Your Real Estate News Update

2012-06-10T11:35:00.000-07:00

Open Sunday 6/10/12 2-5pm

2012-06-10T11:08:00.000-07:00

Great Article from the New York Times about the importance of Pre-approval in this Market

June 7, 2012

The Advantages of Preapproval

By VICKIE ELMER

WITH the housing market warming up in many areas, and multiple offers becoming more commonplace, buyers who want an advantage in the bidding process will need more than a mortgage prequalification. They will need a preapproval.

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.

“It’s verbal — it doesn’t really mean anything,” beyond providing some basic guidance on the range of prices you may be able to afford, said Kevin Chittenden, a vice president and regional sales manager in Paramus, N.J., for Wells Fargo Home Mortgage.

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 should gather together almost everything you will need for the actual mortgage underwriting: W-2 wage statements; 1099s, which show things like dividends and interest income; recent pay stubs; bank statements; and statements from Individual Retirement Accounts and 401(k)sand other assets that could show you have the resources to buy and maintain a home.

At Wells Fargo, one of the country’s largest mortgage lenders, the first quick review provided by an underwriter constitutes an agreement to lend. “It’s a real commitment, a commitment to lend,” Mr. Chittenden said.

Other lenders may treat preapprovals as more of an opinion on the person’s ability to borrow, not a guarantee to lend, said Jack Guttentag, who runs the Mortgage Professor Web site. Generally, borrowers need to have chosen a property and have it appraised before they can expect a firm commitment from a lender, he said.

Still, a preapproval is more important now, with so many more homes receiving multiple bids, and because the housing market in many parts of the New York region has been getting stronger.

“Preapproval carries more weight when you go to negotiate a deal,” said Ray Mignone, a certified financial planner in Little Neck, Queens. “It gives them bargaining power.”

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 loan officer’s contact information. Some letters may have an estimated monthly payment. But details about the loan type and interest rate will not be included; those are filled in when you are ready to receive the loan, experts say.

Timing is important. Buyers should aim for obtaining a preapproval letter from a lender within 30 to 60 days of the expected purchase date, Ms. Cordero said. That is because some letters expire in 90 days or so. (Wells Fargo’s, for instance, last for 120 days.)

Your income and bank statements may also need to be updated if it has been a few months between preapproval and the signed contract for buying, Mr. Chittenden said.

Wells Fargo charges would-be borrowers $18 for the credit report for a preapproval; the other costs of the mortgage start once you have a purchase agreement, he said.

Other lenders may waive the preapproval and application fees because they want to sign you on as a customer, Ms. Cordero noted, adding that if you find another lender with better terms, you are under no obligation to use the lender that provided the preapproval.

2012-05-24T22:32:00.000-07:00

Here's an article discussing the mortgage rates in comparison to last year

2012-01-24T09:40:00.000-08:00

Mortgage rates continue to hover near record lows
Jan 19 2012 6:47PM
Results from Freddie Mac's Primary Mortgage Market Survey for the week ending January 19 shows that average mortgage rates remained near rates from the previous week and continue to offer homebuyers high affordability.

According to the survey, 30-year fixed rate mortgages averaged 3.88 percent and reached a new record low, beating the mark set the previous week when rates averaged 3.89 percent. This time a year ago, the 30-year FRM averaged 4.74 percent.

The 15-year FRM averaged 3.17 percent, slightly higher than the previous week when it averaged 3.16 percent. Despite the small increase, the rate is still significantly lower than the this time in 2011 when the 15-year FRM average was 4.05 percent.

Additionally, 5-year adjustable-rate mortgage averaged 2.82 percent, the same from the previous week and much lower than this time last year when they averaged 3.69 percent.

"Mortgage rates were nearly unchanged this holiday week in lieu of a mixed bag of economic data reports," said Frank Nothaft, vice president and chief economist of Freddie Mac.

A recent surge in mortgage applications shows that buyers are continuing to take advantage of low mortgage rates and home prices, while refinancing also remains popular for homeowners.

Dodd-Frank Act forcing further consumer protection from early payments!

2011-09-22T10:51:00.001-07:00

Print Back to story
Mortgage Safeguards Coming in 2012
By Carter Dougherty - Sep 20, 2011
The Consumer Financial Protection Bureau will complete work on a rule aimed at ensuring borrowers have the ability to repay their mortgages early by next year, according to Raj Date, the former banker running the new agency.

“We plan to issue a final rule early next year in order to provide clarity to the market as quickly as we can, without sacrificing the quality of our analysis,” Date said today at a Washington conference sponsored by American Banker, a print and online publication covering the financial-services industry.

The rule, required under the Dodd-Frank Act, was issued by the Federal Reserve in April and has been taken over by the consumer bureau, which began work in July. The measure includes underwriting standards aimed at preventing abusive lending practices that lawmakers and regulators say led to record foreclosures in the wake of the 2008 credit crisis.

Date is a former executive with Capital One Financial Corp. (COF) and Deutsche Bank AG (DBK) who joined the consumer bureau in February as associate director for research, markets and regulation. He took over as special adviser to the Treasury secretary overseeing the agency on Aug. 1 after Harvard University law professor Elizabeth Warren stepped down.

Richard Cordray, the former Ohio attorney general serving as the consumer bureau’s enforcement chief, is awaiting Senate confirmation to become its first director.

June sales and price report

2011-07-19T15:43:00.000-07:00

For release:
July 14, 2011
June California home sales, median price post increase, C.A.R. reports
LOS ANGELES (July 14) – California home sales edged up in June, and the median price rose to its highest level since December 2010, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.
Closed escrow sales of existing, single-family detached homes in California rose 1.2 percent to a seasonally adjusted 477,710 units in June, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. June home sales were down 3.6 percent from the 495,780 units sold in June 2010. The statewide sales figure represents what would be the total number of homes sold during 2011 if sales maintained the June pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.
“As the housing market tries to gain a more solid footing, the decrease in conforming loan limits that is scheduled for later this year could adversely affect the market,” said C.A.R. President Beth L. Peerce. “Potential buyers – especially trade-up buyers – who are looking for a home in the $500,000 to $1 million price range will, no doubt, face higher mortgage rates, larger down payment requirements, and stricter underwriting standards. “Would-be buyers on the fence need to act well before Sept. 30, when the conforming loan limit is set to be lowered, to avoid a higher cost of homeownership.”
The statewide median price of an existing, single-family detached home sold in California rose 1.0 percent in June to $295,300 from a revised $292,420 in May. June’s median price was down 5.9 percent from the $313,890 recorded in June 2010.
“Looking across the state, a number of areas are showing signs of strength, especially in the San Francisco Bay Area, primarily because of the strong performing tech industry,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “Alameda, Contra Costa, Marin, San Francisco, and Santa Clara counties all posted solid sales and price gains from May levels.”
Other highlights of C.A.R.’s resale housing report for June 2011 include:

The Unsold Inventory Index for existing, single-family detached homes was 5.0 months in June, down from 5.5 months in May, but up compared with June 2010’s 4.6-month supply. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.
Thirty-year fixed-mortgage interest rates averaged 4.51 percent during June 2011, down from 4.74 percent in June 2010, according to Freddie Mac. Adjustable-mortgage interest rates averaged 3.0 percent in June 2011, compared with 3.86 percent in June 2010.
The median number of days it took to sell a single-family home was 50.3 days in June 2011, compared with 41.5 days for the same period a year ago.
View Unsold Inventory by price point.

Note: The County MLS median price and sales data in the tables are generated from a survey of more than 90 associations of REALTORS® throughout the state, and represent statistics of existing single-family detached homes only. County sales data are not adjusted to account for seasonal factors that can influence home sales. Movements in sales prices should not be interpreted as changes in the cost of a standard home. Median prices can be influenced by changes in cost, as well as changes in the characteristics and the size of homes sold. Due to the low sales volume in some areas, median price changes in June may exhibit unusual fluctuation.
Leading the way...® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with more than 160,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.
# # #
June 2011 County Sales And Price Activity - Existing Single-Family Detached Homes

June-11	Median Price of Existing Single-Family Homes							Sales
State/Region/County	Jun-11	May-11		Jun-10		MTM% Chg	YTY% Chg	MTM% Chg	YTY% Chg
CA SFH (SAAR)	$295,300	$292,420	r	$313,890	r	1.0%	-5.9%	1.2%	-3.6%
CA Condo/Townhomes	$236,190	$234,640	r	$260,870	r	0.7%	-9.5%	7.0%	-7.3%
Los Angeles Metropolitan Area	$276,230	$276,680	r	$292,700		-0.2%	-5.6%	6.5%	-8.5%
Inland Empire	$172,800	$172,110		$185,130	r	0.4%	-6.7%	9.9%	-4.4%
S.F. Bay Area	$539,880	$512,420		$553,360	r	5.4%	-2.4%	15.3%	-0.2%

S.F. Bay Area
Alameda	$485,870	$465,550		$519,280		4.4%	-6.4%	15.2%	-5.0%
Contra-Costa (Central County)	$658,700	$602,860		$658,420		9.3%	0.0%	11.6%	8.5%
Marin	$843,080	$807,140		$840,690		4.5%	0.3%	25.0%	-0.9%
Napa	$350,000	$377,270		$390,320		-7.2%	-10.3%	-7.6%	-10.7%
San Francisco	$695,910	$641,670		$740,690		8.5%	-6.0%	8.8%	0.7%
San Mateo	$750,000	$810,000		$793,000		-7.4%	-5.4%	12.9%	5.0%
Santa Clara	$635,000	$600,000		$633,000		5.8%	0.3%	15.1%	0.8%
Solano	$189,790	$191,850		$212,830		-1.1%	-10.8%	17.8%	-6.2%
Sonoma	$327,430	$353,750		$366,390		-7.4%	-10.6%	28.3%	1.8%
Southern California
Los Angeles	$301,300	$271,540	r	$313,420	r	11.0%	-3.9%	2.4%	-11.6%
Orange County	$534,680	$544,700		$566,090	r	-1.8%	-5.5%	7.6%	-12.8%
Riverside County	$202,910	$200,000		$214,330	r	1.5%	-5.3%	9.2%	-1.7%
San Bernardino	$129,570	$127,380		$141,900	r	1.7%	-8.7%	11.3%	-8.8%
San Diego	$377,550	$382,300		$397,910		-1.2%	-5.1%	7.3%	-3.0%
Ventura	$443,290	$425,000		$450,930		4.3%	-1.7%	11.1%	-0.6%
Central Coast
Monterey	$287,500	$251,000		$274,000		14.5%	4.9%	4.5%	-16.5%
San Luis Obispo	$364,750	$381,450		$445,000	r	-4.4%	-18.0%	12.2%	12.2%
Santa Barbara	$421,430	$426,320		$475,000	r	-1.1%	-11.3%	1.5%	1.5%
Santa Cruz	$540,000	$437,500		$507,500		23.4%	6.4%	21.9%	9.2%
Central Valley
Fresno	$138,040	$140,840		$161,180		-2.0%	-14.4%	16.2%	1.6%
Kern (Bakersfield)	$139,900	$135,000	r	$135,000		3.6%	3.6%	-1.3%	-14.2%
Kings County	$154,000	$137,690		$175,000		11.8%	-12.0%	12.0%	20.0%
Madera	$122,000	$116,670	r	$135,550		4.6%	-10.0%	-2.4%	-51.2%
Merced	$114,210	$111,850	r	$119,130	r	2.1%	-4.1%	-6.5%	-29.1%
Placer County	$266,560	$258,120		$286,630		3.3%	-7.0%	1.5%	-4.4%
Sacramento	$165,850	$168,200		$196,220		-1.4%	-15.5%	4.8%	-2.5%
San Benito	$249,000	$280,000		$315,000		-11.1%	-21.0%	-23.7%	-26.2%
Tulare	$121,520	$117,970		$140,890		3.0%	-13.7%	-5.6%	12.2%
Other Counties in California
Amador	$152,500	$171,250	r	$188,000		-10.9%	-18.9%	-4.9%	21.9%
Butte County	$221,050	$222,620		$230,360		-0.7%	-4.0%	19.0%	-12.3%
Humboldt	$243,750	$250,000		$242,860		-2.5%	0.4%	53.4%	1.1%
Lake County	$85,620	$105,560		$146,430	r	-18.9%	-41.5%	2.5%	-16.5%
Tuolumne	$166,000	$181,430		$202,940		-8.5%	-18.2%	22.6%	20.4%
Mendocino	$181,430	$281,250		$257,140		-35.5%	-29.4%	18.2%	8.3%
Shasta	$156,840	$151,110		$190,330		3.8%	-17.6%	7.6%	19.6%
Siskiyou County	$140,000	$85,000		$170,000		64.7%	-17.6%	7.1%	-30.2%
Tehama	$87,500	$117,500		$140,000		-25.5%	-37.5%	7.1%	-2.2%

June-11	Unsold Inventory Index					Median Time on Market
State/Region/County	Jun-11	May-11		Jun-10		Jun-11	May-11		Jun-10
CA SFH (SAAR)	5.0	5.5	r	4.6	r	50.3	51.9	r	41.5	r
CA Condo/Townhomes	5.2	6.0	r	5.2	r	57.4	57.9	r	47.5	r
Greater Los Angeles Area	5.4	6.0		4.4		54.4	55.6		39.2
Inland Empire	4.6	5.2		4.0	r	47.3	51.5		34.2	r
S.F. Bay Area	4.3	5.0		4.4	r	49.9	51.9		48.8	r

S.F. Bay Area
Alameda	4.0	4.8		3.7		65.3	69.4		68.6
Contra-Costa (Central County)	4.3	4.9		4.5		77.4	78.3		72.5
Marin	5.1	6.5		5.7		52.5	55.4		56.3
Napa	7.8	7.3		7.8		57.7	57.4		63.1
San Francisco	4.8	5.2		5.3		45.5	47.0		43.1
San Mateo	3.7	4.1		4.1		26.0	24.6		25.7
Santa Clara	3.3	3.9		3.7		24.5	26.0		23.2
Solano	4.5	5.5		3.7		48.3	53.6		47.3
Sonoma	5.9	7.4		5.7		62.9	65.1		62.5
Southern California
Los Angeles	5.4	6.0	r	4.6		52.7	51.9		40.4	r
Orange County	6.6	7.1		6.1		75.0	70.1		64.2	r
Riverside County	4.3	4.9		3.8		53.4	57.8		44.6
San Bernardino	4.9	5.5		4.3		46.6	50.4		31.1
San Diego	6.4	6.8		6.1		50.7	49.7		41.5
Ventura	6.6	7.5		4.4		62.2	77.6		55.8
Central Coast
Monterey	5.5	5.6		5.1		32.3	39.8		26.4
San Luis Obispo	6.2	6.8		7.6		59.7	59.6		49.9
Santa Barbara	6.9	7.0		6.9	r	56.3	99.8		63.2	r
Santa Cruz	5.4	6.8		6.5		41.0	39.1		29.4
Central Valley
Fresno	5.0	4.8		N/A		39.7	39.6		32.1
Kern (Bakersfield)	4.3	4.0	r	3.4		NA	NA		NA
Kings County	4.7	5.3		4.9		45.5	37.0		34.1
Madera	4.7	4.9	r	6.5		57.1	44.2	r	36.8
Merced	4.2	4.1	r	3.1		40.9	32.9	r	23.8
Placer County	NA	N/A		N/A		NA	NA		NA
Sacramento	2.4	2.5		2.5		35.1	40.9		28.7
San Benito	5.8	4.2		3.9		47.3	33.9		29.5
Tulare	5.0	4.6		5.7		34.3	39.9		25.5
Other Counties in California
Amador	8.2	8.0	r	12.6		55.2	46.7	r	121.0
Butte County	6.7	8.2		6.0		45.5	50.3		45.1
Humboldt	8.0	12.2		8.3		46.4	47.6		35.5
Lake County	7.5	7.7		6.3		92.0	88.7		82.8
Tuolumne	8.9	10.7		12.5		47.0	78.7		79.9
Mendocino	10.5	12.6		13.1		63.1	93.4		80.3
Shasta	5.5	6.1		8.2		41.2	44.4		45.9
Siskiyou County	N/A	N/A		N/A		NA	NA		NA
Tehama	7.4	7.9		7.3		50.8	52.8		44.2

* Los Angeles Metropolitan Area is a 5-county region that includes Los Angeles County, Orange County, Riverside County, San Bernardino County, and Ventura County
* S.F. Bay Area has been redefined to include the following counties: Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano, and Sonoma
* Inland Empire includes Riverside County and San Bernardino County
Regional/County sales data and condo sales data not seasonally adjusted.
The MLS median price and sales data for detached homes are generated from a survey of more than 90 associations of REALTORS® and MLSs throughout the state, representing 90 percent of the market. County sales data are not adjusted to account for seasonal factors that can influence home sales. MLS median price and sales data for condominiums are based on a survey of more than 60 associations. The median price for both detached homes an condominiums represents closed escrows. Movements in sales prices should not be interpreted as changes in the cost of a standard home. Median prices can be influenced by changes in cost and in the characteristics and size of homes sold. Due to low sales volume in some areas, median price changes may exhibit unusual fluctuation. C.A.R.’s data has been standardized to reflect county-level statistics.

find the article at:

"http://www.car.org/newsstand/newsreleases/junesalesprice/"

Great Article about the Drop in Apartment Vacancies this year

2011-07-11T10:05:00.000-07:00

Apartment rents increase as vacancies fall

Hui-yong Yu, Bloomberg News

Friday, July 8, 2011

Rent increases replaced landlord giveaways as U.S. apartment vacancies dropped in the second quarter to the lowest in more than three years, bolstered by rising demand on the West Coast, according to Reis Inc.
The apartment vacancy rate fell to 6 percent in the three months ended June 30 from 6.2 percent in the first quarter and 7.8 percent a year earlier, the property research firm said in a report Thursday. The second-quarter rate matched the first three months of 2008 and was the lowest since 5.7 percent at the end of 2007, the year commercial real estate prices peaked. Rents rose in all but two of the cities Reis tracks.
"The ongoing recovery and tightening vacancies continue to generate greater pricing power on the part of landlords," Ryan Severino, an economist at Reis, said in the report. "Vacancies should continue to decline while rents rise at an even faster pace than we observed in the first half."
Demand for rental apartments in the U.S. has soared as foreclosures forced people out of their homes and prospective home buyers found it harder to get mortgages. The home ownership rate in the U.S. fell to 66.4 percent in the first quarter, the lowest since 1998, according to the U.S. Census Bureau.
"There's still a stigma to buying houses," said Stan Harrelson, chief executive officer of Pinnacle, a Seattle company that manages more than $17 billion of apartments and other commercial properties. "Even with job growth, people aren't ready to take that step."
Landlords had a net increase in occupied space of about 33,000 units in the second quarter, down from 45,000 units in the first quarter, Reis said.
Effective rents, or what tenants actually pay after perks such as a free month, climbed in 80 of the 82 metropolitan areas surveyed, to an average $997 a month from $974 a year earlier and $991 in the first quarter.
San Jose led rent growth last quarter, followed by New York's Westchester County and San Francisco, according to Reis.
Las Vegas, one of the cities hardest hit by the housing collapse, had an increase in effective rents for the first time since 2008, Reis said. Rents in the city were still down from a year earlier.
The national rent increases mark a reversal from early last year, when many landlords were offering gifts to attract tenants. Aspira, a 325-unit luxury apartment building in Seattle, gave away dozens of iPads and 40-inch televisions, preloaded credit cards worth $1,000 each and up to three months of free rent when it opened in January 2010. With occupancy surpassing 80 percent, such enticements are no longer needed.
"They're gone," said John Schwartz, director of the Northwest regional office for Keller CMS Inc., the Los Angeles project manager that oversaw the development of the 37- story Aspira.
San Jose led rent growth for both the second quarter and the 12 months through June 30, Reis said.
"San Jose is everyone's darling and rents are through the roof, but that will plane off" as new supply comes to market in the next 12 to 18 months, said Harrelson of Pinnacle.

Market data provided by Bloomberg News

http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/07/08/BUUU1K7FAL.DTL

This article appeared on page D - 2 of the San Francisco Chronicle

2011-07-06T22:36:00.000-07:00

Sunset Park Santa Monica First Half Statistics

Single Family Residence

Great Article from the Times

2011-07-05T13:44:00.000-07:00

July 2, 2011
Big Banks Easing Terms on Loans Deemed as Risks
By DAVID STREITFELD
As millions of Americans struggle in foreclosure with little hope of relief, big banks are going to borrowers who are not even in default and cutting their debt or easing the mortgage terms, sometimes with no questions asked.

Two of the nation’s biggest lenders, JPMorgan Chase and Bank of America, are quietly modifying loans for tens of thousands of borrowers who have not asked for help but whom the banks deem to be at special risk.

Rula Giosmas is one of the beneficiaries. Last year she received a letter from Chase saying it was cutting in half the amount she owed on her condominium.

Ms. Giosmas, who lives in Miami, was not in default on her $300,000 loan. She did not understand why she would receive this gift — although she wasted no time in taking it.

Banks are proactively overhauling loans for borrowers like Ms. Giosmas who have so-called pay option adjustable rate mortgages, which were popular in the wild late stages of the housing boom but which banks now view as potentially troublesome.

Before Chase shaved $150,000 off her mortgage, Ms. Giosmas owed much more on her place than it was worth. It was a fate she shared with a quarter of all homeowners with mortgages across the nation. Being underwater, as it is called, can prevent these owners from moving and taking new jobs, and places the households at greater risk of foreclosure.

“It’s a huge problem,” said the economist Sam Khater. “Reducing negative equity would spark a housing recovery.”

While many homeowners desperately need help to keep their homes and cannot get it, the borrowers getting unsolicited relief from Chase sometimes suspect a trick. Cutting loan balances, even for loans in default, is supposedly so rare that Federal Reserve economists wrote in a paper in March that “we could find no evidence that any lender was actually reducing principal” on mortgages.

“I used to say every day, ‘Why doesn’t anyone get rewarded for doing the right thing and paying their bills on time?’ ” said Ms. Giosmas, who is an acupuncturist and real estate investor. “And I got rewarded.”

Option ARM loans like Ms. Giosmas’s gave borrowers the option of skipping the principal payment and some of the interest payment for an introductory period of several years. The unpaid balances would be added to the body of the loan.

Bank of America and Chase inherited their portfolios of option ARMs when they bought troubled lenders during the housing crash.

Chase, which declined to comment on its program, got $50 billion in option ARM loans when it bought Washington Mutual in 2008. The lender, which said last fall that it had dealt with 22,000 option ARM loans with an unpaid principal balance of $8 billion, still has $33 billion of them in its portfolio.

Bank of America acquired a portfolio of 550,000 option ARMs from its purchase of Countrywide Financial in 2008. The lender said more than 200,000 had been converted to more stable mortgages.

Dan B. Frahm, a spokesman for Bank of America, said it was using every technique short of principal reduction to remake its loans, including waiving prepayment penalties, refinancing, lowering the interest rate, postponing some of the balance and extending the term.

“By proactively contacting pay option ARM customers and discussing other products with better options for long-term, affordable payments, we hope to prevent customers from reaching a point where they struggle to make their payments,” Mr. Frahm said.

Chase, Bank of America and the other big lenders are negotiating with the Obama administration and the nation’s attorneys general over foreclosures. Debt forgiveness and the moral hazard question of who deserves to be helped are among the most contentious issues.

The banks say cutting mortgage balances would be unfair to borrowers who remain current as well as impractical because so many loans are securitized into pools owned by investors. Bank of America’s chief executive, Brian T. Moynihan, told the attorneys general in April that cutting principal for current borrowers would send the wrong message to all those who have struggled to pay their bills. His counterpart at Chase, Jamie Dimon, bluntly said it was “off the table.”

Having an option ARM loan, however, apparently qualifies the borrower for special help. The loans, with their low initial payments and “teaser” interest rates, were immediately popular with buyers who could not afford or did not want to pay the soaring prices on houses. The problem was, eventually the rate would reset or the loan balance would have to be paid in full. “Nightmare Mortgages” they were called in a 2006 BusinessWeek cover piece.

Option ARMs were never quite as bad as predicted, partly because the crisis pushed down interest rates so far that the resets were relatively mild. Many owners did default on them, but others, like Ms. Giosmas, were quite happy to pay less for years than they would have under a conventional loan. She used option ARMs on her investment properties too.

“They saved me,” she said. “Why would I want to pay a lot more every month? I’d rather have it in my pocket.”

The concern the banks are showing for those who might get in trouble contrasts sharply with their efforts toward those already foreclosed. Bank of America and Chase were penalized last month by regulators for doing a poor job modifying mortgages in default.

Adam J. Levitin, a Georgetown University law professor, said these little-publicized programs were more evidence that the banks were behaving in contradictory and often maddening ways.

“Loan modifications that should be happening aren’t, while loan modifications that shouldn’t be happening are,” he said. “Homeowners of any sort, whether current or in default, would rightly be confused and angry by this.”

The homeowners getting new loans, however, are quite pleased. In effect, the banks are paying the debt these owners accrued as the housing market plunged.

Ms. Giosmas bought her two-bedroom, two-bath apartment north of downtown Miami for $359,000 in early 2006, according to real estate records. She made a large down payment, but because each month she paid less than was necessary to pay off the loan, her debt swelled to about $300,000.

Meanwhile, the value of the apartment nosedived. By the time Ms. Giosmas got the letter from Chase, the condominium was worth less than half what she paid. “I would not have defaulted,” she said. “But they don’t know that.”

The letter, which Ms. Giosmas remembers as brief and “totally vague,” said Chase was cutting her principal by $150,000 while raising her interest rate to about 5 percent. Her payments would stay roughly the same.

A few months ago, Ms. Giosmas sold the place for $170,000, making a small profit. Having a loan that her lender considered toxic, she said, “turned out to be a blessing in disguise.”

For Sale

2011-06-23T19:14:00.000-07:00

Click below for the virtual tour

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For Sale: 1BR/1BA Condo in Santa Monica, CA, $329,000

2011-01-22T14:58:00.000-08:00

Just reduced and open Saturday February 5th from 1-4pm For Sale: 1BR/1BA Condo in Santa Monica, CA, $329,000

California Foreclosure News

2011-01-14T12:22:00.000-08:00

Here is an important article that discusses what happened in 2010 with the foreclosure market, the temporary slowdown and the possibility of more issues in 2011.

California leads as nation sets foreclosure record
By Erick Galindo Staff Writer
Whittier Daily News
Posted:
California led the nation with 546,669 foreclosure properties as a record 2.9 million U.S. properties received foreclosure filings in 2010, according to a report released today by RealtyTrac.

The record-breaking figure comes despite a slowdown in the fourth quarter fueled by the suspension of foreclosure proceedings by several major lenders.

"Total properties receiving foreclosure filings would have easily exceeded 3 million in 2010 had it not been for the fourth quarter drop in foreclosure activity," noted James Saccacio, chief executive officer of RealtyTrac, an Irvine-based online database of foreclosure properties.

The drop in foreclosure activity, which included a 30-month low in December, was fueled by controversy surrounding foreclosure documentation and procedures that prompted Bank of America and many of the nation's other major lenders to temporarily halt some foreclosure proceedings.

"Even so, 2010 foreclosure activity still hit a record high for our report," Saccacio added. "And many of the foreclosure proceedings that were stopped in late 2010 - which we estimate may be as high as a quarter-million - will likely be re-started and add to the numbers in early 2011."

California foreclosures decreased nearly 14 percent from 2009 but the state retained the country's third highest foreclosure rate (4.08 percent) behind Nevada (9.42 percent) and Arizona (5.73 percent).

California, Florida, Arizona, Illinois and Michigan account for 51 percent of the nation's total foreclosure activity. Combined, the states documented nearly 1.5 million foreclosure properties.

The onslaught of foreclosures was anticipated after a similar 2009, but federal and state efforts to curb housing woes fell short, according to Peter Tatian, a senior researcher with The Urban Institute.

"I don't think banks knew the magnitude of the wave of foreclosures," he said. "Had they known how bad it would get there would have been more of an aggressive effort up front."

According to Leslie Appleton-Young, the chief Economist for the California Association of Realtors, there wasn't much that could be done to address the root cause of foreclosures - negative property values.

"Even with lower interest rates, the value of homes dropped so dramatically so quickly that borrowers would still be under water."

erick.galindo@sgvn.com

626-962-8811, ext. 2720

Sunset Park Santa Monica SFR Market Numbers

2011-01-12T16:32:00.000-08:00

Here are the numbers that show how Sunset Park has performed from 2007 till 2010.

Metrodome Roof in Minnesota

2010-12-13T09:23:00.000-08:00

In any market it's important to get your home inspected by a certified and qualified home inspector. Don't let this happen to you!

Bank Of America to Restart Some Foreclosures

2010-12-10T12:08:00.000-08:00

By DAN FITZPATRICK

Bank of America Corp. said it restarted about 16,000 foreclosure cases across the U.S. on Monday, but it may be weeks before it is known whether the bank's submission of new documents will pass muster with local judges.

The bank instructed its foreclosure attorneys this week to prepare new affidavits in 7,800 cases where court approval is required to foreclose on a home, out of a total of 102,000 frozen by the bank amid documentation concerns. In states where no court approval is required, attorneys were asked to lift the hold on 8,000 delayed foreclosure sales out of 30,000.

The nation's largest bank as measured by assets is scrambling to get its foreclosure engine restarted amid widespread scrutiny of its mortgage practices. It and several U.S. banks halted foreclosures following allegations employees signed hundreds of foreclosure documents a day without carefully reviewing their contents.

Bank of America officials previously said they would resubmit affidavits on pending foreclosures starting Oct. 25, with foreclosure sales resuming in November. But those efforts hit several snags, including the hiring of new law firms to handle new foreclosure paperwork, as the bank refiled just a "handful" of cases as part of an initial pilot test of the process. "We are taking a deliberate and phased approach," said bank spokesman Dan Frahm.

Other banks said they too are reviving foreclosures following internal reviews. Wells Fargo & Co. said it has prepared 46,000 supplemental affidavits in cases where court approval is required, and 94% have been sent to outside counsel for submission to the courts. The bank hasn't uncovered any instances where "a foreclosure should not have otherwise occurred," a spokeswoman said. J.P. Morgan Chase & Co. also said it has started refilling foreclosure affidavits on a "state-by-state basis."

The 16,000 foreclosure cases reopened by Bank of America involve vacant properties or homes that were rented to other occupants, both of which present fewer risks of legal challenges. The majority are in Florida, California, Texas, Georgia and Michigan. It will take Bank of America six days to review and approve each newly prepared affidavit, a spokesman said. But it may take some courts several weeks to schedule a hearing. Bank of America expects to file the remaining replacement affidavits "early next year."

Write to Dan Fitzpatrick at dan.fitzpatrick@wsj.com

Mortgage Rates on the rise and hit 4.61

2010-12-09T15:02:00.000-08:00

Mortgage rate for 30-year fixed loans hits 4.61 percent

By Janna Herron

Associated Press
Posted: 12/09/2010 08:21:45 AM PST
Updated: 12/09/2010 08:21:47 AM PST

NEW YORK -- Rates on fixed mortgages rose for the fourth straight week this week, hitting 4.61 percent. The surge could slow refinancings and further hamper the housing market.

Freddie Mac said Thursday that the average rate on a 30-year fixed loan increased sharply from last week's rate. And it is well above the 4.17 percent rate hit a month ago -- the lowest level on records dating back to 1971.

The average rate on a 15-year fixed loan rose to 3.96 percent. Rates hit 3.57 percent last month -- the lowest level since 1991.

Rates are rising after plummeting for seven months. Investors are selling Treasury bonds in anticipation of an extension of tax cuts and unemployment benefits that could boost the economy next year. Investors are also dumping the bonds because they believe budget deficits will grow over the long term because of the deal. The sell-off is raising the yield on Treasury bonds. Mortgage rates tend to track those yields.

The increase in rates already is discouraging homeowners interested in refinancing their homes. Refinance activity fell for the fourth straight week last week, according to the Mortgage Bankers Association.

However, the increase in rates may have convinced some homebuyers who were waffling to go ahead and make a move. Purchase application volume was up for the third consecutive week and is at its highest point since the beginning of May. Mortgage brokers and real estate agents agree that a
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sustained rise in mortgage rates eventually will sideline potential buyers.

To calculate average mortgage rates, Freddie Mac collects rates from lenders across the country on Monday through Wednesday of each week. Rates often fluctuate significantly, even within a single day.

Rates on five-year adjustable-rate mortgages averaged 3.60 percent, up from 3.49 percent. The five-year hit 3.25 percent last month, the lowest rate on records dating back to January 2005.

Rates on one-year adjustable-rate home loans slipped to 3.27 percent from 3.25 percent.

The rates do not include add-on fees, known as points. One point is equal to 1 percent of the total loan amount.

The average fee for 30-year and 15-year mortgages in Freddie Mac's survey was 0.7 point. It was 0.6 point for five-year and one-year mortgages.

Housing Outlook 2011: When Home Prices Will Head Up

2010-11-30T15:32:00.000-08:00

Housing Outlook 2011: When Home Prices Will Head Up

Santa Monica Single Family Residence Market Statistics

2010-11-10T12:22:00.000-08:00

Santa Monica Condominium Statistics

2010-11-06T19:18:00.000-07:00

2010-10-14T09:40:00.001-07:00

Foreclosure Activity Increases 4 Percent in Third Quarter, According to RealtyTrac | RISMedia

Great Advice for any market

2010-10-13T09:47:00.001-07:00

Be Market-Smart: Dos and Don’ts for Home Sellers and Buyers | RISMedia

Foreclosure fiasco: The latest

2010-10-13T09:27:00.000-07:00

Foreclosure fiasco: The latest

Just Reduce and open 2-5 PM Sunday

2010-10-08T18:10:00.000-07:00

Move In Ready Condo In Great Location

2010-10-06T13:51:00.000-07:00

LA unveils $578M school, costliest in the nation

2010-08-23T22:07:00.000-07:00

By CHRISTINA HOAG, Associated Press Writer – Sun Aug 22, 2:46 pm ET
LOS ANGELES – Next month's opening of the Robert F. Kennedy Community Schools will be auspicious for a reason other than its both storied and infamous history as the former Ambassador Hotel, where the Democratic presidential contender was assassinated in 1968.
With an eye-popping price tag of $578 million, it will mark the inauguration of the nation's most expensive public school ever.
The K-12 complex to house 4,200 students has raised eyebrows across the country as the creme de la creme of "Taj Mahal" schools, $100 million-plus campuses boasting both architectural panache and deluxe amenities.
"There's no more of the old, windowless cinderblock schools of the '70s where kids felt, 'Oh, back to jail,'" said Joe Agron, editor-in-chief of American School & University, a school construction journal. "Districts want a showpiece for the community, a really impressive environment for learning."
Not everyone is similarly enthusiastic.
"New buildings are nice, but when they're run by the same people who've given us a 50 percent dropout rate, they're a big waste of taxpayer money," said Ben Austin, executive director of Parent Revolution who sits on the California Board of Education. "Parents aren't fooled."
At RFK, the features include fine art murals and a marble memorial depicting the complex's namesake, a manicured public park, a state-of-the-art swimming pool and preservation of pieces of the original hotel.
Partly by circumstance and partly by design, the Los Angeles Unified School District has emerged as the mogul of Taj Mahals.
The RFK complex follows on the heels of two other LA schools among the nation's costliest — the $377 million Edward R. Roybal Learning Center, which opened in 2008, and the $232 million Visual and Performing Arts High School that debuted in 2009.
The pricey schools have come during a sensitive period for the nation's second-largest school system: Nearly 3,000 teachers have been laid off over the past two years, the academic year and programs have been slashed. The district also faces a $640 million shortfall and some schools persistently rank among the nation's lowest performing.
Los Angeles is not alone, however, in building big. Some of the most expensive schools are found in low-performing districts — New York City has a $235 million campus; New Brunswick, N.J., opened a $185 million high school in January.
Nationwide, dozens of schools have surpassed $100 million with amenities including atriums, orchestra-pit auditoriums, food courts, even bamboo nooks. The extravagance has led some to wonder where the line should be drawn and whether more money should be spent on teachers.
"Architects and builders love this stuff, but there's a little bit of a lack of discipline here," said Mary Filardo, executive director of 21st Century School Fund in Washington, D.C., which promotes urban school construction.
Some experts say it's not all flourish and that children learn better in more pleasant surroundings.
Many schools incorporate large windows to let in natural light and install energy-saving equipment, spending more upfront for reduced bills later. Cafeterias are getting fancier, seeking to retain students who venture off campus. Wireless Internet and other high-tech installations have become standard.
Some pricey projects have had political fallout.
After a firestorm over the $197.5 million Newton North High School in Massachusetts, Mayor David Cohen chose not to seek re-election and state Treasurer Timothy Cahill reined in school construction spending.
Now to get state funds for a new school, districts must choose among three designs costing $49 million to $64 million. "We had to bring some sense to this process," Cahill said.
In Los Angeles, officials say the new schools were planned long before the economic pinch and are funded by $20 billion in voter-approved bonds that do not affect the educational budget.
Still, even LA Unified Superintendent Ramon Cortines derided some of the extravagance, noting that donations should have been sought to fund the RFK project's talking benches commemorating the site's history.
Connie Rice, member of the district's School Bond Oversight Committee, noted the megaschools are only three of 131 that the district is building to alleviate overcrowding. RFK "is an amazing facility," she said. "Is it a lot of money? Yes. We didn't like it, but they got it done."
Construction costs at LA Unified are the second-highest in the nation — something the district blames on skyrocketing material and land prices, rigorous seismic codes and unionized labor.
James Sohn, the district's chief facilities executive, said the megaschools were built when global raw material shortages caused costs to skyrocket to an average of $600 per square foot in 2006 and 2007 — triple the price from 2002. Costs have since eased to $350 per square foot.
On top of that, each project had its own cost drivers.
After buildings were demolished at the site of the 2,400-student Roybal school, contaminated soil, a methane gas field and an earthquake fault were discovered. A gas mitigation system cost $17 million.
Over 20 years, the project grew to encompass a dance studio with cushioned maple floors, a modern kitchen with a restaurant-quality pizza oven, a 10-acre park and teacher planning rooms between classrooms.
The 1,700-student arts school was designed as a landmark, with a stainless steel, postmodernistic tower encircled by a rollercoaster-like swirl, while the RFK site involved 15 years of litigation with historic preservationists and Donald Trump, who wanted to build the world's tallest building there. The wrangling cost $9 million.
Methane mitigation cost $33 million and the district paid another $15 million preserving historic features, including a wall of the famed Cocoanut Grove nightclub and turning the Paul Williams-designed coffee shop into a faculty lounge.
Sohn said LA Unified has reached the end of its Taj Mahal building spree. "These are definitely the exceptions," he said. "We don't anticipate schools costing hundreds of millions of dollars in the future."