California October Foreclosures are Down
November 12, 2010
RealtyTrac, has reported that 66,475 properties foreclosed in California this October. That is down nearly 12% from September and 22% from last October. However even with the drop in overall reported foreclosures, Modesto and Stockton still remain in the top 5 cities nationwide for foreclosures. Although this downward trend has been consistent over the past many months, it is likely to slow down over the winter which is a traditionally slow time for real estate sales.
Home Sales Up in US but Down in CA - Lenders Partially to Blame
October 27, 2010
National home sales were up 10% this September according to the National Association of Realtors. Some factors contributing to this growth are low mortgage rates and high affordability, home prices are averaging 22% less of where they were five years ago. Affordability has been influenced by the weakness in home buying activity. September’s home sales are still down 19.1 % from the same period last year and demand for homes has decreased since the homebuyer tax credit expired last April.
However, California hasn’t experienced this national upswing in sales and the downward trend continues to be a problem. Buyers already have concerns about foreclosure reversals and lenders have already limited the number investors due to putting limits on how many properties they can purchase. Wouldn’t it be better to have a strong buyer with 25% down than a high risk FHA buyer at 3.5% down? This perpetuates the problem only causing more defaults. To make matters worse, many lenders are increasing their demands for short sale purchase prices, often demanding prices tens of thousands of dollars over the prevailing local assessed value. This is not only a disturbing trend to short sale homeowners and homebuyers but to the local communities affected. When lenders demand unreasonable prices in a weak market they discourage what few buyers there are, allowing properties, often vacant, to sit for months or even years. It is these types of practices that encourage the increase of city violations, HOA penalty fees, theft, vandalism and vagrant squatters, resulting in a further decrease in local property values.
Federal Task Force Investigation into Foreclosure Fraud Could Lead to Criminal Charges
October 20, 2010
According to CNN, White House Press Secretary Robert Gibbs the Federal Housing Administration and Financial Fraud Enforcement Task Force are in the process of an investigation into foreclosure regulations and they will expect any bank that violated the law to be fully accountable for those actions. The Task Force is meeting on October 20, 2010 at the Department of Housing and Urban Development. They are planning to determine whether civil or criminal charges will be enforced. There should be a White House briefing after the meeting concludes.
New California Short Sale Deficiency Law
October 6, 2010
As of January 1, 2011, the first position lender will not be permitted to obtain a deficiency judgment against the seller after a short sale. The short sale approval letter and acceptance of the funds will constitute payment in full and discharge of the deficiency. However, these new changes will not apply to refinanced loans. If you are considering a short sale or would like to learn more 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.
Stockton Credit Holds On - Know Your FICO and Vantage Scores
September 23, 2010
According to Experian the Stockton area currently ranks 79th 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.
Do these numbers sound exceptionally high for a national average credit score? If so, it’s because this statistic is measured using the new Vantage score credit rating system launched in 2006. Vantage Scores differently than the FICO system by utilizing data from millions of credit files reviewed by the Experian, Trans Union and Equifax while FICO credit ratings are based on individual credit file factors such as personal debt-to-income ratio, current credit usage and credit history.
Consumers should know the difference between these two scores. What appears to be a good score based on the consumer’s familiarity with the FICO system could actually be a poor Vantage score if the borrower is unaware of which scoring system is being used. This possible confusion is due to the difference in how these two scores are rated.
Vantage Scores are rated as follows:
- 901-990 A
- 801-900 B
- 701-800 C
- 601-700 D
- 501-600 F
FICO scores are rated as follows:
Anything below 600 = High risk borrowers
620 = Dividing line between good and bad credit
640+ = Pretty good
650 = Average general credit-use behavior
690+ = Very good
720 = Excellent
In order to avoid any misunderstandings always be sure to know your FICO and Vantage scores and discuss what scoring system the lender will be using to determine your credit worthiness beforehand.
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San Joaquin First In and Last Out of Recession
September 21, 2010
Expert economists announced on September 20th 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.
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The Good News and the Bad News for San Joaquin
September 16, 2010
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 96th 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 1/5th 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 99th in the nation for employment and housing prices.
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Obama Launches New Mortgage Aid
September 7, 2010
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.
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Mortgage Rates Drop to New Low Record
September 2, 2010
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.
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US Home Sales Plummet as Inventory Rises; Great Time for Central Valley Buyers
August 26, 2010
The latest figures for existing homes sales were released this week with very discouraging results. Existing homes sales have hit the largest monthly decline in history at 27.2%. This is coupled with a record breaking 11 year peak in housing inventory. On the bright side, if you are looking to buy in the San Joaquin valley, there is no better time than the present. With great inventory to choose from and 30 year fixed mortgage rates at an all time low of 4.56% it is truly a buyer’s market.
