Some Homeowners May Be Helped by New Principal Reduction Plan

Grow a new start

While the number of distressed properties on the market has declined greatly, there are those homeowners who are still suffering through with high mortgage payments.  While the Los Angeles/Southern California home market has risen greatly and lifted many "underwater" mortgages out of the pits, some may still find help in this new loan principal reduction program by the Federal Housing Finance Agency.

Nationwide, this program is expected to help approximately 33,000 borrowers, not a large number overall compared to the housing crisis at its peak, a fact the program's critics like to point out: too little too late.  The unpaid principal balance must be no more than $250,000, borrowers must be 90 days delinquent prior to March 1, 2016, and the loan-to-value must be 115% of fair market value. This program is considered a final effort to avoid foreclosure for borrowers who cannot afford to pay their mortgage.  (Just a reminder: a complete assessment of an applicant's financial status with all documentation to be submitted, will most certainly be required in order to apply and be approved.)

FHFA will be sending out solicitation letters by October 15, 2016.  Requirements are outlined at this link.

For another program, California Housing Finance Agency (CalHFA) offers Keep Your Home California, a program that over 62,000 Californians have qualified for so far.  This program offers four different kinds of assistance, including mortgage principal reduction assistance.   By following their online series of questions, you can find out if you qualify.

California Retrofits for Earthquake May Save A Lot of Grief

Foundation

For 1000 owners living in certain Southern and Northern California zip codes including Los Angeles, Pasadena, South Pasadena, Santa Monica, West Hollywood, and elsewhere, money was available as of January 1 for grants up to $3,000 for earthquake retrofit. 

Although those owners have probably all been selected by now, basic retrofits are not costly overall and can be done by following the idea in the illustrations.  By doing simple bolting and bracing, a lot of damage can be prevented and may even cost less than $3000 depending on who performs the work or the construction issues of the foundation and walls.  Cripple walls are not present in all homes, but if they are, and the house is not bolted to the foundation (pre-1933 homes were not required to be), then a retrofit ought to be of special interest.

Crawl Space view

Since Long Beach is a larger city than Pasadena, and was developed in the same eras, it seems quite an oversight that it was not included in this program.


Earthquake Brace and Bolt, site for the California Residential Mitigation Program, explains more, and also provides FAQs and a search engine for licensed contractors.

Why should this be of so much importance? "California has two-thirds of the nation's earthquake risk. Some 2,000 known faults crisscross the state, producing an average of 102 earthquakes a day – more than 37,000 a year. Certain structures that lack adequate bolting and bracing are more vulnerable to earthquake damage. Older houses are often not bolted to their foundations and lack bracing on the wood framed exterior walls enclosing the crawl space. Houses without adequate bolting and bracing are prone to sliding or toppling off their foundation during an earthquake. This type of serious damage can be prevented with proper seismic retrofit of the crawl space."

What can you expect if you buy a pre-1933 home in Southern California?  You may very well find that no retrofit has been done, and it's not something that is ordinarily asked of the seller during escrow because it's not a "repair".  Such work is usually up to the new owner of the property, and is well worth the expense.   Why didn't the previous owner do that work? That's the topic of another post.

See http://www.latimes.com/local/lanow/la-me-ln-quake-retrofit-grants-expanding-to-more-california-single-family-homes-20151118-story.html

February Home Prices in the Long Beach Area for February 2016

February 2016 Los Angeles County Sales

Why the sluggishness in sales?  The ripple down from the top tier of sales is being felt:  "In markets like Oakland, Portland and Washington, the prices for high-end homes are rapidly rising — the rungs of the ladder are moving further apart — and that makes it harder for people who own mid-tier homes to trade up. And when they get stuck, people who own starter homes have a harder time trading up, too."  http://preview.tinyurl.com/gpdc3lj  San Francisco could easily be mentioned too.

It's always speculated in an election year that sales are affected, but it is more likely due to higher prices and lower affordability overall.  

In Los Angeles County, the median priced home in February, 2016 was $530,000 (up from $457,870 in January, 2016), and condos were at $450,000, (up from $409,000 in January, 2016). However, the February sales volume for each type was less than half of the prior year volume, and well below January sales numbers.

Below are average prices for Cerritos, Long Beach, Lakewood , and Seal Beach single family homes.  The four cities have changed between -1.8% to 14% from January.  Current average price - Long Beach $637,112; Cerritos - $682,431; Lakewood $4501,775; Seal Beach $1,066,938.

Average condominium prices increased only in Long Beach, by 22.8%, and are ranging from $237,666 (Cerritos) to $289,667 (Seal Beach), $292,500 (Lakewood) and $379,522 (Long Beach).

While there is an increase in Long Beach average home price, it has the advantage of offering greater types and prices in the housing market compared to surrounding cities.  Still a good time to buy with lower interest rates!