According to Experian the Stockton area currently ranks 79^th out of 142 credit markets the company follows. This is optimistic news for the area which has been the real estate poster child for this recession with some of the highest foreclosure rates in the nation. Stockton with a current score of 744 is now just below the national average of 749.

Expert economists announced on September 20^th that the recession ended in June 2009. This is good news for the country, but not all areas are benefitting at the same rate of progress. Due to ongoing unemployment struggles faced by California and the valley, analysts are adjusting their previous economic predictions of relief in late 2010. However, the new projections have not been released yet. San Joaquin was one of the first areas affected by the recession and it will be one of the last areas to recover.  

Real estate market analysts have been hard at work crunching the latest round of numbers but what does it all mean? Wednesday the news looked optimistic for San Joaquin when it was reported that the area experienced a second quarter decline in foreclosures despite the fact that Stockton still remained 96^th in the nation for foreclosures. However on the heels of that report it was announced that US home seizures had reached a new record and are now 25% higher than a year ago and that California accounted for 1/5^th of the national total. UCLA economists predicted that California is on the road to recovery, but it will be slow stating that unemployment is not likely to fall below 10% until late 2012. This is something to look forward to for San Joaquin county which currently ranks 99^th in the nation for employment and housing prices.

The California Department of Real Estate and the Department of Financial Institutions are warning about increased reports of short-sale mortgage fraud activity. Some of the fraud related activity includes short-sale negotiators requiring buyers to pay their fee, fees being paid outside of escrow and unlicensed negotiators. At Homes In Stockton no buyer is ever asked to pay a short sale negotiation fee and no fees are ever paid “off the HUD”.  If you have any questions about California short sales or are a buyer or seller considering purchasing or selling a short sale in the Stockton area feel free to call Pat Holkesvig & Your Home Team at 209.471.6516 or complete our Contact Us form.  Pat Holkesvig and Your Home Team are The Central Valley’s Short Sale Specialists.  We process Stockton Short Sales, Elk Grove Short Sales, Lodi Short Sales, Lathrop Short Sales, Manteca Short Sales, Modesto Short Sales, Mountain House Short Sales and Tracy Short Sales.

Keith Gumbinger, a vice president at HSH Associates mortgage consulting firm, has proposed a new mortgage relief program he calls “value gap coverage.” In this plan, he proposes that if a borrower did not cause the decline in their home’s value, and has been making their monthly mortgage payments  they should be subsidized rather than punished for doing the right thing. One of the primary differences between the Gumbinger and government plans is that the government plan requires mortgage holders to take a write down, and the “value gap coverage” doesn’t. In addition, Gumbinger’s idea absolves the borrower of any deficiency. Gumbinger believes the “value gap coverage” would reduce interest payments, and the incentive for strategic defaults. Another distinction of the “value gap coverage” plan is that the cost of this program would be known from inception and would go down as the time passed. This type of plan could be very successful in areas, like Stockton, where default rates are high by providing incentive to homeowners that could lead to a more stable market.

Over the last month we have mentioned in Could This Be The End of Short Sales? and  No New Ideas From Mortgage Summit that it was rumored the Obama administration was about to order the government-controlled lenders to forgive a portion of the mortgage debt for Americans who are underwater. Today the Obama administration has indeed launched a revised government mortgage relief program referred to as the “short refinance” program .  However this program is not intended for Fannie Mae or Freddie Mac loans and it still faces the challenge of satisfying second lien holders. The administration still hopes that up to 1.5 million loans could be modified through the program. The intent is to focus on homeowners who are current on their mortgage payments but are at risk of default because they have no equity in their homes. It is still too early to tell how many Stockton area underwater homeowners will benefit from this program.  

Freddie Mac reports that the average rate for a 30-year fixed mortgage fell to another record low at 4.32%. The new 15 year fixed rate also dropped to 3.83%. These new record breaking rates show hope for a struggling housing market since the expiration of the popular home buyer tax credits. On 09-01-10 the Mortgage Bankers Association reported that mortgage applications for purchases increased last week and refinances were up 2.8%. It is too early to report on any impact these new mortgage rates will have on the local Stockton real estate market.