More can afford a home, but lenders remain tight-fisted

Nearly half of all California households can now afford the median-priced home in the state – but that’s no help if they can’t get mortgages.

Making sense of the story

• Six years after the subprime mortgage meltdown, banks remain tight-fisted, even with solid borrowers – a fact they attribute to shifts in government regulation and demands that they buy back bad loans.

• Mortgage credit has not eased much since 2007, according to Federal Reserve surveys of loan officers, even while low rates and the housing recovery have borrowers lined up seeking financing.

• First-time buyers and self-employed borrowers must jump through especially complex hoops. Even gold-plated applicants must justify the smallest quirks in their finances in excruciating detail. And, processing applications can take months.

• Lenders say their cautions stems in part from uncertainty over a tougher new regulatory environment, along with unrelenting demands from government-sponsored mortgage buyers that the banks repurchase soured loans.

• Salaried professionals with credit scores in the high 700s have the best shot at being approved for a mortgage loan in this environment, along with borrowers who have never missed a payment and want to refinance.

• However, even these borrowers may face stiff documentation demands, including having to explain any bank deposit other than a regular paycheck.

Source: L.A. Times March 2013

Homebuyers Growing More Optimistic 2013

February Article

What Should You Aware When Purchasing a Foreclosure Home with Tenants in there?

- Disclosure of Foreclosure to Tenants - 

As of January 1, 2013, property managers and landlords in California are required to disclose in writing to any prospective tenants, if a notice of default has been recorded against the property. The law applies to rentals of single-family homes and apartment buildings of no more than four units.

The disclosure also includes a notice that if a new owner takes ownership of a property following foreclosure, the owner will not be able to evict the tenants without a 90 days written eviction notice, in many cases.


For landlords who violate the disclosure requirement, tenants may be able to void any lease and recover one month’s rent or twice the actual damages—whichever is greater. Tenants may also be able to recover all prepaid rent from the landlord, if the landlord violates the disclosure requirement, according to the new law.

Should the tenant not be notified properly and the property is in escrow, it could delay the closing escrow and issuing title insurance.

If a title company is being asked to insure the sale of the property after a foreclosure, they may require an affidavit from the owner stating, if there are tenants or anyone else in possession of the property.

Source of Information from Cornerstone Title Company - January 2013

Did Housing Price Went Up 33% or Less? Seller Market! Multiple Offers! Price Bidding Wars!

Data from professional sources such as DataQuick shows 33%

over year increase on median price.

http://blog.sfgate.com/stew/2013/01/16/bay-area-home-prices-surge-fastest-pace-in-decades/

This doesn't mean that the price of a particular house has gone up 33%  over the year,

so don't panic.  The median price is sometimes misleading because it shows the mid 

point of all selling price.  If the mix of people buying more expensive house goes up 

compared to lower priced house, median price goes up even if the price for individual 

house has not moved a single bit.  Also note that the monthly median price figure is

quote volatile (kind of like daily stock price) and can jump up or down significantly

from month to month.

With that said, this median price increase is a combination of the two.  My clients 

are definitely seeing solid competitions in making offers to buy properties.  The low end 

still has the most competitions with lots of investors with tons of cash in the mix.

However, I am seeing more action in the mid-range where many buyers are looking at also.

Whether this price increase will continue in the near term or move up a bit more or slow

down a bit is anybody's guess.  However, I think it is safe to say that the "great real 

estate sale of 2008-2012" is over.  If you still want to own your own place (it is as much

a lifestyle choice as it is a financial decision), time to get moving.

My Real Estate Team is very experienced in negotiation and seasonal advise, which includes among other things, an experienced real estate attorney.  Every transaction that I managed is also reviewed by multiple experienced people to ensure that things are done properly. Over the years, I have helped clients overcoming all sorts of thorny issues, before- during -and -after the real estate transactions,and in many cases, saved them tens of thousands of dollars.  Buying a house is a very important and complicated decision,   Make sure you have the right representation.

Call me when you are ready.  Have you gotten a loan pre-approval yet?  

www.RealtorLisaWu.com

Loan Modifcation - Red Flag!

Avoiding loan-modification hoaxes
Homeowners wary of being taken in by bogus “loan modification specialists” should not assume that a law office is the most reliable way to work with their lender.  Consumer advocates say a growing number of fraudulent modification services involve lawyers, or people who say they are lawyers.

Making sense of the story

• Increasingly, lawyers are lending “their names, their offices, their credentials” to fraudulent operations that vaunt superior skills in obtaining loan modifications, according to a senior counselor at the Lawyers’ Committee for Civil Rights Under Law in Washington.

• While Federal Trade Commission rules generally prohibit demanding upfront fees for mortgage relief services, there is a narrow exception for lawyers.

• Under the rules, a lawyer may charge clients in advance for assistance if the service is part of their general practice of law, and not outside of that practice.

• Certainly, many lawyers provide legitimate foreclosure-avoidance services, but borrowers should know that when going to a lawyer whose sole business is loan modifications, that is a red flag.

• As more homeowners become aware of these tactics, some operations are changing their practices.  Instead of selling loan modification services, they are advertising so-called loan workouts and forensic loan audits. Some are even posing as nonprofit groups.

• The Homeownership Preservation Foundation and the Lawyers’ Committee both belong to a coalition of public and private agencies that maintain a national database of loan-modification complaints.  Since March 2010, some 28,000 homeowners have reported potential fraud.  Their reported monetary losses total around $66 million.

• Counseling services offered by the Dept. of Housing and Urban Development are free of charge.  Visit http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm to find a HUD-approved counselor.

www.RealtorLisaWu.com

Short-Sale: Loan Balance Forgiveness Letter

Do you or anyone you know have the experience with the Mortgage Loan Balance Forgiven?  Please share with us.

Have Your Friend Bought a Property at Real Estate Auction? How Do Buyers to Determine - It's a "Good or Fair" Deal or Value of the Property Bought? How Much The Closing Costs, Premium plus Offered Price?

Talking Points

• Many home buyers think that real estate auctions are the best way to get a good deal on a home.  While there are certainly deals to be had, auctions also can be dangerous for buyers.

• Buyers planning to attend an auction are advised to do their homework and know what the property is worth, especially since auctions generally do not offer appraisal contingencies.

• Buyers should know what repairs are needed and what it will cost to make the home livable.

• Setting and sticking to a maximum price and not forgetting to include the buyer’s premium is critical.

• Most importantly, maintain control.  Many auctions turn into feeding frenzies. The excitement of the moment leads to bidders getting carried away. 

www.RealtorLisaWu.com