Real Estate and Real Life in the Wine Country

Some people have compared the current financial turbulence to the 1930’s and other ‘black days’. Some facts to know:

• More than 1000 banks closed in 1930 – only 14 U.S. banks have been taken over in 2008
• There are 76 million households in the U.S. that own their home - 24 million of these homes are free and clear
• There are 52 million homes with mortgages - 97.2% of these are not in foreclosure, 93.8% of these homes are current on their payments

On a sobering note:

• Over 20% of homeowners with a mortgage owe more than their home is worth
• 40% of all foreclosures are non-owner occupied

How did we get here?


Resale numbers – the above does not include new home sales.

Sources: Wall Street Journal / Moody’s Economy.com / RealtyTrac / NAR / Forbes

Do you see the problem and thus the predicament we’re in? Something had to happen one way or the other. Of course no one wanted it to be this bad. Let’s see what’s going to happen the coming time.  In the mean time, Pat Kitano has a great way of keeping us informed -

In the mean time, it’s an excellent time to buy real estate!

Mirjam

Mr. Bernanke is a very busy man nowadays. Working weekends to make the J.P. Morgan Chase & Co/Bear Stearns Cos deal happen and a 1/4 point rate cut this Sunday is unprecedented. And then yesterday an other rate cut for the short-term interest rates with the 0.75 percent cut. This means that the federal funds rate, which banks charge each other for loans, has been lowered six straight times over six months, driving it down to 2.25 percent from 5.25 percent.

The Fed not only pushed its benchmark rate to the lowest point since late 2004, it also cut the discount rate by 0.75 percent to 2.5 percent. That’s the rate the Fed charges banks and brokers that borrow directly from it.

Some of us have worries about inflation and rightfully so. However, all and all for now, this is good news. And the reason to mention the news above is that some people who did sign an adjustable rate mortgage that will reset this year might be better of that they expect.

Should you be in that situation, take our your papers and look how the mortgage will change, based upon which index/rate. Especially if you house does not have the same market value as is had when you bought it and refinancing will be difficult. Look at what your mortgage will do, it might be not that bad…

Should you have difficulties finding the info in the note, don’t hesitate to call your Realtor or you lender and have him/her help you. They will be happy to do so. (I will…)

Have a great day, it might turn out better than you think!

Mirjam (mirjam@c21alliance.com)

So you got pre-approved for a loan a few months ago and are home shopping on your leisure. Inventory is high (this morning we had 3182 active listings in Sonoma County), you have reason to take your time. Just a warning: it might be good to talk to your lender again and find out whether the loan program you got pre-approved on is still available under the same terms. In talking to lenders (Denise is on a trip this week) I do hear over and over again that a lot of programs are not available anymore.

Banks are tightening lending standards for home buyers, even those with good credit, loan officers report the increase in stricter mortgage underwriting standards  due to economic uncertainty, reduced secondary market liquidity, and less of an appetite for risk, according to the survey.

Even for prime mortgages, the terms are tightened in the prior three months for people with the best credit records. That was up from about 15 percent in the previous survey in July. About 60 percent of banks said they tightened standards on home mortgages classified as “nontraditional,” up from 40 percent in the previous survey. Should you be in the market for a new home, make sure you do your homework. Stay in touch with your lender and even more, stay in touch with your Realtor. They are there to help you. 

But don’t worry, mortgage rates are still very reasonable and there are still plenty of programs available, just make sure you are educated about today’s market.

Have a great day!

   Mirjam

TheVeteran’sAdministration http://www.homeloans.va.gov/ offers vets great opportunities to purchase homes. Do you know a vet? or you a vet? If so, call me and find out how you can qualify with little or no down on VA programs. Let me do the paperwork for you….Read the following information from American Banker.

New Campaign for Veterans’ Loan Program
American Banker (10/12/07) P. 3A; Johnson, Hilary
The number of outstanding mortgages guaranteed by the Department of Veterans Affairs’ Home Loan Guaranty Program fell to 2.5 percent at the end of this year’s second quarter from 3.2 percent in 2005, reports the Mortgage Bankers Association. The agency is undertaking some improvements to make the loan program more efficient and to eliminate some of the red tape that made lenders and real estate agents hesitant to deal with such loans in the past, and Don Munro of the agency’s St. Paul, Minn.-based regional loan center says the efforts are beginning to attract the attention of lenders that have not participated in the program in years. Computer system updates allow lenders to go online for veterans’ certificates of eligibility, and appraisals also are reviewed on the Web. To minimize paperwork for servicers and enhance loan monitoring, the agency will launch its VA Loan Event Reporting Interface System in early 2008. Meanwhile, Congress is considering legislation that would boost the maximum guarantee on home-purchase loans to $625,000 from 25 percent of the conforming loan limit; and the agency may seek additional help in updating lending guidelines and enabling it to refinance problem loans.

Rate & Market Update

September 28, 2007

This update is provided as a service to my Realtor and Affinity-Partners as a means of obtaining legitimate current interest rates. Rates
are quoted as a range due to variations in purchase price, loan amount, LTV, SRP, subordinate financing, escrow waiver, lock period,credit score, asset reserves, job history, etc. Rates quoted are based on FNMA and FHLMC national averages.

Due to the Internet and other available public information our clients have greater access now than ever before to interest rate quotesand mortgage financing information in general. More information makes for more knowledgeable clients and that benefits everyoneinvolved. My greatest concern recently has been the amount of inaccurate information that our clients have to wade through and that sometimes lures them into situations that cause great hardship for them and all parties in the transaction.The information below is intended to be a tool that allows you to more confidently submit contract offers and give your clients an idea of real market interest rates. Rates are subject to change, even during the same day. Please contact me to get the current interest rate.

Conforming Fixed Rate FHA Jumbo Fixed Rate

6.125% @ .875 pt(s).

to

6.25% @ 0.375 pt(s).

6.25% @ 1.0 pt(s).

to

6.5% @ 1.125 pt(s).

Call for Pricing

1-Year ARM Conf. 3/1 Fixed to ARM Conf. 5/1 Fixed to ARM

Call for Pricing

5.625% @ 1.0 pt(s).

to

6.375% @ 0 pt(s).

5.875% @ 1.25 pt(s).

to

6.5% @ 0 pt(s).

Conf. 7/1 Fixed to ARM Jumbo 3/1 Fixed to ARM Jumbo 5/1 Fixed to ARM

6.0% @ 1.25 pt(s).

to

6. 5% @ 0 pt(s).

6.625% @ 1.125 pt(s).

to

7.875% @ .375 pt(s).

6. 75% @ 1.25 pt(s).

to

7.125% @ 0 pt(s).

Jumbo 7/1 Fixed to ARM VA CHFA

6.5% @ 0.5 pt(s).

to

7.0% @ 0.125 pt(s).

Call for Pricing

Call for Pricing

Stated Income 100% Financing 95% Jumbo Fixed

6.125% @ .875 pt(s).

to

6.375% @ 0.125 pt(s).

100% LTV

Stated Value

*Call for Rates!

Call for Pricing

Market Commentary

(707) 528-2600, ext. 1264

(800) 800-8412, ext. 1264

Cell: (707) 694-6826

dbeeson@cal-bay.com

*CalPERS Certified

Denise Beeson

Stock futures suggest a bit of profit-taking today even though there is some good economic news. The market is focused on thef act that the core PCE deflator - the Fed’s favorite inflation measure - was up just 0.1% for August. That was in line with expectations, but is still a very good number. Further good news comes from the less noticed solid gain in personalconsumption expenditures of 0.6% (also 0.6% after inflation adjustment). This follows a solid 0.4% gain in July. Personal consumption expenditures make up over 70% of GDP, and these two good gains at the start of the quarter will assure a decent third quarter GDP number. The market is very focused on economic data as recession concerns persist. The next really big economic release will be the September employment data a week from today. Even so, the market tone is stabilizing.

-Briefing.com

 One of the best resources for a professional in real estate is from the Mortgage Banker’s Association (see http://www.mbaa.org/It also provides great information for your educated buyer to understand what the “pros” are saying.

Soooo today in the News we see

Fed Chairman Vows to Curb Mortgage Abuses
Charlotte Observer (NC) (07/20/07); Aversa, Jeannine
In testimony before the Senate Banking Committee on Thursday, Federal Reserve Chairman Ben Bernanke said the central bank is looking into ways to protect home buyers from predatory lenders. Under consideration are enhanced disclosures as well as restrictions on the use of prepayment penalties and mortgages with no income verification. Bernanke speculated that credit losses tied to delinquent subprime mortgages ultimately could reach as high as $100 billion. Despite the central bank’s plans, Sen. Charles Schumer, D-N.Y., insisted that federal legislationis necessary to protect consumers and “prevent this subprime mess from happening again.”

My commentary:

I believe that soon the entire industry of Mortgage lenders will have to be licensed or certified as our real estate professionals are in every state. Oftentimes when the market is great–low interest rates, lots of buyers, some individuals from other industries like retail, services or even manufacturing fill the local junior college real estate classes because they are looking for the “quick buck” in real estate sales or mortgages. We are seeing those individuals leaving the market, thank goodness, and the dedicated professionals staying.

Read this….Mozilo: Pain to Last Until ‘09
American Banker (07/20/07); Berry, Kate
The mortgage market probably will not recover until 2009, according to Countrywide Financial Corp. Chairman and CEO Angelo Mozilo, who originally thought a rebound would occur next year. Mozilo believes a decline in interest rates could be a positive consequence of problems in the subprime mortgage market. However, he is worried about excessive regulation in response to the market’s ongoing weakness, which would dry up creditat a time when borrowers need to refinance out of adjustable-rate mortgages. “A lack of liquidity will kill you instantly, and that’s the issue we’re facing today,” Mozilo remarked.

My commentary….

I think this opinion swings widely from area to area. Certainly in areas of CA, NV and AZ we are seeing an extended softness in the market….however in the Wine Country the appeal is still strong. Great time to buy…..don’t sit it out. Be sure to visit are previously listed OPEN HOUSES this weekend! because

Please read on…..

30-Year Mortgage Rates Remain Near Yearly High
San Jose Mercury News (CA) (07/20/07); Crutsinger, Martin
The 30-year fixed mortgage rate held steady at 6.73 percent this week, which Freddie Mac chief economist Frank Nothaft attributes to recent economic data failing to have any impact on inflation forecasts. The five-year adjustable mortgage rate also stayed firm, averaging 6.35 percent. The 15-year fixed mortgage rate slipped a notch to 6.38 percent from 6.39 percent, while the one-year adjustable rate bumped up to 5.72 percent from 5.71 percent. The 30-year fixed rate was 6.80 percent at this time last year, while the 15-year rate stood at 6.41 percent and the five-year and one-year adjustable rates at 6.36 percent and 5.80 percent, respectively.

My commentary….

These are NOT bad rates. Some of us remember the days of double digit interest rates. My home was at 16% in 1981 and both my husband and I had six figure incomes and we could barely qualify…so let’s keep this in perspective!!!

Take time this weekend to drive up to see us? Enjoy some sun, some wine and remember that Mirjam and I would like to see you at our open houses!!