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Archive for 'The Economy'
How Big Is Benicia-Vallejo’s Shadow Inventory?
April 7th, 2011 categories: Benicia, Fairfield-Gr Valley, Foreclosures / Short Sales, Market Update, Selling, Suisun City, The Economy, Vacaville, Vallejo
About a week ago, I listened to Rick Sharga, Sr. V.P. of Realty Trac, share his firm’s current foreclosure numbers. In his talk, one statistic really stood out: right now, there are 1 million foreclosures in the U.S., yet only 300,000 of them have come on the market.
In other words, 7 out of every 10 U.S. homes that the banks already own haven’t even hit the market yet. That’s the “shadow inventory” that you may have heard people talk about.
It prompted me to look at our local market a little closer and see how big our own shadow inventory is right now. The numbers were pretty startling. Not quite as large as the nationwide figures that Mr. Sharga talked about, but still pretty shocking nonetheless.
I looked at all five cities in our primary market area (Benicia, Vallejo, Fairfield, Suisun City & Vacaville) and found that about 3 of every 5 foreclosed homes have not yet come on the market. Read the rest of this entry »
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BofA Proves Its Short Sale Mantra Isn’t All Talk
March 8th, 2011 categories: Foreclosures / Short Sales, The Economy, Viewpoint
A year ago, if you’d asked me who were the worst banks to negotiate a short sale with, I would have quickly put Bank of America near the top of that list.
Back then, BofA was notorious for dragging out short sales for months on end, for asking for the same documentation over and over again, and for switching negotiators in mid-stream and starting from scratch. Each time you called, you got a different story. It all depended on who answered the phone.
There was no consistency and certainly no commitment to expediting the short sale process. It was as if the powers that be at BofA just wanted to make the homeowner’s life a little more miserable by dangling the possibility of doing a short sale in front of them before ultimately making a settlement demand so unreasonable that the owner would finally just walk away out of frustration.
A year ago, I wondered whether the acronoym BofA really stood for “Bank of Anxiety,” for that’s the state of mind most short sellers found themselves in for months and month on end.
Fast forward to the present
Well, as they say, that was then and this is now. Read the rest of this entry »
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Big Vote Thursday: The End Of Loan Mods?
February 28th, 2011 categories: Foreclosures / Short Sales, Loans / Financing, The Economy
If you own a home in Solano County and are thinking of applying for a loan modification under the government’s widely publicized Home Affordable Modification Program (HAMP), come Thursday you may find yourself out of luck.
For that’s when the House Finance Services Committee plans to vote on a bill that, if passed, would signal the end the White House’s failed loan mod program.
When the HAMP program was announced by President Obama almost two years ago, there were high expectations and hopes that it would help millions of underwater borrowers restructure their loans so that they could stay in their homes with newly affordable monthly payments.
Well here we are two years later, and only about 3% of the $29 billion (yes, billion) that was allocated has been spent. Less than 15% of the Read the rest of this entry »
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Obama’s Mortgage Reform Plan: A Bitter Pill
February 19th, 2011 categories: Loans / Financing, The Economy, Viewpoint
Many years ago, another agent in my office shared a great little saying with me.
It was one that really cut to the chase with a seller who wanted to hold out 
for a better offer when the one they had in front of them was clearly the best they were ever going to get.
She would say: I know it’s a bitter pill to swallow…but do you want that pill now or do you want it later?
And that little saying of hers resonated with me the moment I heard about the White House’s proposed mortgage reform plan, which was announced just over a week ago.
I wrote about that plan a few days ago. In a nutshell, the Obama administration has proposed sweeping mortgage policy changes that would:
- Require higher down payments
- Drop the maximum loan amounts for conventional loans in many areas
- Raise loan fees to borrowers
- Do away with mortgage giants Freddie Mac & Fannie Mae
Making all these changes would definitely be a very bitter pill for the mortgage and housing markets to swallow right now. But if we really want to make sure we don’t have a repeat of the recent mortgage meltdown, there’s no doubt some changes have to take place.
Mortgage Reform Is Needed…But Now or Later?
We have to make sure the riskiest borrowers really have the means to own a home before letting them slip through the cracks and Read the rest of this entry »
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What Obama’s Mortgage Reform Plan Means For Solano County Home Buyers & Sellers
February 17th, 2011 categories: Buying, Contra Costa, Loans / Financing, Selling, Solano, The Economy
You may have heard that President Obama unveiled his plans to reform the mortgage industry last Friday. Since then, his proposal has taken a lot of heat in real estate circles, especially since one of his recommendations is to reduce the maximum loan limits on conventional mortgages in high-cost areas by more than $100,000 as early as this fall.
Among some of the proposals in Obama’s plan:
- Drop the maximum loan amount in high cost areas (which includes much of the Bay Area) from $729,750 to $625,500.
- Phase out both Fannie Mae and Freddie Mac by reducing their loan portfolios by 10% a year
- Raise fees for borrowers
- Increase minimum down payments borrowers
What This Means To Solano Home Buyers & Sellers
It’s still unclear whether the White House’s proposal to lower the maximum loan limit would really impact Solano County. Currently, for most of the U.S., the limit is $417,000. The majority of the Bay Area, though is at $729,750 — which is the amount that Obama’s plan wants reduced by about $105,000.
In Solano County, however, our limit is $557,500, which is higher than the rest of the U.S., but lower than most other Bay Area counties.
So if the White House plan reduces the loan limit for all high cost areas on a proportionate basis, then Solano County buyers and sellers could definitely feel a pinch, since buyers of homes priced above the new loan limit would be forced into higher-rate “jumbo” loans, which would no doubt kick some buyers out of the market or force some sellers to lower prices to attract conventional loan buyers.
But if the White House plan keeps our limit at $557,500, since it’s already below the proposed $625,500 ceiling, then Solano County Read the rest of this entry »
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Haven’t We Learned Anything?
April 20th, 2010 categories: Loans / Financing, The Economy, Viewpoint
I just got the following email in my spam folder, from a mortgage lender out of Southern California:
Even though we’re not even close to getting out of our nation’s worst financial mess since the Great Depression, we’re already beginning to see a smattering of snake oil salesman peddling loans that look and feel just like their subprime cousins that started this whole economic tailspin.
I guess I was naive to think that those flim-flam men and women who pushed people into homes they clearly couldn’t afford had left our industry for good.
No, it looks like they’ve just been laying low for the last few years. Read the rest of this entry »
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Will California’s First-Time Buyer Tax Credit Money Run Out Almost Before It Begins?
April 15th, 2010 categories: Buying, The Economy
$100 Million Could Be All Gone By Mother’s Day
California’s first-time buyer tax credit, which is slated to begin May 1, the day after the federal tax credit goes away, may be very short-lived, according to a just-release analysis by our state trade association, the California Assn. of Realtors (CAR).
According to CAR, the entire $100 million that the state legislature allocated for first-time buyer tax credits could be entirely used up in the first 10-20 days after the credit takes effect.
That means the money could be all spoken for shortly after Mother’s Day, if CAR’s prediction is accurate.
An email I received from CAR earlier today said that its economic team had looked at projected May sales and figured that all $100 million will likely be gone in the first few weeks of May. Read the rest of this entry »
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Tax Relief For Distressed Solano County Sellers Finally Goes Into Law
April 13th, 2010 categories: Foreclosures / Short Sales, Selling, The Economy
Not only did the rain clouds disappear yesterday, but so too did the dark black clouds that had been hanging over many penniless 
distress-sale sellers from last year, who were about to incur huge state income tax bills.
But just about the same time the skies parted over Solano County yesterday afternoon, a new tax relief law went into effect, which will save distressed sellers who sold their homes in 2009 thousands of dollars.
The Long Wait Is Over
Prior to the passage of SB 401, most California sellers who received debt relief through a short sale, foreclosure or loan modification would have been required to report the forgiven debt as ordinary income and pay taxes on it.
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6 Big Real Estate Changes For Benicia-Vallejo Home Buyers & Sellers This Month
April 5th, 2010 categories: Buying, Foreclosures / Short Sales, Loans / Financing, Selling, The Economy
If you’re planning to buy or sell a home in Benicia, Vallejo or even anywhere else in Solano County, you may need a scorecard to keep track of all the changes that either already have occurred or will take place by the end of April.
I’ve been a real estate agent since 1995. And before that I worked in the title and new homes sectors of our business — dating all the way back to 1978. And in all the years I’ve been in the real estate business, I can’t remember another time when this many changes occurred in one single month.
So if you’ve got your scorecard ready, here’s a quick overview of some of the changes that are taking place in April: Read the rest of this entry »
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Is The Party Over For Low Mortgage Rates?
March 31st, 2010 categories: Buying, Loans / Financing, The Economy
Will Rates Skyrocket As Some Previously Predicted?
Today marks the end of an unprecedented era for the mortgage market.
That’s because this is the final day of the Federal Reserve’s 14-month program to buy up mortgage-backed securities (MBS) — a practice that has kept mortgage rates down in the 5-percent-and-below range.
The Fed’s MBS purchase program was initiated by the government in order to keep mortgage money flowing at the time our economy was suffering through its darkest hours.
Buoyed by a consensus that the economy was on the mend, last fall, the government proclaimed that it would end its MBS buy-back program by the end of the first quarter of 2010.
In other words: today.
A New Era Starts Tomorrow
So starting tomorrow, MBS purchases will fall on the shoulders of regular investors, which means that mortgage rates will again be determined by the free marketplace, without any governmental support. Read the rest of this entry »
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