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760 Area Code is Saved!

The CPUC Thursday voted 5 to 0 to reverse course and adopt an overlay in the 760 area code instead of the 442/760 split they had previously mandated. Click here to learn more www.keep760.org.

5 Key Answers On Housing Relief Act

by J. Craig Anderson - Aug. 18, 2008 12:00 AM, The Arizona Republic

The Housing and Economic Recovery Act of 2008, signed into law by President Bush on July 30, has sparked numerous debates over its mechanisms to assist struggling homeowners, future homebuyers and lending institutions. However, some of the complex law's nuances are poorly understood, and certain provisions have received only a passing mention in news reports. In an effort to better explain the law, here are five key questions and answers:

Question: Why does the housing act offer unlimited credit to Fannie Mae and Freddie Mac?

Answer: The law's most far-reaching provision gives financial assistance to the government-sponsored Federal National Mortgage Association and Federal Home Loan Mortgage Association, which own or insure nearly half of the roughly $12 trillion in U.S. mortgage debt. Fannie Mae and its younger brother Freddie Mac have suffered losses totaling about $11 billion in recent months, due in large part to their investments in financially risky subprime loans. Both associations purchase loans from lenders and sell them as mortgage-backed securities to the global investment market.

The housing act allows the U.S. Treasury to offer Fannie Mae and Freddie Mac an unlimited line of credit until the end of 2009, and it can also buy their stock. The hope is that a federal guarantee will bring gun-shy investors back to the secondary market, which provides the funding for lenders to make future loans.

Q: Which homeowners are eligible for Federal Housing Administration refinancing of their existing mortgage loans?

A: To qualify, a borrower must live in the home, cannot own any other property and must have a high mortgage debt-to-income ratio - most likely 31 percent or more, though there may be exceptions. Applicants also must agree to forfeit no less than 50 percent of the home's future appreciation. They lose even more - up to 100 percent - if they sell within one to five years. FHA must consider the applicant's debt-to-equity ratio, which means borrowers who are significantly upside-down would not likely qualify. The borrower must provide tax returns for the past two years to prove adequate income and must not have any fraud convictions in the past 10 years.

Possibly the most significant hurdle is that lenders are not obligated to accept the refinancing plan. Also, there is a $300 billion limit on the cost of insuring all refinanced loans.

Q: What are the terms and conditions of the new $7,500 homebuyer tax credit created under the law?

A: Most importantly, the tax credit is in the form of an interest-free loan and is not a gift or grant. The borrower must repay it within 15 years of purchasing the home. Only first-time homebuyers are eligible, and the tax break only applies to homes purchased between April 9, 2008, and July 1, 2009.

The tax credit's full amount is only available to individual borrowers whose annual income is below $75,000 and couples with a combined income below $150,000.

Q: How does the new law affect reverse mortgages?

A: The housing act will have a significant effect on the issuance of home-equity conversion mortgages, also known as reverse mortgages. Proponents of reverse mortgages, which allow homeowners age 62 or older to liquidate their home's equity over time by deeding the home to a bank upon their death, say the law makes them safer and more accessible than in the past.

The law requires reverse-mortgage borrowers to receive "adequate counseling" from a third party not associated with the lender, and it allows the government to create a new counseling program funded by mortgage insurance premiums. It also reduces possible conflicts of interest by forbidding reverse-mortgage loan originators from selling insurance, annuities or other financial products. They may not give or receive incentives from others to sell such products to reverse mortgage borrowers. The law also places a $6,000 cap on origination fees, which will be adjusted periodically for inflation.

Q: What other provisions are included in the bill?

A: One provision that has received some attention is the elimination of seller-funded down-payment-assistance programs for FHA borrowers, which takes effect Oct. 1. The ban will virtually eliminate no-down-payment offers on new homes. FHA officials requested the ban, saying loans issued with down-payment assistance carry a default rate three times higher than traditional FHA loans.

The housing act also places a one-year moratorium on "risk-based" FHA loan insurance premiums, a program initiated in July to charge borrowers based on the likelihood of loan repayment. It streamlines the process for issuing FHA-insured loans on condominiums and reforms the FHA loan process for manufactured homes.

In addition, it authorizes a pilot program to generate alternative credit rating information for loan applicants with insufficient credit history.

760/442 Area Code Split - Public Hearings Scheduled

On August 25, 2008, the California Public Utilities Commission (CPUC) announced it will hold two additional public participation hearings regarding the recent decision to split the 760 area code, in response to a petition requesting an Area Code Overlay instead of an Area Code Split.

More information on the 760 area code is available at: www.cpuc.ca.gov/760areacode

The public is invited to comment on the petition at two Public Participation Hearings as follows:

September 4, 2008, 4pm–7pm
Carlsbad City Hall, Council Chambers
1200 Carlsbad Village Dr.
Carlsbad, CA 92008

Click here to learn more about the differences between an Area Code Split and an Area Code Overlay.

The Ruling setting the hearings is available at: http://docs.cpuc.ca.gov/PUBLISHED/RULINGS/87021.htm

Stewart Title Rates Going Down

In response to industry-wide company consolidation and technical advances within the title insurance industry, Stewart Title recently announced that their prices are adjusting downward, much to the delight of home buyers and Real estate agents.
To learn more, click here.

In addition to the rate reduction for title insurance rates that has the industry buzzing, Stewart Title posted a recent report demonstrating it's unparalleled financial strength compared to all other title companies.

"The benchmark of a financially strong title company is the 'statutory policyholders surplus'," says Shawn Harris in San Diego. "You are comparing apples to oranges when you see the difference between our solid financial position versus the financial footing others are standing upon. And I am proud to say that Stewart is heads above them all." A graph that illustrates this difference can be viewed here.

For more about these facts and other title and escrow services offered by Stewart, contact Shawn at (760) 271-8584 or Bev at (619) 246-6715.

The Housing Crisis Is Over

Finally, a leading authority put their flag in the sand and proclaimed it so. According to The Wall Street Journal, 'The housing crisis is over'.

"Not so fast," says Jim Belfiore at Belfiore Real Estate Consulting. At least it is not the truth in certain parts of the South West that enjoyed stratospheric increases during the housing bubble only to fall equally dramatically after the 'pop.'

Perhaps the folks at Calculated Risk said it best with this brief analysis: Click here. Or, the Housing Bubble folks here.

But we San Diego optimists prefer to take a chapter out of 'A Nerd's Eye View of San Diego' with the strong local employment numbers, an economic fact that challenges even the most pessimistic view of the housing bubble, at least locally.

No matter how you slice it, we are nearing the point where negative trend statistics are flattening out, and the experts all say this is the best time to buy. And, when you do be sure to call us for your title and escrow services. Stewart Title is on a solid financial foundation and we bring to you a 'super-servant' mindset.
Call today:
Shawn at 760-271-8584
Bev at 619-246-6715

CA Attorney General Shuts Down SD Scam Ring

A San Diego based foreclosure scam ring was shut down by California AG Brown recently, which took dreadful advantage of homeowner real estate misfortunes.

Click here for the full Press Release.

"Luckily, these guys are stopped. The problem is, there are still properties out there with this unresolved and very serious title problem." Exclaimed Frank Green. Advisory Title Officer for Stewart Title of California.

"If some fast-talking scam artist offers a quick escape from foreclosure using some archaic documents, be extremely suspicious," Attorney Brown said.

As they say, if it sounds too good to be true, it probably is.

30 Steps to Financial Freedom

Today, a majority of consumers are experiencing some sort of financial difficulty causing a significant impact on their everyday lives. In fact, Americans carry more than $2 trillion in consumer debt and 30 percent of consumers report having no extra cash; making it impossible to escape the burden of living paycheck to paycheck.

Too many Americans are insufficiently educated about their personal finances. So, in honor of Financial Literacy month, Money Management International created a great website (Click Here) that is full of practical resources for managing your money WELL. Check it out for tips, gadgets, excellent money management worksheet tools, and an entire 30 step path to financial wellness. It is very useful, and I hope you and your clients benefit from it as well.

Opportunity: Green Home Remodeling

Once thought to be a fringe mindset, new trends in building and remodeling projects that utilize environmentally friendly materials is fast moving to the mainstream. Right now is a once in a lifetime opportunity for Realtors to learn about the 'green' technologies, and how to integrate various aspects and features of 'green building' into their service offerings.

Today on NPR.Org radio was a good example of a 'green' remodel project in Washington, D.C. which was LEED Platinum rated.

Click below for more resources:
http://www.buildinggreen.com/
http://www.greenhomeguide.org/

Now Is a Great Time To Buy a Home

Looking back, many economists regard the 2001 recession as the strangest one on record. Unlike a typical recession, consumer spending rolled on like a freight train without hesitation.

According to John Mauldin at Investors Insight, consumer spending did not slow down in the last recession of 2001 because consumers leveraged their homes to continue their spending growth, as well as increased their credit card debt. Mortgage equity withdrawals (MEWs) accounted for 2-3% of the growth of overall GDP in 2001-6.

What is interesting is that without MEWs we would have seen two solid years of recession (the red bars) rather than a few quarters, and a decidedly below trend economy. Such large MEWs were possible because of the bubble in housing prices and the availability of cheap and easy mortgages.

It's as if the bubble actually burst 6 years ago but we are just now feeling the effects. The blue bars are what we thought was the real GDP, now we know the red bars are the economic truth.

So, what does it all mean today, and going forward?

As we know, we are in the middle of a slow motion bubble bursting and (let's face it) in a recession. In data released this week, we learn that home values are down almost 8% nationwide, with many areas in double digit declines. Here in San Diego, the housing data seems to show that we have perhaps seen the worst of the current downturn. Brian Brady always has interesting insights about the economy. Be sure to visit his blog to stay on top of the trends.

We are edging ever closer to a national average of 12 months supply of homes for sale this spring, with many more home owners who would like to sell simply not bothering to list their home.

Simply put, with all the 'negative nellies' in the media, the good news is that if you want to buy a home, you are likely to find a very willing seller at a very good price. The old adage 'buy low', never looked so timely.

For more information, visit: John Mauldin's Weekly E-Letter Investors Insight

Benefits of Blogging - A Learning Machine

Creating and maintaining an interesting blog is a bit daunting, and requires discipline over the long-haul. But a funny little notion occurred to me recently as I was searching for fresh new content for the blog.

Blogging keeps me on my toes!

Frankly, I have never been so well informed about the real estate industry, the latest technology, new blogs and websites, the latest in lead generation, dialogue techniques from referral masters, market forces in this topsy-turvy economy, etc. Wow!

You may be considering a blog for your business, or may have one that is uninspired or updated infrequently. What may be missing is simply connecting to great sources of information that you find interesting and inspiring. 

Visit one of my favorite sources: http://sethgodin.typepad.com/ and add it to your list to view several times a week. Also, http://www.futureofrealestatemarketing.com/. Two of my favorite. You'll can't help but get inspired!