Update on Interest rates from Mr. Fed himself

Ben Bernanke says rates will be relatively low through 2015 and this will stimulate job growth and yadda, yadda, yadda ... does this indicate that Ben has looked into his crystal ball. Clearly I am no Ben Bernanke however I find this an interesting posture right before election time. He says the goal is to stimulate i.e. make people spend, buy houses, create jobs ... heck we haven't even recovered from the last real estate crash and 18% of all real estate loans are still delinquent (including the new loans made under the newest and most stringent guidelines-Yes!). We might be able to wave the flag however we are a long way from declaring recovery and going on a drunken sailor spending binge. This tactic normally steers the economy towards spending and not saving. We have more rainy days ahead to deal with ... and then ... what about the inflation that will follow the spending spree ... All of a sudden I hear that song in the background "Things that make you go Huh? Certainly there are great reasons to invest in real estate which I would love to discuss further however this is about Ben so, here's the story released last night ... http://abcnews.go.com/Business/federal-reserve-interest-rates-low-mid-2015/story?id=17226149

Housing is on the mend but a full recovery?

It is very apparent that prices hit bottom quite some time ago and are clearly rising, especially here in the Coachella Valley. A tight inventory has made activity (especially in the under $300,000 pricepoint) quite competitive with multiple offers being the norm; and, if you haven't been Pre-approved by your Lender don't bother looking at homes or writing an offer because it's like bringing a knife to a gunfight. If you've not been Pre-approved and start looking at homes, it is inevitable that you are going to run across the house of your dreams and any offer you make is not going to be well received because someone else will have been prepared with a pre-approval so rather than affording yourself the chance of getting into a multiple offer situation with at least a chance to compete for the home, the other Buyer is going to win because they were ready. You can't win the game unless you know all the rules. Anyway, back to pricing ... word is that 18% of exisiting loans are delinquent and that includes the new loans made under the new guidelines so if the economy doesn't improve soon, we could be subjected to another tailspins so stay tuned for more ... here's the story about prices ... Home prices during the first half of 2012 posted their strongest gains in six years, the clearest sign that more U.S. housing markets have hit bottom. Home prices during the first half of 2012 posted their strongest gains in six years, the clearest sign that more U.S. housing markets have hit bottom. But don't confuse that with a full-on recovery. WSJ's Nick Timiraos reports. Photo: Getty Images. . But the housing market remains far from normal. Hitting a bottom shouldn't be confused with a full-on recovery, which looks a ways off. Today's rising prices have less to do with surging demand—though hard-hit markets in Arizona, California, and Florida have seen significant investor appetite for distressed homes—than with declines in the number of properties for sale. Inventories of "existing" homes—that is, ones that haven't just been built—are at eight-year lows. New-home inventories are lower than at any time since the U.S. census began tracking them in 1963. In some cities, there are one-third fewer homes listed for sale than a year ago. Here's why prices are rising: There are more buyers chasing fewer homes, and—critically—fewer distressed homes, such as foreclosures. Low inventory is one sign that housing markets may have reached a turning point because many want to buy at the bottom but few want to sell. There are several factors behind the low inventory. Banks have slowed their pace of foreclosures. Investors have snapped up discounted properties that they can convert into rentals. Home builders, struggling for several years to compete on price with foreclosed properties, have added little in the way of new supply. For now, price gains are concentrated at the low end of the market, where inventory declines have been most dramatic. "The market is really drying up in these seemingly distressed markets really quickly," said Michael Sklarz, president of research firm Collateral Analytics. "They really are scratching for properties to sell." Low inventory is benefiting home builders, as buyers grow frustrated by bidding wars sparked by a shortage of move-in-ready housing. "People can't find inventory that they want, so they say, 'I'm just going to buy the house down the block that's brand new. I don't have to go through the whole torture,' " Mr. Sklarz said. Housing's progress is good news for the economy. Residential investment has now contributed to U.S. economic output for the past five quarters, which hasn't happened since 2005. In other words, housing is no longer a drag, though it is packing far less of a punch than it normally does at this point in the economic cycle. Rising prices also could help turn around consumers' fragile psychology, an unpredictable but important factor that can fuel more sales. But low inventory isn't necessarily a sign of strength. One problem is that many sellers can't or won't become buyers. Millions still owe more than their homes are worth, and even more—about 45% of all homeowners with a mortgage, according to data firm CoreLogic Inc.—have less than 20% in equity. That means they don't have enough money to make a large down payment and pay their real-estate agent's commission to buy a comparable house. Large price declines have left cities without what historically has been the most active segment of the home-buying market: families looking to trade up and retirees seeking to downsize. That leaves many markets relying on investors and first-time buyers, who are most sensitive to rising prices and mortgage rates. Ironically, prices are rising fastest in markets that have the most underwater borrowers because so few homes are for sale. While low inventories have helped firm up prices, they could also soon lead to year-over-year declines in sales volumes because there aren't enough homes on the market to sustain the current sales pace. Consider Phoenix. Home prices through June were up by 17% over the past year, the best increase among the nation's big cities. But home sales in July fell 8% from a year ago, amid a drop in supply of more than 25%, according to a report from Mike Orr of Arizona State University. Jon Mirmelli, a local real-estate investor, said, "Buyers aren't happy with what they see, and they're staying on the sidelines." There are other reasons for caution. Banks are still stingy with credit. Many would-be buyers have too much debt to qualify for a mortgage. A large overhang of distressed mortgages ultimately could drive more homeowners to sell or push banks to accelerate foreclosures. This "shadow inventory" looks as if it won't be dumped on the market in a way that would trigger deep price declines, but it would probably keep a lid on any swift gains. Jobs and wages also aren't growing fast enough to sustain big rises in home prices. Recent gains may be less indicative of a strong recovery and instead point to how prices in some markets "overcorrected," bringing in investors who will step back as prices firm up. Others worry that mortgage rates, which are down by a full percentage point from one year ago, are temporarily boosting sales and that housing demand will slump once rates rise. Compared with a year ago, mortgage rates allow borrowers to take out about 12% more in debt without increasing their monthly payment. The changing debate over housing underscores the sector's tentative progress. Earlier this year, the question was whether housing would hit bottom this year or next. Now, it is "about how strong any recovery will be, how long it will last, and whether it will reach every neighborhood in America," said Glenn Kelman, chief executive of Redfin, a real-estate brokerage. An important test comes later this year. In each of the past three years, prices rose in the summer but gave up all those gains and more in the winter, when sales traditionally slow. This year could be different because the supply of homes isn't piling up. Absent a shock to the economy, housing is on the mend. But it will be a long time before it returns to normal. Keep the faith!!!

Is a mortgage refinance right for you and is this the time to do it?

Fairly recently this article was written and appeared in the Sacramento Bee website. I think it's a good story and backs up my recent blog comments about timing and if you should refinance at all; it is aso a good reminder to shop not only rates but fees as well. Try to get a good faith estimate from several Lenders and make a spread sheet for yourself and really compare what the cost of the mortgage is ... Please note that it's not all about the interest rate unless you are doing a no fee mortgage and then the rate is all you have t cmpare (A no fee mortgage would lump all the costs into a slightly higher interest rate which some choose because you can write off the interest but rarely the fees associated with a refinance - talk to your CPA about this alternative). Here's the story ... By Claudia Buck cbuck@sacbee.com Published: Sunday, Aug. 26, 2012 - 12:00 am | Page 1D Last Modified: Wednesday, Aug. 29, 2012 - 1:56 pm They're knocking on the lender's door. As mortgage rates have tumbled to all-time lows, demand for refinancing has fired up homeowners nationwide. And it's not just those drowning in underwater mortgages. With rates for 30-year mortgages hovering below 4 percent since last October, all kinds of homeowners are trying to get their monthly mortgages reduced, say lenders and mortgage experts. "It's huge. It's buried our staff and every other lender in town," said O.J. Vallejo, mortgage consultant with First Priority Financial in Sacramento, who said his three-person staff has been working six days a week the last four months. Nationally, refinance volume "has been running at a three-year high in recent weeks, as mortgage rates remained extremely low," Mike Fratantoni, vice president of research for the Washington, D.C.-based National Mortgage Bankers Association, said in an email. "With refinances, the No. 1 driver is interest rates." Along with months of record-breaking low interest rates, other factors are driving the refinancing boom: a competitive lending market and changes in some federal refinancing programs for struggling homeowners. It's prompted many established homeowners with old-school, high-interest mortgages to decide it's time to refi. Neil and Louise Mueller, longtime Land Park residents, were encouraged by their financial planner to look into refinancing their mortgage last spring. "It was almost too easy," said Louise, an American River College counselor, who said the process, including a home appraisal, took about three weeks. The result: Their 30-year, fixed-rate mortgage dropped from 5.12 percent to 3.87 percent, which lowered their monthly payment by about $100. They also pulled out about $11,000 for savings and for a family cruise overseas with their two adult children. Why refi? Generally the primary reasons for refinancing a mortgage are to: • Lower monthly mortgage payments. • Eliminate the unpredictability of an adjustable-rate mortgage by switching to a fixed rate. • Free up home equity cash for home improvements, college costs or other expenses. • Shorten the loan term, say from a 30- to a 15-year mortgage, which can save thousands in interest payments. Saving money is usually the biggest incentive. Calling the low rates "historic," John Winters, a wealth adviser with Morgan Stanley Smith Barney in Sacramento, said he recently advised all his clients to consider a refi. Especially for those "finding it difficult to live with" the anemic returns on low-interest CDs and bonds, freeing up monthly income by refinancing can make sense, he said. Should you refi? It's a personal calculation that varies. Generally, you look at how long you plan to be in your current home and whether the upfront costs outweigh the monthly savings. "If you're not going to be in your home another one or two years, you're not going to recoup the closing costs," said Greg McBride, senior financial analyst with Bankrate.com. "Everybody's situation is different," said mortgage consultant Vallejo. "There's no right or wrong answer. The only answer is what works for your family." Some couples who refinance are looking ahead to retirement. "Paying off the mortgage is now back in vogue," Vallejo said, especially for those in their late 40s or 50s, who want to be mortgage-free at retirement age. That doesn't necessarily mean they'll lower their monthly payment by refinancing. For example, a couple with a $250,000, 30-year loan at 5.25 percent three years ago would have been paying about $1,380 a month. If they refinanced their current balance to a 20-year, 3.5 percent loan today, their payments would increase slightly, to $1,405. "Their payment goes up $25, but they just took seven years off their mortgage," said Vallejo. "That's almost $116,000 in interest. That's huge." On the other hand, younger homeowners with kids might choose a 30-year mortgage when they refinance because they need the lower monthly cash flow to save for college or pay off debt. Or those with adjustable mortgages due to reset to higher rates may want to lock in single-digit rates. What you'll pay The mortgage rate you'll be offered depends on numerous factors, including: your credit score, loan amount, loan-to-value ratio (how much you owe compared to the home's appraised value), length of your loan term and type of home (rates on condos, rentals and vacation homes are typically higher.) Lots of mortgage ads promise "no-cost" loans. According to some lenders, that's a misnomer. "It really means 'no cash out of pocket,' " said Vallejo. "There's no free lunch; somebody is paying for it." Typically, in a no-cost loan, all closing costs and pre-paid items (such as appraisal fees and credit checks) are paid by the lender and built into the interest rate. Shop around It pays to compare quotes from several lenders because they offer different rates and fees. Start with your current lender or sit down with a local loan originator. You can also do refinance comparisons online, using mortgage calculators at sites like Bankrate.com or those of individual banks and lenders. If you're a struggling homeowner, ask your lender about changes in the federal Home Affordable Refinance Program and FHA refinance programs that have made refinancing options more plentiful. Bankrate.com's McBride said the refinance market is particularly "compelling" in California, where home prices have bottomed out and there are lots of competitive lenders. But don't focus solely on interest rates, said McBride. When comparing refinance quotes, look at appraisal fees, title searches and closing costs. And be sure you're comparing the same loan terms, not a 15- and a 30-year, for instance. Good standing Be sure the lender is in good standing. Tom Pool, spokesman for the state Department of Real Estate, said state and federal licensing standards for mortgage originators are much stricter than they used to be, which "has weeded out most of the bad actors." Nevertheless, you can check a company's or individual's licensing status at the state Department of Corporations (www.corp.ca.gov) or the Department of Real Estate (www.dre.ca.gov). Pool also recommends online searches at sites like the Better Business Bureau (necal.bbb.org) to see if the lender has been linked to bad practices or scams. Too late? Even though interest rates have inched upward in the last month, you're probably not too late. "It's not worth losing any sleep over," said Bankrate's McBride. "Given the European debt crisis, (interest rates) can't rise appreciably." On the other hand, the national mortgage bankers group predicts mortgage interest rates will "drift slowly higher" next year, leading to significant declines in refinance activity. Above all, make sure a refinance is right for your situation. "It's a significant financial transaction," said Edward Achtner, an Oakland-based regional sales executive for Bank of America. "If buying a home is the largest transaction a consumer embarks upon, a refinance is a close second. Do the research, evaluate the different options. Take your time and do not be pressured into making any decisions." Editor's note: This story was changed Aug. 29 to correct the length of the Muellers' mortgage. Read more here: http://www.sacbee.com/2012/08/26/4755335/personal-finance-is-a-mortgage.html#storylink=cpy

Re-newed assistance with Refinancing California property

My advice is to jump on it while you can because rates won't be here forever ... For Immediate Release: September 10, 2012 Contact: Washington D.C. Office (202) 224-3553 Menendez,Boxer Urge Republicans to Join Them to Help Responsible Homeowners Refinance WASHINGTON, DC - Citing new momentum and support among a broad array of stakeholders, U.S. Senators Robert Menendez (D-NJ) and Barbara Boxer (D-CA) today reintroduced the Responsible Homeowner Refinancing Act and called on Republicans to join them in passing the measure which would help millions of responsible homeowners refinance at lower mortgage rates. “I’ve received thousands of messages from hardworking homeowners back home, including a cancer survivor named Linda who said trying to refinance her mortgage is harder than fighting cancer,” said Senator Menendez. “Passing this bill will get rid of the red tape that leaves millions of borrowers like Linda trapped in higher interest loans, put money back into the pockets of middle class families and strengthen our economy. I’m asking Republicans to join us in putting families first.” Senator Boxer said, “This bill is a win-win-win: homeowners will have more money in their pockets, Fannie and Freddie will see fewer foreclosures, and the housing market and economy will be strengthened. That’s why the Menendez-Boxer bill has such broad support from industry and consumer groups.” The legislation is supported by a broad array of stakeholders representing borrowers, lenders, sellers, finance and industry, and other experts including the Mortgage Bankers Association, National Association of Realtors, National Association of Home Builders and the Center for Responsible Lending. Summary of The Responsible Homeowner Refinancing Act of 2012 Senators Robert Menendez (D-NJ) and Barbara Boxer (D-CA) There are nearly 13.5 million responsible borrowers in loans guaranteed by Fannie Mae and Freddie Mac who could benefit from refinancing at today’s low interest rates. Although recent changes to the Home Affordable Refinance Program (HARP) were a step in the right direction, they left in place barriers that will keep millions of borrowers trapped in higher interest loans. The Responsible Homeowner Refinancing Act will build on these changes and further expand opportunities to access historically low interest rates for borrowers who make their mortgage payments on time. To remove the barriers preventing borrowers who are making their payments on time from refinancing their loans at the lowest rates possible, the bill would: • Remove barriers to competition Under HARP, lenders who want to compete with the borrower’s current lender for that borrowers’ business continue to face stricter underwriting criteria and greater risk that the GSEs will force them to buy that loan back should the borrower default. These different standards have posed a barrier to competition, resulting in higher prices and less favorable terms for borrowers. A recent study by Amherst Securities Group found that HARP borrowers are paying more than half a percentage point more than borrowers with other types of loans. This bill would direct the GSEs to require the same streamlined underwriting and associated representations and warranties for new servicers as they do for current servicers, leveling the playing field and unlocking competition between banks for borrowers’ business. • Guarantee equal access to streamlined refinancing for all GSE borrower When FHFA recently expanded HARP eligibility to underwater borrowers, they continued to require lenders to distinguish between borrowers with less than 20 percent equity and greater than 20 percent equity in ways that left higher equity borrowers with greater costs and administrative burden. This meant that borrowers who have been paying down their mortgages over many years, building equity in their homes, were locked out of the program. This bill would ensure that all GSE borrowers who are making their payments have the same access to simple, low-cost refinances, regardless of the level of equity they have in their home. This is not only a simple matter of fairness- it also makes good business sense. Providing a single set of rules for all lenders and all GSE borrowers will simplify the process for all involved, allowing all lenders to offer a single, streamlined program to all GSE borrowers who have been paying their loans on time. • Eliminate up-front fees completely on refinances Although the GSEs lowered up-front fees for HARP loans with less than 20 percent equity, they left them in place for those with more equity. This created the economically indefensible situation in which borrowers with significant equity in their homes could face steeper costs in refinancing than borrowers with no equity whatsoever. So borrowers who pose less risk to the GSEs are in fact paying a higher risk premium. These additional fees can be as high as two percent of the loan amount, or an extra $4,000 on a $200,000 loan. For borrowers struggling to keep up with their payments, this is an additional cost they simply cannot afford. This bill prohibits the GSEs from charging up-front fees to refinance any loan they already guarantee, which is also in the best financial interests of the GSE’s and taxpayers. • Eliminate appraisal costs for all borrowers GSEs use Automated Valuation Models to determine home values without the need for slow and costly manual appraisals. However, borrowers who happen to live in communities without a significant number of recent home sales often cannot use these models and are forced instead to pay hundreds of dollars for a manual appraisal for a HARP refinance. This bill requires the GSEs to develop additional streamlined alternatives to manual appraisals, eliminating a significant barrier and reducing cost and time for borrowers and lenders alike, especially in rural areas. Again, this just makes good economic sense. Taxpayers are already on the hook for these loans and will benefit from providing the borrowers with an easier path to refinancing. • Further streamline refinancing application process HARP already restricts participation to borrowers who are current on their loans and have demonstrated a commitment to making their payments on time – even in the face of loss of income or employment. There is thus no reason to require proof of employment or income for these loans, particularly given that the GSEs already retain the risk, and that risk will only go down with lower interest rates. So this bill eliminates employment and income verification requirements, further streamlining the refinancing process and removing unnecessary costs and hassle for lenders and borrowers alike. • Save taxpayers money According to the CBO, the bill pays for itself through reduced default rates on GSE loans, which saves taxpayers. http://boxer.senate.gov/en/press/releases/091012.cfm

You know the economy is recovering when people start writing about Adjustable Rate mortgages

Well, it seems that it's time for the Adjustable Rate Mortgage conversation again ... Some people forget that while lax approval guidelines and bad lending practices were at the core of the financing debacle our economy went through, once the apple was cut open, there also lay the Adjustable Rate Mortgage "ARM". While it is not an evil financing vehicle by any means, it can tempt many away from the 'sleep good' insurance of a fixed interest rate. It definitely can be a great tool for purchases or refinances whose owners will not be in the property for a lengthy period, i.e. those who might downsize when kids go off to college or anticipate an employment tranfer or even those anticipating paying off their mortgage debt in the near future. Regardless of the reason, in my opinion, if anyone discuses ARM's with you ... you should be thinking short term solely and if you do choose one you should at least double your time estimate to give yourself a cushion if your plans change. Thinking one year take the 3 year ARM. Thinking 2 years ... go for the 5 year.Read on for one person's opinion about big savings and then think about that 'sleep good' insurance When an adjustable-rate mortgage makes sense from August 30, 2012: 5:00 AM ET Locking in a historically low fixed rate might feel safer. But borrowers can save big on ARMs right now. By Janice Revell, contributor FORTUNE -- During the housing meltdown, adjustable-rate mortgages were vilified as a hallmark of irresponsible borrowing. Recently, though, they've been making a comeback, especially among affluent borrowers. This summer, for instance, Facebook (FB) CEO Mark Zuckerberg reportedly financed his home using an ARM with a rate of just 1.05%. Most borrowers can't snag a rate remotely close to that. But many would still do well to consider an ARM right now -- even if conventional wisdom says otherwise. An adjustable-rate mortgage offers an introductory period in which you pay a lower interest rate than with a fixed loan; after that, the rate can fluctuate up or down. With rates near historic lows, the safety of locking in a fixed rate appeals to many borrowers. But they're paying a premium for that security: The spread between rates on 30-year fixed-rate mortgages and the most popular ARMs now stands at about one percentage point, more than double the difference just five years ago. That means that homeowners who are planning to either move or pay off their mortgage over the next few years can save big with an ARM. Take, for example, a homebuyer who plans to pay down an $800,000 mortgage. Currently the rate on the fixed portion of a 5/1 ARM -- which is guaranteed for the first five years and adjustable once a year thereafter -- is around 3%. In a typical 5/1 ARM, the maximum increase during the sixth year is five percentage points above the initial rate. Alternatively, our hypothetical borrower could opt for a 30-year mortgage that locks in an annual rate of about 4%. MORE: Mortgage applications up, mortgages not so much Fortune asked Greg McBride, an analyst with mortgage tracker Bankrate.com, to run the numbers on both options. To be conservative, McBride assumed the worst-case scenario with the ARM -- one in which the rate shoots up to the 8% maximum in year six. Here's what would happen: For the first five years, our homebuyer's monthly payments on the ARM would be $3,373 -- or $446 less than what he'd pay under the 30-year fixed mortgage. Over that period he'd save a total of $39,000 in interest and would amass $12,000 more in equity. After the initial five years the monthly payments under the ARM would balloon to $5,490. But it's not until the seventh year of the loan that the savings garnered by the lower ARM payments during the first five years would be wiped out entirely. (This doesn't factor in the mortgage-interest tax deduction, which would be greater on the fixed-rate loan for the first few years but higher on the ARM thereafter.) If after five years, however, the rate on the ARM increased at a more moderate pace of one percentage point a year, the initial savings wouldn't be eclipsed by the fixed rate until the 10th year of the loan. The bottom line: Unless you definitely plan to stay in your mortgage over the long term, it might pay to adjust your thinking. * * * As always ... Keep the faith and when making decisions like these, don't just talk to your Lender and Realtor, choose to consult your CPA or Estate Planner for major decisions like these.

Deptatment of Justice warns of debt relief scams

The Dept. of Justice Consumer Protection Branch is warning consumers about debt relief scams and providing tips to avoid such scams. Tips include: •Fraudulent debt relief companies will often make claims of being able to negotiate a one-time settlement with creditors that will reduce a consumer’s principal by 50 percent or more. The Consumer Federation of America, an association of non-profit consumer organizations, warns that such a promise is a virtual impossibility. •If you have trouble making credit card payments, immediately call the creditor to work out a payment plan. If that is unsuccessful, a non-profit credit counseling service may be able to help you. These services may charge a small fee, but the cost will be substantially less than using a debt relief company. An excellent resource for locating a local credit counseling service is the National Foundation for Credit Counseling, at www.nfcc.org. •If a company offers a “one size fits all” solution, what they are really offering is a “no size fits anyone” problem. Legitimate credit counseling services tailor a consolidation plan to each consumer’s individual needs. •Do not be afraid to ask questions. Demand that the company disclose set-up and maintenance fees, and that these fees be set in writing. According to the Consumer Federation of America, consumers should not pay more than $50 for the set-up fee and $25 for monthly maintenance of the account. •Do not rely on the company’s website. Conduct your own research of the company – the Better Business Bureau and the state consumer protection agencies are valuable resources. For more information on debt relief scams, see the Federal Trade Commission’s website. Additional information on legitimate debt relief services can be found on the Consumer Federation of America’s website. As always - keep the faith!

CFPB wants to simplify Mortage shopping for Borrowers

No-fee mortgage option is on the way ... Richard Cordray, who runs the consumer bureau, announced new rules Friday that would limit fees on mortgages. NEW YORK (CNNMoney) -- Lenders would have to offer potential home buyers an option to get mortgages with no fees, under a rule proposed by the Consumer Financial Protection Bureau. Generally, homeowners pay fees and points in exchange for lower overall interest rates on mortgage loans. "Consumers have a hard time comparing loans when they are dealing with a bewildering array of points and fees," said Richard Cordray, director of the Consumer Financial Protection Bureau, in a statement. "We want to provide consumers with clearer options and enable them to choose the loan that they believe is right for them." In the Dodd-Frank Act, Congress wanted to clean up the process of getting a residential mortgage, which was criticized as a contributing factor to the financial crisis. The idea was to ensure consumers understand the mortgage loans they're offered, as well as all the accompanying fees. While good news for consumers, the mortgage proposal is actually easier on lenders. Lawmakers banned extra fees and points on mortgage loans in cases when the originator makes a commission -- which happens with most mortgages. Under this proposed rule, the bureau would allow lenders to keep offering consumers options to reduce their mortgage interest through fees and points, as long as those fees and points actually reduce the overall interest rate on the mortgage. Lenders must offer the no-fee mortgages as well. A senior official with the consumer bureau explained that the rule was a balance between a blanket ban on fees and the current origination process, which has no rules for mortgage fees. Consumer groups and those in the lending industry weighed in, saying it would be better to keep giving consumers the opportunity to lower interest rates by paying more up front. The bureau will now collect comment on the rules and finalize them to take effect by January.

Renting ... Buying a home pays off after three years on average

In the Coachella Valley, rents are rising, housing affordability is at record levels, inventory is extremely low and interest rates are near all time lows; and there is conversation going on about flipping to a Seller's Market and certainly everyone is hearing about multiple offers on homes (at least at certain price points). All of this is contributing to rising prices and many are concerned that the market is rebounding too quickly fearing another downturn is in our future. Should I buy or should I rent and pay the rising rental rates. There is a new tool designed to help you make a decision. Zillow's analysis, which covered more than 200 metropolitan areas and 7,500 U.S. cities, found that buying is a better financial decision than renting in the Riverside-San Bernardino area if you live in the home for at least two years. In my opinion, the information release is helpful, however, the Coachella Valley differs so much from the rest of the Riverside - San Bernadino are that I believe the numbers would be different. I would really like to see the formula (or an example) used to allow a more insightful opinion ... Click here or cut and paste for the full zillow story: as always, Keep the faith! La Quinta Real Estate

Credit scoring 2012 and beyond

Credit scoring is going to a new level as recently announced by CoreLogic/Fico, one of the 3 major reporting agencies. It has been rumored for years and has made many wonder what it will entail. Surely it is likely that future reporting from your Lender(s) and other creditors will detail information such as ~ Do you make your payments in days 1-5, 6-10 or 11-15 of the grace period which would assist this new system greatly. Here's the release from CoreLogic/Fico website ... FICO and CoreLogic Announce Availability of More Predictive Mortgage Credit Score Designed to Enable Growth in Mortgage Lending Market Innovative predictive score can help lenders safely grow mortgage origination volumes CoreLogic® (NYSE: CLGX), a leading provider of information, analytics and business services, and FICO (NYSE: FICO), the leading provider of predictive analytics and decision management technology, today jointly introduced a high-performance consumer credit risk score that is expected to improve lending decision quality and increase the number of mortgage loans lenders make. The new FICO® Mortgage Score Powered by CoreLogic® evaluates the traditional credit data from the national credit data repositories and the unique supplemental consumer credit data contained in the CoreLogic CoreScore™ credit report, introduced in October 2011, to deliver a more comprehensive and accurate view of a consumer’s credit risk profile for loan prequalification and origination. The new scoring model was designed specifically to predict mortgage loan performance and has shown a substantial improvement in risk prediction over other generally available risk scores in use today. As a result, this new scoring model developed by FICO to leverage data only available on the CoreLogic CoreScore credit report, will help mortgage lenders more safely and profitably expand their origination volumes, ultimately strengthening and growing the overall mortgage lending market. According to a recent FICO quarterly survey of bank risk professionals, conducted by the Professional Risk Managers’ International Association (PRMIA), bankers continue to lack confidence in the housing finance marketplace. Of bankers surveyed, approximately 75 percent of respondents expect the level of mortgage delinquencies to increase or stay the same over the six-month period following the survey, and more than 85 percent hold the same view for home equity line delinquencies. “In this complicated operating environment, lenders are increasingly turning to new data sources to help better interpret a consumer’s credit risk, so that more loans can be approved while mitigating potential losses,” said Tim Grace, senior vice president of product management at CoreLogic. “Today, we are announcing an industry first—a new composite, multi-bureau credit score generated from both traditional credit data and CoreLogic supplemental data, expanding the applicant credit spectrum by including property transaction data, landlord/tenant data, borrower-specific public data, and other alternative credit data. For a top-20 lender processing 300,000 applications a year, adopting this new score could translate into 3,900 more loans approved every year along with a net financial benefit of $14.5 million. As such, it not only provides a more complete and predictive evaluation of a consumer’s credit risk profile, but it can empower lenders to better mitigate risk and approve more loans for more consumers.” “The new FICO Mortgage Score is designed especially for prequalification and origination and delivers increased insight when it matters most,” said Joanne Gaskin, senior director of Scores product management and mortgage practice leader at FICO. “For many lenders, the increased predictive lift will translate into thousands of new mortgages, and the avoidance of millions of dollars in bad loans and associated costs. This innovation is a win-win for lenders and consumers alike.” The new FICO® Mortgage Score Powered by CoreLogic® maintains a consistent score range, set of reason codes and odds-to-score relationship with prior FICO® Score versions, making it easy for lenders to integrate and for consumers to understand. Additionally, the CoreScore Solution maintains backward compatibility making it readily available within existing CoreLogic Credco Instant Merge® integrations – the most widely used credit report in the mortgage industry. For more information about the new FICO® Mortgage Score Powered by CoreLogic® and the CoreScore credit report, visit www.CoreScore.com. About CoreLogic CoreLogic (NYSE: CLGX) is a leading provider of consumer, financial and property information, analytics and services to business and government. The Company combines public, contributory and proprietary data to develop predictive decision analytics and provide business services that bring dynamic insight and transparency to the markets it serves. CoreLogic has built one of the largest and most comprehensive U.S. real estate, mortgage application, fraud, and loan performance databases and is a recognized leading provider of mortgage and automotive credit reporting, property tax, valuation, flood determination, and geospatial analytics and services. More than one million users rely on CoreLogic to assess risk, support underwriting, investment and marketing decisions, prevent fraud, and improve business performance in their daily operations. The Company, headquartered in Santa Ana, Calif., has approximately 5,000 employees globally. For more information, visit www.corelogic.com. CORELOGIC, the stylized CoreLogic logo, CREDCO and INSTANT MERGE are registered trademarks owned by CoreLogic, Inc. and/or its subsidiaries. CORESCORE is a common law trademark owned by CoreLogic, Inc. and/or its subsidiaries. All other trademarks are the property of their respective owners. No trademark of CoreLogic shall be used without the express written consent of CoreLogic. CoreLogic Statement Concerning Forward Looking Statements Certain statements made in this news release are forward-looking statements within the meaning of the federal securities laws, including but not limited to those statements related to the mortgage default industry, expected number of future mortgage delinquencies, benefits of the CoreLogic CoreScore credit report and/or the new credit score. Factors that could cause the anticipated results to differ from those described in the forward-looking statements are set forth in Part I, Item 1A of CoreLogic’s most recent Annual Report on Form 10-K for the year ended December 31, 2011, including but not limited to: limitations on access to data from external sources, including government and public record sources; changes in applicable government legislation, regulations and the level of regulatory scrutiny affecting our customers or us, including with respect to consumer financial services and the use of public records and consumer data which may, among other things, limit the manner in which we conduct business with our customers; compromises in the security of our data transmissions, including the transmission of confidential information or systems interruptions; difficult conditions in the mortgage and consumer credit industry, including the continued decline in mortgage applications, declines in the level of loans seriously delinquent and continued delays in the default cycle, the state of the securitization market, increased unemployment, and conditions in the economy generally; our cost reduction initiatives and our ability to significantly decrease future allocated costs and other amounts in connection therewith; risks related to our international operations and the outsourcing of various business process and information technology services to third parties, including potential disruptions to services and customers and inability to achieve cost savings; and impairments in our goodwill or other intangible assets. The forward-looking statements speak only as of the date they are made. CoreLogic does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made. About the FICO® Score With over 10 billion FICO® Scores used worldwide to empower lenders to make credit decisions, the FICO® Score has become the standard measure of credit risk worldwide. FICO® Scores are used today in more than 20 countries on five continents, as well as all of the top 50 U.S. financial institutions and both the 25 largest U.S. credit card issuers and auto lenders. The latest FICO® Score version, the FICO® 8 Score, has already been adopted by more than 7,500 lenders. About FICO FICO (NYSE:FICO) delivers superior predictive analytics solutions that drive smarter decisions. The company’s groundbreaking use of mathematics to predict consumer behavior has transformed entire industries and revolutionized the way risk is managed and products are marketed. FICO’s innovative solutions include the FICO® Score — the standard measure of consumer credit risk in the United States — along with industry-leading solutions for managing credit accounts, identifying and minimizing the impact of fraud, and customizing consumer offers with pinpoint accuracy. Most of the world’s top banks, as well as leading insurers, retailers, pharmaceutical companies and government agencies, rely on FICO solutions to accelerate growth, control risk, boost profits and meet regulatory and competitive demands. FICO also helps millions of individuals manage their personal credit health through www.myFICO.com. Learn more at www.fico.com. FICO: Make every decision count™. For FICO news and media resources, visit www.fico.com/news. Statement Concerning Forward-Looking Information Except for historical information contained herein, the statements contained in this news release that relate to FICO or its business are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the success of the Company’s Decision Management strategy and reengineering plan, the maintenance of its existing relationships and ability to create new relationships with customers and key alliance partners, its ability to continue to develop new and enhanced products and services, its ability to recruit and retain key technical and managerial personnel, competition, regulatory changes applicable to the use of consumer credit and other data, the failure to realize the anticipated benefits of any acquisitions, continuing material adverse developments in global economic conditions, and other risks described from time to time in FICO’s SEC reports, including its Annual Report on Form 10-K for the year ended September 30, 2011 and its last quarterly report on Form 10-Q for the period ended December 31, 2011. If any of these risks or uncertainties materializes, FICO’s results could differ materially from its expectations. FICO disclaims any intent or obligation to update these forward-looking statements. FICO and “Make every decision count” are trademarks or registered trademarks of Fair Isaac Corporation in the United States and in other countries. Keep the faith!!!

Foreclosure Assistance in California from Big Brother in 2013

California Attorney General Kamala Harris recently announced that Governor Edmund G. Brown signed two provisions of the much-debated Homeowner Bill of Rights into law. Read below the announcement for the rudiments of the bill. The Homeowner Bill of Rights so far consists of a series of related bills containing provisions that prohibit certain practices by lenders that have been attributed to the state’s foreclosure crisis. Chief among the banned practices are robo-signing (signing of fraudulent mortgage documents without review) and dual-track foreclosure (starting foreclosure proceedings while the homeowner is in negotiations to save the home). The bill imposes civil penalties on perpetrators of these activities. In addition, it guarantees struggling homeowners a single point of contact at their lender who has knowledge of their loan and direct access to decision makers. “Californians should not have to suffer the abusive tactics of those who would push foreclosure behind the back of an unsuspecting homeowner,” said Brown. “These new rules make the foreclosure process more transparent so that loan servicers cannot promise one thing while doing the exact opposite.” The laws will go into effect at the start of 2013. Borrowers can access courts to enforce their rights under the legislation. The Homeowner Bill of Rights also contains a number of bills currently outside of the conference committee process. These other bills enhance law enforcement responses to mortgage and foreclosure-related crime. In addition, some bills are designed to help communities fight neighborhood blight resulting from foreclosures and provide enhanced protection for tenants in foreclosed homes. The bill, unveiled by Harris in February, builds upon reforms negotiated in the national mortgage settlement between leading lenders and 49 states. Harris secured up to $18 billion for California homeowners in the agreement, some of which was used to establish a Mortgage Fraud Strike Force intended to investigate crime and fraud associate with mortgages and foreclosures. “The California Homeowner Bill of Rights will give struggling homeowners a fighting shot to keep their home,” said Harris. “This legislation will make the mortgage and foreclosure process more fair and transparent, which will benefit homeowners, their community, and the housing market as a whole.” Applicability of the Law: This law will generally come into effect on January 1, 2013. It only pertains to first trust deeds secured by owner-occupied properties with one-to-four residential units, unless otherwise indicated below. "Owner-occupied" means the property is the principal residence of the borrower and secured by a loan made for personal, family, or household purposes (CC 2924.15). A "borrower" under this law must generally be a natural person and potentially eligible for a foreclosure prevention alternative program offered by the mortgage servicer, but not someone who has filed bankruptcy, surrendered the secured property, or contracted with an organization primarily engaged in the business of advising people how to extend the foreclosure process and avoid their contractual obligations (CC 2920.5(c)). A "foreclosure prevention alternative" is defined as a first lien loan modification or another available loss mitigation option, including short sales (CC 2920.5(b)). Some of the requirements of this law do not apply to "smaller banks" that, during the preceding annual reporting period, foreclosed on 175 or fewer properties with one-to-four residential units (CC 2924.18(b)). No Dual Tracking During Short Sale: A mortgage servicer or lender cannot record a notice of default or notice of sale, or conduct a trustee's sale, if a foreclosure prevention alternative has been approved in writing by all parties (e.g., first lien investor, junior lienholder, and mortgage insurer as applicable), and proof of funds or financing has been provided to the servicer. This requirement expires on January 1, 2018. Effective January 1, 2018, a lender or mortgage servicer cannot record a notice of sale or conduct a trustee's sale if the borrower's complete application for a foreclosure prevention alternative is pending, and until the borrower has been given a written determination by the mortgage servicer. Smaller banks are only covered by the requirements taking effect in 2018. CC 2924.11. Cancelling a Pending Trustee's Sale: A mortgage servicer must rescind or cancel any pending trustee's sale if a short sale has been approved by all parties (e.g., first lien investor, junior lienholder, and mortgage insurer as applicable), and proof of funds or financing has been provided to the lender or authorized agent. For other types of foreclosure prevention alternatives, a lender must record a rescission of a notice of default or cancel a pending trustee's sale if a borrower executes a permanent foreclosure prevention alternative. These requirements do not apply to smaller banks, and will sunset on January 1, 2018. CC 2924.11. Providing a Single Point of Contact: For a borrower requesting a foreclosure prevention alternative, the mortgage servicer must, upon the borrower's request, promptly establish and provide a direct means of communication with a single point of contact. The single point of contact must remain assigned to the borrower's account until all loss mitigation options offered by the mortgage servicer are exhausted or the borrower's account becomes current. The single point of contact must be an individual or team responsible for, among other things, coordinating the application for the foreclosure prevention alternative, giving timely and accurate status reports, having access to those with the ability and authority to stop foreclosure proceedings, and referring the borrower to a supervisor if any upon the borrower's request. Each team member must be knowledgeable about a borrower's situation and current status in the foreclosure alternatives process. These requirements do not apply to smaller banks as defined. CC 2923.7. No Dual Tracking During Loan Modification: A mortgage servicer generally cannot record a notice of default, notice of sale, or conduct a trustee's sale for a nonjudicial foreclosure if the borrower’s complete application for a first lien loan modification is pending as specified, or if a borrower is in compliance with the terms of a written trial or permanent loan modification, forbearance, or repayment plan. The borrower will have 30 days to appeal the denial of a loan modification, and the mortgage service cannot proceed with the above foreclosure steps until 31 days after giving the borrower a written denial of a loan modification, or longer if the borrower appeals the denial. To prevent abuse of this provision, however, a mortgage servicer is not obligated to evaluate a first lien loan modification application from a borrower who has previously been evaluated before 2013, or given a fair opportunity to be evaluated, unless the borrower submits a documented material change in the borrower's financial circumstances. These specific requirements expire on January 1, 2018 at which time, as stated above, a lender or mortgage servicer will be prohibited from recording a notice of sale or conducting a trustee’s sale if the borrower’s complete application for a foreclosure prevention alternative is pending, and until the borrower has been given a written determination by the mortgage servicer. Smaller banks are only covered under the requirements commencing in 2018. CC 2923.6 and 2924.11. No Late Fees or Application Fees: A mortgage servicer cannot collect any late fees while a complete first lien loan modification application is under consideration, a denial is being appealed, the borrower is making timely modification payments, or a foreclosure prevention alternative is being evaluated or exercised. A mortgage servicer is also prohibited from charging for any application, processing, or other fee for a first lien loan modification or other foreclosure prevention alternative. These requirements do not apply to smaller banks as defined. These requirements will sunset on January 1, 2018. CC 2924.11. Additional Loan Modification Safeguards: Until January 1, 2018, a mortgage servicer must provide written acknowledgment of receipt within five business days of a borrower's submission of a complete first lien modification application or any document in connection with a first lien modification application. The acknowledgement of receipt must provide a description of the loan modification process, including an estimated timeframe for the mortgage servicer to decide, other timeframes, and any deficiencies in the borrower's application. CC 2924.10. Furthermore, effective January 1, 2013 with no expiration date, if a first lien loan modification is denied, a mortgage service must send a written notice to the borrower with the reasons for denial and additional information as specified. On January 1, 2018, the required content of the denial letter will change to comport with other changes that will take effect. Smaller banks need not comply with these requirements until January 1, 2018. CC 2923.6 and 2924.11. Binding if Loan is Transferred: Any written approval for a foreclosure prevention alternative shall be honored by a subsequent mortgage servicer in the event the borrower's loan is transferred or sold. This requirement does not apply to smaller banks. This requirement will expire on January 1, 2018. CC 2924.11. Lender Required to Review Foreclosure Documents: No entity can record a notice of default or otherwise initiate the foreclosure process, except for the holder of the beneficial interest under the deed of trust, an authorized designated agent of the holder of the beneficial interest, or the original or substituted trustee under the deed of trust. Furthermore, a mortgage servicer must ensure that certain foreclosure documents are accurate and complete, and supported by competent and reliable evidence. Those foreclosure documents are the initial contact declaration, notice of default, notice of sale, assignment of deed of trust, substitution of trustee, and declarations and affidavits filed in a judicial foreclosure proceeding. A mortgage servicer must, before recording or filing these documents, review competent and reliable evidence substantiating a borrower’s default and the right to foreclose. The above provisions have no expiration date. However, until January 1, 2018, any mortgage servicer who engages in multiple and repeated uncorrected violations of its obligation to review foreclosure documents shall be liable for a civil penalty up to $7,500 per deed of trust in an action brought by the Attorney General, district attorney, or city attorney, or in an administrative proceeding brought by the DRE, DOC, or DFI against a respective licensee (see below for a borrower's legal remedies). These provisions apply to all trust deeds, regardless of occupancy or number of units. CC 2924(a)(6) and 2924.17. Extending Initial Contact Requirement: Existing law requiring a lender to contact a borrower 30 days before initiating foreclosure has been modified as well as extended with no expiration date. Originally set to expire on January 1, 2013, this provision generally prohibits a mortgage servicer or lender from recording a notice of default until 30 days after the lender or mortgage servicer contacts the borrower in person or by telephone to assess the borrower's financial situation and explore options for avoiding foreclosure. During the initial contact, the mortgage servicer must advise the borrower of the right to request a subsequent meeting within 14 days, and provide a toll-free number to find a HUD-certified housing counseling agency. Any meeting may occur telephonically. Instead of directly contacting the borrower, a mortgage servicer can satisfy due diligence requirements in the manner specified. A notice of default must include a declaration that the mortgage servicer has complied with or is exempt from this initial contact requirement. An existing requirement for a declaration in the notice of sale will be eliminated. Until January 1, 2013, this law generally applies to loans made from 2003 to 2007 secured by owner-occupied residential properties with one-to-four units, whereas starting January 1, 2013, this law will generally apply to first trust deeds secured by owner-occupied residential properties with one-to-four units. CC 2923.5 and 2923.55. Notifying Borrower Before NOD: A mortgage servicer cannot record a notice of default for a nonjudicial foreclosure until the mortgage servicer informs the borrower of the borrower’s right to: (1) request copies of the promissory note, deed of trust, payment history, and assignment of loan if any to demonstrate the mortgage servicer's right to foreclose; and (2) certain protections under the Servicemembers Civil Relief Act if the borrower is a service member or dependent. This requirement does not pertain to smaller banks as defined. This requirement expires on January 1, 2018. CC 2923.55. Notifying Borrower After NOD: Within 5 business days after recording a notice of default, a mortgage servicer must generally send a written notice to the borrower on how to apply for the mortgage servicer’s foreclosure prevention alternatives if any. This notice is not required if the borrower has previously exhausted the first lien loan modification process offered by the mortgage servicer as specified. This requirement does not apply to smaller banks as defined. This requirement shall sunset on January 1, 2018. CC 2924.9. Postponing a Trustee's Sale: Whenever a trustee’s sale is postponed for at least 10 business days, the lender or authorized agent must provide written notice of the new sale date and time to the borrower within five business days after the postponement. However, any failure to comply with this requirement will not invalidate any trustee's sale that would otherwise be valid. This requirement applies to all trust deeds, regardless of occupancy or number of units. This requirement shall sunset on January 1, 2018. CC 2924(a)(5). Legal Remedies for Borrowers: A borrower may generally bring a private right of action to enjoin or stop a trustee's sale until the mortgage servicer has corrected certain material violations of this law. If a trustee’s deed has already been recorded, the borrower may recover actual monetary damages for certain material violations. For intentional and reckless violations by the mortgage servicer, the borrower may recover treble actual damages or $50,000, whichever is greater. A prevailing borrower who is awarded relief under this provision can also recover reasonable attorneys’ fees and costs. Certain violations by a person licensed by the DRE, DOC, or DFI are deemed violations of that person's licensing laws. These provisions do not apply to smaller banks until 2018. CC 2924.12. C.A.R. opposed this provision because of our concern for bad faith claims, but the Legislature was not convinced. Lender's Standard of Care to Investors: The Legislature intends for a mortgage servicer to offer the borrower a loan modification or workout plan in accordance with the mortgage servicer's contractual or other authority. Any duty a mortgage servicer has to maximize net present value under a pooling and servicing agreement is owed to all investors, not any particular investor. A mortgage servicer will be deemed as acting in the best interest of all investor if it implements a loan modification or workout plan in accordance with certain specified parameters. CC 2923.6. Keep the Faith!

Inventory Down, Prices up, Things are looking better - Surprised?

We've all been watching the headlines and listening to the news. There are signs that we are healing and tipping towards a 'Seller's market'; Heck - Multiple Offers are the norm ... I have attached information from the Census Bureau for June 2012 FOR IMMEDIATE RELEASE WEDNESDAY, JULY 18, 2012 AT 8:30 A.M. EDT NEW RESIDENTIAL CONSTRUCTION IN JUNE 2012 The U.S. Census Bureau and the Department of Housing and Urban Development jointly announced the following new residential construction statistics for June 2012: BUILDING PERMITS Privately-owned housing units authorized by building permits in June were at a seasonally adjusted annual rate of 755,000. This is 3.7 percent (±1.0%) below the revised May rate of 784,000, but is 19.3 percent (±1.8%) above the June 2011 estimate of 633,000. Single-family authorizations in June were at a rate of 493,000; this is 0.6 percent (±0.8%)* above the revised May figure of 490,000. Authorizations of units in buildings with five units or more were at a rate of 241,000 in June. HOUSING STARTS Privately-owned housing starts in June were at a seasonally adjusted annual rate of 760,000. This is 6.9 percent (±13.3%)* above the revised May estimate of 711,000 and is 23.6 percent (±16.8%) above the June 2011 rate of 615,000. Single-family housing starts in June were at a rate of 539,000; this is 4.7 percent (±10.1%)* above the revised May figure of 515,000. The June rate for units in buildings with five units or more was 213,000. HOUSING COMPLETIONS Privately-owned housing completions in June were at a seasonally adjusted annual rate of 622,000. This is 2.6 percent (±12.5%)* above the revised May estimate of 606,000 and is 7.2 percent (±13.2%)* above the June 2011 rate of 580,000. Single-family housing completions in June were at a rate of 470,000; this is 1.3 percent (±9.8%)* above the revised May rate of 464,000. The June rate for units in buildings with five units or more was 134,000. New Residential Construction data for July 2012 will be released on Thursday, August 16, 2012, at 8:30 A.M. EDT. Our Internet site is: http://www.census.gov/newresconst EXPLANATORY NOTES In interpreting changes in the statistics in this release, note that month-to-month changes in seasonally adjusted statistics often show movements which may be irregular. It may take 3 months to establish an underlying trend for building permit authorizations, 4 months for total starts, and 6 months for total completions. The statistics in this release are estimated from sample surveys and are subject to sampling variability as well as nonsampling error including bias and variance from response, nonreporting, and undercoverage. Estimated relative standard errors of the most recent data are shown in the tables. Whenever a statement such as “2.5 percent (±3.2%) above” appears in the text, this indicates the range (-0.7 to +5.7 percent) in which the actual percent change is likely to have occurred. All ranges given for percent changes are 90-percent confidence intervals and account only for sampling variability. If a range does not contain zero, the change is statistically significant. If it does contain zero, the change is not statistically significant; that is, it is uncertain whether there was an increase or decrease. The same policies apply to the confidence intervals for percent changes shown in the tables. On average, the preliminary seasonally adjusted estimates of total building permits, housing starts and housing completions are revised about three percent or less. Explanations of confidence intervals and sampling variability can be found on our web site listed above. * 90% confidence interval includes zero. The Census Bureau does not have sufficient statistical evidence to conclude that the actual change is different from zero. http://www.census.gov/newresconst U.S. Census Bureau News Joint Release U.S. Department of Housing and Urban Development U.S. Department of Commerce Washington, D.C. 20233 Table 1. New Privately-Owned Housing Units Authorized in Permit-Issuing Places [Thousands of units. Detail may not add to total because of rounding] 2 to 4 5 units Total 1 unit units or more Total 1 unit Total 1 unit Total 1 unit Total 1 unit 2011: June 633 412 23 198 71 36 101 70 323 225 138 81 July 627 417 24 186 64 38 100 71 331 225 132 83 August 645 429 27 189 62 35 110 76 332 234 141 84 September 616 428 21 167 67 39 110 75 307 233 132 81 October 667 444 24 199 66 42 109 74 359 244 133 84 November 709 451 23 235 80 46 107 73 360 244 162 88 December 701 454 24 223 76 41 112 78 358 246 155 89 2012: January 684 452 20 212 78 37 101 75 377 245 128 95 February 707 478 25 204 82 46 119 79 361 260 145 93 March 769 466 22 281 81 44 130 84 371 241 187 97 April 723 475 22 226 88 45 114 76 359 248 162 106 May (r) 784 490 22 272 78 43 119 82 412 255 175 110 June (p) 755 493 21 241 78 43 118 81 379 257 180 112 Average RSE (%)1 1 1 6 1 3 3 2 2 1 1 1 2 Percent Change: June 2012 from May 2012 -3.7% 0.6% -4.5% -11.4% 0.0% 0.0% -0.8% -1.2% -8.0% 0.8% 2.9% 1.8% 90% Confidence Interval 3 ± 1.0 ± 0.8 ± 3.2 ± 3.0 ± 7.2 ± 10.2 ± 3.5 ± 4.1 ± 0.8 ± 1.0 ± 1.1 ± 1.4 June 2012 from June 2011 19.3% 19.7% -8.7% 21.7% 9.9% 19.4% 16.8% 15.7% 17.3% 14.2% 30.4% 38.3% 90% Confidence Interval 3 ± 1.8 ± 0.8 ± 8.5 ± 5.0 ± 9.9 ± 14.0 ± 4.0 ± 4.7 ± 1.6 ± 1.9 ± 3.0 ± 3.8 2010: 604.6 447.3 22.0 135.3 73.8 49.1 103.5 75.4 299.1 232.3 128.2 90.6 2011: 624.1 418.5 21.6 184.0 68.5 39.0 102.7 70.5 320.7 227.1 132.2 81.9 RSE (%) (X) (X) (X) (X) (X) (X) (X) (X) (X) (X) (X) (X) 2011: Year to Date2 294.6 208.5 9.3 76.8 33.0 18.9 45.7 33.3 152.9 113.9 63.0 42.4 2012: Year to Date2 380.3 249.4 10.8 120.0 38.6 21.1 55.9 40.1 200.1 134.3 85.6 53.9 RSE (%) 1 1 5 (Z) 3 3 2 1 1 (Z) 1 1 Year to Date Percent Change 4 29.1% 19.6% 16.1% 56.4% 17.0% 11.7% 22.4% 20.5% 30.9% 17.9% 35.8% 27.2% 90% Confidence Interval 3 ± 1.4 ± 1.2 ± 8.6 ± 2.2 ± 5.9 ± 8.0 ± 2.5 ± 3.0 ± 1.1 ± 1.3 ± 2.3 ± 2.9 2011: June 63.8 41.5 2.1 20.3 8.2 3.7 10.1 7.4 31.1 21.9 14.3 8.5 July 52.6 35.9 1.9 14.8 5.1 3.5 9.1 6.4 27.6 18.9 10.8 7.2 August 62.6 41.6 2.6 18.4 6.0 3.4 11.3 7.8 31.4 22.3 13.8 8.1 September 53.2 36.3 1.9 15.1 6.0 3.6 10.5 7.0 25.4 18.9 11.3 6.8 October 52.0 34.4 2.0 15.7 5.8 3.6 10.0 6.5 26.1 17.8 10.1 6.5 November 51.9 31.6 1.8 18.5 6.5 3.5 8.4 5.3 25.6 16.9 11.4 6.0 December 51.6 29.8 1.8 20.0 5.7 2.8 7.1 4.2 27.2 16.9 11.5 6.0 2012: January 46.3 29.9 1.3 15.1 4.8 2.2 5.0 3.3 28.4 18.3 8.2 6.1 February 51.9 35.1 1.7 15.2 5.5 2.7 6.5 4.6 28.9 21.1 11.1 6.8 March 67.4 42.2 2.0 23.2 5.8 3.6 10.3 7.3 34.3 22.5 17.0 8.9 April 62.5 43.9 1.8 16.8 7.6 4.0 10.6 7.8 30.5 22.4 13.7 9.6 May (r) 75.4 49.6 2.0 23.8 7.3 4.4 12.3 9.1 38.6 24.9 17.2 11.3 June (p) 73.3 47.8 2.1 23.5 8.2 4.1 11.4 8.2 35.2 24.1 18.5 11.3 Average RSE (%)1 1 1 6 1 3 3 2 2 1 1 1 2 (p) Preliminary. (r) Revised. RSE Relative standard error. S Does not meet publication standards because tests for identifiable and stable seasonality do not meet reliability standards. X Not applicable. Z Relative standard error is less than 0.5 percent. 1Average RSE for the latest 6-month period. 2Reflects revisions not distributed to months. 3 See the Explanatory Notes in the accompanying text for an explanation of 90% confidence intervals. 4 Computed using unrounded data. Seasonally adjusted annual rate Not seasonally adjusted Midwest South West Period In structures with -- United States Northeast Table 2. New Privately-Owned Housing Units Authorized, but Not Started, at End of Period [Thousands of units. Detail may not add to total because of rounding] 2 to 4 5 units Total 1 unit units or more Total 1 unit Total 1 unit Total 1 unit Total 1 unit 2011: June 84.7 45.5 1.7 37.5 11.7 6.2 5.7 4.5 42.4 23.5 24.9 11.2 July 80.7 43.4 1.9 35.5 8.3 5.8 6.2 4.2 43.2 23.6 23.1 9.8 August 87.4 45.5 2.5 39.4 8.7 5.9 7.8 5.9 46.2 23.6 24.8 10.1 September 79.9 45.0 3.5 31.4 8.9 5.8 7.9 5.9 41.6 23.8 21.5 9.5 October 75.3 42.8 3.0 29.5 8.0 5.6 7.0 4.9 39.9 22.8 20.3 9.4 November 73.8 43.6 3.1 27.1 6.8 4.9 8.9 6.9 39.8 22.4 18.3 9.4 December 78.1 42.3 2.4 33.3 7.8 4.9 6.2 3.9 43.3 23.3 20.9 10.3 2012: January 75.0 39.9 1.6 33.5 8.1 5.0 5.6 3.7 41.4 21.1 20.0 10.1 February 78.7 44.2 1.9 32.6 9.8 5.1 6.7 4.5 41.1 23.5 21.1 11.1 March 87.6 45.2 2.0 40.4 8.4 5.2 8.4 5.2 44.4 23.6 26.4 11.3 April (r) 80.6 44.2 2.0 34.5 8.8 5.1 7.2 5.3 39.9 22.8 24.8 11.1 May (r) 87.9 46.8 1.6 39.5 9.8 5.6 8.1 5.6 44.4 24.4 25.6 11.2 June (p) 88.0 44.8 1.7 41.5 9.6 5.0 8.8 4.8 45.4 23.5 24.1 11.5 Average RSE (%)1 5 6 20 7 17 21 12 14 7 8 12 16 Percent Change: 2 June 2012 from May 2012 0.2% -4.3% 12.3% 5.0% -1.4% -11.6% 8.5% -13.9% 2.4% -3.7% -5.7% 2.7% 90% Confidence Interval 3 ± 7.4 ± 6.5 ± 27.3 ± 12.5 ± 13.2 ± 14.4 ± 12.5 ± 13.2 ± 6.1 ± 7.7 ± 19.4 ± 13.0 June 2012 from June 2011 3.9% -1.5% 0.7% 10.6% -17.3% -20.5% 55.0% 7.6% 7.1% -0.1% -3.2% 2.6% 90% Confidence Interval 3 ± 8.0 ± 10.9 ± 34.2 ± 14.8 ± 23.9 ± 16.9 ± 27.3 ± 20.2 ± 11.7 ± 13.8 ± 15.1 ± 23.5 (p) Preliminary. (r) Revised. RSE Relative standard error. S Does not meet publication standards because tests for identifiable and stable seasonality do not meet reliability standards. 1Average RSE for the latest 6-month period. 2 Computed using unrounded data. 3 See the Explanatory Notes in the accompanying text for an explanation of 90% confidence intervals. Note: These data represent the number of housing units authorized in all months up to and including the last day of the reporting period and not started as of that date without regard to the months of original permit issuance. Cancelled, abandoned, expired, and revoked permits are excluded. Period In structures with -- United States Northeast Not seasonally adjusted Midwest South West Table 3. New Privately-Owned Housing Units Started [Thousands of units. Detail may not add to total because of rounding] 2 to 4 5 units Total 1 unit units or more Total 1 unit Total 1 unit Total 1 unit Total 1 unit 2011: June 615 443 (S) 165 69 38 126 84 286 235 134 86 July 614 429 (S) 176 86 41 91 75 304 225 133 88 August 581 422 (S) 152 56 35 86 51 298 244 141 92 September 647 422 (S) 219 59 41 97 74 329 220 162 87 October 630 439 (S) 175 65 42 110 78 321 234 134 85 November 708 460 (S) 239 98 57 94 70 344 238 172 95 December 697 520 (S) 153 62 44 178 138 328 248 129 90 2012: January 720 511 (S) 193 74 44 106 82 403 290 137 95 February 718 470 (S) 240 66 50 99 87 419 253 134 80 March 706 481 (S) 215 87 45 116 88 354 249 149 99 April (r) 747 504 (S) 234 80 48 125 91 395 265 147 100 May (r) 711 515 (S) 182 63 43 109 87 379 276 160 109 June (p) 760 539 (S) 213 77 54 101 91 363 279 219 115 Average RSE (%)1 6 5 (X) 15 15 14 10 10 7 6 12 9 Percent Change: June 2012 from May 2012 6.9% 4.7% (S) 17.0% 22.2% 25.6% -7.3% 4.6% -4.2% 1.1% 36.9% 5.5% 90% Confidence Interval 2 ± 13.3 ± 10.1 (X) ± 45.6 ± 29.2 ± 44.1 ± 16.9 ± 19.4 ± 14.2 ± 15.0 ± 44.0 ± 17.0 June 2012 from June 2011 23.6% 21.7% (S) 29.1% 11.6% 42.1% -19.8% 8.3% 26.9% 18.7% 63.4% 33.7% 90% Confidence Interval 2 ± 16.8 ± 13.5 (X) ± 45.4 ± 31.9 ± 45.3 ± 11.8 ± 17.8 ± 19.2 ± 16.4 ± 57.9 ± 30.3 2010: 586.9 471.2 11.4 104.3 71.6 52.3 97.9 79.2 297.5 247.1 119.9 92.6 2011: 608.8 430.6 10.9 167.3 67.7 41.2 100.9 74.3 307.8 229.3 132.5 85.7 RSE (%) 1 1 14 3 4 4 2 3 2 2 2 2 2011: Year to Date 289.1 213.1 5.2 70.8 31.6 19.5 46.8 34.7 150.2 116.0 60.5 42.9 2012: Year to Date 365.6 257.7 5.2 102.8 36.5 23.3 52.4 42.0 195.2 139.5 81.5 52.9 RSE (%) 2 2 15 5 4 5 3 3 2 2 4 3 Year to Date Percent Change 3 26.5% 20.9% -0.6% 45.1% 15.3% 19.4% 12.1% 21.1% 30.0% 20.3% 34.7% 23.2% 90% Confidence Interval 2 ± 4.0 ± 3.3 ± 33.5 ± 15.9 ± 9.0 ± 11.9 ± 6.7 ± 5.9 ± 5.9 ± 4.6 ± 11.3 ± 7.2 2011: June 60.5 44.8 0.6 15.2 6.9 4.0 13.2 9.3 27.5 22.8 13.0 8.7 July 57.6 41.0 0.8 15.8 8.0 4.0 9.1 7.7 27.7 20.6 12.7 8.7 August 54.5 39.4 0.6 14.5 5.2 3.2 8.6 5.3 27.2 22.1 13.4 8.8 September 58.8 37.3 0.6 20.9 5.2 3.5 9.5 7.2 29.4 19.0 14.6 7.5 October 53.2 36.2 1.4 15.6 5.8 3.8 10.0 7.2 26.7 19.0 10.6 6.3 November 53.0 32.7 0.7 19.6 7.6 4.2 7.2 5.3 25.7 17.0 12.6 6.3 December 42.7 31.0 1.6 10.1 4.2 3.0 9.7 7.0 20.9 15.6 7.9 5.3 2012: January 47.2 33.1 1.1 13.0 4.6 2.6 5.3 3.7 28.4 20.7 9.0 6.1 February 49.7 32.2 0.6 16.9 3.8 2.7 5.0 4.1 31.1 19.5 9.8 5.9 March 58.0 40.2 0.8 17.1 7.0 3.7 8.4 6.1 30.2 21.8 12.4 8.5 April (r) 66.8 46.6 0.7 19.5 7.1 4.4 11.3 8.5 35.0 24.2 13.4 9.5 May (r) 68.3 50.2 1.3 16.9 6.2 4.3 11.6 9.6 34.6 25.1 15.8 11.1 June (p) 75.6 55.4 0.7 19.4 7.8 5.7 10.9 10.0 35.8 28.1 21.1 11.6 Average RSE (%)1 6 5 29 15 15 14 10 10 7 6 12 9 (p) Preliminary. (r) Revised. RSE Relative standard error. S Does not meet publication standards because tests for identifiable and stable seasonality do not meet reliability standards. X Not applicable. 1Average RSE for the latest 6-month period. 2 See the Explanatory Notes in the accompanying text for an explanation of 90% confidence intervals. 3 Computed using unrounded data. Period In structures with -- United States Northeast Seasonally adjusted annual rate Not seasonally adjusted Midwest South West Table 4. New Privately-Owned Housing Units Under Construction at End of Period [Thousands of units. Detail may not add to total because of rounding] 2 to 4 5 units Total 1 unit units or more Total 1 unit Total 1 unit Total 1 unit Total 1 unit 2011: June 418 246 (S) 162 93 35 67 46 170 114 88 51 July 418 243 (S) 165 95 35 66 46 166 110 91 52 August 413 239 (S) 164 94 33 62 44 166 111 91 51 September 418 238 (S) 171 91 34 63 44 169 110 95 50 October 423 237 (S) 176 88 34 65 44 172 109 98 50 November 432 236 (S) 186 92 35 65 43 174 109 101 49 December 434 236 (S) 188 91 35 68 46 174 107 101 48 2012: January 443 241 (S) 191 90 36 69 46 182 111 102 48 February 450 243 (S) 196 89 37 70 47 188 111 103 48 March 459 245 (S) 204 90 37 69 47 191 111 109 50 April (r) 464 247 (S) 207 89 37 70 47 197 113 108 50 May (r) 472 251 (S) 211 88 36 72 48 202 115 110 52 June (p) 482 256 (S) 216 88 36 71 48 206 118 117 54 Average RSE (%)1 2 3 (X) 4 6 8 6 7 4 4 4 8 Percent Change: June 2012 from May 2012 2.1% 2.0% (S) 2.4% 0.0% 0.0% -1.4% 0.0% 2.0% 2.6% 6.4% 3.8% 90% Confidence Interval 2 ± 1.7 ± 1.6 (X) ± 3.0 ± 3.1 ± 4.4 ± 2.5 ± 3.7 ± 2.3 ± 2.4 ± 5.1 ± 3.0 June 2012 from June 2011 15.3% 4.1% (S) 33.3% -5.4% 2.9% 6.0% 4.3% 21.2% 3.5% 33.0% 5.9% 90% Confidence Interval 2 ± 4.1 ± 4.3 (X) ± 10.2 ± 7.5 ± 7.2 ± 9.8 ± 13.0 ± 5.0 ± 5.6 ± 7.3 ± 5.5 2011: June 426.2 253.4 10.2 162.6 93.9 35.8 68.7 47.5 174.5 117.8 89.1 52.4 July 428.7 253.9 9.9 164.9 96.5 36.0 68.5 48.8 170.8 114.8 92.9 54.3 August 424.7 250.6 9.8 164.3 94.8 34.4 65.2 46.8 170.8 115.5 93.9 53.9 September 429.1 248.2 9.3 171.7 92.1 34.7 66.3 47.3 172.7 113.8 98.0 52.4 October 429.5 241.6 9.8 178.2 89.9 35.0 67.7 46.3 173.4 109.9 98.5 50.3 November 433.3 234.9 9.9 188.5 93.6 35.3 66.2 44.2 172.9 107.4 100.7 48.1 December 417.7 221.6 10.3 185.9 89.6 34.1 66.1 44.1 165.1 99.1 96.9 44.4 2012: January 426.8 227.7 10.4 188.7 87.7 34.6 66.1 43.4 174.0 104.2 99.0 45.4 February 435.1 230.2 10.5 194.4 86.1 34.9 65.3 42.6 182.6 106.4 101.0 46.2 March 449.3 236.5 10.2 202.6 88.7 35.5 64.8 43.3 189.4 109.6 106.4 48.0 April (r) 462.1 245.0 10.4 206.6 88.7 36.6 68.0 45.1 197.6 113.7 107.9 49.6 May (r) 475.3 254.1 10.3 210.9 87.9 36.3 71.2 47.3 205.0 117.7 111.1 52.8 June (p) 491.4 264.9 9.6 216.9 88.6 36.4 73.4 50.4 210.5 122.2 119.0 55.9 Average RSE (%)1 2 3 12 4 6 8 6 7 4 4 4 8 (p) Preliminary. (r) Revised. RSE Relative standard error. S Does not meet publication standards because tests for identifiable and stable seasonality do not meet reliability standards. X Not applicable. 1Average RSE for the latest 6-month period. 2 See the Explanatory Notes in the accompanying text for an explanation of 90% confidence intervals. Seasonally adjusted Not seasonally adjusted Midwest South West Period In structures with -- United States Northeast Table 5. New Privately-Owned Housing Units Completed [Thousands of units. Detail may not add to total because of rounding] 2 to 4 5 units Total 1 unit units or more Total 1 unit Total 1 unit Total 1 unit Total 1 unit 2011: June 580 454 (S) 110 84 49 113 75 283 246 100 84 July 634 483 (S) 142 66 48 116 79 351 273 101 83 August 617 478 (S) 135 65 50 123 80 294 242 135 106 September 600 424 (S) 166 97 32 91 67 299 235 113 90 October 578 445 (S) 126 89 36 94 82 284 238 111 89 November 583 455 (S) 123 51 42 95 76 313 233 124 104 December 606 460 (S) 137 79 39 105 78 297 245 125 98 2012: January 542 394 (S) 140 89 37 87 65 275 220 91 72 February 572 432 (S) 136 79 40 97 79 283 229 113 84 March 587 440 (S) 136 71 44 121 79 284 227 111 90 April (r) 663 490 (S) 170 80 44 106 90 325 246 152 110 May (r) 606 464 (S) 126 79 48 103 86 299 245 125 85 June (p) 622 470 (S) 134 71 53 107 71 321 253 123 93 Average RSE (%)1 6 6 (X) 16 19 17 11 13 9 9 12 12 Percent Change: June 2012 from May 2012 2.6% 1.3% (S) 6.3% -10.1% 10.4% 3.9% -17.4% 7.4% 3.3% -1.6% 9.4% 90% Confidence Interval 2 ± 12.5 ± 9.8 (X) ± 46.3 ± 45.7 ± 32.0 ± 27.3 ± 19.9 ± 15.5 ± 16.4 ± 27.6 ± 16.7 June 2012 from June 2011 7.2% 3.5% (S) 21.8% -15.5% 8.2% -5.3% -5.3% 13.4% 2.8% 23.0% 10.7% 90% Confidence Interval 2 ± 13.2 ± 12.3 (X) ± 44.0 ± 40.0 ± 38.6 ± 16.1 ± 25.6 ± 22.8 ± 18.1 ± 24.0 ± 22.7 2010: 651.7 496.3 8.9 146.5 80.4 54.0 106.9 81.9 316.7 257.6 147.7 102.8 2011: 584.9 446.6 8.4 129.9 72.5 44.0 103.0 75.9 295.5 235.6 113.9 91.2 RSE (%) 2 2 18 7 5 4 3 3 3 3 3 3 2011: Year to Date 258.9 199.0 4.5 55.3 31.4 20.8 45.0 33.0 132.3 105.3 50.2 39.9 2012: Year to Date 277.7 207.5 4.8 65.3 35.8 20.4 46.6 34.8 139.7 110.9 55.6 41.4 RSE (%) 3 3 22 7 8 8 5 5 4 4 5 5 Year to Date Percent Change 3 7.3% 4.3% 6.4% 18.1% 13.8% -2.0% 3.6% 5.5% 5.6% 5.3% 10.9% 3.7% 90% Confidence Interval 2 ± 6.8 ± 6.3 ± 45.4 ± 20.6 ± 19.9 ± 17.7 ± 10.8 ± 12.9 ± 10.2 ± 8.8 ± 10.6 ± 8.5 2011: June 50.5 39.7 1.4 9.4 7.5 4.5 9.6 6.3 24.6 21.4 8.8 7.4 July 53.6 40.2 0.8 12.6 5.8 4.2 9.7 6.4 29.6 22.7 8.5 6.9 August 57.3 42.1 0.5 14.7 6.3 4.6 11.8 7.1 26.9 21.1 12.4 9.3 September 54.7 38.4 0.9 15.3 8.9 2.9 8.6 6.4 26.5 20.6 10.7 8.6 October 52.1 41.3 0.5 10.3 7.7 3.4 9.0 8.0 25.6 21.9 9.8 8.0 November 50.1 40.7 0.4 9.0 4.7 4.1 8.8 7.5 26.0 20.1 10.5 9.1 December 58.3 44.8 0.8 12.6 7.8 4.0 10.0 7.6 28.6 23.8 11.9 9.4 2012: January 36.4 26.0 0.6 9.8 5.8 2.2 5.8 4.3 18.8 14.9 6.0 4.7 February 39.0 29.4 0.3 9.3 5.3 2.6 6.4 5.2 19.9 16.2 7.4 5.4 March 44.4 33.6 0.8 9.9 4.8 2.9 8.4 5.3 22.1 17.9 9.1 7.6 April (r) 52.3 37.6 0.3 14.5 6.1 3.0 8.3 6.9 26.1 19.4 11.9 8.3 May (r) 50.1 38.8 1.3 9.9 6.7 4.3 8.5 7.2 24.5 20.2 10.4 7.2 June (p) 55.5 42.0 1.6 11.9 7.0 5.5 9.2 6.0 28.4 22.3 10.9 8.3 Average RSE (%)1 6 6 43 16 19 17 11 13 9 9 12 12 (p) Prelminary. (r) Revised. RSE Relative standard error. S Does not meet publication standards because tests for identifiable and stable seasonality do not meet reliability standards. X Not applicable. 1Average RSE for the latest 6-month period. 2 See the Explanatory Notes in the accompanying text for an explanation of 90% confidence intervals. 3 Computed using unrounded data. Seasonally adjusted annual rate Not seasonally adjusted Midwest South West Period In structures with -- United States Northeast As always ... Keep the faith! Roger A. Sulllivan ~ Roger@RogerASullivan.com ~ Roger@ShortSaleSully.com

Prequalified or PreApproved !!!

With the low inventory levels in the Coachella Valley and multiple offers becoming more commonplace, buyers who want any chance in the bidding process need to provide a mortgage prequalification or preapproval ... and this should be applied for prior to looking at homes or engaging your Real Estate agent. Here in the Valley, most offers won't even be considered without one or the other. The low inventory we are experiencing makes timing a top priority to have any chance at having your offer accepted. Should you elect to search for property prior to meeting with a Lender(s), it is inevitable that you will come across the home that is ideal for you and the family and one of three things can happen: A) Every other Buyer and Agent at that price point has fallen asleep and you have your offer received because you have plenty of time to comply with paragraph 3.H.1 of the CAR 'California Association of Realtors" California Residential Purchase Agreement "(1) loan Applications: Within 7 (or ___ days after acceptance. Buyer shall Deliver to Seller a letter from lender or loan broker stating that, based on a review of Buyer's written application and credit report, Buyer is prequalified or preapproved for any NEW loan specified in 3C above. (If checked, letter attached." B) You will come across the home that is ideal for you and the family and the Seller accepts an offer from someone else because they won’t know if you are creditworthy and why would they risk taking their home off the market for someone who is not credit worthy; and C) You will come across the home that is ideal for you and the family and after submitting all the required the documentation to the Lender, you discover that it is $5,000 the maxim you can qualify for. Each of these examples is intended to stress the necessity of identifying that the prequalification or preapproval is one of the most important steps in the process of home buying in the 2012 marketplace. Now, prequalified or preapproved? The difference is significant. Prequalifying for a mortgage is based solely on what you disclose to the loan officer or broker about your earnings, credit score and total assets, including what is available for a down payment. Prequalification can be accomplished on the phone, online or written as it doesn’t normally investigate all of the criteria that is required to issue a preapproval letter; and so, the prequalification letter normally states … Congratulations, based upon the information received, you qualify for a loan of $ xxx,xxx.xx at market rate. Please contact me when you have located a property. A preapproval, by contrast, requires borrowers to provide documentation of their income and their assets. The lender typically pulls your credit report and score and you submit nearly everything you will need for the actual mortgage underwriting: recent pay stubs & bank statements; Investment Account statements, including any/all pension; W-2’s; last 2 years tax statements, 1099’s and any other assets that could show you have the resources to buy and maintain a home. Some lenders treat preapprovals as an opinion on the person’s ability to borrow, not a guarantee to lend while a few actually issue what constitutes a commitment. Generally, borrowers need to have chosen a property and have it appraised before they can expect a firm commitment from a lender. Preapproval carries more weight when you go to negotiate a deal. It tells the Seller that you can take your property off the market in confidence because as long as we complete our contract requirements, I have the ability to obtain financing to buy your home. I will not waste your time nor cause you to lose another Buyer. Borrowers should ask the lender to provide a good-faith estimate on closing costs and fees along with the preapproval. Many will provide this only once you have a home under contract, but some will give you an estimate of those costs, said Sofi Cordero, a senior housing counselor with La Casa De Don Pedro, which works on affordable housing and neighborhood development in Newark. The preapproval letter should include the amount a borrower is qualified to borrow, as well as the interest rate the prequalification was calculated at; in addition, it should always include the loan officer’s contact information. Some letters may have an estimated monthly payment, however this is not as important as the loan term and the loan type i.e. Conventional, FHA, VA etc... If you receive a preapproval letter however can’t locate an acceptable property for some time, stay engaged with your Loan Officer. Provide them with update paystubs and bank statements so that they can update your preapproval letter. Make sure the preapproval letter specifically states the property address you are making an offer on and do not expect a letter to serve for more than one property. This is more important than you realize. It makes one think that it’s more of a prequalification than a preapproval. Give yourself the best chance – stay engaged with the process. As always – Keep the faith!

Have we turned the corner?

Have we turned the corner? We'll if we haven't, we are certainly peeking around it with a giraffe-like neck. More and more, I hear everyone around the real estate industry bemoaning the fact that there is low inventory or no inventory. "If I had another listing like this one, I could sell it 20 times". There are Buyers out there and no product to offer. The tide is changing from a Buyer's market to a Seller's market by strict definition: A market which has more buyers than sellers. High prices result from this excess of demand over supply. This is certainly supported by the prices trending upward through the $500,000 level accompanied by the multiple offers have have been prominent for a number of months; in addition, unemployment figures are showing signs of improvement for numerous consecutive months. New businesses/restaurants are starting to pop up in and around the valley ... All favorable signs that we may be inching out of this hole "recession" -OR- is it springing from the hope that the election year brings? Another key factor is that the Mortgage loan delinquency rates are at their lowest since 2009. The national mortgage delinquency rate (the rate of borrowers 60 or more days past due) declined in the first three months of 2012 to 5.78 percent. This improvement ends two quarters of increases that began in the 3rd quarter of 2011, according to TransUnion (One of the big three credit-reporting agencies). Prior to the 3rd quarter of 2011, 60-day mortgage delinquency rates had dropped for six consecutive quarters. This latest quarter brings the delinquency rate to its lowest point since the first quarter of 2009. Between fourth quarter 2011 and first quarter of 2012, all but eight states experienced decreases in their mortgage delinquency rates; and TransUnion forecasts mortgage delinquency rates to drift downward in 2012 as more homeowners are able to repay their mortgage. As the season winds down, interest is still very high and should remain as such through the start of the next season. We will have an interesting interlude called the Presidential Campaign and by the time those results are in, the nationa largest lenders should likely have made a decision on their shadow industry and how they will we dealing with it. Stay tuned for more exciting news ... and as always ... Keep the faith!

Is it time to refinance yet - again?

THOSE who refinanced their mortgages a year or so ago, when interest rates averaged just below 5 percent for a 30-year fixed-rate loan, may be wondering whether it’s time to refinance yet again, now that rates are at least a full percentage point lower. As of Thursday, according to Freddie Mac’s weekly survey, the average rate on a 30-year loan was 3.84 percent, down from 3.88 percent the previous week and 4.71 percent around the same time a year ago. The rate on the 15-year loan averaged 3.07 percent, off from 3.12 percent the previous week and 3.89 percent last year. A Freddie Mac spokesman says the rates are the lowest in the 41-year history of the weekly survey. Many homeowners opted to refinance last fall and winter when mortgage rates first dipped below 4 percent, said Guy Cecala, the chief executive of Inside Mortgage Finance, a trade publication. “People who jumped at 5 percent also jumped on 4 percent,” he said. Mr. Cecala says many borrowers refinancing these days are at least second-timers — he, for one, did so last fall in order to cut his mortgage interest three-quarters of a percentage point — but he said he knew of no specific data tracking this trend. If you’re considering refinancing, financial planners suggest you first delve into your financial goals — specifically, how long you expect to live in your home. Some homeowners decide it makes more sense to stay with their current mortgage, especially if the savings are small or they plan to move within a year or two. “There is a hassle to refinancing — all this paperwork,” said Sheila Walker Hartwell, a financial planner in Manhattan. One of her clients, she noted, recently decided against refinancing because she was already building equity in her home, which she hoped to use on her next home purchase. “When you refinance, you’re not building equity,” Ms. Walker Hartwell said. “You’re starting at the beginning” of the amortization tables. Amortization schedules work like this: In the first few years, almost all of the payment goes toward interest, so the longer you have the loan, the more is put toward the principal. “That’s very important,” said Edward Ades, a partner in Universal Mortgage in Brooklyn. He noted, for example, that in the first year of a $300,000 30-year mortgage at 4 percent, a borrower would have paid off 1.76 percent of the balance; in the fifth year, that rises to 2.06 percent. Those who refinanced in the last year or two don’t have to consider amortization tables, but they do need to know their equity position — and when the refinancing would begin to pay off. To calculate that, start with a rundown of all the closing costs, then divide the closing costs by the amount you expect to save on each monthly payment. So if closing costs total $5,000, and your monthly savings are $400, it will take you 12.5 months to break even on refinancing. If it takes you, say, three years to recoup the costs and you hope to move within two years, then refinancing does not make sense, said John J. Vento, a Staten Island financial planner. Depending on your lender, you probably need to have 20 percent equity, and maybe a little more, if you want to wrap your closing costs into the new mortgage. Those who are underwater — shorthand for owing more than the home is worth — may consider the Home Affordable Refinance Program, or HARP, which is now widely available, Mr. Cecala noted. Greg McBride, a senior financial analyst for Bankrate.com, suggests homeowners start with their current lender, and ask if they can streamline the process. You may be able to avoid a second appraisal and title insurance reports and fees, he said, adding, “That would save not only time but also money.” He also suggests that borrowers check out new lenders and consider a shorter loan term, to “shave years off the payments” and build equity faster. As always - Keep the faith!

Are we turning the corner? Fannie Mae thinks so ...

A new Fannie Mae study suggests Americans are beginning to consider 2012 a good year to acquire a home.

The GSE released its March National Housing Survey of just over 1,000 Americans and found more citizens expect rents and home prices to increase in the coming months, making today a better time to purchase a residence.

About 73% of those interviewed said buying a home today is a good idea, up from 70% in February.

Thirty-seven percent of those interviewed believe prices will increase, which is up 5 percentage points since February and the highest point reached in more than a year.

About half of the respondents expect both home rentals and purchases will grow over the next 12 months.

Consumers also are more confident about their own finances, with 44% believing their financial situations will get better in the near future.

"Conditions are coming together to encourage people to want to buy homes," said Doug Duncan, vice president and chief economist of Fannie Mae. "Americans' rental price expectations for the next year continue to rise, reaching their record high level for our survey this month. With an increasing share of consumers expecting higher mortgage rates and home prices over the next 12 months, some may feel that renting is becoming more costly and that homeownership is a more compelling housing choice."

Still, 58% of those surveyed believe the economy is still on the wrong track, with only 35% holding a more optimistic view of the nation's economic situation. Twelve percent believe their financial situation will worsen, and 21% believe their income is now significantly higher than it was 12 months ago.


Keep the faith!

How much of your property taxes do you write-off?

The Franchise Tax Board will soon be getting a new computer system and starting with the 2012 tax year, property owners will be required to break down payments into deductible and non-deductible portions when they file.

This change could result in a significant reduction in deductions. Up until this point, property owners claimed the total amount of their property tax bill or as provided on the 1098 form by their mortgage company.


With the tax filing season majorly over, this is a perfect opportunity to interface with your CPA to discuss how this will affect your future filings; and the need for any changes to amounts withheld for the year.

FHA to deny mortgage backing for credit disputes above $1,000

As of April 1, potential borrowers with ongoing credit disputes totaling more than $1,000 are no longer eligible for mortgages insured by the FHA.

Under the rule, borrowers must either pay off the outstanding balance on these collections accounts or document a payment arrangement that the lender must then submit to the FHA before closing. The payment arrangement will be counted into the debt-to-income ratio for the new home loan.

The rule excludes disputed accounts from more than two years ago, along with those related to theft. But the lender must document an identity theft or police report on the fraudulent charges.

An FHA spokesman said the rule was designed as another protection for the FHA emergency fund. The fund levels slipped to 0.2 percent of at-risk insurance last year, well below the 2 percent mandated by Congress. The FHA raised insurance premiums on April 1 as well to boost the fund by $1 billion.

See your Mortgage Professional to answer all your questions about the FHA program and all other options available to you.

FHA Mortgages are poised to get more expensive

If you're considering buying a house with an FHA mortgage and expect the seller to help out with your closing costs, here's a heads-up: The Federal Housing Administration plans to impose significant restrictions on the amount of money that sellers can contribute at closing in the near future.

On top of that, the FHA also will be raising its mortgage insurance premiums during the coming weeks, increasing charges for new purchasers across the board.

You might ask, why hit us with additional financial burdens right now, just as housing is showing modest signs of recovery in many areas and the spring buying season is getting underway?

One big reason: Over the last six years, the FHA has been the turnaround champ of residential real estate, offering down payments as low as 3.5% despite the recession and housing bust and growing its market share to 25%-plus from 3%. The program is financing 40% or more of all new-home purchases in some metropolitan areas and is a crucial resource for first-time buyers and moderate-income families, especially minorities. With a maximum loan amount of $729,750 in high-cost areas, it is also a force in some of the country's most expensive markets — California, Washington, D.C., New York and parts of New England.

But during the same span of rapid growth, the FHA's insurance fund capital reserves have steadily deteriorated — far below congressionally mandated levels. Delinquencies have been increasing. According to the latest quarterly survey by the Mortgage Bankers Assn., FHA delinquencies rose to 12.4%, compared with a 4.1% average for prime (Fannie Mae-Freddie Mac) conventional fixed-rate mortgages and 6.6% for VA loans.

As a result, the FHA is under the gun — with Congress and within the Obama administration — to get its own house in order, cut insurance claims and rebuild its reserves. The upcoming squeezes on seller contributions and bumps in premiums are steps in this direction.

The seller-contribution cutbacks could be painful, particularly in areas of the country where closing costs and home prices are relatively high.

Here's what's involved: Traditionally the FHA has been uniquely generous in allowing home sellers — including builders marketing new construction — to sweeten the pot for purchasers by chipping in money to defray closing costs. The FHA now allows sellers to pay up to 6% of the price of the house toward their buyers' closing expenses. Fannie Mae and Freddie Mac, by comparison, cap contributions at 3%. The VA's ceiling is 4%.

Under newly proposed rules, the FHA cap would drop to the greater of 3% of the home price or $6,000. In sales involving houses priced at $100,000 or less, this wouldn't change anything ($6,000 equals 6% of $100,000). But on all sales above this threshold, the squeeze would get progressively tighter.

On a $200,000 home, a buyer could today ask the seller to pay for $12,000 of a long list of settlement charges including all prepaid loan expenses, discount points on the loan, interest rate buy-downs and upfront FHA insurance premiums, among others. Under the proposed cutback, the maximum amount would be slashed in half.

On many home transactions, the reductions would force sellers to lower their prices to enable cash-short buyers to get through the closing. In other cases, sales might simply be too far of a stretch for some purchasers.

The proposed cuts are open to public comment through the end of this month but are highly likely to be adopted in much the same form soon afterward. The FHA also is restricting the types of "closing costs" that sellers can pay. Six months' or a year's worth of interest payments or homeowner association dues in advance no longer will be permitted — a serious blow to many builders who use these as financial carrots.

Beyond these changes, FHA also plans significant increases in insurance premiums — upfront premiums will rise to 1.75% from 1%, effective April 1, and annual premiums will increase by 0.1% on all loans under $625,000 and 0.35% on mortgage amounts above that, effective June 1.

William McCue, president of McCue Mortgage Co. in New Britain, Conn., which does a sizable percentage of its business with the FHA, said the cumulative effect of all these increases "will not just crowd first-time buyers out of the FHA market, it will prevent them from owning a home that, absent these new costs, would be affordable."

Bottom line: Nail down your FHA money and seller-contribution negotiations as soon as you can because later looks a lot more expensive.

Real Estate Financing ~ Points -vs- No points

The New York Times recently ran an article that covered some basics and provided some stats. Definitions are good if you are not experienced but stats are only fluff because everyone's situation is different so what John Smith does has no bearing on what you should do.

Here's the highlights of the New York Times article but read on to the end as I will make some valid points that you should consider closely before you automatically agree to what your Lender has chosen for you or what information you give to Lenders to quote you on, especially important if you are shopping your loan with 2 or 3 Lenders. so here goes the Times story highlights ...

Points lose favor
With interest rates at or near record lows, many borrowers are seeing little reason to pay points when buying or refinancing a home. Some are even opting for what’s known as “negative points,” agreeing to a slightly higher rate to help pay closing costs.

Making sense of the story

Paying points enables a borrower to “buy down” the interest rate on a mortgage in exchange for an upfront fee. The trend away from points partly reflects borrower sentiment that rates are already low enough, according to industry experts.

A point equals 1 percent of the loan amount, so paying one point on a $250,000 refinancing costs an extra $2,500 at closing, in addition to other mortgage fees, taxes, and escrow amounts. Paying a point usually reduces the interest rate by 0.25 points over its term, so for instance, instead of 4 percent, the rate is 3.75 percent.

The average number of points paid in 2011, according to a Freddie Mac survey, was 0.7 percentage points, less than half the levels people paid in the 1990s. The average has been 0.7 percent for three years, after it hit a low of 0.4 percent in 2007; in 1995 it averaged 1.8 percent, according to Freddie Mac data.

The primary advantages of paying points are a lower rate and monthly payment. To decide if paying points is worthwhile, borrowers should consider two key decisions: How long they plan to live in the home, and how much they can afford in close costs.

Many mortgage professionals suggest following this rule: If the borrower plans to live in the home for at least five years, paying points will help the homeowner to reap savings.

Some borrowers are even going for negative points, which is also called a lender rebate or points in reverse. In exchange for accepting a higher interest rate, the lender agrees to give the borrower a credit, which is usually used for closing costs.

Roger's highlights:

1) If you purchase and pay points, you can write off those points on your taxes. If you refinance and pay points, you can still write them off but you must amortize them over the terms of the loan;

2) When you pay points, you have availed yourself of a lower interest rate so that you realize a savings monthly which helps your cashflow. It generally takes 3-5 years of savings to equal the points you paid up front (depending on the loan amount, rate and term) however from that point until you pay the loan off, refinance or sell the property, you are saving $ _X_ amount monthly after the break even date.

3) If cash is a little tight when you are purchasing or refinancing, you could seek a no point loan or even a no cost loan. ..coupling this with closing credits from the seller could put you into your dreamhouse.

Talk to a Realtor® - your local desert real estate soltions expert is:
Roger A. Sullivan reachable at 760-610-3245 or Roger@RogerASullivan.com

as always - Keep the faith!