Update to HAFA Short Sale Program in 2013

The "Home Affordable Foreclosure Alternative" (HAFA) program is a program for distressed homeowners to sell their homes and avoid foreclosure.

This program applies only to participating lenders who agreed to participate in the government's "Home Affordable Modification Program" (HAMP). There are currently about 100 participating lenders, including Chase, Wells Fargo, Bank of America. On February 1, certain rules were changed for these lenders (who are not Freddie Mac, Fannie Mae, or FHA/VA lenders, which are excluded from this post), which simplified some of the steps.

One change now in effect is that the property is no longer required to be owner-occupied, in fact, it may be vacant or tenant-occupied, to be eligible for a HAFA short sale, and the tenant/borrower/non-borrower occupant may qualify for the $3,000 in relocation assistance. Payment to subordinate mortgage lienholders (do you have a 2nd mortgage?) has been increased to a maximum of $8500.

Borrowers are no longer required to successfully complete an initial trial loan period or be eligible for a HAMP loan modification in order to be eligible, and the borrower may apply directly for the HAFA program.

The hardship must be verified by the borrower's lender, with no convictions relating to mortgage fraud or real estate transaction within the past 10 years. A hardship means the borrower must show, among other things, they no longer have sufficient assets to make the mortgage payment (these are  not supposed to include retirement funds).

The current program cutoff date is December 31, 2013 for submission of request for a short sale, or request for approval of an executed sales contract, with conclusion of the transaction by September 30, 2014.

There are specific procedures and forms the borrower must cooperative with during the approval process, which includes about 12 steps including all borrower document submission and lender deadlines. Additional information may be requested depending on the particular loan investor on the borrower's loan.

For a more complete fact sheet on a HAFA short sale, please contact me and I will be happy to e-mail the information, plus links to informational sites.

Renting vs. Buying a Home in California Today

Each region has it's own market, and here are some interesting comparisons around California for buying vs. renting.

A prospective homebuyer needs to think about total costs and expenses of owning a home--these include the principal and interest on the monthly mortgage payment, home insurance, property taxes, home improvements and repairs. Don't forget--tax deductions on mortgage interest and property taxes are among the savings that you will benefit from, plus other tax deductions as allowed in the owner's particular situation. Renters are basically concerned with costs of monthly rent and renter's insurance.

Is owning for everyone? Perhaps not, depending on the individual's desire to maintain a property, long term financial abilities, and short term or long term job relocation factors, and the fact that in some areas, renting may be a lower monthly expense.  But when the long-term view is taken, owning a home offers long-term security and financial return over time.  Whether you rent or own, you're paying for the home, but when you rent, you're buying it for your landlord--is that really what you want?

Today's interest rates are still low, around 3.75% for a conventional loan under $417,000 and even lower  for FHA loans.  In today's buyer's market, we're hearing lots of complaints about buyer competition especially in lower price ranges.  While each local market varies, so far this year, housing inventory is up compared to 2011 and 2012, so buyers need to "hang in there" and not give up, because this is still one of the best cycles in which to become a homeowner!

Do you want a more detailed explanation of your rent vs. buy scenario? Please contact me for a buyer's estimate sheet, and for additional market report information, go to my Market Trends page.

Los Angeles County (South) and North O.C. Tell Interesting Stories Of Prices, Sales and Inventory

The latest market updates for April, 2013, are out for the south Los Angeles County and North Orange County cities--and here is a breakdown of stats for single family homes in local cities (all comparisons are a one-month comparison of April 2013 to April 2012, not on an annual basis):

• Long Beach  -- New listings are up 4% for April 2013; the median sales price has increased 25% to $440,500 (citywide figures); the average sales price is $495,000, an increase of 27%. Listing inventory has decreased by 62.6%, with 1.4 months of inventory at the end of April.
• Cerritos -- New listings are up 25% for April 2013; the median sales price has increased 8% to $573,000 (citywide figures); the average sales price is $615,758, an increase of 14%. Listing inventory has decreased by 78%, with 1 month of inventory at the end of April.
• Lakewood -- New listings are up 8.2% for April 2013; the median sales price has increased 12% to $405,000 (citywide figures); the average sales price is $413,000, an increase of 14%. Listing inventory has decreased by 76%, with .8 months of inventory at the end of April.
• Signal Hill -- New listings are down 42% for April 2013; the median sales price has increased 18% to $594,750 (citywide figures); the average sales price is $529,875, an increase of 8.8%. Listing inventory has decreased by 77%, with 1.8 months of inventory at the end of April.

The general picture is: prices have gone up, and inventory for all properties (houses and condos) is down compared to last year this time, with the lone exception of Avalon (Catalina Island), where inventory is actually up 17% but the median market price is down 33%.   Areas with the greatest increase in median market price tended to be lower priced areas in the past, and are now attracting buyer attention, Bell Gardens and Stanton being two examples.  Los Alamitos (including Rossmoor area) actually decreased by about 6% in median price.  Long Beach stands out at the top of the list of all area cities for the greatest number of closed sales in April at 324 and the most new listings, followed by Irvine at 264 closed sales, then by Anaheim and Huntington Beach.  Of the 68 cities included in the geographic area, only 4 are showing a decrease in median price!

Do you want to know what's going on in your zip code? It's sometimes a different picture than the surrounding city. Get the picture now by giving me a call or e-mailing me, so that you can stay up with your market.