16% of all buyers change their mind from the time they sign the contract to the time they open escrow. Never before has there been such buyer’s remorse. I believe that this is a direct result of the people they know, like and trust, influencing them based on stories they know or believe to be true. We all know someone that has been affected by our recent shift in the real estate market, and it’s easy for someone to have an opinion on whether or not it may be a good or bad time for someone to purchase a home.

11% of all properties fall out of escrow due to low appraisals. There is no doubt that the market continues to place downward pressure on pricing, and the fact that we have these appraisal issues supports that fact. A lot of these appraisal issues may be corrected in time… Many of today’s appraisal’s come in low because the contract price that was agreed upon was 3, 4 or even 6 or more months back. Now that the Lender has approved the short sale, value is no longer there. As the lenders continue to become more organized and systematized, they continue to speed up the short sale process. As the short sale process continues to speed up, we should see less of these appraisal problems.

Bottom line… now more than ever, you need to work with a real estate professional that understands the market, has a deep understanding of value, and one that is intimately familiar with what to expect during the process.

Please feel comfortable giving me a call or sending me an email should you have any questions or simply wish to discuss this further.

Any questions on what the right improvements in your home may be… simply give me a call and I will happily meet with you, make some cost saving suggestions, and introduce you to the professionals that can get it done right, and a great value to you. Talk to you soon…

By Jim Puzzanghera and Alejandro Lazo, Los Angeles Times -March 30, 2011
Reporting from Washington and Los Angeles—

Major banks may be forced to let severely delinquent homeowners sell their houses for less than the loan amounts owed as part of a broad settlement of federal and state investigations into botched foreclosure paperwork, according to government officials involved in the negotiations.

The requirement to allow so-called short sales would be in addition to forcing mortgage servicers to reduce the amount some homeowners owe on their loans, said two officials, who spoke on the condition of anonymity because negotiations are ongoing.

The goal of short sales would be twofold: provide a quicker and more economical way for banks to dispose of distressed real estate and to help stabilize the real estate market by clearing out a backlog of defaulted mortgages that are poised for foreclosure.

They would be used in situations in which borrowers were so underwater that the more costly and time-consuming process of foreclosure would seem to be the only option.

Read the full article here

High residential vacancies are killing many housing markets, as foreclosed homes sit on the market and depress sale prices and property values.

The national vacancy rate at 11.4% according to a release Tuesday from the Census Bureau.

“Vacant homes equal more downward pressure on home prices,” said Brad Hunter, chief economist for Metrostudy, a real estate information provider.

Maine had the highest proportion of empty housing stock, at 22.8%. Other states with gluts of empty houses included Vermont (20.5%), Florida (17.5%), Arizona (16.3%) and Alaska (15.9%).

The way the census calculates the vacancy rates, however, is problematic. It includes properties such as ski lodges, beach houses and pied-à-terres that many real estate statisticians would not.

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These are often summer homes or second homes, but census lumps them together with homes that have been sold but not occupied, empty homes for sale or rent, and homes used by migrant workers. Basically, anything other than a primary residence is considered vacant.

“You can only live in one home,” said William Chapin of the Census Bureau’s Housing Statistics Branch. “If you own five homes that you occasionally live in, four of them will be counted as vacant.”

But Paul Bishop, the vice president for research for the National Association of Realtors, countered that these properties aren’t vacant in the usual sense of the term. “A vacation home is hardly the same situation as a foreclosed home that has been taken back by the bank,” he said.

Read the full article here

Last fall, Gretchen Steinmiller Torres and her husband, Dustin, bought their first place, a $204,000, four-bedroom, 2½-bath house in the suburbs of Columbus, Ohio — even though they didn’t have immediate plans to use much of the space.

“We have a baby room in our house with no baby,” says Ms. Torres, 29 years old, adding that the newly constructed home is in a good school district. Now they just have to grow into it.

Forget the starter home.

With housing prices stagnant and still falling in many parts of the country, and interest rates still relatively low, younger first-time buyers are finding that they can afford more house than they would have a few years ago. And they don’t have the complication of having to unload an existing home that also has dropped in value before they can buy a new one.

But the current market also presents some challenges for younger buyers. Many lenders are requiring higher credit scores and larger down payments. Mortgages insured by the Federal Housing Administration, a popular option for first-time buyers, are getting higher fees. And buyers should prepare to stay put for a while since home prices aren’t expected to rebound any time soon.

The median existing-home price was $158,800 in January, down 3.7% from a year earlier and down 24.7% from January 2007, according to the National Association of Realtors.

Read the full article here

Lenders would have to originate mortgages with at least a 20% down payment if they want to repackage the loan to sell to other investors without keeping some of the risk on their books, according to a proposal that U.S. bank regulators endorsed Tuesday.

The Federal Deposit Insurance Corp. board and the Federal Reserve agreed to seek public comment on the proposal, which is intended to restore lending discipline and define the safest form of mortgages that can be completely resold to other investors.

However, the rule is expected to have little near-term effect because not many investors are yet eager to buy repackaged mortgages and because it would not include loans sold to mortgage finance giants Fannie Mae and Freddie Mac.

Last year’s Dodd-Frank financial reform law requires firms that package loans into securities — a practice known as securitization — to keep at least 5% of the credit risk on their books.

Read the full story here

Fixed mortgage rates edged up this week, but even 30-year rates below 5 percent have done little to boost home sales.

Freddie Mac said Thursday the average rate on the 30-year fixed mortgage rose to 4.81 percent from 4.76 percent the previous week. It hit a 40-year low of 4.17 percent in November.

The average rate on the 15-year fixed mortgage increased to 4.04 percent from 3.97 percent. It reached 3.57 percent in November, the lowest level on records dating back to 1991.

Mortgage rates tend to track the yield on the 10-year Treasury note, which rose this week.

Still, low rates haven’t helped the weak housing market. In February, sales of previously occupied homes fell 9.6 percent and new-home sales tumbled to the slowest pace in nearly a half-century.

High unemployment, a record number of foreclosures and tight lending standards have kept people from making purchases. Other would-be buyers are waiting for home prices to bottom out, which most economists predict won’t happen until midyear.

To calculate average mortgage rates, Freddie Mac collects rates from lenders across the country on Monday through Wednesday of each week. Rates often fluctuate significantly, even within a single day.
read the full article here

Nearly one out of every two houses sold in Orange County last month was either a bank-owned home or a “short sale,” the California Association of Realtors reported this week.

“Distressed homes” accounted for a greater share of all existing single-family homes sold in O.C. last month compared to both January and to February 2010.

The state Realtor Group reported:
48% of all existing single-family homes sold in O.C. in February were distressed sales — either because they were homes previously seized by lenders through foreclosure or because they were short sales. (Short sales are homes selling for less than the amount owed on their mortgage.)

That compres to 43% of all sales in January and 42% in February 2010.

Statewide, distressed sales accounted for 56% of all existing single-family home sales. That’s up from 54% in January and 55% in February 2010.

Bank-owned homes accounted for 33% of the homes sold statewide, and short sales accounted for 23%.
For some real estate context …

Read the full article here

In the years since the financial crisis, adjustable-rate mortgages, or ARMs, with their low initial interest rates that changed over time, have been considered riskier than fixed-rate loans and shunned by most buyers. But these days more people are being persuaded to give the loans a try.

This time around, lenders are rolling out more conservative ARM products — without the gimmicky extra-low “teaser” rates that adjust every six months, or the “pick-a-pay” and “option” features that allow borrowers to pay less than the monthly interest, only to be hit with a huge bill down the road.

Those ARMs were hallmarks of the subprime mortgage boom that fueled the soaring rate of mortgage defaults and home foreclosures nationwide.

“An adjustable now is basically a prime product,” said Michael Moskowitz, the president of Equity Now, a lender in New York. “There’s definitely a comeback in their popularity.”Read the full article here

New home sales fell 16.9% in February, to the lowest level since the government began keeping records in 1963, as the reeling housing market failed to generate any momentum.

Sales fell to an annual rate of 250,000 from the revised 301,000 in January, according to the Census Bureau’s monthly report released Wednesday. The rate was down a whopping 28% from the 347,000 of February 2010.

“We’ve been running at a very low level,” said John Canally, an economist with LPL Financial, a Boston-based financial adviser.

The release followed Monday’s downbeat report on existing home sales, which fell 9.6% month-over-month.

“New home sales are even more crucial to the nation’s economy,” said Canally “It’s the new home sales that actually drive economic activity and contribute to GDP.”
Read the full article here