expected to improve but with dramatic local market variation in the timing of recovery. “The market has already bottomed in some areas, but this is an unusual housing cycle with some areas improving rapidly while others languish or decline,” Yun said.

Summary?

First time buyers are ruling the marketplace.

Some don’t even care where the home is – they just want to get into something soon before interest rates change too much, or the market takes off again.

Location, Location, Location? While still very important – it seems that “PRICE, PRICE, PRICE” is absolutely ruling the day.

- Jim

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

www.CashOutofCalifornia.com

www.GoodCreditGreatLoan.com

Are Low Mortgage Rates Gone for Good ??

Hello Neighbors,

This article from John Graham, the Neighborly Financial manager:

In light of the recent run-up in mortgage rates, one has to ask if the low rates are gone for good. After all it was hard to imagine rates being at 4.75% for a 30 year fixed loan. At this time, I think these rates are gone. Why? Well, everyone is now seeing the light at the end of the tunnel for the recession. Stocks are up over 25% from the March '09 lows, with confidence growing. People are selling bonds with relatively low yields - moving to higher yielding stocks. As people sell bonds, the interest rates move up.

Add to this all the federal spending that will be pushed into the economy in the coming months. Money that will generally not hit the economy till it's too late. Think of it as giving stimulants to a hyperactive person - not a good outcome....

This is the outcome everyone is worrying about now. How do we keep the economy from getting out of control on the other side - with runaway inflation the primary fear. The main weapon in controlling a runaway economy is interest rates on various financial instruments.

As people sell bonds, and the fed is deciding how high and how fast to raise rates, mortgage rates are the first to suffer. After all the fed had a program to buy mortgage backed securities, to artificially drive these down. Now in light of the changing economic times, they are backing away from this program in the first step to let rates rise.

So.... what does this mean to the average borrower? Get ready for higher rates. If you have not refinanced, and if it makes sense, do it now! Remember, any rate below 6% is still a good rate.

see us at http://www.neighborlyfinancial.com/

- Jim

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

www.GoodCreditGreatLoan.com

Activerain - GREAT Insight for all Real Estate & Loan Needs

Hello Neighbors,

Are you familiar with "Activerain"?

It's a professional networking tool for Real Estate professionals.

It is also A GREAT source of information for the consumer - real estate or financing.

If you would like to check it out, give it a shot:



It's very much like a "LinkedIn" (networking tool for all professional disciplines). A bit like "Facebook" (networking tool for connecting with friends and family).

Good information, updates on market conditions, insight on financing and selling, and access to several hundred thousand real estate professionals around the world.

Enjoy!

- Jim

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

www.CashOutoftheBayArea.com

Neighborly is Twitter-ing (Tweeting) !

Hello Neighbors,

Join us in Twitter now too!

You've been hearing the buzz for months now. We've taken the leap.

Here you go: https://twitter.com/NeighborlyJim

Why?

Another way to keep our neighbors informed.

Enjoy, and happy Twitting, Tweetering, Tweeting,

- Jim

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

www.LoanMod.CashOutoftheBayArea.com

Newest Neighborly Team Member

Hello Neighbors,

It is with great excitement that we announce the newest addition to the Neighborly Realty team roster: Holden Nicole Harris. Born June 4th, 2009. 9 pounds 6 ounces. 21.25 inches long. 10 fingers, 10 toes. Outstanding.

- Jim

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

Loan Modifications - Are They Right for Your Family?

Hello Neighbors,

Is a Loan Modification the right answer for your family?

We've made a new web site available at www.LoanMod.CashOutoftheBayArea.com to help you answer that question.

If you would like, you can also call our toll free 24x7 information line at 1-800-960-0860 and enter extension 1611 and listen to a recorded message.

Many thanks, and let us know how we can help.

- Jim

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

Foreclosure Homes - We Can Help!

Hello Neighbors,

Find us now on the Foreclosure.com Broker Network!



Just another step in getting you connected with the latest opportunities in our markets!

Many thanks!

- Jim

www.NeighborlyRealty.com

www.NeighborlyFinancial.com