Monday, May 30, 2011
Sunday, May 22, 2011
Thursday, May 19, 2011
Fixed mortgage rates touch new lows for 2011
Fixed mortgage rates fell this week to the lowest point of the year, offering incentives for homeowners to save money by refinancing their loans. Read the full Marcury News story...
Sunday, May 15, 2011
Government Likely to Drop the Level at which It will Back Home Mortgages
By Chris Moles
Brokerage Counsel
Intero Real Estate, Inc.
A New York Times article this week revealed that the federal government is set to drop the levels at which it will back home mortgages in September. The sobering news identified that mortgages in Monterey County will likely be slashed by a third and re-set at $483,000. Other California counties will see similar cuts. This could negatively affect the California market because buyers will have to increasingly depend on private loans to purchase in this region.
Current Policy
At present, government backed loans for most bay area counties cap around $729,750. This is substantially higher than the national average and it reflects the above average cost of land in the bay area. Government backed loans are insured by the Federal Housing Administration, so lenders are somewhat protected from default. Lenders face less risk when making these loans to borrowers and borrowers are able to purchase more expensive homes with a smaller down payment and at a lower interest rate then they might otherwise expect. Suffice it to say that many government backed loans are offered at terms that would not be available in a purely private transaction.
The New Proposal
Democrats and Republicans in Congress seem to agree that the federal taxpayer should no longer bear the risk on loans that far exceed the national average for home mortgages. On September 30th, the Congress is posed to cut the levels for government backed mortgages across the board. The new caps will be re-set from county to county with most bay area counties seeing a 15% or so decline. Some anticipate that Santa Clara County’s new government backed mortgage cap may be set at $625,500 – representing a potential loss of more than $100,000 in the purchasing power of the average south bay buyer.
Of course, this could pull prices down as many local buyers are pushed out of the market. California borrowers will likely start to depend more heavily on private mortgages, and this means borrowers will be subject to greater scrutiny about credit worthiness and finances before securing an adequate loan. This also means that buyers may have to settle for higher interest rates and less favorable terms.
Some listing prices will have to decrease to reflect the diminished purchasing power of the average buyer.
The National Association of Realtors Lobbyists
NAR is presently lobbying against these measures in Washington. While it is clear that the government must remake its affordable housing laws, many Realtors argue that an overly simplistic policy based on the national average for home mortgages will have a disparate impact on those living in pricier regions of the country.
However, elected officials have become increasingly blunt in light of political pressure to address the causes of the last housing bubble and the subsequent mortgage crises. The Times reported that, according to a recent White House position paper on government backed mortgages, “Larger loans for more expensive homes will once again be funded only through the private market.”
Assuming Congress does as expected in September, this summer may present the best opportunity to buy and sell for a while.
We hope you enjoy this post by guest blogger, Chris Moles. Thanks, Chris, for providing Intero agents with the most updated legal information in your weekly post.
Brokerage Counsel
Intero Real Estate, Inc.
A New York Times article this week revealed that the federal government is set to drop the levels at which it will back home mortgages in September. The sobering news identified that mortgages in Monterey County will likely be slashed by a third and re-set at $483,000. Other California counties will see similar cuts. This could negatively affect the California market because buyers will have to increasingly depend on private loans to purchase in this region.
Current Policy
At present, government backed loans for most bay area counties cap around $729,750. This is substantially higher than the national average and it reflects the above average cost of land in the bay area. Government backed loans are insured by the Federal Housing Administration, so lenders are somewhat protected from default. Lenders face less risk when making these loans to borrowers and borrowers are able to purchase more expensive homes with a smaller down payment and at a lower interest rate then they might otherwise expect. Suffice it to say that many government backed loans are offered at terms that would not be available in a purely private transaction.
The New Proposal
Democrats and Republicans in Congress seem to agree that the federal taxpayer should no longer bear the risk on loans that far exceed the national average for home mortgages. On September 30th, the Congress is posed to cut the levels for government backed mortgages across the board. The new caps will be re-set from county to county with most bay area counties seeing a 15% or so decline. Some anticipate that Santa Clara County’s new government backed mortgage cap may be set at $625,500 – representing a potential loss of more than $100,000 in the purchasing power of the average south bay buyer.
Of course, this could pull prices down as many local buyers are pushed out of the market. California borrowers will likely start to depend more heavily on private mortgages, and this means borrowers will be subject to greater scrutiny about credit worthiness and finances before securing an adequate loan. This also means that buyers may have to settle for higher interest rates and less favorable terms.
Some listing prices will have to decrease to reflect the diminished purchasing power of the average buyer.
The National Association of Realtors Lobbyists
NAR is presently lobbying against these measures in Washington. While it is clear that the government must remake its affordable housing laws, many Realtors argue that an overly simplistic policy based on the national average for home mortgages will have a disparate impact on those living in pricier regions of the country.
However, elected officials have become increasingly blunt in light of political pressure to address the causes of the last housing bubble and the subsequent mortgage crises. The Times reported that, according to a recent White House position paper on government backed mortgages, “Larger loans for more expensive homes will once again be funded only through the private market.”
Assuming Congress does as expected in September, this summer may present the best opportunity to buy and sell for a while.
We hope you enjoy this post by guest blogger, Chris Moles. Thanks, Chris, for providing Intero agents with the most updated legal information in your weekly post.
Thursday, May 12, 2011
Bankruptcy and 2nd Mortgage Information
Sunday, May 01, 2011
San Jose Mercury News Reports on the Real Estate Market Gone "Crazy"
The San Jose Mercury News' reporter Patrick May reports on the whole Bay Area, but be assured that all of the situations May writes about are happening right here in Gilroy and the close surrounding area. It's not pretty, but when you have an experienced and ethical Realtor to represent you, real estate transactions can happen, and they can benefit you. Here's the full story...
Saturday, April 23, 2011
Thursday, April 21, 2011
Are Home Buyers getting their money's worth with their Lender-Required Appraisals?
A Los Angeles Times story with great information for Home Buyers:
By Kenneth R. Harney
When you pay $450 to $550 for an appraisal on a home purchase or refinancing, do you assume that all or most of the money is going to the appraiser who comes to the house and performs the valuation?
That's logical, but probably not correct. Despite Federal Reserve regulations that took effect April 1 requiring lenders to pay appraisers fair fees, growing numbers of them say they are still being offered $200 to $250 — even as low as $134 — for work that gets billed to consumers at $450 and higher. Click here for the rest of the story.
Wednesday, April 20, 2011
Mortgage Bank Insights
Intero Real Estate Services, Inc. presents the The Intero Insider video series, a candid Q&A session on hot real estate topics with recognized real estate experts. This Insider brings you Rick Soukoulis, CEO of Western Bancorp's insight and projections on 2011 mortgage rates, the effects of the Japan crisis on our market and the potential after effects if the U.S. Government had shut down.
Tuesday, April 19, 2011
Housing Recovery Confusion – The 3 Things We Know
A lot of news is happening in the world of mortgage finance and the housing economy. The government is trying to figure out how to fix and/or prevent another bubble and collapse in housing finance, while also trying to help boost the housing market – an impossible feat when you think about it. Kind of like running in two opposing directions at once. Read the full story...
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