Aug 14
0

All Real Estate is local

By | Buyers, Disclosures, Sonoma County info | No Comments

 mirjamnew.jpgLast week I was on a Cruise with Holland America in Alaska and on our hike in Ketchikan we came by a very interesting little ‘fixer’.

p8093721.jpgLooking at the amount of moss on the roof it really brought home the amount of rainfall in Ketchikan every year, it’s a rain forest area. That gives a whole different meaning to mold….

This is only one of the reasons why it’s wise to hire a local Realtor when selling or buying. You need someone who is familiar with the area. For a seller, you want to have all the necessary disclosures taken care of and for buyers, you want to know everything that there is to know with regards to the desirability of  the property you are about to buy.

It’s easy to find homes for sale with all the information available, it’s easy to post a home on the internet. It is something else to stay current with local developments regarding the sales process, maybe a local ordinance, a change in required paperwork, a change in the contracts. Chris Iverson, a realtor in Palo Alto wrote an interesting article on the subject.

In Sonoma County, things are constanly changing. A recent change was in Graton, there is a sewer lateral that affects all home owners who are thinking about selling their property. Just so you know…

Have a great day!

Mirjam

Aug 13
0

Is there any humor left in this market?

By | Sonoma County info | No Comments

For those of you in the lending market, let’s hope that today is the start of a  better week than last week….to set us in the mood. I received this from the VP to day to set the stage for the week ahead.

“Very Important- Guideline Changes Effective August 8, 2007

· All borrowers must have one blue eye and one brown eye to qualify.

· LTV > 65% SIVA requires minimum credit score of 849.

· For all LTV > 65%, 360 months of payment reserves now required.

· Borrower’s must have no previous bankruptcies in their family history going back

three generations.

· A minimum of 25 years self-employment history now required for all NIV Programs

(at same location).

· Minimum Credit Score for Subprime Loans raised to 720.

· All non-arm’s length transaction borrowers (mortgage, real estate professionals,

family members) will be required to provide full-documentation, subject to

criminal background checks, wire tapping, strip-searches, and a minimum of 12

hours of interrogation by the Department of Homeland Security.

Please note that these changes will go into effect within the next five minutes. So please

lock you existing loan immediately. All existing loans in your pipeline must fund by noon

tomorrow.

We apologize for the inconvenience. We realize these are tough times in the mortgage

industry for all of us. Be assured that we have a commitment to remaining strong and

weathering out the storm. We ask for your understanding and cooperation.”

 

On a more serious note:

MBA reports some good news and some not so good news…the not so good…

Commercial Hit Expected Next
Globe and Mail (CAN) (08/13/07); Jonas, Ilaina
Problems in the U.S. residential mortgage sector have impacted the credit market; and the turmoil may wind its way into apartment, office, industrial and shopping center properties–which are likely to draw smaller deals as a result. Sales prices will fall, says Robert Horowitz, a financing arranger for Cooper-Horowitz in New York, adding that commercial mortgage interest rates already have risen half a percentage point. Commercial mortgage lenders are asking higher interest rates and financing lower portions of the purchase price, even though vacancies are down and rental rates are up for property owners. Buyers had an opportunity to borrow up to 95 percent of a purchase in recent years due to the demand for property and cheap money.

but some good…
Homeowners Are Still ‘Cashing Out’ Billions in Equity Through Refinancings
Realty Times (08/13/07); Harney, Kenneth R.
Freddie Mac’s “Cash-Out Refi” report for the second quarter indicates that $76.7 billion in equity was extracted by refinancing from April through June. About 83 percent of refinancings during this period involved cash outs that boosted the new mortgage balance by 5 percent or more, down from a record high of 88 percent last year. Additionally, the median increase in interest rates was one-eighth of a percentage point above the original rate. Freddie Mac deputy chief economist Amy Crews Cutts predicts a 33 percent decrease in cash-out refinancings over the remainder of the year, though she insists that homeowners have plenty of equity to extract–if they so choose–during this extended period of reasonable mortgage rates.

Let’s hope that the market can settle down and we can get back to business!

more tomorrow

Denise

Aug 09
0

Today’s Mortgage Markets Predictions

By | Sonoma County info | No Comments

Some good news today….

NAMB Releases New Trend Data on 2007 Mortgage Markets
Conservative Trend Continues As Market Corrects

Washington, DC – July 24, 2007 – The National Association Mortgage Brokers (NAMB) (www.namb.org)  today released new trend data that shows mortgage brokers continue to close fewer non-traditional or “subprime” loans than in 2006.The data is part of an ongoing survey of mortgage brokers nationwide that is conducted by NAMB’s research partner Wholesale Access Mortgage Research and Consulting, Inc. The latest update confirms that the trend toward more traditional loans continues to be the norm in 2007 as the market corrects from a decade-long housing expansion. “This data shows that brokers are anticipating and meeting the changing needs of their customers,” said NAMB President George Hanzimanolis. “The shift in the market toward more traditional loan products is yet another reason we have cautioned Congress not to overreact to existing concerns and allow the market to adjust.”Prime loans continue to make up the majority of all loans originated by mortgage brokers, according to the study.  Though their share of the marketplace dipped slightly in April – to roughly 56%, down from 61% in March – prime loans were still by far the most widely used class of mortgages.  In April, only 11% of all loans offered were subprime.In 2006, 13% of all loans offered were subprime loans, designed for homebuyers with credit scores below 620.“This ongoing study further puts subprime mortgage issues in perspective,” said Hanzimanolis.  “For all the attention that these loans have received in the media, we’re talking about a small – and shrinking – portion of the homebuying market.”The survey responses came from more than 200 brokers, and were analyzed to compare types of loan products offered, adjustable versus fixed-rate offerings and combined loan to value ratios. To view a chart of these finding, click here.###The National Association of Mortgage Brokers is the voice of the mortgage broker industry with more than 25,000 members in all 50 states and the District of Columbia. NAMB provides education, certification and government affairs representation for the mortgage broker industry, which originates over 50% of all residential loans in the United States.Let’s hope this happens….. 

 

Merrill Says Fed to Cut Rates in October on Slowdown (Update2) By Daniel KrugerAug. 6 (Bloomberg) — Merrill Lynch & Co.(http://www.ml.com/index.asp?id=7695_15125) said the Federal Reserve will cut interest rates in October as the turmoil in the credit markets and falling home prices slow U.S. growth. The central bank will reduce the target rate for overnight loans between banks by a quarter percentage point to 5 percent, Merrill chief economist David Rosenberg said in a report today. In June, Rosenberg said the central bank wouldn’t lower borrowing costs until next year. An almost 100 basis point increase in the difference in yields on corporate and government debt, a 15 percent decline in equities and another 5 percent drop in home prices will slow gross domestic product growth to 1.5 percent next year, Merrill said. The firm had predicted GDP of 2.3 percent. Rosenberg’s earlier forecast of a 4.25 percent year-end federal funds rate was among the lowest of economists surveyed by Bloomberg News. “The Fed will cut rates to 3.75 percent by mid-2008,” Rosenberg said today in the report. That would bring the Fed funds rate to the lowest level since October 2005. Merrill is one of 21 so-called primary dealer firms that trade directly with the Fed.

Market Line Reports Some Big News….

08/09/2007

The big news today is from overseas as the European Central Bank, in an unprecedented response to a sudden demand for cash from European banks roiled by the subprime mortgage collapse in the U.S., loaned $130 billion to alleviate a credit crunch. The U.S. Federal Reserve added $24 billion in temporary reserves to the U.S. banking system in a sympathy move. The credit crunch came as BNP Paribas, France’s biggest bank, halted withdrawals from three investment funds because it could not fairly value their holdings, which included subprime loans. Now here is something you will not hear from the news readers on CNBC or Bloomberg. It is not the subprime loans themselves that are the problem, as delinquencies on these loans are quite close to delinquencies on FHA/VA loans. The problem arises when a hedge fund raises capital to invest in bonds backed by subprime loans, and then uses that capital to borrow additional funds that are used to buy more bonds. This is called leverage and it increases the rate of return if all goes as planned. However, any hiccups along the way create the problems we now see. The value of the bonds is decreasing so the hedge fund is receiving a margin call, which in some cases they cannot meet, so the fund suspends withdrawals. The central banks get involved because the banks that lent money to the hedge funds are probably not going to be repaid, creating a loss to the bank. The Fed and ECB get involved as it is supposedly their duty make sure the banking system is sound, which will not be the case if the banks experience to many losses. This is a cliff notes version, but hopefully it helps you understand the problem. The U.S. treasury market rallied on a flight to quality bid as the equity markets were selling off. Stability seems to be coming back into the markets as the day progresses, so we may see the bid in the treasury market unwind.

Information provided by Southern California Mortgage Exchange

In addition, US Census stats were released today from the 2nd quarter . Demographic information can also assist you in various aspects of your business. Sign up for this free service….

“The economy grew at an annualized 3.4 percent in the second quarter of
2007, and the unemployment rate for the months of April, May, and June was
4.5 percent. Meanwhile, small businesses and consumers were more
pessimistic about the future than the previous quarter, according to the
new Quarterly Indicators: The Economy and Small Business.

A copy of the Quarterly Indicators: The Economy and Small Business can be
found at: http://www.sba.gov/advo/research/sbqei0702.pdf. For inquiries
about the quarterly indicators please feel free to contact Chad Moutray at
advocacy@sba.gov or (202) 205 6533.”

More Tomorrow…

Denise

Aug 09
0

REAL LIFE IN THE WINE COUNTRY TODAY

By | Sonoma County info | No Comments

Fed Interest Rates from two views: 

Market Line
08/08/2007

Yesterday the Fed told us the biggest danger to the U.S. economy is still inflation and kept the Fed funds rate at 5.25%. Regarding the housing and mortgage markets the Fed merely stated that financial markets have been volatile in recent weeks, and credit conditions have become tighter for some households and businesses, while the housing correction is ongoing. And late yesterday afternoon a telling, but often overlooked report on consumer borrowing told us that consumer credit increased $13.2 billion in June to $2.46 trillion. This was after a $15.9 billion increase in May, reflecting that consumers are turning to credit card and non mortgage debt to maintain spending. This morning we are seeing the unwinding of the flight to quality bid the treasury market has experienced the past few days. The strong earning report from Cisco after the market close yesterday has lifted the spirits of equity investors who are now selling bonds to move back into stocks.

Information provided by Southern California Mortgage Exchange

Fed Softens Its Bias, Citing Growth Risks and Tighter Credit
Investor’s Business Daily (08/08/07) P. A1; Shinkle, Kirk (www.ibd.com)
The Federal Reserve voted for the ninth straight time to hold the federal funds rate steady at 5.25 percent at its Tuesday meeting, but it issued its first post-meeting statement that acknowledged problems in the credit markets. The central bank stated, “Financial markets have been volatile in recent weeks, credit conditions have become tighter for some households and businesses, and the housing correction is ongoing.” However, the Fed once again noted “moderate” economic expansion and underscored its ongoing concerns about inflation. Some analysts believe the fact that the central bank is less biased toward inflation risks indicates that a neutral bias might be on the horizon, permitting rate reductions in the coming months; but others speculate that a steady stance on economic growth and the housing downturn makes it unlikely that the central bank will cut rates any time soon. Future traders indicated a 25-percent chance that rates would be lowered at the central bank’s Sept. 18 meeting, a drop from a 65-percent likelihood at the start of the week.

But, much more fun was the August meeting of the local Chapter of the Woman’s Council of Realtors http://www.wcrca.org/chapters/chapter28.asp , an affiliate chapter of the national organization http://www.wcrca.org/. It was “hat” day and the winner was our own Jon Lehre, Marketing Director of The Cal-Bay Mortgage Group with a very unique chapeaux from Silo & Linus. Can you believe that a guy won the contest???

The speaker was Victory Williams Turner from Victory Speaks Consulting Company on  Negotiation techniques.  She had several very good points that I would like to share:

  • Know your facts…nothing more will turn off a buyer/seller (B/S) more than “bluffing” them about the house, the neighborhood, schools, etc. The old “knowledge is wisdom” saying will help you more than you can ever imagine in gaining credibility with your client.
  • Understand the personality traits of your B/S. She highlighted the 4 types that we all should know : verbalizers, convincers, rationals, and reasonables and how to manage their expectations.
  • Know your business etiquette. With all the different cultural groups now in the bay area we need to be more sensitive than-ever about  ways to interact with our clients so that we do not offend.
  • Read the body language of your client
  • Watch out for “the take it or leave it close.” Give yourself plenty of room to negotiate.
  • 80%/20% Rule with a different spin— 80% of the objections diminish the last 20% of time remaining to negotiate.

All in all a good time was had by all…..some time away from the difficult market that we are all finding ourselves in….

more tomorrow….

Denise