Open house | Saturday , February 11th | 1pm-4pm

Completely remodeled 3-bedroom, 3.5-bath oceanfront home located on a prime lot on the Balboa Peninsula, with panoramic views of the bay, city lights and ocean. Its custom, open floor plan is ideal for comfortable living and entertaining, with a large beachside patio and rooftop deck. House is wired for security and surround sound entertainment systems. Designer window treatments, vaulted ceilings, and built-in cabinets throughout. Gourmet kitchen has stainless steel appliances. All baths have granite counters and designer stone-tiled showers. This home is in turn-key condition.

For a private tour, please contact Renee West of Prudential California Realty at (714) 914-9060 or renee@prucdm.com. Please visit her website at www.ReneeWest.com, or the property website at www.1213EBalboaBlvd.com. Prudential California Realty is located at 3301 East Coast Highway, Corona del Mar.

Property is listed by Renee West, of Prudential California Realty. DRE #01181153

In his State of the Union Address, President Obama laid out a plan to help responsible borrowers and support a housing market recovery. Details of that plan were released yesterday. However, funding for the proposed program must be approved by Congress, lowering the possibility that it will be implemented quickly.

Making sense of the story:

• Operated by the Federal Housing Administration, the plan would allow underwater homeowners to refinance into cheaper federally insured loans. Borrowers with good credit who are current on their loan payments are eligible.
• The measure also streamlines the process of refinancing an underwater mortgage, eliminating the need for an appraisal or submitting a new tax return.
• To qualify, borrowers must be current on their mortgage, have a minimum credit score of 580, and must be refinancing a loan on a single-family owner-occupied principal residence.
• Lenders only need to confirm that the borrower is employed. Loans that are more than 140 percent of the home value probably would not qualify until banks wrote down part of the balance.
• Congress must approve $5 billion to $10 billion in funding, leading housing experts to praise the plan’s objectives with skepticism of it passing this year.

Read the full story from The Mercury News here: “More mortgage relief from the White House – but congressional ‘ok’ doubtful.”

By Inman News, Thursday, February 2, 2012  Inman News®

Mortgage rates plunged to new all-time lows this week as investors in bonds that fund most home loans reacted to news that the economy grew more slowly than expected during the last three months of 2011.

Freddie Mac’s weekly Primary Mortgage Market Survey showed rates on 30-year fixed-rate mortgages averaged 3.87 percent with an average 0.8 point for the week ending Feb. 2, down from 3.98 percent last week and 4.81 percent a year ago. That’s a new all-time low in Freddie Mac survey records dating to 1971.

Rates on 15-year fixed-rate loans averaged 3.14 percent with an average 0.8 point, down from 3.24 percent last week and 4.08 percent a year ago. Rates on 15-year loans have never been lower since Freddie Mac began tracking them in 1991.

For five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) loans, rates averaged 2.8 percent with an average 0.7 point, down from 2.85 percent last week and 3.69 percent a year ago. That’s a new low in records dating to 2005.

Rates on one-year Treasury-indexed ARM averaged 2.76 percent with an average 0.6 point, up slightly from last week’s record low of 2.74 percent. At this time last year, the one-year ARM averaged 3.26 percent…

Read the rest of this article here: “Mortgage rates probe new lows.”

Similarly, millions of borrowers who are having trouble making their mortgage payments but want to remain in their homes could have their mortgages modified to make the payment affordable but haven’t.

The reasons in both cases probably include apathy, resignation and ignorance, but this article is about ignorance only. Many borrowers are even hazy about the difference between a refinance and a modification.

Refinance vs. modification

In a refinance, you take out a new mortgage, either from your current lender or from a different one, and use the proceeds to pay off your existing mortgage. In a modification, the terms of your current mortgage are changed by your existing servicer, usually for the purpose of reducing the payment.

Most often this involves an interest-rate reduction, but it may also include a term extension and, in some cases, the loan balance may be reduced.

A refinance is a market-based transaction entered into by a lender who wants the new loan. A modification is an administrative measure designed to prevent the costs of a foreclosure. In both cases, however, the borrower must document an ability to make the new payment.

Refinance profitably if you can

In general, borrowers should refinance if a profitable refinance option is available to them. A refinancing will not drop a borrower’s credit score, while a modification will. Refinancing borrowers can deal with their existing lenders but are free to shop alternatives.

A modification is a lot more complicated, takes a lot more time, and borrowers are wholly dependent on their existing servicers, which means that they have no bargaining power.

Qualifying for a refinance vs. qualifying for a modification

Declining home values have severely restricted the ability of many borrowers to refinance by eroding the equity in their homes. (Equity is property value less the mortgage balances.) With an important exception noted below, borrowers who have negative equity cannot qualify.

Borrowers with equity of 3 percent to 20 percent can qualify if they purchase mortgage insurance, which in some but not all cases will eliminate the profit from the refinance.

Borrowers with equity of 20 percent or more are best positioned to refinance profitably. In contrast, insufficient or negative equity will not bar a modification.

A low credit score will also prevent a refinance, but not a modification. Because lenders have become extremely risk-averse in the post-crisis market, credit scores have increased in importance and are related to equity.

On a Federal Housing Administration (FHA) mortgage, for example, the minimum score is usually 620, but a 620 score may require equity of 15 percent. If the borrower’s equity is the minimum of 3 percent, the required credit score is likely to be 660.

Borrowers who have suffered income declines to the point where the ratio of housing expense to income is viewed as excessively high will have their refinance applications rejected. However, an income decline of this magnitude will not necessarily prevent a loan modification.

On the contrary, an income decline that weakens the ability of the borrower to continue current payments but still enables the borrower to afford lower payments is the major problem loan modifications are designed to meet.

Borrowers can check on whether they qualify for a refinance using the new qualification calculator on my website.

The HARP exception

The earlier statement that borrowers with negative equity cannot refinance has a major exception: If their loan is owned by Fannie Mae or Freddie Mac, they are eligible for refinancing under the Home Affordable Refinance Program (HARP). This program was recently extended and liberalized.

The previous negative equity ceiling of 25 percent was eliminated for fixed-rate mortgages; fees were reduced; the requirement for a new appraisal was eliminated in some cases; and incentives were provided to the lenders servicing the loans to refinance them.

Qualifying for a modification

Determining whether a borrower is eligible for a modification is a complicated exercise on which the rules are anything but clear. The government-supported program, which differs from the strictly private programs, requires that the borrower’s income be large enough to afford a reduced payment but it cannot exceed 3.23 times the current mortgage payment. Further, the borrower cannot have “sufficient liquid assets” to make the payments, whatever that means.

In addition, the owner of the loan must be better off with the modification than without it, which is determined by a complicated algorithm that is available to servicers but not to borrowers or to me. The servicer has the final say.

Jack Guttentag is professor of finance emeritus at the Wharton School of the University of Pennsylvania.

Home prices in 2011 fell by 4.7 percent, according to CoreLogic–for the fifth straight year.  However, that decrease is due in large part to distressed sales, since once CoreLogic excluded short sales and REOs, prices declined only by 0.9 percent.

Year-end data from CoreLogic shows home prices fell by 4.7 percent over 2011. It marks the fifth consecutive year the company has recorded an annual decline in residential property values.

CoreLogic performed a separate calculation, which illustrates just how big an impact distressed sales are having on home prices. The company excluded all short sale and REO transactions from 2011 and found that when the distress factor is taken out, prices declined by just 0.9 percent.

Commenting on the company’s latest results, Mark Fleming, CoreLogic’s chief economist said, “While overall prices declined by almost 5 percent in 2011, non-distressed prices showed only a small decrease. Until distressed sales in the market recede, we will see continued downward pressure on prices”…

Open house | Saturday , February 11th | 1pm-4pm

Completely remodeled 3-bedroom, 3.5-bath oceanfront home located on a prime lot on the Balboa Peninsula, with panoramic views of the bay, city lights and ocean. Its custom, open floor plan is ideal for comfortable living and entertaining, with a large beachside patio and rooftop deck. House is wired for security and surround sound entertainment systems. Designer window treatments, vaulted ceilings, and built-in cabinets throughout. Gourmet kitchen has stainless steel appliances. All baths have granite counters and designer stone-tiled showers. This home is in turn-key condition.

For a private tour, please contact Renee West of Prudential California Realty at (714) 914-9060 or renee@prucdm.com.  Please visit her website at www.ReneeWest.com, or the property website at www.1213EBalboaBlvd.com.  Prudential California Realty is located at 3301 East Coast Highway, Corona del Mar.

Property is listed by Renee West, of Prudential California Realty.  DRE #01181153

Sellers who are financially strapped often have a hard time accepting that they’ll need to invest in preparing a house for sale even though they may sell for less than they paid. Fix-up costs can mount up; your agent can help you prioritize so that you don’t waste money. It’s important to keep your goal in mind, which is to sell your house in a difficult market.

Recently, a home in an affluent city came on the market in “as is” condition. It had been lived in for decades without much upgrading. Although located in a desirable area, the listing was vacant, dark and showed poorly. The sellers refused to do any work to improve its appeal.

After months on the market with no significant interest, the sellers pulled the house off the market and made improvements. The wall-to-wall carpet was pulled up to reveal hardwood floors that were then refinished. Painters lightened the interior and a professional stager was hired to bring in furniture, artwork, house plants and accessories. The listing was put back on the market with a fresh look and sold right away.

HOUSE HUNTING TIP: Although listings staged by a good decorator show well and often sell quickly, you don’t need to spend a lot to put your home into shape for marketing. Most homeowners have too many personal possessions in their home from a sale standpoint. Decluttering is something most sellers need to do.

Consider hiring someone to help you sort, pack, donate and recycle items that you no longer want. You may be able to take a tax deduction for things you donate. Make sure to get a receipt. Your real estate agent should be able to recommend someone who can help you clear your house of clutter if you are overwhelmed by the project.

Your agent, or stager, may ask you to put away collections of art, personal photos, etc. This can be difficult for most sellers because, for them, it’s part of the emotional appeal of their home. Your house won’t look like your home after you’ve removed personal possessions and moved what’s left around to display the house to its best advantage.

That’s the point of the preparation process. You don’t want prospective buyers focusing in on your personal property; you want them to focus on the house. Keep in mind that how you live in your home and how it should look when it goes on the market are not the same.

Some sellers complain that their house looks too stark without all their possessions. Even so, it helps you to detach yourself emotionally from the property. Also, less personal property usually gives homes a more spacious feel. When buyers are looking for the most for their money, bigger is usually better.

To close the deal, a listing should be spotless and inviting. Bring in new house plants to put in strategic locations, like orchids in the bathrooms. In dark spots that need a dash of warmth and color, use bromeliads.

THE CLOSING: If you can’t pull this together yourself, or with the help or your agent, hire a good stager for a consultation or a proposal for full or partial staging.

Dian Hymer is a real estate broker with more than 30 years’ experience and a nationally syndicated real estate columnist and author.

Online user-generated encyclopedia site Wikipedia blacked out its site recently to protest the anti-piracy legislation that critics say could have wide-reaching and “scary” ramifications for most Internet users and the nation’s burgeoning e-commerce sector.

And Craigslist, a popular real estate listings site, is among the sites that lent their weight to the protest movement with messages and information about the legislation. Google’s logo was blacked out in recognition of the protest, while the site remained fully accessible.

The legislation, say critics, could allow authorities to shut down websites, deemed to infringe upon copyrights, with no due process, while proponents of the bills say that the legislation would streamline and strengthen copyright holders’ creations.

Also, the bills focus on foreign copyright-infringing websites, and many opponents of the bills agree with the anti-piracy aspects of the bill but fear that, as written, domestic sites and copyright infringement definitions are susceptible to unchecked oversight, which could bleed into all areas of the Internet.

Think of all the shared information: multiple listing services, photos, videos. Can you verify the copyrights of all the content? One unknown copyright infringement, like finding a needle in a sky-high haystack, could mean your whole site being removed, blocked, if this legislation passes, critics say.

Dr. Jim Gaines, a researcher at Texas A&M’s Real Estate Center, said that this legislation could have severe ramifications for the real estate industry. He mentioned possible data-sharing restrictions, like multiple listing service info on Craigslist, as an example.

Broker Eric Post, principal of Better Homes and Gardens Realty Partners Inc., Clackamas, Ore., said, “The real estate industry is a collaborative industry.” “We thrive on the ability to share listings, photos, information,” he said. “Any threat like this is a threat to our industry.”

“The ability to take down entire websites is pretty scary,” said Post. “The online economy is so important to us, we need to protect it.”

Being ultimately responsible for every minutiae of copyrighted content on your website would not only be impossible, wrote Eric Stegemann, a writer at Tribus.com in a blog post, but is unreasonable:
“For one photo on one listing, your entire site could be filtered right off the Internet. No more SEO (search engine optimization). No more leads, no more branding. For one photo, out of the 100,000 listings your MLS may have, with five photos each. One in 500,000 — yes.”

Jay Thompson, who leads a 34-agent brokerage in Phoenix, “blacked” out his popular real estate blog by making only one page active on the site; it urges action to join in the protest of the legislation. The choice to “blacken” the site, which is his primary lead generation source, was not easy, he said, but he believes the legislation is a serious matter.

“Let’s say I’m taking a video of a listing; there could be copyrighted photographs on the wall that could lead to my site being removed,” said Thompson, if the legislation passed.

Charlottesville, Va., broker Jim Duncan also “darkened” his landing page today. “My world relies on sharing with attribution,” he said, noting that he couldn’t possibly verify whether every bit of information he links to would be compliant with the new rules under consideration. That would kill the way he does business, he said.