Contact Lee Williams, Keller Williams Realtor (310) 882-5428 LeeWilliams@KW.com DRE#01726182

Repost from DQNews.com

La Jolla, CA.–Lenders filed a record number of mortgage default notices against California homeowners during the first three months of this year, the result of the recession and of lenders playing catch-up after a temporary lull in foreclosure activity, a real estate information service reported.

A total of 135,431 default notices were sent out during the January- to-March period. That was up 80.0 percent from 75,230 for the prior quarter and up 19.0 percent from 113,809 in first quarter 2008, according to MDA DataQuick.

Last quarter’s total was an all-time high for any quarter in DataQuick’s statistics, which for defaults go back to 1992. There were 121,673 default notices filed in second quarter 2008 and 94,240 in third quarter 2008, during which a new state law took effect requiring lenders to take added steps aimed at keeping troubled borrowers in their homes.

“The nastiest batch of California home loans appears to have been made in mid to late 2006 and the foreclosure process is working its way through those. Back then different risk factors were getting piled on top of each other. Adjustable-rate mortgages can be good loans. So can low- down-payment loans, interest-only loans, stated-income loans, etcetera. But if you combine these elements into one loan, it’s toxic,” said John Walsh, DataQuick president.

The median origination month for last quarter’s defaulted loans was July 2006. That’s only four months later than the median origination month for defaulted loans a year ago, in first quarter 2008. That suggests a period where underwriting criteria were particularly lax.

Of the 3.7 million home loans made in 2004, less than 1 percent have since resulted in a lender filing a default notice. Of the 3.7 million loans originated in 2005, 4.9 percent have triggered a default notice so far. Of the 3 million in 2006, 8.5 percent have so far resulted in default. A particularly toxic period appears to have been August through November 2006 which had more than a 9 percent default rate. Of the 2.1 million loans made in 2007, it’s 4.6 percent - a percentage that’s likely to rise significantly during the rest of this year.

The lending institutions with the highest default rates for loans originated in August to November 2006 include ResMAE Mortgage (69.9 percent of loans resulting in a default notice), Master Financial (64.6 percent) and Ownit Mortgage Solutions (63.6 percent). Of the major lenders, IndyMac has a default rate on those loans of 18.9 percent, World Savings 8.0 percent, Countrywide 7.7 percent, Washington Mutual 6.3 percent and Wells Fargo 3.4 percent. Less than 1 percent of the home loans originated in late 2006 by Citibank and Bank of America have since gone into default.

Many, if not most, of the loans made in 2006 are owned and/or serviced by lending institutions other than those that made the loans (mortgages are often sold off after the initial lender originates the loan, and are often serviced by a different entity). Many of the originating lending institutions no longer exist.

While most first quarter 2009 foreclosure activity was still concentrated in affordable inland communities, there are signs that the problem is slowly migrating into other areas. The affordable sub-markets, which represent 25 percent of the state’s housing stock, accounted for more than 52.0 percent of all default activity in 2008. Last quarter it fell to 47.5 percent.

On primary mortgages, California homeowners were a median five months behind on their payments when the lender filed the notice of default. The borrowers owed a median $12,926 on a median $346,400 mortgage.

On home equity loans and lines of credit, borrowers owed a median $4,229 on a median $63,600 credit line. However the amount of the credit line that was actually in use cannot be determined from public records.

MDA DataQuick is a division of MDA Lending Solutions, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. MDA DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts. Notices of Default are recorded at county recorders offices and mark the first step of the formal foreclosure process.

Although 135,431 default notices were filed last quarter, they involved 130,718 homes because some borrowers were in default on multiple loans (e.g. a primary mortgage and a line of credit). Multiple default recordings on the same home are trending down, DataQuick reported.

Mortgages were least likely to go into default in Marin, San Francisco, and San Mateo counties - the historical norm. The probability was highest in Riverside, Merced and San Joaquin counties.

Trustees Deeds recorded, or the actual loss of a home to foreclosure, totaled 43,620 during the first quarter. That’s down 5.5 percent from 46,183 for the prior quarter, and down 7.6 percent from 47,221 for first-quarter 2008. They reached 79,511 during last year’s third quarter before dropping because of lenders’ temporary policy changes (e.g. a temporary foreclosure moratorium).

In the last real estate cycle, Trustees Deeds peaked at 15,418 in third-quarter 1996. The state’s all-time low was 637 in the second quarter of 2005, MDA DataQuick reported.

There are 8.5 million houses and condos in the state.

Foreclosure resales have emerged as a significant market factor, accounting for 58.1 percent of all California resale activity last quarter. A year ago it was 33.1 percent. Foreclosure resales varied significantly by area, from 13.0 percent in San Francisco County to 80.8 percent in Merced County.

Notices of Default (first step in foreclosure process)
houses and condos

* includes additional counties

Trustees Deeds Recorded (signal homes were lost to foreclosure)
houses and condos

Source: DataQuick Information Systems

Media calls: Andrew LePage (916) 456-7157 or John Karevoll (909) 867-9534

The following is a Q&A released by the US Treasury Department to answer the folks who are not behind on their mortgage and those at risk of foreclosure and want to know how the $75 Billion Homeowner Affordability and Stability Plan affects them.

 Fact Sheet http://www.treas.gov/news/index2.html

Borrowers Who Are Current on Their Mortgage Are Asking:

1. What help is available for borrowers who stay current on their mortgage payments but have seen their homes decrease in value?

Under the Homeowner Affordability and Stability Plan, eligible borrowers who stay current on their mortgages but have been unable to refinance to lower their interest rates because their homes have decreased in value, may now have the opportunity to refinance into a 30 or 15 year, fixed rate loan. Through the program, Fannie Mae and Freddie Mac will allow the refinancing of mortgage loans that they hold in their portfolios or that they placed in mortgage backed securities.

2. I owe more than my property is worth, do I still qualify to refinance under the Homeowner Affordability and Stability Plan?

Eligible loans will now include those where the new first mortgage (including any refinancing costs) will not exceed 105% of the current market value of the property. For example, if your property is worth $200,000 but you owe $210,000 or less you may qualify. The current value of your property will be determined after you apply to refinance.

3. How do I know if I am eligible?

Complete eligibility details will be announced on March 4th when the program starts. The criteria for eligibility will include having sufficient income to make the new payment and an acceptable mortgage payment history. The program is limited to loans held or securitized by Fannie Mae or Freddie Mac.

4. I have both a first and a second mortgage. Do I still qualify to refinance under the Homeowner Affordability and Stability Plan?

As long as the amount due on the first mortgage is less than 105% of the value of the property, borrowers with more than one mortgage may be eligible to refinance under the Homeowner Affordability and Stability Plan. Your eligibility will depend, in part, on agreement by the lender that has your second mortgage to remain in a second position, and on your ability to meet the new payment terms on the first mortgage.

5. Will refinancing lower my payments?

The objective of the Homeowner Affordability and Stability Plan is to provide creditworthy borrowers who have shown a commitment to paying their mortgage with affordable payments that are sustainable for the life of the loan. Borrowers whose mortgage interest rates are much higher than the current market rate should see an immediate reduction in their payments. Borrowers who are paying interest only, or who have a low introductory rate that will increase in the future, may not see their current payment go down if they refinance to a fixed rate. These borrowers, however, could save a great deal over the life of the loan. When you submit a loan application, your lender will give you a “Good Faith Estimate” that includes your new interest rate, mortgage payment and the amount that you will pay over the life of the loan. Compare this to your current loan terms. If it is not an improvement, a refinancing may not be right for you.

6. What are the interest rate and other terms of this refinance offer?

The objective of the Homeowner Affordability and Stability Plan is to provide borrowers with a safe loan program with a fixed, affordable payment. All loans refinanced under the plan will have a 30 or 15 year term with a fixed interest rate. The rate will be based on market rates in effect at the time of the refinance and any associated points and fees quoted by the lender. Interest rates may vary across lenders and over time as market rates adjust. The refinanced loans will have no prepayment penalties or balloon notes.

7. Will refinancing reduce the amount that I owe on my loan?

No. The objective of the Homeowner Affordability and Stability Plan is to help borrowers refinance into safer, more affordable fixed rate loans. Refinancing will not reduce the amount you owe to the first mortgage holder or any other debt you owe. However, by reducing the interest rate, refinancing should save you money by reducing the amount of interest that you repay over the life of the loan.

8. How do I know if my loan is owned or has been securitized by Fannie Mae or Freddie Mac?

To determine if your loan is owned or has been securitized by Fannie Mae or Freddie Mac and is eligible to be refinanced, you should contact your mortgage lender after March 4, 2009.

9. When can I apply?

Mortgage lenders will begin accepting applications after the details of the program are announced on March 4, 2009.

10. What should I do in the meantime?

You should gather the information that you will need to provide to your lender after March 4, when the refinance program becomes available. This includes: information about the gross monthly income of all borrowers, including your most recent pay stubs if you receive them or documentation of income you receive from other sources your most recent income tax return information about any second mortgage on the house payments on each of your credit cards if you are carrying balances from month to month, and payments on other loans such as student loans and car loans.

Borrowers Who Are at Risk of Foreclosure Are Asking:

1. What help is available for borrowers who are at risk of foreclosure either because they are behind on their mortgage or are struggling to make the payments?

The Homeowner Affordability and Stability Plan offers help to borrowers who are already behind on their mortgage payments or who are struggling to keep their loans current. By providing mortgage lenders with financial incentives to modify existing first mortgages, the Treasury hopes to help as many as 3 to 4 million homeowners avoid foreclosure regardless of who owns or services the mortgage.

2. Do I need to be behind on my mortgage payments to be eligible for a modification?

No. Borrowers who are struggling to stay current on their mortgage payments may be eligible if their income is not sufficient to continue to make their mortgage payments and they are at risk of imminent default. This may be due to several factors, such as a loss of income, a significant increase in expenses, or an interest rate that will reset to an unaffordable level.

3. How do I know if I qualify for a payment reduction under the Homeowner Affordability and Stability Plan?

In general, you may qualify for a mortgage modification if (a) you occupy your house as your primary residence; (b) your monthly mortgage payment is greater than 31% of your monthly gross income; and (c) your loan is not large enough to exceed current Fannie Mae and Freddie Mac loan limits. Final eligibility will be determined by your mortgage lender based on your financial situation and detailed guidelines that will be available on March 4, 2009.

4. I do not live in the house that secures the mortgage I’d like to modify. Is this mortgage eligible for the Homeowner Affordability and Stability Plan?

No. For example, if you own a house that you use as a vacation home or that you rent out to tenants, the mortgage on that house is not eligible. If you used to live in the home but you moved out, the mortgage is not eligible. Only the mortgage on your primary residence is eligible. The mortgage lender will check to see if the dwelling is your primary residence.

5. I have a mortgage on a duplex. I live in one unit and rent the other. Will I still be eligible?

Yes. Mortgages on 2, 3 and 4 unit properties are eligible as long as you live in one unit as your primary residence.

6. I have two mortgages. Will the Homeowner Affordability and Stability Plan reduce the payments on both?

Only the first mortgage is eligible for a modification.

7. I owe more than my house is worth. Will the Homeowner Affordability and Stability Plan reduce what I owe?

The primary objective of the Homeowner Affordability and Stability Plan is to help borrowers avoid foreclosure by modifying troubled loans to achieve a payment the borrower can afford. Lenders are likely to lower payments mainly by reducing loan interest rates. However, the program offers incentives for principal reductions and at your lender’s discretion modifications may include upfront reductions of loan principal.

8. I heard the government was providing a financial incentive to borrowers. Is that true?

Yes. To encourage borrowers who work hard to retain homeownership, the Homeowner Affordability and Stability Plan provides incentive payments as a borrower makes timely payments on the modified loan. The incentive will accrue on a monthly basis and will be applied directly to reduce your mortgage debt. Borrowers who pay on time for five years can have up to $5,000 applied to reduce their debt by the end of that period.

9. How much will a modification cost me?

There is no cost to borrowers for a modification under the Homeowner Affordability and Stability Plan. If you wish to get assistance from a HUD-approved housing counseling agency or are referred to a counselor as a condition of the modification, you will not be charged a fee. Borrowers should beware of any organization that attempts to charge a fee for housing counseling or modification of a delinquent loan, especially if they require a fee in advance.

10. Is my lender required to modify my loan?

No. Mortgage lenders participate in the program on a voluntary basis and loans are evaluated for modification on a case-by-case basis. But the government is offering substantial incentives and it is expected that most major lenders will participate.

11. I’m already working with my lender / housing counselor on a loan workout. Can I still be considered for the Homeowner Affordability and Stability Plan?

Ask your lender or counselor to be considered under the Homeowner Affordability and Stability Plan.

12. How do I apply for a modification under the Homeowner Affordability and Stability Plan?

You may not need to do anything at this time. Most mortgage lenders will evaluate loans in their portfolio to identify borrowers who may meet the eligibility criteria. After March 4 they will send letters to potentially eligible homeowners, a process that may take several weeks. If you think you qualify for a modification and do not receive a letter within several weeks, contact your mortgage servicer or a HUD-approved housing counselor. Please be aware that servicers and counseling agencies are expected to receive an extraordinary number of calls about this program.

13. What should I do in the meantime?

You should gather the information that you will need to provide to your lender on or after March 4, when the modification program becomes available. This includes

·                     information about the monthly gross income of your household including recent pay stubs if you receive them or documentation of income you receive from other sources

·                     your most recent income tax return

·                     information about any second mortgage on the house

·                     payments on each of your credit cards if you are carrying balances from month to month, and

·                     payments on other loans such as student loans and car loans.

14. My loan is scheduled for foreclosure soon. What should I do?

Contact your mortgage servicer or credit counselor. Many mortgage lenders have expressed their intention to postpone foreclosure sales on all mortgages that may qualify for the modification in order to allow sufficient time to evaluate the borrower’s eligibility. We support this effort.

Source: http://www.treas.gov/initiatives/eesa/homeowner-affordability-plan/ConsumerQA.pdf

“Today, as a result of declining home values, millions of families are “underwater,” which means they owe more on their mortgages than their homes are worth. These families are unable to sell their homes, and unable to refinance them. So in the event of a job loss or another emergency, their options are limited.

“Right now, Fannie Mae and Freddie Mac — the institutions that guarantee home loans for millions of middle-class families — are generally not permitted to guarantee refinancing for mortgages valued at more than 80 percent of the home’s worth. So families who are underwater — or close to being underwater — cannot turn to these lending institutions for help.

“My plan changes that by removing this restriction on Fannie and Freddie so that they can refinance mortgages they already own or guarantee. This will allow millions of families stuck with loans at a higher rate to refinance. And the estimated cost to taxpayers would be roughly zero; while Fannie and Freddie would receive less money in payments, this would be balanced out by a reduction in defaults and foreclosures.

“I also want to point out that millions of other households could benefit from historically low interest rates if they refinance, though many don’t know that this opportunity is available to them — an opportunity that could save families hundreds of dollars each month. And the efforts we are taking to stabilize mortgage markets will help these borrowers to secure more affordable terms, too.

“Second, we will create new incentives so that lenders work with borrowers to modify the terms of sub-prime loans at risk of default and foreclosure.

Sub-prime loans — loans with high rates and complex terms that often conceal their costs — make up only 12 percent of all mortgages, but account for roughly half of all foreclosures.

Right now, when families with these mortgages seek to modify a loan to avoid this fate, they often find themselves navigating a maze of rules and regulations but rarely finding answers. Some sub-prime lenders are willing to renegotiate; many aren’t. Your ability to restructure your loan depends on where you live, the company that owns or manages your loan, or even the agent who happens to answer the phone on the day you call.

“My plan establishes clear guidelines for the entire mortgage industry that will encourage lenders to modify mortgages on primary residences. Any institution that wishes to receive financial assistance from the government, and to modify home mortgages, will have to do so according to these guidelines — which will be in place two weeks from today.

“If lenders and homebuyers work together, and the lender agrees to offer rates that the borrower can afford, we’ll make up part of the gap between what the old payments were and what the new payments will be. And under this plan, lenders who participate will be required to reduce those payments to no more than 31 percent of a borrower’s income. This will enable as many as three to four million homeowners to modify the terms of their mortgages to avoid foreclosure.

“So this part of the plan will require both buyers and lenders to step up and do their part. Lenders will need to lower interest rates and share in the costs of reduced monthly payments in order to prevent another wave of foreclosures. Borrowers will be required to make payments on time in return for this opportunity to reduce those payments.

“I also want to be clear that there will be a cost associated with this plan. But by making these investments in foreclosure-prevention today, we will save ourselves the costs of foreclosure tomorrow — costs borne not just by families with troubled loans, but by their neighbors and communities and by our economy as a whole. Given the magnitude of these costs, it is a price well worth paying.

“Third, we will take major steps to keep mortgage rates low for millions of middle-class families looking to secure new mortgages.

“Today, most new home loans are backed by Fannie Mae and Freddie Mac, which guarantee loans and set standards to keep mortgage rates low and to keep mortgage financing available and predictable for middle-class families. This function is profoundly important, especially now as we grapple with a crisis that would only worsen if we were to allow further disruptions in our mortgage markets.

“Therefore, using the funds already approved by Congress for this purpose, the Treasury Department and the Federal Reserve will continue to purchase Fannie Mae and Freddie Mac mortgage-backed securities so that there is stability and liquidity in the marketplace. Through its existing authority Treasury will provide up to $200 billion in capital to ensure that Fannie Mae and Freddie Mac can continue to stabilize markets and hold mortgage rates down.

“We’re also going to work with Fannie and Freddie on other strategies to bolster the mortgage markets, like working with state housing finance agencies to increase their liquidity. And as we seek to ensure that these institutions continue to perform what is a vital function on behalf of middle-class families, we also need to maintain transparency and strong oversight so that they do so in responsible and effective ways.

“Fourth, we will pursue a wide range of reforms designed to help families stay in their homes and avoid foreclosure.

“My administration will continue to support reforming our bankruptcy rules so that we allow judges to reduce home mortgages on primary residences to their fair market value — as long as borrowers pay their debts under a court-ordered plan. That’s the rule for investors who own two, three, and four homes. It should be the rule for ordinary homeowners too, as an alternative to foreclosure.

“In addition, as part of the recovery plan I signed into law yesterday, we are going to award $2 billion in competitive grants to communities that are bringing together stakeholders and testing new and innovative ways to prevent foreclosures. Communities have shown a lot of initiative, taking responsibility for this crisis when many others have not. Supporting these neighborhood efforts is exactly what we should be doing.

“Taken together, the provisions of this plan will help us end this crisis and preserve for millions of families their stake in the American Dream. But we must also acknowledge the limits of this plan.

“Our housing crisis was born of eroding home values, but also of the erosion of our common values. It was brought about by big banks that traded in risky mortgages in return for profits that were literally too good to be true; by lenders who knowingly took advantage of homebuyers; by homebuyers who knowingly borrowed too much from lenders; by speculators who gambled on rising prices; and by leaders in our nation’s capital who failed to act amidst a deepening crisis.

“So solving this crisis will require more than resources — it will require all of us to take responsibility. Government must take responsibility for setting rules of the road that are fair and fairly enforced. Banks and lenders must be held accountable for ending the practices that got us into this crisis in the first place. Individuals must take responsibility for their own actions. And all of us must learn to live within our means again.

“These are the values that have defined this nation. These are values that have given substance to our faith in the American Dream. And these are the values that we must restore now at this defining moment.

“It will not be easy. But if we move forward with purpose and resolve — with a deepened appreciation for how fundamental the American Dream is and how fragile it can be when we fail in our collective responsibilities — then I am confident we will overcome this crisis and once again secure that dream for ourselves and for generations to come.

“Thank you, God bless you, and God bless America.

President Obama will sign into law the $787 Billion stimulus bill tomorrow in Denver.  There are a number of provisions in this plan that affect California home owners including:

FHA, Fannie Mae and Freddie Mac Loan Limits -The bill reinstates last year’s 2008 loan limits for FHA, Freddie Mac, and Fannie Mae loans.  These limits were equal to the greater of 125% of the 2008 local area median home price or $271,050 for FHA and $417,000 for Fannie and Freddie, with an overall maximum cap of  $729,750.  For the few areas where the 2009 limits were higher, the higher limits will apply.  In addition, the bill includes language providing the HUD Secretary with the discretion, if warranted, to increase the loan limit for any “sub-area”, i.e.an area smaller than a county. The Secretary’s discretion is again limited by the $729,750 cap. These 2009 limits will expire December 31, 2009.

The inclusion of these loan limit provisions in the final bill is a victory for the California housing market as well as existing home owners.   Click Here for the estimated loan limits in your area.

Homebuyer Tax Credit – The bill provides for a $8,000 tax credit that would be available to first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009.  The credit does not require repayment.  Most of the mechanics of the credit will be the same as under the 2008 rules:  the credit will be claimed on a tax return to reduce the purchaser’s income tax liability.  If any credit amount remains unused, then the unused amount will be refunded as a check to the purchaser.  CLICK HERE for details on this tax credit.

Neighborhood Stabilization – Division A, Title XII of the bill provides $2,000,000,000 in additional funding for the Neighborhood Stabilization Program (NSP).  The NSP was created by the Housing and Economic Recovery Act of 2089 (Public Law 110–289) to provide grants through the Community Development Block Grant program (CDBG) to states and localities to address the problems that can be created when whole neighborhoods are decimated by foreclosures. The funds can be used to purchase, manage, repair and resell foreclosed and abandoned properties. In addition, the funds can also be used by states and localities to establish financing methods for the purchase and redevelopment of foreclosed properties.  After purchase the homes must be used to assist individuals and families with incomes at or below 120% of area median income. Twenty-five percent of funds must be used for households with incomes at or below 50% of area median income.  By leveraging their expertise in partnership with others from both the public and private sector, Realtors® in many communities have been making important contributions to their local communities’ neighborhood stabilization programs.

Energy Efficient Housing Tax Credits & Grants - To promote green jobs and energy independence, ARRA invests significantly in efforts to make homes and buildings more energy efficient.  The bill provides state and local governments with $6 billion in energy efficiency and conservation grants for energy audits, retrofits and financial incentives.  Through 2010, homeowners will be able to claim a 30% tax credit (up from 10%) for purchases of new furnaces, windows and insulation.  Another $5 billion will be available to modernize the nation’s electricity grid and install smart meters on homes that help to save consumers money.  There is also $5 billion for weatherization assistance for low income households and $2 billion for federally assisted housing (section 8 ) efficiency efforts. 

Commercial Real Estate - Commercial real estate is impacted primarily through those provisions of the bill focused on green building and energy efficiency as well as business tax incentives. H.R. 1 provides significant funds for state energy programs, which could be used to support commerical property owners’ investment in energy efficiency upgrades while commercial property owners seeking to invest in alternative energy systems for onsite power generation would benefit from the Department of Energy Renewable Energy Loan Guarantees Program.  Of particular benefit to small businesses would be certain provisions of the bill that provide tax relief in the area of bonus depreciation and capital expenditures, as well as the 5-Year carryback of net operating losses for small businesses.

Rural Housing Service – The bill provides an additional $500 million to existing USDA Rural Housing programs.  The RHS provides both a guaranteed loan program and a direct housing loan program for those meeting the program’s eligibility criteria. The direct loan program will receive $270 million while $230 million will be allocated for unsubsidized guaranteed loans. It has been reported that this level of funding would provide for an additional 192,000 homeowners.

Low Income Housing Grants - Allow states to trade in a portion of their 2009 low-income housing tax credits for Treasury grants to finance the construction or acquisition and rehabilitation of low-income housing, including those with or without tax credit allocations.

Tax-Exempt Housing Bonds - Tax-exempt interest earned on specified state and local bonds issued during 2009 and 2010 will not be subject to the Alternative Minimum Tax (AMT).  In addition, financial institutions will have greater capacity to purchase tax-exempt state and local bonds.

Once the bill is signed it will take some time for the Agencies to price and implement these changes.  Contact my office for additional details on how you can take advantage of these new provisions.

Lee Williams, 415-310-0855 Lee@gggloans com

La Jolla, CA.—-Bargain hunting dominated the Bay Area housing market last month as the purchase of foreclosure properties accounted for more than half of all resales for the first time. Sales patterns also reflected continued problems for buyers looking to finance purchases in the upper half of the market’s price range, a real estate information service reported.

A total of 6,889 new and resale houses and condos were sold in the nine- county region last month. That was up 19.7 percent from 5,756 in November, and up 36.0 percent from 5,065 for December 2007, according to MDA DataQuick.

While sales were well below the 8,807 average for all Decembers going back to 1988, they were no longer at the record low levels of late 2007 and the first half of 2008.

The median price paid for a Bay Area home was $330,000 in December. That was down 5.7 percent from $350,000 for the month before, and down 43.8 percent from $587,500 for December 2007. That was the lowest it has been since March 2000 when the median was $320,500, and 50.4% below the $665,000 peak of June/July 2007.

“It would be wrong to say that Bay Area home values are half of what they were a year-and-a-half ago. We’re figuring that maybe half of the decline in median is a market mix issue, and DQNEWS.com

The media picked up on the prospect of 4.5% fixed mortgages back in November causing a lot of people to wait for rates to come down to this level before refinancing.  11 straight weeks of interest rate drops lead us to 4.5% fixed rate mortgages for the first time ever!!!  Yay!  But that celebration was short lived as rates jumped back up about a half a percent later that same week.  Boo!!! Fundamentally pressures on interest rates are sound with much of the increase coming from banks trying to unclog their pipelines.  So many people rushing to refinance caused most lenders to slow things up a bit by raising rates.

Also, there is a chance of a rate drop again this week as the Fed sits in a two day meeting focused on further helping to shore up the crumbling credit markets and build investor confidence.  The $500 Billion dollars committed to buying Mortgage Backed Securities has lead us to record lows in interest rates.

Now here’s the bad news.  First, with 50% of all home sales in the Bay Area being foreclosure related, home values have plummeted, especially painful to folks who have 20% or less in equity (Down Payment).  People looking to refinance are having trouble getting back appraisals that show loan to values within the new much stricter guidelines.  There is a log jam currently with appraisals caused by this refinancing boom.  I suggest your mortgage rep order an appraisal early in the process.

DataQuick Information Systems, www.DQNews.com

La Jolla, CA.—-Bay Area home sales decelerated in November but beat the year-ago mark for the third consecutive month. The allure of discounted foreclosures continued to drive sales in affordable inland markets, which helped push the median sale price down to its lowest point since former President Bill Clinton was in the White House.

The median price paid for all new and resale houses and condos combined in the nine-county Bay Area fell to $350,000 last month. That was down 6.7 percent from $375,000 in October and down a record 44.4 percent from $629,000 in November 2007, according to MDA DataQuick, a San Diego-based real estate information service.

The November median sale price - the point where half of the homes sold for more and half for less - stood at its lowest since it was $350,000 in September 2000. It was 47.4 percent below the peak median of $665,000 reached last year in June and July.

The median has fallen on a year-over-year basis for 12 consecutive months, yanked lower by several factors: price depreciation; a shift toward more sales in the less-expensive inland markets; slower high-end sales; and buyers’ preference for lower-priced foreclosures.

Last month 47.6 percent of all homes that resold in the Bay Area had been foreclosed on at some point in the prior 12 months, up from 44.0 percent in October and 10.1 percent a year ago.

Visit DQNews.com for the full article.

www.ForeclosureNorCal.com

“I keep waiting for someone to pinch me and say ‘Wake up, Paul, it’s time for work - you’re late again’.  I feel like I’m on a rollercoaster - a white knuckle ride into the unknown.  And I don’t want to get off!”

Britain’s Got Talent winner Paul Potts has spent most of his life feeling ‘insignificant’.  Bullied at school for being ‘different’, he realised growing up that he had one true friend and that was his voice.  Singing was his escape.  He was able to lose himself in his own little world - the vicious words of his tormentors replaced by hauntingly beautiful lyrics and melodies that lifted his heart and spirit.  It was a love, a passion, a lifeline that would follow Paul into adulthood and help him through many more periods of adversity.  But it was also a gift that was destined to go largely undiscovered, due to a crushing lack of self-confidence that has dogged this hard working and humble man throughout his 36 years.

Born just outside Bristol on October 13, 1970, to bus driver Roland and his wife Yvonne, a supermarket cashier, Paul - who’s one of four children
- was singing almost from the moment he could talk.  “My mother recalls me listening to the theme from ET and conducting an imaginary orchestra with sticks,” laughs Paul.  By the time he reached 11, he was part of one of the best church choirs in Bristol.  But it was when he hit 16 that his love of opera took hold.  “I bought a cheap recording of Carreras,” he recalls.  “It was the first time I had heard Che Gelida Manina (Your Tiny Hand Is Frozen) and I was so moved by it.  To this day La Boheme remains my favourite opera.”

Although Paul  has performed at amateur level, most notably with Bath Opera, his chronic lack of self esteem and fear of rejection always prevented him from trying to make it professionally.  ” As I saw it, if I never asked - never put myself out there - then I’d never get told “No”,’says Paul.  “It was safer that way.”

So instead, he carried on with his day jobs - which have included stacking shelves in a supermarket and, most recently and famously, selling mobile phones, where he was told by one of his superiors that he was a ‘natural salesman’.  “But I knew I wasn’t,” says Paul.  “When I was selling, I always felt like I was putting on an act.  When I sang, that’s when I felt I was myself - the real me.”

In 2000, Paul used savings and a bit of money he’d won on a quiz show to attend a three-month summer school in Italy, where he learned the language and got to indulge his passion further.  He even got to sing in a masterclass for his idol, Pavarotti.  But he was about to be dealt a cruel blow.

In 2003, he suffered a burst appendix.  While undergoing treatment for this, doctors discovered a benign tumour on his adrenal gland.  It was successfully removed but while he was recovering, he was knocked off his bike and broke his collarbone.  “Of all the health problems I’d been through, breaking my collar bone was the most painful and it took months to recover,” says Paul.  ” I got very, very low and for once, singing was the last thing on my mind.”

And he might have given up forever, had it not been for Britain’s Got Talent - the talent show for today’s generation, created by Simon Cowell and co-producved by his Entertainment company Syco TV, which last week was celebrating a double whammy.  In a first for a reality TV format, the Got Talent shows on both sides of the Atlantic -  Britain and America  - were at number one, with more than 13 million viewers tuning in to see Paul win the final of the British version and the same figure welcoming back a second season of America’s Got Talent in the States.  (The format has now been commissioned worldwide and will be shown in 40 countries by the end of the year!)

Though it’s fair to say that when Paul strolled awkwardly - almost apologetically - onto the Cardiff stage for his first Britain’s Got Talent audition a week before that final, in his now infamous £35 Tesco suit, and announced to Simon and fellow judges Amanda Holden and Piers Morgan that he was going to sing opera, they never thought for one minute they were looking at their winner.  Until he opened his mouth and started to sing.
It was, as Simon has said since, simply magical.  “Incredible”, agreed Piers.  And Amanda, who was moved to tears, said his voice had left her covered in goosebumps.  “We were not expecting that,” admitted Simon.

“I was so nervous I was shaking like a jelly, but when I watch that audition back, i can see in my eyes that when I start to sing I go to a totally different place and the nerves just vanish,” says Paul.  “When I stopped singing, there were a few seconds when my heart was racing because I had absolutely no idea what the judges were going to say.”

Since then, accolades have been posted on the Internet from as far afield as Australia and Taiwan, from fans who’ve seen Paul’s performances on
YouTube.   “A humble bloke who’s not even aware of his amazing gift - Paul
Potts is a true star” wrote one.

“It has changed my whole life. I used to feel so small and insignificant.
But now I know I am someone - I am Paul Potts and this is what I do,”
smiles Paul.

But don’t worry - there’s no danger of him going all starry and getting above himself!  “I am not going to change - although I might invest in some nicer suits!  But whatever happens, I’m keeping that Tesco one.  It’s a reminder of where I was and where I attempt to remain - except in better clothes!”

Paul also hopes to get his teeth done.  “I don’t think I’d suit one of those dazzling Hollywood smiles, but I’d like to get the cap sorted as I’m very conscious about it when I sing.”  Other plans for the £100,000 prize money include taking proud wife Julie-Ann, 27, who he wed four years ago, on safari - and, fingers crossed, starting a family.

“It’s something we couldn’t afford to think about before,” explains Paul, who lives with Julie-Ann in a modest two bedroomed house in Port Talbot, south Wales.  “Now we can and that would complete things.”

However, it might have to wait a little while.  His feet have barely touched the ground since his victory last Sunday and he’s got a host of engagements to prepare for.  The Thursday after winning, Paul flew to New York to perform in the plaza for NBC’s  Today show  - just days after Enrique Iglesias played the same venue and, the previous week, JonBon Jovi!   Then he’ll be back to the UK to start work on his first album.
 And, of course, there’s also the VIP performance for which he was competing in Britain’s Got Talent - appearing in front of Her Majesty the Queen at the Royal Variety Performance in early December.

“All of this is like a fairy tale and I’m terrified I’m going to wake up soon and find I’ve dreamt it all,” says Paul.  “The support I’ve had has been incredible and I feel so touched and humbled by it.   It has done so much for my confidence and I really can’t thank people enough for giving me the chance to realise my dream.  To be given an opportunity like this is more than I ever could have hoped for.  Finally, I am going to be doing what I’ve always felt I was put here to do - something I love and that gives me so much joy

Tony Robbins explains how to unlock your true potential, and asks the audience (including former Vice President Al Gore) for a bit of high-level interaction. Robbins is a leading expert in leadership psychology, and one of America’s most popular public speakers. (Recorded February 2006 in Monterey, CA. Duration: 22:30) - More TED Talks at http://www.ted.com 

President-elect Barack Obama lays out key parts of Economic Recovery Plan

Yesterday we learned that our economy has lost 2 million jobs since the recession began 11 months ago.

That’s why, in today’s weekly address, President-elect Barack Obama explains the key parts of his Economic Recovery Plan — which will save or create 2.5 million jobs in the next two years.

Good morning.

Yesterday, we received another painful reminder of the serious economic challenge our country is facing when we learned that 533,000 jobs were lost in November alone, the single worst month of job loss in over three decades. That puts the total number of jobs lost in this recession at nearly 2 million.

But this isn’t about numbers. It’s about each of the families those numbers represent. It’s about the rising unease and frustration that so many of you are feeling during this holiday season. Will you be able to put your kids through college? Will you be able to afford health care? Will you be able to retire with dignity and security? Will your job or your husband’s job or your daughter’s or son’s job be the next one cut?

These are the questions that keep so many Americans awake at night. But it is not the first time these questions have been asked. We have faced difficult times before, times when our economic destiny seemed to be slipping out of our hands. And at each moment, we have risen to meet the challenge, as one people united by a sense of common purpose. And I know that Americans can rise to the moment once again.

But we need action – and action now. That is why I have asked my economic team to develop an economic recovery plan for both Wall Street and Main Street that will help save or create at least two and a half million jobs, while rebuilding our infrastructure, improving our schools, reducing our dependence on oil, and saving billions of dollars.

We won’t do it the old Washington way. We won’t just throw money at the problem. We’ll measure progress by the reforms we make and the results we achieve — by the jobs we create, by the energy we save, by whether America is more competitive in the world.

Today, I am announcing a few key parts of my plan. First, we will launch a massive effort to make public buildings more energy-efficient. Our government now pays the highest energy bill in the world. We need to change that. We need to upgrade our federal buildings by replacing old heating systems and installing efficient light bulbs. That won’t just save you, the American taxpayer, billions of dollars each year. It will put people back to work.

Second, we will create millions of jobs by making the single largest new investment in our national infrastructure since the creation of the federal highway system in the 1950s. We’ll invest your precious tax dollars in new and smarter ways, and we’ll set a simple rule – use it or lose it. If a state doesn’t act quickly to invest in roads and bridges in their communities, they’ll lose the money.

Third, my economic recovery plan will launch the most sweeping effort to modernize and upgrade school buildings that this country has ever seen.  We will repair broken schools, make them energy-efficient, and put new computers in our classrooms. Because to help our children compete in a 21st century economy, we need to send them to 21st century schools.

As we renew our schools and highways, we’ll also renew our information superhighway. It is unacceptable that the United States ranks 15th in the world in broadband adoption. Here, in the country that invented the internet, every child should have the chance to get online, and they’ll get that chance when I’m President – because that’s how we’ll strengthen America’s competitiveness in the world.

In addition to connecting our libraries and schools to the internet, we must also ensure that our hospitals are connected to each other through the internet. That is why the economic recovery plan I’m proposing will help modernize our health care system – and that won’t just save jobs, it will save lives. We will make sure that every doctor’s office and hospital in this country is using cutting edge technology and electronic medical records so that we can cut red tape, prevent medical mistakes, and help save billions of dollars each year.

These are a few parts of the economic recovery plan that I will be rolling out in the coming weeks. When Congress reconvenes in January, I look forward to working with them to pass a plan immediately. We need to act with the urgency this moment demands to save or create at least two and a half million jobs so that the nearly two million Americans who’ve lost them know that they have a future. And that’s exactly what I intend to do as President of the United States.

Thanks for listening.

In essence, lender guidelines force appraisers to put a fair market value on a home based upon comparable sales in the area where the home is located, as the home must be bracketed according to size and value. For example, there is no set amount associated with a great view, pool, spa, bathroom upgrades, etc. If a homeowner installs a custom pool that cost them $30,000, and the local marketplace supports the value of a pool at $15,000, that item will be bracketed as [$15,000] on the appraisal. Upgrades can usually be expressed at full value in newer homes since they required investing additional money onto the cost of building the home. On the other hand, the amount invested in upgrading or remodeling an older home is rarely reflected in full in the final appraisal. The reason is the home had value in its original condition, and again, the value of the upgrades must be supported by comparable examples within the same marketplace.

These comparisons must be drawn from current market activity within the last six months. Some lenders may want to look at both closed and pending sales to see if there is any room for negotiation. This is a safeguard to prevent appraisers from over-valuing the home in question. It is further stated in the guidelines that appraisers can only place a value on homes that have closed escrow. However, when property values rapidly increase within a marketplace, appraisers are generally permitted to make concessions and put more weight on the evidence provided by comparisons to pending sales and listings. This allows for a “real time” appraisal.

Although there is no formal standard to speak of, most lenders give the appraiser a 5% margin of error. If the file is reviewed and the appraiser is off by 8%, there is a good chance the value will be cut by the full 8%. It is in the best interest of both the appraiser and the homeowner not to push the value up higher than the market will support, otherwise the property evaluation may be exposed to a strict appraisal review.
As a loan executive, I make it a point to follow lender guidelines at all times, and work within the systems they provide. This promotes a good relationship with the lender, and smooth closure for my borrowers. As always, you are welcome to contact me if you have any questions.

Lee Williams Senior Advisor and Loan Consultant
www.GGGLoans.com
Tel: 415-345-0787

Should you ever need to take out new credit you are much more likely to get great credit card deals at sites like BankRate.com so there is no need for these offers to clog your mailbox.

If you would like to reduce the number of pre-screened credit and insurance offers you are receiving, visit www.optoutprescreen.com or call 1-888-5OptOut (1-888-567-8688) to opt-out of these offers. This is a free service to consumers offered by the major credit bureaus.

Through this website, you may request to:

• Opt-Out from receiving Firm Offers for Five Years - (electronically).
• Opt-Out from receiving Firm Offers permanently - (mail).
• Opt-In and be eligible to receive Firm Offers. This option is for consumers who have previously completed an Opt-Out request - (electronically).

Other consumers who wish to decrease the amount of unsolicited telemarketing calls they receive should register with the Federal Trade Commission’s National Do Not Call Registry at: www.donotcall.gov or by phone 1-888-382-1222.
Lee Williams

Big Deal

As for commercial real estate, it’s a great market. I just bought a 350-unit apartment house in Tulsa with an assumable loan at a 4.9 percent interest rate. Rents are low, the oil business is creating jobs, and demand for apartments is high.
As with any market, the real estate business is terrible for some people and couldn’t be better for others (like me).
But as much as I love real estate, I believe the biggest opportunity today is in silver. I think this precious metal is about to become the most spectacular investment in recent history — bigger than oil, even bigger than Google.
Read the whole story CLICK HERE

Rental income is split between the hotel operator (often called the front desk operator) and the Unit Owner.

Ownership is deeded and Fee Simple

Financing of this type of property needs to be handled by a Mortgage Professional who speciallizes in Condotels because the number of lenders are very limited.  Condotels work best in resort locations and we are the recommended lender for many in Hawaii, Nevada and California.

Feel free to contact us for financing questions.

Lee Williams 

Here’s the math: I purchased a new Beetle convertible and “financed” $20K. I took $20K of my own money and purchased a 5 year CD at my credit union that was paying 4.5% return, with the option if the interest rates went up I could bump it upwards (’step-up’) twice with no penalty. I then pledged that $20K CD as security on a secured loan to myself for 5 years at 6% (locked in). I have the added benefit that the car was then completely paid for when I drove it off the lot and if I really was ever strapped for cash in an emergency, I could always borrow against the car. I also didn’t have to worry about getting approved for a loan, and my credit union reports my payments to the credit agencies, improving my credit. Because my payments are automatically debited, I have a perfect loan payment record.

Now, you might say, hey, if the CD is earning less interest than the interest of the loan, how is that a good idea? You can check this out at any loan calculator and/or investment calculator site (Bankrate.com has good ones), but here is the math in short: $20K CD for 60 months at 4.5% intersest compounding daily earns $25,046 after 5 years. (Remember I have two options to ’step-up’ the CD if interest rates go up so I might make more, which I did when it hit 5%, but I’m keeping the math here simple.) My payments on a $20K loan for 60 months come to $386.66\mo and the total amount of payments over the life of the loan is $23,200. Basically, it’s a forced savings plan where over 5 years I actually make $1,846 (subtract loan payments made to CD maturity value). While not the greatest ROI, the car is still paid for and worth something, my credit union actually lost money on the deal (if you hate banks like I do, it’s kind of fun to do this - sticking it to them and beating them at their own game), and I have $25K after five years to go do it again. Because, let’s face it, no matter what, yes, I have to have a car and I’m going to have to buy one somehow no matter what. Just better that I get to keep my money and profit off myself instead of letting a finance company get it. Worst case scenario, if I had a huge real life emergency and could no longer make the payments, I liquidate the CD and pay off the loan and keep the remainder, but that’s not going to happen and it’s a nice secure feeling to have.

While I know most people don’t have enough cash on hand to do this themselves, it’s a worthwhile goal to work towards getting one’s current car paid off, keep driving it, and then take what you were making in payments and sucking it up and saving that money so you can finance your next purchase yourself. Not a shortcut to success, just a long term plan towards financial security. It takes years to build wealth, not months. Just like you can’t lose 20 pounds in a week unless you cut off your arm, one has to work at it and then keep working at it once you get to goal marker and then make a new goal. There is no instant gratification.

This financing idea would work for more than just cars, like financing a boat, an education, or a way to finance your own flip, or then only borrow against a property’s value with a regular or hard money lender for a construction loan and securing it with the property if necessary. I’d rather go to an investor I might line up and say hey, I’d like to borrow $100K, but let’s hedge your security interest by buying a CD(s), borrowing against the CD(s) (show them the math), I’ll go buy the property whose ARV is $150K but selling for $70K (you make your money when you buy right, right?), put $30K of estimated improvements into it, and after realtor fees and carrying costs, we’ll net maybe $25-30K to split. And your money is secure in a bank\credit union. And then we can go do it again. Because the rates you can get with a bank doing it that way are way less than the 17%+ charged by the hard money lenders, and the math still works out in your favor after you figure in the amount paid in principal\interest earned, etc. That, my friends, is “Creative Financing 102″. And I don’t have to defraud any lender or friends to do it.

http://www.myspace.com/karenjensenclark

There are about 3 million millionaires in the U.S., according to the report. They have more than $11 trillion and did a pretty good job of managing their wealth: assets rose 10.3% for the year. Europe, with about the same number of millionaires, didn’t do as great a job in terms of asset growth; assets there rose 7.8% in the year.

All in all, the numbers point to high growth rates in the ranks of the world’s wealthiest individuals, and CapGemini/Merrill Lynch don’t see a stall anytime soon: they predict financial wealth among the high-net-worth population globally will increase by an annual rate of 6.8% in the next few years, hitting $51.6 trillion by 2011.

Full Article: Click Here