New Fannie Mae and Freddie Mac Loan Modification Guidelines for July 1, 2013

If you're still an "underwater" homeowner of a single family residence, a condominium, a second

Did you buy when the market was high?

home, or an investment property with a mortgage owned or guaranteed by Fannie Mae or Freddie Mac, you might be eligible for sweeping new changes as of July 1, 2013, known as the "Streamlined Modification Initiative."

Past programs for helping borrowers modify their loans met with less success than hoped for, and Fannie Mae/Freddie Mac are now offering eligible borrowers the opportunity for less documentation and document collection which also removes administrative issues for the lender.  Under this new program, borrowers are not required to document their hardship or financial situations.

This program ends August 1, 2015, so it's basically in effect for 2 years.

What are the borrower eligibility requirements?

• The loan must be owned or guaranteed by Fannie Mae or Freddie Mac.
• Homeowners must be 90 days to 24 months delinquent.
• There must be a first-lien mortgage that is at least 12 months old with a loan-to-value ratio equal to or greater than 80 percent.
• Loans that have been modified at least two times previously are not eligible.
• The borrower must participate in a trial payment plan period of 3 months.

Loan servicers, i.e, Bank of America, Wells Fargo, Chase, or whomever handles your loan payments, will be required to send a Streamlined Modification Solicitation Offer to borrowers who are at least 90 days delinquent and meet the initiative’s eligibility requirements.  The HAMP program (Home Affordable Modification Program) is still available to borrowers, and may offer more favorable payment options to the borrower, however it also requires borrowers to meet certain guidelines and submit full documentation. 

If you are considering selling, and are not yet 90 days delinquent on your loan, you should carefully consider your plan of action.  The proposed monthly payment may or may not be satisfactory to you under this Streamline program, and as a seller, you would ideally have a very clear picture in your mind as to the direction you are going to take.  Borrowers should be aware that "strategic defaulters" will be screened for in advance, so if someone is purposely defaulting in order to obtain this program, Fannie Mae and Freddie Mac will be on the lookout for that.

Interestingly, some property owners are not aware of current selling prices in their local market, so obtaining a good market valuation on your property should be a first priority. If your property is a candidate for a non-short sale transaction, you could move on. If on the other hand, you would rather stay put and not sell if you obtained a better mortgage payment, you should find that out as soon as possible to avoid being an unmotivated seller at this time.

For more details about this program, or to find out if you have a Fannie or Freddie mortgage, please contact me via e-mail or phone, I will welcome the opportunity to help you. I serve the Long Beach, Lakewood, Cerritos, Cypress, Seal Beach, Los Alamitos, and San Pedro areas, including adjacent cities such as Huntington Beach.

In Long Beach, What Can You Buy Under $300,000?

There have been several articles talking about this price range in the last few years since the market downturn.  With both limited inventory, and an increase in the real estate market, there is a declining number of single family homes available under $300,000 in Long Beach, California.  There are 47 listings as of July 1 in this category, in various areas of Long Beach.  One of the best values in this range is really Windward Village, a secure planned unit development (PUD) park which offers open space and recreational facilities. 



Windward Village Home--Click on photo for info 

As of July 1, 2013 (check for any updated information) the home in the photo is listed in the MLS for $239,000, and at the listed 1600 sq. ft. for 2 bedrooms and 2 baths, is an unbelievable value. 

Windward Village homes may qualify for FHA, VA or conventional financing, and because it's a PUD, the new owner owns the land too.  Individual lot sizes vary from 2500 sq. ft to 3800 sq.ft., equal to or more than lot sizes in Belmont Shore.  While older models feature the carport style, newer models offer closed door garage parking.


Community Center

The complex has a 24-hour guard entry where all entrants are checked in by staff; there is a community center for activities and gatherings, an outdoor pool, grassy green areas, outdoor play areas for children, basketball  and tennis courts, car wash center, guest parking, and a putting green. For the unit shown above, the HOA dues are only $188/month.  Contrast that figure to the average condominium HOA fee of $250/month elsewhere in Long Beach, without all the recreational facilities.
Because these are manufactured home purchases, there are some differences from a regular single family home process which are normal to this type of purchase, such as the foundation system. But because it is a PUD and the owner owns their own land, there is absolutely no space rent, a monthly cost of $900 or more per month in similar complexes.

The common areas are very well kept with well-maintained and patrolled asphalt roads, and has the feel of a small single family residential community. It's a great opportunity while prices are still low, and nowhere else in Long Beach can you buy your own private home and have such advantages.

Please contact me about this complex!

Long Beach Summer 2013 Schedule for Concerts in the Park

Stearns Park





Did you know that Long Beach parks rate as the 22nd best among the 50 largest cities in the United States?  Park size and access are among the reasons for such a favorable review.  According to the Trust for Public Land, 78 percent of Long Beach residents live with a 10-minute walk of a park (the national average is 64 percent). Long Beach spends more ($125) than the national average per resident.  The city has more than 3,100 acres for recreation, equivalent to 9.7 percent of the city's 50 square miles.


Stearns Park, one of many LB parks

See below for this summer's Concert in the Park schedule, offered by one of the few cities that has its own municipal band led by Larry Curtis:

Theme: Star Spangled Special
Tuesday, July 2:	Whaley Park
Wednesday, July 3:	Los Cerritos Park
Thursday, July 4:	Marine Stadium
Friday, July 5:	El Dorado Park West
Sounds of Cinema
Tuesday, July 9:	Bluff Park
Wednesday, July 10:	Los Cerritos Park
Thursday, July 11:	Marine Stadium
Friday, July 12:	El Dorado Park West
Cartoon Musical Madness
Tuesday, July 16:	Bluff Park
Wednesday, July 17:	Los Cerritos Park
Thursday, July 18:	Marine Stadium
Friday, July 19:	El Dorado Park West
The Voices
Tuesday, July 23:	Bluff Park
Wednesday, July 24:	Los Cerritos Park
Thursday, July 25:	Marine Stadium
Friday, July 26:	El Dorado Park West
Swing is the Thing
Wednesday, July 31:	Los Cerritos Park
Thursday, August 1:	Marine Stadium
Friday, August 2:	El Dorado Park West

See more at  http://www.longbeach.gov/park/recreation/lb_municipal_band.asp

Checking Your Credit Report is Important for Buying Long Beach Real Estate

According to DS News, 22% of Americans have never checked their credit report, according to Findlaw.com survey conducted in March, with about 1,000 participants.

Unfortunately, there is always potential for errors and negative information to be entered onto your credit report. And even though credit reports and scores as they currently exist came into usage in very recent history, after the economic downturn in the 1990s, they now have a major influence in our lives.

Obtaining a mortgage is one of the best known times when credit scores are reviewed, but also employers check credit scores to evaluate job candidates, insurance companies evaluate prospective insureds, and auto loan makers also pull credit.  I was once in the position of paying all cash for an automobile with a guaranteed check, yet the auto dealer still consulted my credit score online before finalizing the deal to make sure my overall profile fit who I said I was--they didn't want another "buyer" driving a new car off the lot on a phony check, never to be found again.

Protecting your credit, and your credit cards, may take additional work.  You may be at risk if you pay restaurant bills--where you have to give up your card momentarily while it's taken away out of your sight by the waiter for processing--and it's out of your hands.  It's an opportunity for a dishonest person to write down your card account number and use it later.  I rarely ever have had such problems to worry about, but this happened to me recently when I discovered my account number had been used by someone else to establish an account for, guess what, checking their credit at an Equifax site and I was billed a small amount monthly.  It went on for some time before I caught it (another reason to balance your account every month) and fortunately I got my money reimbursed.  But of course I had to cancel that card, write checks for a few days, and wait for a new card to be issued.  It was a time in which I was reminded that this is increasingly a plastic card world.  Writing checks is less common, and in fact there are some circumstances where checks or cash are not accepted and merchants want payment only by your credit card.  So keeping your credit in good shape is so important.

My bank offers a service where I now have credit card alerts sent to my email so that I can spot a problem right away--if you have Smartphone or mobile tablet, you don't have to wait until you get to a desktop computer to check your email or messages. It's working great. 

Here is the entire article at DS News.

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.

Average Selling Price for a House in Long Beach CA in 1Q 2013

For the first quarter of 2013 (January through March) in Long Beach, the MLS shows 503 single family home sales.

The sales price ranged from $98,900 (a 432 sq.ft bank-owned house) in North Long Beach to a sale for $3.8 million for a 3600+ sq.ft house on The Peninsula.  The average selling price in Long Beach for this time period was $443,772 for a 3 bedroom, 1.75 bath house between 1400-1500 sq. ft.  All cash purchases accounted for 122 of the total, or 24% of all houses sold.

• Of these homes, 18 out of the 503 houses sold for over $1,000,000 (a small percentage of all Long Beach houses), or 4%
• There were 364 houses selling under $500,000, or 72% of the total
• There were 265 houses selling under $400,000, or 53% of the total
• There were 121 houses selling between $501,000 and $999,999, or 24% of the total.

In other words, more than half of the selling activity took place at the price range under $400,000, and 88 of those purchases were by all-cash buyers, or 33% of the total number of purchases for houses sold under $400,000.  This means 72%, the vast majority, of the all-cash activity is in the lowest price range for the city. 

This is a paradise for certain sellers, and a big challenge for buyers, especially for the 1st time buyers and/or 2nd home buyers because under $400,000 is their most affordable market.  (And even though Long Beach is very competitive due to its location, some buyers are looking further south in San Diego area for lower prices.)

Cash buyers often attempt to buy at a much lower price, thinking the seller will be thrilled with them because the transaction does not require a lender or an appraisal, but often they come in very low, or much lower than what is attractive to the seller. So those offers don't always work, at least not at first. And are some sellers being unrealistic about their asking price? In some cases, yes, depending on other factors such as condition, upgrades, permitted square footage, and nearby comparables, but that is something to determine on a case-by-case basis.  Overall, the market trends in many Long Beach zip codes is going up by as much as 20% compared to this time last year.

A buyer's best protection is to be totally pre-approved with a solid pre-approval where the lender has not only their income and debt information, but their tax returns have been thoroughly reviewed as well (if possible, submitting to underwriting in advance can give additional assurance for a pre-approval).  I'm amazed at how often I hear from a hopeful property buyer who tells me they know they're well-qualified, "getting a loan will not be a problem."  If it's not a problem, do it now.  Buyers, sellers want to find out what a good loan source has to say about your loan qualifications or that your statement shows you have all the cash ready-- your own personal opinions simply will not carry much weight when you submit an offer. It is essential to accomplish this step PRIOR to looking at properties so that the seller knows qualified buyers are viewing their home. 

Please contact me for an estimate of your buying costs--I can help you with different down payment scenarios to show you what your monthly payment could be.

 

 

 

What Are Some of the California Tenant/Landlord Rules About Pets In HOAs?

If you live in a homeowner association in particular, questions may have come up about the presence (or not) of pets when leasing property:

California passed new pet laws effective in 2000 for homeowner association owners, allowing a minimum of one dog, cat, fish, or bird (simply speaking) per owner.  The homeowner association is allowed to set further rules concerning size, number of pets above one, and other rules including the presence of animals in the common area, or animal behaviors, as long as they don't conflict with state law.

So what does this mean for tenants who are renting in a homeowner association, because the pet laws for owners do not necessarily apply towards tenants, the exception to many of the following rules being if the tenant is disabled and requires a certain service animal under "reasonable accommodation" rules.

• A landlord may ban pets in a lease; the law allowing pets in an HOA concerns owners, not their tenants.
• A landlord can restrict breeds or types of pets.
• A larger deposit may be charged if a pet is allowed, but the total deposit must comply with California's rules about maximum security deposits.
• If allowed in a homeowner association, the pet provisions will apply concerning any rules such as cleaning up pet waste in the common area, being leashed in the common area, or areas where pets may be allowed or prohibited such as pools or other recreation areas.
• If, for example, a dog bites or harms the postal worker who is on the property delivering mail, the dog's owner will be responsible for his/her pet, and the property owner could also have some responsibility depending on the circumstances involved.
• A landlord/tenant lease can require the tenant to obtain renter's insurance to cover pets on the premises.

For more detailed information, please contact me via phone or e-mail to be sent a more detailed summary prepared through California Association of Realtors about landlord/tenant pet laws and how they might affect you, whether you are or will be a landlord, tenant, or someone who may want to know more about service animals in this situation.

Tighter Lending Standards Are Making Home Sales More Difficult

Long Beach housing inventory/end of 2012

Although much is being said about the housing recovery, the fact is that mortgage loans are much tougher to get than in years past.

• It's just recently come out that some lenders are loosening up the requirement for equity (30% or more) for owners wanting to keep their current homes, but then, a lot of property owners just getting into the market didn't know about that rule in the first place.  It's one of the many things making it difficult for people to move on, because even if they otherwise qualify for a new mortgage, their property doesn't. 
• Another issue is FICO scores.  Higher than ever scores are being demanded of the "average" buyer and this has impacted the market to the extent that, per Laurie Maggiano of the U.S. Treasury's Homeowner Preservation Office, between 2007 and 2012, new home purchases dropped 30% for those with a FICO score over 780.  In that same period of time, new home sales dropped 90% for borrowers with a FICO score between 620 and 680. "Where are these folks supposed to live?" asked Maggiano.  (At one time, a FICO score of 700 or higher was considered very good for a borrower.)
• And then again, specific lenders have their own overlay of loan requirements.  Fannie Mae and Freddie Mac may accept FICO credit scores as low as 620, and FHA will approve applications with scores as low as 580, yet investors for the loans may require FICOs at least 60 points