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.

California Short Sales continue to close at a rapid pace, while many home foreclosures have been slowed by the recent trend of loan modification plans.  loan modification companies and distressed homeowners.  In a recent Reuters article, Lisa Baertlein evaluates the significance of recent reports that December home sales in Southern California jumped 50.5 % from the year earlier. The DataQuick report also indicated that the median price fell 34.6 % to $278,000 as homebuyers snapped up foreclosed properties.  Read the original article > Southern California Home Sales up 50% but Most Are Foreclosures

New York and LA to lead US Cities in Job Losses

Only 5 metropolitan areas in the U.S. will escape job losses this year, according to a forecast released Saturday by the U.S. Conference of Mayors.  Many analysts anticipate that New York will be hit hardest as thousands of jobs will be cut as Wall Street firms clean house. Large financial firms are cutting work force as they adjust to loss of cash flow and bad debt. Some banking institutions have gone under, like Lehman Brothers which filed for bankruptcy in September.  While other struggling banks like Indy Mac, WAMU and Wachovia are taken over with buy-outs.

 

The New York marketplace is expected to lose 181,000 jobs in 2009, the report said. Consulting company IHS Global Insight produced the report for the group.  While the greater Los Angeles area is expected to see 164,000 lost jobs, mostly because of the sour housing market that has seen a significant decline in home prices that has tore through the Southern California economy.  After New York and Los Angeles, the Miami area is expected to see the greatest loss, with a decline of 85,000 jobs. Chicago and the surrounding area are next, with losses projected at 80,000.

 

Unemployment is expected to top 10%  in 70 areas, from already hard-hit cities like Detroit and Cleveland to places that had until recently been prosperous like the Riverside-San Bernardino area in California. Other big cities like Denver and St. Louis are expected to see unemployment rise above 9%.  Ithaca, N.Y.; Fairbanks, Alaska; and St. George, Utah, are among the handful of the nation’s 363 metropolitan areas expected to see employment remain flat or increase slightly.  Get the latest news and insight at  

 

Read more articles:  Fed Chief Says Obama Stimulus Could Revive Economy and Housing Markets |  California Home Prices Forecasted to Decline Further in 2009  

Credit Scores Still Vital to Gurantee Lowest Possible Mortgage Rates

In a recent article, the chief economist for LendingTree, Cameron Findlay stated that borrowers need to have a few qualifications met to get the lowest mortgage rates.  First, you’ll need a FICO credit score of 720 or higher, a loan-comparison website.  To avoid surprises, you should obtain your credit score before you apply for a mortgage loan , says Nancy Flint-Budde, a financial planner in Salem, N.Y. Your credit score is based on information in the credit reports compiled by the three main credit bureaus: TransUnion, Equifax and Experian. You can order a free copy of all three of your credit reports once a year at www.annualcreditreport.com. You’ll have to pay extra for your credit score.   Once you have ve received your credit reports, check them for errors that could hurt your score. If your reports show late payments — and the information is accurate — the only way to repair the damage is by showing lenders that you’ve changed your ways, says Craig Watts, spokesman for Fair Isaac, developer of the FICO score. That will take time, because you need to demonstrate a pattern of on-time payments.  However, if your credit reports show large credit card balances, you can raise your score quickly by paying them off, Watts says. Your “credit utilization” ratio, which reflects to the amount you’ve borrowed as a percentage of your available credit, accounts for 30% of your credit score.  Read the complete story by Reporter Sandra Block>

Tony Robbins Date with Destiny Event

Anthony Robbins expressed some thoughts that reveal the source of his motivational drive. Robbins discusses “Why we need to live strong and with passion.” Unleash the Power within is a culmination of the revolutionary tools by Tony Robbins. Whether your focus is on your health, relationships, finances, career or time, now is the time to get a proven system to create a life of your dreams. Robbins recently said that “the strongest force in the human personality is the need to remain consistent with how we define ourselves.”  Tony Robbins provides motivational videos and live events from around the world.  Incredibly intense and unusually intimate, this six-day event is one of only two programs worldwide where you can experience Anthony Robbins live and in person.  If you constantly demand the most from yourself and the people around you and if you refuse to accept good enough and long for access to that peak emotional and physical state where anything and everything is within reach, Date With Destiny is not an option, it’s a must.  Date With Destiny will help define your ultimate purpose and massively accelerate the pace of your success.

                           

What is a Loan Modification?

Turn on the news and you likely hear talk about the government planning foreclosure prevention measures with pressure on lenders to modify loans for struggling homeowners.  What is a Loan Modification? First let’s spell out what a modification means today.  Ten years ago when I was originating loans, we called them note modifications and they were extremely rare.  Today, most people refer to them as a loan modification or mortgage modification, but they are extremely common and probable for distressed homeowners to be approved by most lenders.  A home loan modification, can only become official if the present mortgage lender’s agrees to modify the existing mortgage note.  The loss mitigation department actually creates a legal addendum to your mortgage note that specifies the changes in terms like, interest rate, term and in some cases the outstanding loan principal amount. 

 

With the subprime mortgage meltdown fueling the foreclosure crisis, loan modification has become quite the buzz word.  Loan work outs and mortgage modification programs have been promoted and in some cases sponsored by Government agencies (ie. FDIC loan modification) to for homeownership preservation, but they have introduced some interesting new twists in the home financing maze.  Both government counseling agencies and local community service agencies concede they have been swamped by demand for loan modifications agreements.

Loan modifications have been around for years, but the recent events in our economy and the FDIC endorsement has created a whole new world for loan modification terms.  The media continues to magnify the spotlight on foreclosure prevention options with short sales, forbearance, and bankruptcy. However, homeowners seeking home loan modifications are at the mercy of lenders, because the workouts are voluntary and often without regulatory standards.  Now recent reports indicate that many homeowners are finding it difficult to know when a modification will benefit them and exactly how to qualify for a loss mitigation plan.    Read the

Tips for Mortgage Refinancing

Before starting the time consuming process of a mortgage refinance, take out a piece of paper write down the 3 most important goals you want to accomplish from home refinancing.

Most people will list lower monthly payment, save money, get cash or convert ARM into a fixed interest rate home loan.

o Lower Mortgage Payment

o Save Money for Increased Cash Flow

o Get Cash & Consolidate Revolving Debt

o Convert ARM to a Fixed Rate Term

Rarely do homeowners list things like, stretching the length of the loan term or increase your mortgage debt with a higher outstanding loan balance, but often that’s exactly what some of these borrowers end up accomplishing. Remember to hold true to whatever goals you listed on paper. Make sure the loan officers and processors that you work with are well aware of your refinancing goals and hold them accountable for delivering the mortgage terms that were quoted in the loan disclosures and “good faith estimate.”

Use mortgage refinancing as an opportunity to save money by locking in lower interest rates that are fixed for the duration of the loan term. In most cases you should increase your cash flow simply by reducing the monthly mortgage payments. If you have the option to consolidate credit card debt or adjustable rate credit lines into your mortgage without the “cash-out” feature raising the interest rate, take it.

According to mortgage rate publisher, HSH, savvy applicants should shop mortgage lenders and home loan brokers in an effort to uncover the lowest rates and most significant fees reductions. Take some advice from a former loan officer, interest rates and closing costs can vary significantly, so spend a few hours researching something that could save you thousands of dollars a year by refinancing with the best fitting mortgage program from a lender that provides you cost effective home financing.

In the event that you are turned down from a mortgage company, consider a loan modification. Foreclosure prevention services have turned into a billion dollar business. You can either contact from your existing lender directly or attempt to negotiate a mortgage rate modification yourself or locate a loan modification company that will negotiate with the lender on your behalf. If you chose to hire a mortgage modification company, make sure they have a proven track record with your lender. I strongly recommend only working with attorney backed loan modification companies because attorneys appear to have more leverage and experience negotiating lower mortgage rates and principal reductions. Some loan modification lawyers have had success settling 2^nd mortgages. For example, I have heard of $150,000 second mortgages being settled for $7,000. It sounds unbelievable and unrealistic, but when you consider the other alternative for the borrower is foreclosure and with the mortgage balances significantly exceeding the fair value of the home, the 2^nd mortgage lender would get $0 if the borrower chose the foreclosure or bankruptcy options. Read more helpful articles on 2009 Home Financing Tips. Get alerted when new financing tips are published at

Fed Chief Says Obama Stimulus Could Revive Economy and Housing Markets

Federal Reserve Chairman Ben Bernanke said today that a giant stimulus package continues to be crafted by the team of President-elect Barack Obama that many believe will give the economy the boost it needs, but additional measures must be taken to reinforce the unstable financial system for any recovery to work.  In his news conference, the Fed Chief suggested the government infuse more funds into banking system. He offered options to deal with bad credit mortgages and other poor performing assets held by financial institutions, a problem that has contributed to stagnant mortgage lending.  Again, Bernanke requested government intervention to stem the foreclosure crisis in the wake of a crumbling housing market.

 

The Fed Chief mentioned that the $800 billion recovery plan, a combination of tax cuts and increased government spending is now being massaged by the Obama team and the Democrat-controlled Congress could provide a “significant boost” to the hobbling economy. But he made clear that such a plan must be part of a broader, multi-pronged government response to fight the worst financial and housing crisis the hit the U.S. and the global economy since the Great Depression in the 1930s.  “Fiscal policy can stimulate economic activity, but a sustained recovery will also require a comprehensive plan to stabilize the financial system and restore normal flows of credit,” Bernanke said. “History demonstrates conclusively that a modern economy cannot grow if its financial system is not operating effectively.”

 

To help on that front, the Federal Reserve has agreed to lend billions to finance companies and purchasing some of these companies’ debt to rebuild the credit markets. The US Treasury Department is overseeing a $700 financial bailout program that has pledged to inject $250 billion into banks in return for partial government ownership.   Bernanke said “more capital injections and guarantees may become necessary” to stabilize financial markets and spur more lending. If Obama’s incoming Treasury secretary Timothy Geithner decides to remove toxic assets from financial institutions’ balance sheets — the original but abandoned strategy under the $700 billion bailout — Bernanke suggested some options to do that.

 

Bernanke said he understands this concern, but added: “This disparate treatment, unappealing as it is, appears unavoidable.”  Washington policymakers, Bernanke said, “must therefore do what they can to communicate to their constituencies why financial stabilization is essential for economic recovery and is therefore in the broader public interest.”

 

The Federal Reserve Chief reminded us that more Obama led relief efforts were on the way to stop the home foreclosure mess could strengthen the real estate market if the lenders offer loan modification plans that struggling homeowners can afford.   To soften the landing from the recession, last month the Fed Chief cut key rates to an all-time low of between zero and 0.25%. The Federal Reserve renewed his commitment to keep mortgage rates at that level for some time and pledged to use unconventional tools to jump-start the ailing economy. The central bank led by the Fed Chief will reconvene later this month to assess economic and financial conditions.  Sign up today at

California Home Prices Forecasted to Decline Further in 2009

By admin · January 12, 2009 · Filed in Real Estate Tips, Recent Tips · 1 Comment »

 

In a recent LA Times article, Peter Y. Hong examines the facts that many real estate experts troubled by a 10% drop in median home prices near the end of 2007 were likely astonished by the 35% decline in home values since then.  The only forecasts that may be more shocked what lies ahead? With unemployment rates rising rapidly, more declines in consumer spending and a particularly long and deep recession are expected to batter home prices even further next year, they said.  Director of USC’s Casden Real Estate Economics Forecast Delores A. Conway said “As unemployment keeps rising, demand for housing softens. It will probably get worse before it gets better.”

 

And the ripple effect is pushing rents down, which in turn could put greater pressure on home prices and exacerbate the downward spiral.  Overbuilding in some areas and hard economic times have driven apartment vacancies up, and that is causing rents to stagnate or fall, Conway said.  In downtown Los Angeles, for instance, apartment rents were about the same in the third quarter this year as they were in the same period a year ago, halting the rise in rents in previous years, Conway said. In Hollywood, apartment rents fell 2% in the third quarter compared with a year ago, she said.  Data on single-family home rentals are less complete, but real estate agents in areas with numerous foreclosures say rents for houses are falling as the supply of vacant houses for rent exceeds demand.  Those falling rents could offset any boost to home sales from currently low interest rates and prices, economists said. For those able to qualify for mortgages and willing to buy a home, terms have become quite favorable.  Sign up now and get the latest real estate and finance at  

At the end of November, Southern California’s median home sales price had fallen to $285,000, from $435,000 in November 2007. If median prices were to continue falling at that pace, they would be below $200,000 a year from now.   But even bearish forecasters don’t expect so severe a decline. More likely, prices in Southern California will settle in late 2009 at a level roughly 55% below their peak, said Christopher Thornberg, a Los Angeles economist.  That would amount to a price near $230,000, a level at which home prices would be roughly in line with incomes by historical norms.  The rapid drop in home prices this year has helped to bring previously inflated prices closer to normal levels. About 20% of Los Angeles-area residents could afford to buy a median-priced home at the end of September, according to a National Assn. of Home Builders index. A year before, only 2% could make such a purchase, based on area income levels.   The typical monthly payment for such a home in November would be just over $1,300, according to the real estate information service MDA DataQuick. That’s down from $2,049 a year earlier. Adjusted for inflation, the $1,300 monthly payment would be 37% below the typical payment in 1989, the peak of the previous real estate cycle, DataQuick reported.  Read the original article >