www.financialstability.gov  is the Government economic recovery website.

program 1

Home Affordable Refinance-

homeowners whose property has lost value (rules apply- see site details)

Program 2

Home affordable Modification-

borrowers with hardship job loss illness or interest rate reset higher on an ARM- adjustable-rate mortgage

Thanks to info from maura.reynolds@latimes.com and Scott.reckard@latimes.com

Why do I love the internet?  This info will live on and be accessable long after the Thursday March 5th 2009 paper is gone. Also www.assessor.lacounty.gov 213-974-3211

for decline in value reassessment application (prop8)  

Todays message to California Realtors complete m

Feb. 18, 2009

Dear C.A.R. Member,

Earlier today, President Obama unveiled the Homeowner Affordability and Stability Plan, which will offer assistance to as many as 9 million homeowners, while attempting to prevent the destructive impact of foreclosures on families and communities.

The plan contains three main components, and only applies to primary residences. The loans referenced in the plan cannot exceed Freddie Mac/Fannie Mae conforming loan limits.  I¢â‚¬â„¢ve outlined the plan in greater detail below.

The first component is directed toward homeowners suffering from falling housing prices who still have equity in their homes, but no longer have the 20 percent equity needed to refinance.  Under the plan, homeowners who have conforming loans owned or guaranteed by Freddie Mac and Fannie Mae will be allowed to refinance their homes, even if they do not have 20 percent equity left in the house. The U.S. Treasury Dept. estimates that about 5 million homeowners will be helped by this portion of the program.

The second component, known as the Homeowner Stability Initiative, is designed to assist homeowners who are ¢â‚¬Å“underwater¢â‚¬Â on their mortgages. The $75 billion initiative will bring together lenders, servicers, and the government so that all stakeholders share in the cost of the modification.  Primary mortgages would be reduced to monthly payments that do not exceed a 38 percent debt-to-income ratio, with the costs of doing so borne by the lender. The government and lender then would split the costs of further reducing the monthly payments until they were at a 31 percent debt-to income ratio. An important aspect of the initiative is that homeowners do not have to be delinquent to participate.

The Homeowner Stability Initiative also will create incentives for servicers, mortgage holders, and homeowners. Servicers would receive an up-front fee of $1,000 for every eligible modification meeting the initiative¢â‚¬â„¢s guidelines. Guidelines are scheduled to be released by March 4. Mortgage holders will receive an incentive payment of $1,500, and servicers $500, for modifications made on loans that are current but at risk of imminent default.

The final aspect of the Homeowner Stability Initiative is creating clear and consistent guidelines for loan modifications. The Obama Administration plans to work with federal agencies, banking and credit union regulators, and the private sector in order to develop loan modification guidelines that can be implemented across the entire mortgage market. While adoption of the guidelines will be voluntary for the private sector, all financial institutions receiving Financial Stability Plan assistance going forward will be required to implement the loan modification guidelines.

The government estimates that between 3 and 4 million homeowners will benefit from the Homeowner Stability Initiative component of the plan.

The third component of The Homeowner Affordability and Stability Plan is supporting low mortgage rates by strengthening Fannie Mae and Freddie Mac.  The Treasury Dept. plans to increase their Preferred Stock Purchase Agreements with both Fannie Mae and Freddie Mac from its current $100 billion in both entities to $200 billion in each. The Treasury Dept. also will continue to purchase Fannie Mae and Freddie Mac mortgage-back securities in order to help promote stability and liquidity in the marketplace.  Additionally, the Treasury Dept. will increase Fannie Mae and Freddie Mac¢â‚¬â„¢s portfolios by $50 billion, for a total of $900 billion. The Obama Administration will work with Fannie Mae and Freddie Mac to support state housing finance agencies in serving home buyers, such as CalHFA. Funding for this will not come from TARP money but from the Housing and Economic Recovery Act.

While some of the details still are being developed, such as the modification guidelines, the Obama Administration plans on using programs and funding already allocated for The Homeowner Affordability and Stability Plan and will need little legislative approval for programs under the plan.

We¢â‚¬â„¢ll keep you updated on the Homeowner Affordability and Stability Plan as more details and information become available to us.

Sincerely,

James Liptak
2009 President
CALIFORNIA ASSOCIATION OF REALTORS®
 
 

“But what gets people upset ¢â‚¬â€ and rightfully so ¢â‚¬â€ are executives being rewarded for failure, especially when those rewards are subsidized by U.S. taxpayers.”

Top business leaders often receive annual packages worth several million dollars, so a $500,000 compensation cap is striking says Ben Feller of AP Feb 4th 2009

It wont be retroactive -”it would have applied only to executives at five companies that have received so-called exceptional help: Chrysler LLC, General Motors Corp., American International Group Inc., Bank of America Corp. and Citigroup Inc.”

Americans need homes…and our country has plenty of them. If the Gov owns them so be it. They can rent now and sell later. Why not?

They are good. They were amazing week before last. It was like riding in a small boat. The up and down makes me a little seasick. Its also like a car you inch a bit and move ahead of the traffic or get stuck in the red lights over and over. Thats the borrower saga.

Buy now…but what if you lose your job or your spouse does.

Over 1/2 of all the sales were Bank Owned last year in California. Of course you know that if you breathe or know what a white Bronco means.

I think the interest rate is going to bob up and down and your lender needs to snag it right when it drops. Its possible. Also there are all kinds of little things like the floating rate, the one time switch.

I went to Circuit City today. The sign said, they no longer guarantee the lowest price.

That makes sense. I didn’t buy anything. Like a true shopper, the 10% off things did not lure me to buy. It had a twilight zone feeling creeping in. I went to Mervyns the last day and it really was the twilight zone. We bought a garment rack for 15 dollars. (They sell anywhere else for 200.) We didn’t need new and pretty purely industrial.

I have people still try and offer 1/2 of the listing price on a bank owned. It’s not in the cards people!  They will find a buyer who is savvy on buying and they will get the house.

Actually I fell for that and wrote an offer like that only to get educated squarely by the mega listing agent. I learned. I went to Bank owned classes. I paid the price of street smarts too. I am getting my REO Bank Owned Certified status next week.  We do know something everyone doesn’t.  How to handle the Bank owned properties, the open houses, the offer, the escrow and the close. Long Beach, Irvine, Redondo Beach and up to the valley- we have bank trained ready agents hitting the streets with the black and yellow signs…bank owned.

But back to what we don’t know…the hairline trigger of the mystery of the interest rate. I am still impressed by the statement of a Chase agent who said 3 weeks ago..The rate now gives your clients 40K more buying power than the interest of last week. Now thats a deal!

As a professional Realtor I study the market trends, homes and Mortgage information. This is absolutely urgent! Buyers need to know how this will affect the monthly payment on the home they want. The bottom price, the bottom of the market will be the difference in the loan package. If you are shopping above 629K then this info is critical to your purchase power.
We pay the top coaches just like every athlete in any major sport. Realtors who are serious about staying on top of the market, the industry are still getting coached. This article came to me from my Tom Ferry coaching group.
Author is ….Keith K AKadu LIC # 510-LO-31808

“Breaking NEWS!!!

First AGENCY JUMBO LOANS, drop dead funding date is December 15th.
What does this mean if your client has a loan above $417,000 to $567,500 get them closed before the 15th.
Why? The stimulus package comes to an end until the Obama’s financial advisors come up with a new plan.

Last big change in underwriting guidelines! Debt to Income ratios have been pulled back to 45% as a standard no matter what the computer system says. This is in full force December 15th.

How does this affect you and your clients. If you client who has a loan not funded after December 15th and was computer approved with a debt to income ratio above 45% stands the chance of having their loan declined. This is very important to protect your listings!!!!! Ask for updated approvals if your closing date is beyond the 15th. THIS IS A FANNIE AND FREDDIE RULING! Don’t let a uniformed loan officer tell you otherwise. Unless they are going to guarantee funding from their own pocket book!

I have also attached the National Matrix which reflects the new loan conforming loan limits in 2009, some areas have been increased so search for your state and county to make sure.

This is very very important to understand to protect seller and buyers!!!! ”

The awakening of the first time buyer has been cautious. There was a surge in April and early this month in home buying. The misleading fact of 1/2 of all sales have been REO or bank owned in our state is one thing but the south bay beach areas have few bank owned properties. The slowdown and lending crunch has affected prices. We have higher inventory and it takes longer to sell properties and there are price reductions that have to be factored in. The other BIG and GOOD factor is that these homes are a short drive to the beach. The glorious Pacific Ocean! This week we toured a new Bank Owned listing on Perkins in North Redondo Beach. We were excited that it was under 700K. Every agent that went on our agent thought it was a great deal. The interesting thing is that some of the listings have had to price accordingly. The new listing coming up down the street that is similar is in top condition, it is also in a block that has a preferred school district for higher performing student test scores. It will be priced slightly more than the bank owned for those 2 reasons. This is actually why some people are buying the other homes sometimes before the bank owned ones. Investors and out of the country buyers are out buying more than one property at a time. They LOVE LA! Canada, Korea, and Japan, residents, that I have met are visiting and buying.
I have a listing in Torrance with value built in of over 80K in upgrades. The electrical, plumbing, new windows and roof make it more desirable than a similar home without those updates. The sharp first time home buyer today is educated in real estate values and prices. They shop the internet and visit open houses.They don’t have to be told to get a lender although they may need to get an update from the lender they have on a regular basis. The rates are still fantastic.

Jitters…first time home buyers and that magic word…Confidence!

The US Government is the headless horseman in charge of home ownership.

Did you ever jump rope at school? The 2 people holding the rope swing it around and around and you jump in. It takes practice. The first few times you get hit by the rope.
You watch others and it looks so easy. They show you that it is possible. But you think, how do I learn to do this without really hurting myself and embarrassment?

All this is to say -the neophyte is aware of the danger. The jitters of the bridegroom! It takes a lot of partying to slip on the collar…married.

Is the Realtor your party planner? “Trust us” and the purchase will work smoothly. The lender walks the bride down the aisle. A technical give away but we own your DNA. Escrow and Title are the legal entity – preacher – judge- just tying the knot! Feeling confident?

Is using a full service Realtor like going to the best schools, being in the best places, meeting the best people? Is using the discount company like going to Vegas- getting drunk and finding yourself married? It was so quick, you saved 2000 dollars but you felt it was not that special planned wedding, with the photo album and all the lovely memories.

Then, there is the investor. The guy who has been around a few times. This one only wants a good deal. He or she wants the house, that has been around. How long has it been on the market? Give me the old gal over there in the corner- she looks like some good bones! Yep- she is bank owned now, way past the short sale. Nobody wants her on the books anymore. The investor takes and rents it out. Where is the love?

What in the world is going to happen to the good old days? Those days when the plantation was humming along smoothly. The slaves worked for food and the landowner -was, is currently the USA. Financial crisis, world power, POWER = energy, influence whatever, is making some corrections. The Global war-ning. We are all working for food. Getting back to basics, leaving baby formula, leaving beef, leaving lead based paint, leaving carbon fuels, leaving DDT.

Remember the line in Joni Mitchell’s song..Give me spots on my apples…and they put up a parking lot!

Jitters…first time home buyers and that magic word…Confidence!

Todays financial headline on FED gets it….

 Toss away the LA times and read the real information here….plus the political

 http://www.inman.com/buyers-sellers/columnists/loubarnes/fed-gets-it-credit-crisis-trumps-inflation

They do. Worth your time: http://www.federalreserve.gov/, the minutes of the Aug. 5 meeting. Unusually short, clear and grim, two things stand out: They get the risk of credit-default spiral (shrinking credit, more defaults, less credit …), and that risk is greater than inflation. The FDIC sure as hell gets it, staring at a bank/collateral spiral.

1. Fannie Mae and Freddie Mac raised limits “late” in the game and the sub-prime could not have done the damage it did had they entered sooner..some say…what about you?

2.Is it good to refinance now and lower the cost of your mortgage?400Thousand have been helped

3. If you have a high debt to income ratio will that hurt or help? The government ways if it helps you then you have to share in the profit with the gov when you resell it.

3. First time home buyer tax credit of 7500? NO-It is a zero % loan and it has to be paid back.

4.Immediate new deductions on property taxes?

5. Is 2010 or 2111 the year of the pick up for Real Estate?

6. Will there be 10 years of unparalleled growth?

7. Can you get a loan?

8. Is California ahead or behind the curve?

9. Have you found a Realtor on Linkden or Facebook?

big problems. every week we have a mortgage update. More and more people are getting their  Helocs frozen- closed without any letter, call, email- zip-o-la nada…

Thats bad…but how about this…

the automatic payment you think you are making to that HELOC is also nada zip and your credit is melting faster than ice-cream at the beach. The agent in our office today had many stories about clients, family and even their own story. You have to have a nice chunk of equity to keep your Heloc or get it back when frozen. some people said 40%. One agent wrote checks out of her HELOC to stage a property, only to find out she had to cover the checks right then because the account is closed. No more credit card float.

It was nice while it lasted. It helped so many people in the swing loan area when they found the dream house and then listed the other house after close of escrow. Lots of homes were improved. In our case we finally got some income property!