Archive for California Real Estate News
Orange County Foreclosures Drop
Orange County home foreclosures declined significantly this spring, with some economists and home financing analysts speculating that most risky mortgage loans have worked their way through the system and the housing market may bottom by year end. However, home financing advisor and Kelly Media Group founder, Jason Cardiff reminded us that “Orange County was the epic center for option ARM loan also know as 1% negative amortization loans.” Cardiff said in a recent article that “We are not out of the woods until the neg ams and exotic mortgages disappear. Banks seized 42 properties in the second quarter in Santa Ana’s 92701, which had the county’s highest ratio of foreclosures to existing homes at 8 per 1,000. Yet the 42 foreclosures represented a 65 % drop from a year ago. More examples: Buena Park’s 90620 saw foreclosures drop 57 % to 29 homes seized. In Costa Mesa’s 92627 they dropped 37 % to 22, and in Ladera Ranch’s 92694, foreclosures dropped 40 % to 30. Yet experts say government intervention has played a role in the declines. Read the original Jason Cardiff article at > Foreclosures Drop in Orange County
Is the FHA Planning to Penalize Borrowers?
When it was passed last year as part of the FHA reform package, the Hope for Homeowners program was a federal mortgage refinancing plan designed to help some 400,000 people who now have toxic loans. In fact, the program has been a complete bust. As of January 31st, HUD figures show that there have been 465 Hope for Homeowners applications — and not one approval from the government.
Hope for Homeowners has gone nowhere because it’s complex. It requires lenders to take a loss and borrowers to share profits and make big payments to Uncle Sam. While the intention is good, the program is just too complex to succeed.
Now we find an effort to revamp the Hope for Homeowners program and the betting here is that few FHA loans will result.
Under H.R. 1106: The Helping Families Save Their Homes Act of 2009, the program will become MORE restrictive if the legislation passes as it is now written. Huh? How can that help anyone?
Once again, the intention is good but the result is doomed to failure. For instance, the legislation requires that a borrower does not “intentionally defaulted on the existing FHA home loans or mortgages.”
Translation: If you’re stuck in an over-priced house you can’t buy a replacement home and then default on house #1. This seems logical, except that when someone applies to buy that second home they have not yet defaulted on the first house. If default comes at all, it will come later.
Here’s another one: You can’t get a Hope for Homeowners loan if you have “knowingly, or willfully and with actual knowledge, furnished material information known to be false for the purpose of obtaining the eligible mortgage to be insured.”
What’s remarkable about this section is that it ought to apply to all loans. The simple solution here is to require that EVERY home loan applications must be fully documented. That’s the case with FHA mortgage applications and one reason the program is successful. If a borrower can’t come up with some tax returns and proof of employment and income why would you give that person several hundred thousand dollars? It makes no sense.
However, my favorite section goes like this: “BAN ON MILLIONAIRES — The mortgagor shall not have a net worth, as of the date the mortgagor first applies for a mortgage to be insured under the Program under this section, that exceeds $1,000,000.” I’m not making this up. The home financing bill would actually ban financially-strong borrowers from the program. Now — just thinking out loud here — wouldn’t it make sense to get borrowers with a net worth of $1 million or more to participate in the program? You know, folks who might pay their bills and, if they don’t, could be sued by the government for any shortfall?
Read the complete article > Should We Ban Millionaire Borrowers?
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Whether you live in Orange County, California, Broward County, Florida, or Detroit Michigan, there is an opportunity nationwide for homeowners to reduce their expenses by making an effort to lower your property taxes. might be facing exorbitant hikes in property taxes. In one of the more extreme cases, residents of West New York, N.J., are fighting a planned 27% bump in their property tax rates. What gives? Squeezed by foreclosures and falling revenues, many local governments are facing unprecedented budget shortfalls. To fill some of the gap, more municipalities will have to raise property taxes, says Sharon McCabe, associate director of the Graaskamp Center for Real Estate at the University of Wisconsin. While homeowners would have a hard time fighting the local government on such increases (although West New York residents are certainly trying to), there are ways to reduce the impact of the hit. Like most homeowners, your property’s value has most likely fallen off a cliff over the past year. If your assessment is based on a higher valuation from several years ago, it’s probably time to get it reassessed, says Stuart Gabriel, director of the Ziman Center for Real Estate at UCLA. The end result could save you hundreds of dollars a year. However, this move isn’t right for everyone. If you decide to hire a lawyer or property tax consultant to help you, for example, you could lose much of the savings you’d otherwise reap to their fees. Here are a few things to consider before seeking a reassessment: Your Town’s Methodology While some municipalities revalue properties annually, others do so every five years, says McCabe. There’s also wide variation in how towns assess properties. Homeowners should visit their assessor’s office or check their web site for information about when assessments can be done, what period they cover, and how and when homeowners can appeal those decisions. You Can Do It Yourself You may get mailed solicitations from realtors or attorneys offering to help lower your property taxes by filing for a reassessment. But most homeowners can manage the appeal process on their own, says Tara-Nicholle Nelson, a real estate broker. Lawyers and consultants typically charge a percentage of your first year’s tax reduction sometimes as much as 50%. Check for Errors Mistakes on property assessment records often mean homeowners are taxed at higher rates than they should be. The record might say, for instance, that your lot is one acre when it’s three-quarters of an acre, or your house has four bathrooms when it has three. Check Out Similar Home Sales Towns typically make assessments based on market value. But sometimes those figures aren’t very realistic. If you don’t think you can sell your home at the value your town pegs, find out what comparable homes in your area have been selling for, says McCabe. Lower Your Property Tax
Southern California Home Prices Decline 35% but Home Sales Jump 51%
DataQuick reported the dropping prices were driven by sales of foreclosed properties, which comprised 56% of all homes sold in the region. Consequently, the lowest median sales prices were reported in San Bernardino County ($180,000) and Riverside County ($209,000), where foreclosures have been rampant. The Low home sale prices fueled the increase for Southern California homes sold in December to rise almost 51% from the previous year.
