Orange County Homes

There a new bill on the hill having to do with bankruptcy court judges to set the terms of your loans, to help you stay in your home, and continue to pay some sort of mortgage. Citi group is the first to get on board with this new bill, and hopes it will encourage those thinking of just going bankrupt, to force them to try loan modification first. There has been a slew of homeowners that would rather walk away from there homes, and that are not even interested in modifying there loans to stay in their home. Some say who can blame them, with most of these homeowners 100k in the red, there figuring it will be a long time before they can get there home value up high enough to just break even. So they figure, why adjust the terms of their loan to stay in a house that has negative equity. What the courts will attempt to do is basically force these homeowners into some type of payment plan that should work for there financial situation instead of being free and clear from the debt. This whole bill has its benefits and burdens. The benefit may be that homeowners will not be able to simply walking away from there obligation, which is destroying local home values. But the burden maybe, two fold. One, can a judge really discern the adequate amount of a repayment structure within a few moments in court, that is both fair to the homeowners & lenders. Plus the impact this will have on the secondary market that buys and sells these financial notes, will they trust that there is inherent value in these notes. Or will these type of loan mods threw bankruptcy court be the second falling of the financial markets. We will have to wait and see.

Has housing finally bottom out! Depends are where your at, here in South Orange County we are starting to level out. We are still seeing reo and short sales, but they are starting to liquidate that inventory. The number of 90 day defaults has fallen, and we believe that's do to more homeowners  trying loan mods, and of coarse those who cant afford to stay in there homes have already foreclosed, or short saled there property. Now we are imply this is happening everywhere, you will still see on the news tells of woe in the housing market. But Orange County is a different market. To start with our local unemployment rate is much lower than any of the surrounding counties, over 48% of homeowners own there home out right is OC, and we have already taken housing prices down to 2002 to 2004 levels, which is close to where this housing bubble began. So if your looking for the bottom, and your reading this blurb, you may have just found it.

Rate are still down, and will probably sit at this range for the first quarter of 2009. There has been a large surge of refi applications through out the month of December. The biggest question on everybodies mind is will the rate drop again. Honestly at this time there is no incentive by the fed to lower the rates lower for rifi's. They are interested in possibly dropping rates for home buyers, to stimulate home sales and sell of the large inventory of REO's and Short Sales. But as far as refinances go, this will most likely be the bottom for 30 year rates. So if you got a little equity left in your home, and are interested in refinancing give us a call today, for those who qualify we have 30 year fixed rate as low as *4.85%, and best of all were local and can even come meet you and go over your options in the comfort of your own home. Call 949-310-1222

Now is a great time to refinance, with 30 fixed rates at all time lows. there are a few thing you need to know to qualify for refi. The 3 C's of refinance are, Credit, Capacity, and Collateral. And the one C that really become hard to come by is collateral. Since house prices have went down, there are people with little to know equity, and unfortunately we find these seem to be the same people that most need to refinance. A good percentage of borrowers that got into short interim loans such as 3/1, 5/1 and neg am loans, are the ones who new higher adjustable rates are coming do. Plus these are also the people that bought within the last 5 years, and anyone who has bought in the area in the last 5 years are most likely to be at or below what they originally paid for there home. So is a problem adding to the current house crisis. Great news is rates are low, banks are letting up on the conditions, and with FHA with lower rates and collateral standards, we just might be able to start lifting ourselves out of the current housing slump.

The is an interesting video about how HUD's bailout plan is failing. Unfortunately, there are only a few options to fix this housing crisis. One, sell all the current short sale and reo inventory. For those homeowners trying to do loan modifications that really don't have the ability to pay their new lower payments, they are simple delaying the inevitable, which is short sale or even foreclosure. Research has shown that 50% of loan modifications go into default within 90 days after being issued. The best thing that can happen is if the banks get more strict with homeowners that do not have the ability to afford their loan modifications, and let them go to short sale, or even foreclosure. The faster we get these homes on the market, the faster we can reduce this type of inventory, which will help home prices rise again. The other solution has already happened, the drop in mortgage rates. Noticeably, in the first quarter of  2009 we saw the first big surge in home purchase, and refinance rates are at a 37 year low. Currently, we are able to offer loans as low as 4.85% on a 30 year fixed. With the rate this low, now is the time to get a great deal on a home and mortgage loan. So, even though it may sound harsh, the best thing some defaulting homeowners can do at this time is to simply let it go short sale and start working on rebuilding their credit right away. The longer we sit around waiting for  another band aid fix to saving homeowners from going into short sale or foreclosure, the longer we're going to suffer with housing crisis.

Mortgage rates fell this week, with the 30-year fixed mortgage sinking to its lowest rate in 37 years as the Federal Reserve cut interest rates to historic lows.

Government-sponsored mortgage lender Freddie Mac (FRE, Fortune 500) said Thursday that fixed rates on 30-year mortgages averaged 5.19% for the week ending Dec. 18. That's down from 5.47% last week and below the year-ago rate of 6.14%.

"Interest rates for 30-year fixed-rate mortgage rates fell for the seventh consecutive week, moving these rates to the lowest since the survey began in April 1971," said Frank Nothaft, Freddie Mac vice president and chief economist.

"The decline was supported by the Federal Reserve announcement on December 16th, when it cut the federal funds target to a record low and stated it stood ready to expand its purchases of mortgage-related assets as conditions warrant."

In a bid to reduce interest rates and to stabilize the housing market, the government in late November announced a plan to buy $500 billion worth of mortgage-backed securities and $100 billion of debt issued by government-sponsored mortgage financiers Fannie Mae (FNM, Fortune 500) and Freddie Mac

The 15-year fixed rate mortgage this week fell to its lowest rate in four and a half years. It averaged 4.92%, down from 5.20% last week. A year ago at this time, a 15-year fixed rate loan averaged 5.79%.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARM) averaged 5.60% this week, down from last week when it averaged 5.82%. At this time a year ago, the 5-year ARM averaged 5.90%.

And the one-year Treasury-indexed ARM averaged 4.94% this week, down from last week when it averaged 5.09%. Last year, the 1-year ARM averaged 5.51%

Here's some potentially good news for investors from the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac.

James Lockhart, who runs the agency, says there's been some "re-thinking" underway on the controversial limits on the numbers of rental properties investors can own if they're seeking new financing. B

Both Fannie Mae and Freddie Mac have imposed a four-unit limit, reversing their previous investor maximum of ten units.

The rationale for the change, according to the agencies, was their belief that investors who own higher numbers of rental condos and houses pose a greater risk of default, foreclosure and loss for the companies.

The restriction effectively shut out many small investors from Fannie's and Freddie's standard programs -- and pushed them into much higher-cost financing from so-called "hard money" lenders.

In a letter to Charles McMillan, president of the National Association of Realtors, Lockhart said, "While no final decisions have been made, I can share with you the fact that the issue of raising the selling guide ceiling on investors loans is under active consideration at one of the (corporations), and reflects an appreciation of the role for investors in the housing recovery."

Realty Times obtained a copy of Lockhart's letter to McMillan, which was intended to respond to issues raised at the Realtors' annual convention in Orlando in November, where Lockhart spoke to two sessions. Lockhart did not disclose which company may soften its rule, but when one changes its standards, the other typically follows suit.

Lockhart addressed another issue of concern to investors and other buyers of condo units: The negative impacts of growing numbers of foreclosed units and bank-owned REO in condo projects.

Under current rules, Fannie and Freddie generally avoid loans in condominium developments where less than 51 percent of the units are owner-occupied. The problem is that both companies define REO and foreclosed units as non-owner-occupied, even though they are temporarily vacant and not owned by investors.

Lockhart said in his letter that "at least one" of the two corporations -- either Fannie or Freddie -- "is considering a clarification of the 51 percent (rule) that would exclude REO units from being counted as investor units … in the owner-occupancy ratio."

Lockhart offered no timetables for either of these key potential policy improvements, but investors may well see one or both changes within weeks.

At the very least, it's good news that the top executive regulating Fannie and Freddie recognizes the significant roles investors can play in helping the industry dig out of the current mortgage mess.

The number of American homeowners dragged into the housing crisis fell last month to the lowest level since June as new state laws lengthened the foreclosure process, RealtyTrac reported Thursday.

"We're going to have a pretty significant spike in January," said Rick Sharga, RealtyTrac's vice president for marketing. Plus, as job losses mount, "increases in foreclosure activity follow that pretty directly," he added.

Nationwide, more than 259,000 homes received at least one foreclosure-related notice in November, down 7 percent from October, but 28 percent higher than a year ago, RealtyTrac said.

The report comes as Democrats, including President-elect Barack Obama, insist that the government must use some of the bailout funds to halt rising foreclosures.

Last week, the Mortgage Bankers Association reported that a record one in 10 American homeowners with a mortgage was either at least one month behind on their payments or in foreclosure at the end of September.

RealtyTrac monitors default notices, auction sale notices and bank repossessions. More than 78,000 properties were repossessed by lenders last month, said the Irvine, Calif.-based company.

The worst recession in decades, falling home values and stricter lending standards have ensnared millions of U.S. households. The Federal Reserve predicts that new foreclosures this year will reach about 2.25 million, more than double pre-crisis levels.

In RealtyTrac's report, Nevada, Florida and Arizona had the nation's top foreclosure rates. In Nevada, one in every 76 homes received a foreclosure filing last month. Florida saw one in every 173 properties receive a foreclosure filing, and in Arizona it was one in every 198 homes. Rounding out the top 10 were California, Michigan, Georgia, Ohio, Colorado, Utah and Idaho.

Among metro areas, the Cape Coral-Fort Myers area in Florida was first, with one in every 59 housing units receiving a foreclosure filing. It was followed by Las Vegas, and the California cities of Merced, Modesto and Stockton.

Mortgage rates fell again this week, following the government's efforts to assist the troubled housing market.

Government sponsored mortgage lender Freddie Mac said Thursday that fixed rates on 30-year mortgages averaged 5.47% for the week ending Dec. 11. That's down from 5.53% last week and well below 6.11%, which is where the rate stood at this time last year.

Mortgage rates began to fall after November 25th, when the administration announced that it would pump another $800 billion into the credit markets to unfreeze consumer and mortgage lending.

Specifically, mortgage rates responded to the Federal Reserve's announcement that it would purchase up to $500 billion in mortgage backed securities backed by Fannie Mae, Freddie Mac and Ginnie Mae. It will also buy another $100 billion in direct debt issued by those firms.

Rates dipped to 5.77% on a 30-year, fixed rate loan the day after the government's announcement, down from the previous Monday's 6.06% average, according to Keith Gumbinger, vice president of HSH Associates. And the downward trend has persisted.

"What we're seeing is a slight continued decline influenced by the Federal Reserve's announcement to buy half a trillion in mortgage backed securities," Gumbinger said. "And this continued minor downdraft is also due to the poor economic climate."

The 30-year rate has not been this low since March 25th, 2004 when it averaged 5.40%.

"Following the release of the November employment report, which showed the largest monthly decline in jobs since December 1974, bond yields fell slightly this week allowing fixed-rate mortgage rates room to ease back a little further," said Frank Nothaft, Freddie Mac vice president and chief economist, in a release on Thursday.

The 15-year fixed rate mortgage this week averaged 5.20%, which is down from 5.33% last week. A year ago at this time, a 15-year fixed rate loan averaged 5.78%.

The 15-year rate has not been this low since February 7, 2008, when it averaged 5.15%.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.82% this week, up from last week when it averaged 5.77%. At this time a year ago, the 5-year ARM averaged 5.89%.

And the one-year Treasury-indexed ARM averaged 5.09% this week, up from last week when it averaged 5.02%. Last year, the 1-year ARM averaged 5.50 percent.

"The housing market still hangs in the balance," Nothaft said in a release. "On a year-over-year basis, after rising in both August and September, pending existing home sales fell 1.0% in October, based on figures from the National Association of Realtors. Meanwhile, conventional mortgage applications for home purchases over the week ending December 5th were up 2.0% from four weeks prior, but were still 51% below the same period last year, according to the Mortgage Bankers Association."

Recent data suggests that many borrowers who received help with mortgage modifications earlier this year tended to re-default on their payments, a top U.S. banking regulator said on Monday.

"The results, I confess, were somewhat surprising, and not in a good way," said John Dugan, head of the U.S. Office of the Comptroller of the Currency, in prepared remarks for a U.S. housing forum.

"Put simply, it shows that over half of mortgage modifications seemed not to be working after six months," he said.

Dugan said based on data collected from some of the biggest U.S. institutions, like Bank of America, Citibank and JPMorgan Chase, home foreclosure starts fell 2.6 percent in the three months ended in September.

However, data which is to be issued by the OCC and the Office of Thrift Supervision (OTS) next week could throw cold water on a push by some U.S. policymakers for loan modifications as the key remedy for the ailing U.S. financial and economic crisis.

Dugan said recent data showed that after three months, nearly 36 percent of borrowers who received restructured mortgages in the first quarter re-defaulted.

The rate of re-default jumped to about 53 percent after six months and 58 percent after eight months, Dugan said, without providing an explanation for the trend.

Regulators speaking at an OTS-housing forum did not provide any explanations for the causes behind the data.

"We don't know the answers yet, but these are the types of questions that we have begun asking our servicers in detail," Dugan said.

Sheila Bair, chairman of the Federal Deposit Insurance Corp, who has been pushing for fast and systematic loan modifications, said regulators need to examine re-default data more closely.

"I think it's very important to look at this data carefully and know what it says and what it doesn't say," Bair said.

Dugan said the third-quarter report will show many of the same disturbing trends as other recent mortgage reports, as credit quality continued to decline across the board and delinquencies rose for subprime, alt-A and prime mortgages.

He said the report will also show that the greatest delinquencies were in prime mortgages.

Despite a meltdown in financial markets, a credit freeze and soaring unemployment, housing markets fared better than expected in October.

Pending home sales fell just 1% year over year according to a report out today from the National Association of Realtors (NAR), and were down 0.7% from September. Analysts surveyed by Briefing.com had expected pending sales to slip by 3.6% year over year, and by 3% from September.

The condition of the housing market varies considerably around the country, according to NAR.

Many of the one-time bubble markets in Florida and California are now showing substantial sale gains from their depressed levels over the past couple of years. Sharp price declines in these markets have attracted bargain hunting buyers.

"Despite the turmoil in the economy, the overall level of pending home sales has been remarkably stable over the past year, holding in a generally narrow range (of about 5 million in annualized sales)," said Lawrence Yun, chief economist for NAR.

"We did see a spike in August when mortgage conditions temporarily improved, which underscores two things - there is a pent-up demand, and access to safe, affordable mortgages will bring more buyers into the market," he said.

The flat home sales report was unexpected good news, according to real estate analyst Pat Newport of HIS Global Insight.

"I was expecting big drops - 5% to 7% - because of the credit crunch," he said. "[The better report] was probably because of what's happening in the West where there are a lot of distressed sales."

Distressed sales include sales of foreclosed properties as well as short sales, which is when troubled mortgage borrowers sell their homes for less than what they owe on their mortgage, with lender approval.

NAR found that sales in the West climbed 17.4% in October, compared with a year ago. Northeast sales plunged 14.1% year-over-year; Midwest sales dropped 6.8%; and sales in the South inched down 2.9%.

Yun is forecasting a very slow housing market recovery. He expects sales of existing homes to total about 4.96 million this year, and then increase to 5.19 million in 2009 and 5.55 million in 2010. He said new home sales will be 486,000 this year, but will fall in 2009 to 393,000 and then rebound in 2010 to 446,000.

Current economic trends are worrisome, according to Yun. He's forecasting a rise in unemployment to more than 8% by the first quarter of 2009, and expects to see a contraction in the gross domestic product of 5.2% in the current quarter compared with a year ago.