housing market
Is Federal Reserve Chairman Ben Bernanke’s new found embrace of financial re-regulation patently political? It would certainly seem so.
I think the analysis that there wasn’t enough regulation is poppycock. Low interest rates spur real estate investing. It’s a historical fact. Real estate loans increase the money supply. Another historical fact. Increased money supply stimulates inflation, which benefits real estate investing. Historical fact. The reality of the regulation argument is it passes the blame which is a favorite thing for politicians to do. The easy way to prevent this problem is to have a Fed Chairman who isn’t in a politician’s pocket. Nobody in the Fed had the guts to put the brakes on before it blew up. read more…
The Treasury Department released guidelines and forms for its new Home Affordable Foreclosure Alternatives (HAFA) Program which is part of the home Affordable Modification Program (HAMP). HAFA provides incentives in connection with a short sale of a deed-in-lieu of foreclosure used to avoid foreclosure on a loan eligible for modification under the HAMP program HAFA applies to loans not owned or guaranteed by Fannie Mae or Freddie Mac, which will issue their own versions of HAFA in the near future.
HAFA:
- Complements HAMP by providing a viable alternative for borrowers (the current homeowners) who are HAMP eligible but nevertheless unable to keep their home.
- Uses borrower financial and hardship information already collected in connection with consideration of a loan modification.
- Allows borrowers to receive pre-approved short sales terms before listing the property (including the minimum acceptable net proceeds).
- Prohibits the servicers from requiring a reduction in the real estate commission agreed upon in the listing agreement (up to 6 percent)
- Requires borrowers to be fully released from future liability for the first mortgage debt (no cash contribution, promissory note, or deficiency judgment is allowed).
- Use standard processes, documents, and timeframes/deadlines.
- Provides financial incentives: $1,500 for borrower relocation assistance; $1,000 for servicers to cover administrative and processes costs; and up to $1,000 for investors for allowing a total of up to $3,000 in short sale proceeds to be distributed to subordinate lien holders (on a one-for-three matching basis).
The program does not take effect until April 5, 2010, but servicers may implement it before then if they meet certain requirements. The program sunsets on December 31, 2012. For more information visit www.hmpadmin.com. Escondido California real estate
San Diego home values
Stockton California ( San Joaquin County Seat), an inland port city 80 miles east of San Francisco, has had one of the worst foreclosure rates in the nation – for most of the time, the worst.
At the height of the bust, about one in 10 houses fell to foreclosure. Houses that sold for more than $500,000 before the crash now go for $200,000.
home mortgage rules save cash
Federal rules now require mortgage lenders and brokers to give consumers better estimates of the costs they incur when taking out home loans, and mandate a standard three-page Good Faith Estimate that urges consumers to shop around for the best loan and helps them compare lenders’ offerings. The rules, announced by the Department of Housing and Urban Development in November 2008, are an update of the Real Estate Settlement Procedures Act, a 1974 law known as Respa. One difficulty of shopping for mortgages is that the lender with the lowest rates sometimes isn’t offering the best deal. High fees can wipe out the benefits of low rates, and little-noticed features such as prepayment penalties can burn borrowers. read more…
construction spending
The U.S. Dept. of Commerce has reported that construction spending declined 13.2 percent in November 2009 compared with November 2008, and 0.6 percent compared with October 2009. According to this report, residential construction declined 1.6 percent to a seasonally adjusted annual rate of $250.7 billion in November, compared with $254.9 billion in October. Los Angeles California real estate
Sacramento, California
Today Gov. Arnold Schwarzenegger announced that the California budget was 21 BILLION in the red. One would think that with this horrible news, the state would look at ways to reduce or in the very least, cap spending. Maybe I’m just being too logical, because practically in his next breath, Schwarzenegger proposed the adoption of a new home buyer tax credit for California taxpayers.
Last year California had a $8,000 new home buyers credit. Now with a much larger deficit, the Governator has upped the credit to $10,000! read more…
