Marin Foreclosures Plummet 60 Percent

Foreclosures have plunged 60 percent in Marin County since last year, according to a report issued this week by San Diego based housing stat tracker DataQuick. The report shows a 60 percent decline from the first three months of 2013 to the first quarter of this year in the county. Similar declines were reported for the San Francisco Bay Area as a whole, and for California, as well. Bay Area home seizures fell 46 percent year-over-year, while statewide foreclosures fell 43 percent, DataQuick said.


In addition to few home seizures, DataQuick’s report also indicates that fewer homeowners are receiving notices of default, as well. The first step in the foreclosure process, notices of default were down 21 percent year-over-year. Of course, insiders were quick to point out that last year’s figures were skewed because the new Homeowner Bill of Rights went into effect at the end of 2012. A set of laws that govern how foreclosures are processed, the legislation prompted most lenders and loan servicers to halt most activities pertaining to delinquent borrowers until their legal departments could absorb and understand the new laws. Taking that development into account, Tuesday’s report is even more positive, overshadowing other recent reports that would seem to indicate a slowdown in the housing market.


04 2014

Condo Market Flooded with Cash Buyers

While the percentage of all-cash sales in the housing market has been well documented, there has been very little attention paid to the number of all-cash deals in the multi-family market. The numbers in some states are astounding, with more than 80 percent of condo sales paid for in cash in Florida and Nevada. New York and Alabama, meanwhile, have seen about 75 percent of condo sales close as all-cash deals and about 68 percent of condo sales in Arizona were cash purchases. These five states are the most glaring examples of a recession-driven trend in the market, and continue to be impacted by it. Another stat illustrating the trend is that these five states accounted for more than half of all-cash condo sales across the nation last year.


Prior to the recession, just under 25 percent of condo sales were cash deals in Nevada as mortgages to finance a condo purchase were readily available. During the recession, credit standards became tighter and the availability of home loans shrunk. This not only slowed home sales, but also drove up the percentage of non-financed sales, which rose over 90 percent before the recession was declared over. Since the end of the worst downturn to hit the US since the 1930s, the share of cash sales in the multifamily market has dropped, but remains elevated in a handful of states. This reflects not only the reluctance of lenders to open up the vaults and fund condo purchases, but also the vigor with which investors are stepping in to acquire units.


While these five states account for the bulk of the cash deals in the condo market, they are definitely not alone. Of the 25 states with the most condo sales, Virginia had the lowest percentage of all-cash deals at 32.4 percent. Massachusetts is second, with 36.7 percent of condo sales paid for with cash, while Minnesota, Wisconsin and Maryland saw just under 39 percent of condo sales as cash deals. The data all points to an undeniable trend brought on by the recession, but also illustrate that the trend isn’t coming to an end anytime soon.


04 2014

Housing Market Slow to Reach Typical Springtime Activity

Spring is typically the busiest time of year for real estate, as families with children scramble to get settled into a new home in time to enroll students in the schools of their choice. So far, however, the 2014 spring season has been a bust, with a series of recent reports indicating that the usual pickup has not yet happened. A study of homebuyer traffic in 40 US markets, compiled by Credit Suisse, shows that shopper traffic is off by a third compared to last year. And a report issued Thursday by the National Association of Realtors showed that pending home sales in February were down almost 11 percent compared to last year. Pending home sales are viewed as an indicator of future sales, so the drop indicates that existing home sales for March and April will likely be that much lower.

Suggested causes for the slow start to the spring selling season are numerous. Investors aren’t buying as many properties because the inventory of distressed properties has shrunk substantially, colder-than-normal weather in several regions has had an impact, and the cost of buying a home has gone up considerably over the last year because of rising home values and interest rates. In fact, the average monthly mortgage payment has increased about 20 percent over the last year according to most housing insiders. The biggest concern is that the slower spring will transition into a dismal summer, and in effect derail the ongoing recovery from the worst US recession since the 1930s. Real estate experts are particularly concerned about a couple of trends as many markets are running out of inventory of homes on the market and others just have too many high-priced homes but not enough entry-level units.

While the disappointing spring is discouraging, some of the factors involved also come with a bright side. The fact that inventory of distressed properties such as foreclosures and short sale listings is helping to alleviate concerns that the overwhelming “shadow inventory” will hinder the recovery. At the same time, home prices in many US markets have reached all-time or post-recession highs way sooner than most experts would’ve predicted just a handful of months ago. That shows that the recovery has been stronger than we thought over the last few years. Of course, those same factors have also bled into the current slump. In addition, the slower spring seems more pronounced in areas like Phoenix, Southern California and other markets that had been leading the recovery. Markets in the East, where the recovery has been slower to take hold, have actually experienced typical activity in the early spring.

So while the tepid beginning to the spring season is concerning, some of the factors involved make it a little easier to swallow. The same factors that are affecting home sales now are also evidence that the recovery has been more robust than most insiders thought, which means we are further along in that recovery than we had figured. Besides, the spring season is just getting started, so the slow start could still transition into a strong close, and the concerns that some economists have may turn out to be completely unwarranted by the time the spring is over.


04 2014

Don’t Wait too Long to Buy Home Insurance

Home shopping is an arduous, complex process with many, many steps. One step that is often overlooked by buyers is obtaining insurance coverage. As insurance companies will tell you, they routinely get phone calls from frantic title or escrow firms because the buyer forgot to secure coverage. Experts recommend buyers start shopping for coverage as soon as the seller accepts their offer, giving themselves plenty of time to shop around and find the policy that best fits their needs. It’s also a good idea to compile some information before calling insurers to speed up the process.

When you call an insurer to obtain a quote, the agent will need certain information before a rate is quoted. In addition to your personal information, the agent will also need to know some details about the home you are buying. These details include the age, square footage and location of the home, as well as how old the plumbing and electrical wiring are, the type and shape of the roof and the number of claims filed on the house over the last five years. If you’re buying a country home nowhere near a fire department, some insurers will refuse to cover it. In that case, you will have to shop around and may have to use a specialty insurer, which generally takes more time.

When you’ve gathered all the information you need, it’s time to familiarize yourself with home insurance policies, how they work and some tips to save you money. One was to reduce your monthly premiums, or the monthly fees paid for coverage, is to go with a higher deductible. This is the amount that you’ll pay before insurance kicks in when you make a claim. The higher the deductible, the lower the monthly premiums. Be careful, however, as many lenders have a cap on your deductible, and you may lose financing if you get the wrong policy. So contact your lender before taking a policy with a high deductible.

Another way to save money on insurance is to make sure all the discounts you are eligible for are being applied. Insurers offer discounts for a variety of reasons, though individual agents may not always ask all the pertinent questions to determine your eligibility. Some common insurance discounts are for 24-hour alarm monitoring service, senior citizens or multi-policy discounts. Multi-policy discounts are offered by most insurers when policy holders hold more than one type of coverage with the same firm. For this reason, it’s always a good idea to go ahead and get a quote from your auto insurer, if they offer home insurance, even if you’ve already received a low quote from somebody else. Regardless of who you’re getting the quote from, however, make sure to ask them to run through all their discounts.


04 2014

What Are Fair Housing Issues?

Fair housing issues stem from the Fair Housing Act of 1974, a law enacted to prevent discrimination in selling or renting homes, or in issuing homeowners insurance or home loans. The law essentially outlaws discrimination based on race, color, religion, sex, handicap, familial status, or national origin. Some fair housing issues are governed by other laws, including the Civil Rights Act of 1966, the Equal Credit Opportunity Act or the 14th Amendment, also known as the Americans with Disabilities Act. Even though these laws have protected consumers for at least 40 years, there are still millions of Fair Housing complaints filed by Americans each year.


Housing discrimination can come in many forms. In the most obvious cases, the guilty party may slam a door in somebody’s face or make insensitive comments that leave no doubt that the victim has been treated unfairly. But discrimination can also occur as the result of an unlawful policy. An apartment complex, for example, may have a No Pets policy, but that does not entitle them to reject a handicapped person who lives with a service animal. Turning down renters because they have kids is another violation of the Fair Housing Act.


As stipulated by the Fair Housing Act, all Americans are entitled to fair treatment from landlords, home sellers, Realtors, and brokers, as well as loan officers and insurance agents. When violations of fair housing policy occur, victims are advised to file a complaint with the US Department of Housing and Urban Development. HUD is the agency responsible for investigating claims of unfair housing practices. Those wishing to file a complaint can contact one of 10 Regional offices either by phone or in person, or file the complaint online at Click Here for the online complaint form, or Click Here to find the nearest regional office.


03 2014

Understanding Closing Costs

Buying a home can be a confusing, complicated process, made even more so by the lack of familiarity most of us have with it. Most Americans will only buy a home once in their lifetime, so the process will be completely new to them. One of the more misunderstood aspects of home buying is the concept of closing costs. These are costs related to appraisals, escrow, taxes and other fees for which the buyer is usually responsible. Some buyers prefer to have closing costs rolled into their loans, while others just bring a check along to the closing and pay for them there. Hardly any buyers, however, take the time to educate themselves about the closing costs and just pay what they’re told. To help educate buyers, we’ve included the following breakdown of typical closing costs, and how much they usually run. Buyers should always ask their lender to run them through all closing costs before they close to avoid surprises.

Appraisal Fee – A fee paid to an appraisal company for determining the market value of the home. Typically $300 to $400 in the Colorado Springs market.

Closing or Escrow Fee – A fee paid to the title company, escrow firm or attorney for handling the closing. Typically calculated as a fee of around $250 plus 0.2 percent of sales price.

Home Inspection – In most home sales, the seller should bring in an inspector to ensure that everything in the home is in good working order. Inspector will confirm that there are no problems with the foundation, electrical wiring or anything else in the home. Some sellers fail to get their own inspection, but are then surprised at closing when the buyer wants to be reimbursed for it at closing. Inspection fees should not cost more than $500.

Title Search Fee – Also known as a title exam fee, this fee is paid to a title company for ensuring that a seller is the only person with a rightful claim to the property. This fee varies greatly by market and company.

Credit Report Fee – Typically no more than $30, this fee is paid to a third party for a report on the credit history of either party.

Flood Determination Fee – Fee paid to a third party to determine if property is in a flood zone. If it is, buyer is required to purchase flood insurance separately. Flood Determination fees usually run about $20.

Courier Fee – Not used in all home sales, this fee applies if a courier service is used to transport documents between agents, attorneys and bank staff in order to speed up the closing process.

Title Insurance – A small fee paid to protect the seller in case someone comes forward with an ownership claim on the property after sale.

Home Insurance – All home owners are required to carry insurance as long as they have an outstanding mortgage. Buyers are usually required to pay the first year of insurance at closing or before. Varies based on insurance firm and value of home.

Natural Hazard Disclosure Report – Some states require sellers to provide this report for the seller, informing him of any damage the home has sustained as a result of natural disasters. $100 to $150

Escrow Deposit for Taxes, Mortgage Insurance – Home buyers are often required to put down two months worth of property taxes and mortgage insurance.

Title Transfer Taxes – Fees collected by municipal officials for transferring title from seller to buyer.

Recording Fee – Municipal fee charged for detailing home sale information into the public record. Amount depends on governing agency.

Processing Fee – Lender fee designed to recoup costs associated with issuing a loan. These fees vary greatly depending on the lender, but can run as high as $1,000.

Underwriting Fee – Also charged by a lender, this fee is designed to recoup costs associated with investigating the borrower’s credit-worthiness.

Loan Discount Points – “Points” are essentially pre-paid interest payments. Buyers will often agree to pay points in order to keep their monthly mortgage payments lower. One point is equal to one percent of the total amount financed.

Pre-paid Interest – Buyers will often pay a small amount of insurance at closing in order to get the interest paid up through the beginning of the month.

Property Tax – In most home sales, six months of property taxes are expected to be paid by the buyer at closing.

HOA Transfer Fees – Usually paid by seller, these fees go the the homeowners association, who supplies a report detailing what monthly dues are, whether or not they’re current, the association’s financial records and minutes of its last meeting. Buyers are advised to look over these documents carefully. These fees can vary greatly, running anywhere from $100 to $400 for a complete report and transfer.


03 2014

FHFA Gets Leader After 8-Month Delay

The Federal Housing Finance Agency will finally have a new leader Monday when Vice President Joe Biden swears in former North Carolina congressman Mel Watt as the agency’s new director. President Obama nominated Watt for the position last May, but Republicans have blocked the appointment using repeated filibusters. The GOP’s interference has been so frustrating, in fact, that the Democratic-led Senate changed its ruled on filibusters to get Watt’s appointment through. On December 10th, the Senate changed the requirement for bypassing a filibuster, a move that now requires just a simple majority vote. Prior to the change, 60 of the 100 Senators had to vote in favor to get past a filibuster attempt. Mel Watt is expected to be sworn in to his new post at 3 PM ET Monday.


01 2014

US Pending Sales End Five Month Losing Streak

The National Association of Realtors reported Monday that pending home sales edged up slightly in November, marking the first time in six months with an increase in signed contracts to purchase homes.  The group said that contracts rose 0.2 percent from October, though the reading was still down 1.6 percent in year-over-year terms.  The gain was slightly less than economists were expecting, as a group forecast a 1.0 percent surge in a recent FactSet survey.

Home sales, which rose earlier in the year, seem to be slowing as 2013 comes to a close.  NAR chief economist Lawrence Yun pointed out, however, that Americans have already purchased more homes than they have in the last seven years, and numerous other housing indicators have also improved.  Yun noted that improvement in the housing sector played a significant part in the Fed’s decision earlier this month to begin winding down its stimulus measures aimed at keeping interest rates down.

Last month’s gain in pending sales was fueled by gains in the West and South, which offset declines in contract signings in the Northeast and Midwest.  For the year, economists are now expecting sales of existing homes to jump by 10 percent from a year ago to just over 5.1 million, a umber that isn’t expected to change much in 2014.  Since 2013 began, the median US home value has surged 12 percent, and the trend is expected to continue into 2014, with prices expected to rise between 5.0 and 5.5 percent, depending on which survey you read.


12 2013

Mortgage Applications Jump Following Thanksgiving Week Slide

The Mortgage Bankers Association reported Wednesday that demand for home loans climbed higher for the first time in six weeks in its latest report, based on the week ended December 6th.  The group said that its Market Composite index, a seasonally adjusted reading on applications for both purchase and refinanced home loans, edged up 1 percent from the prior week on a seasonally adjusted basis.  The gain was an astounding 43 percent in a non-seasonally adjusted terms, but that’s because the week before included the Thanksgiving holiday, when even home shoppers tend to take a break.  During the Thanksgiving week, in fact, application volume fell 40 percent from the week ended November 22nd.

According to the MBA’s report, demand for home refinancings rose 2 percent this week as compared to the Thanksgiving Day week.  Compare the numbers to the week before Thanksgiving, however, and refinancing demand slipped 16 percent.  Demand for purchase loans rose 1 percent from Thanksgiving week, but were down 3 percent from two weeks ago.  The percentage of all mortgage applications requesting refinance loans rose from 63 percent during the Thanksgiving week to 65 percent.


12 2013

30-Year Mortgage Rate Drops to 3.43 Percent

US mortgage insurer Freddie Mac reported Thursday that fixed mortgage rates dipped slightly this week after climbing significantly last week.  The average rate for a 30-year, fixed-rate loan was 4.42 percent this week, the report showed, down from last week’s average of 4.46 percent.  The average for a 15-year, fixed loan, meanwhile, slid from 3.47 percent a week ago to 3.43 percent.  Economists are keeping a close eye on rates as the Federal Reserve meets next week and will discuss winding down stimulus measures designed to keep rates low.

Mortgage rates reached all-time lows several times in 2012, thanks primarily to the Fed’s bond purchases.  Known as quantitative easing, the program entails the purchase of billions of dollars of Treasury bills each month.  Since interest rates track the yield on the 10-year bond, these purchases lower rates by lowering the yield of the benchmark note.  Speculation about the Fed ending the program began having an impact on rates in May, and they peaked in August, with the 30-year reaching an average interest rate of 4.6 percent.  A series of positive economic indicators have surfaced in recent weeks, fueling increased expectations that the Fed will taper bond purchases sooner rather than later.

Fixed-rate mortgages were not the only mortgage types to see a reduction in interest rate this week, according to Freddie Mac’s report.   The average rate for a 1-year, adjustable-rate mortgage, or ARM, dropped from 2.59 to 2.51 percent, according tot the survey, and the average rate for a 5-year ARM fell from 2.99 to 2.94 percent.  To calculate the weekly averages, Freddie’s staff contacts conforming lenders between Monday and Wednesday of a given week, releasing its findings each Thursday.


12 2013