The end is near for housing slump

Despite the weakness in housing markets, economic malaise and gloomy consumers, Fiserv continues to project that home prices will remain on track to stabilize by the end of 2012.

by Broderick Perkins
© 2011 DeadlineNews.Com

Unauthorized use of this story is a copyright violation -- a federal crime

Deadline Newsroom - Don’t expect a sonic boom, but the housing market is poised to turn around next year and much of the nation should be in full-fledged recovery by 2013.

The Fiserv Case-Shiller Home Price Index for the first quarter 2011, is a lagging index, but after examining 384 markets it found signs strong enough to indicate the end is near.

“Mortgage delinquency rates have been falling for more than a year. Foreclosure rates have started to decline. The flood of bank-owned sales, which has swamped many markets, will finally begin to recede this year as fewer houses enter the foreclosure pipeline,” said David Stiff, chief economist at Fiserv.

That doesn’t mean happy days are here again just yet.

“It’s going to be a cold winter,” says Jon Sterling, director of marketing at real estate research firm Altos Research in Mountain View, CA.

Get the full story: "The End Is Near For Housing Slump"

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California short sale snafus worsen

Even more real estate agents than last year characterized closing short-sale transactions as a drawn-out process laden with communication snafus, lost documents and "dual tracking," according to the California Association of Realtors.

by Broderick Perkins
© 2011 DeadlineNews.Com

Unauthorized use of this story is a copyright violation -- a federal crime

Deadline Newsroom - The short sale system in California isn't just broken, it's getting worse.

Unfortunately, that means home owners who were looking for the short sale alternative to foreclosure could be out of luck and need to consider other cures for their mortgage distress.

This year, even more real estate agents than last year characterized closing short-sale transactions as a drawn-out process laden with communication snafus, lost documents and "dual tracking" -- lenders proceeding with foreclosures even when short sales are underway, according to the California Association of Realtors.

A short sale occurs when the bank allows the sale of a home for less than the existing mortgage balance, typically, provided there's a qualified buyer in the wings. Home owners likely to seek short sales are often those floundering "underwater" with mortgage balances larger than the value of their home in a state of negative equity.

Negative equity can occur because of a decline in value, an increase in mortgage debt or both. Many home owners suffer both because they used their home equity like an ATM machine during the housing boom. When housing crashed, values tumbled exacerbating the effects of equity-tapping.

Short sales can be a better option than foreclosures for a consumer's credit history, depending upon how the lender reports the deal to credit bureaus. Instead of having the black mark of a foreclosure that can last seven years, short sellers may only take a credit score hit they can overcome in a few years.

Other options for struggling mortgage holders include refinancing to a new loan, but that's virtually impossible for home owners underwater. Another option is a mortgage modification, which retains the original mortgage, but lengthens the loan term, reduces the interest rate, or reduces the principle, or includes a combination of the three. Some lenders have additional options to foreclosures

The short sale option is long on promise but short on delivery for Californians.

CAR said 77 percent of California real estate agents reported closing short-sale transactions as "difficult" or "extremely difficult," up from 70 percent in December 2010 when CAR first gauged real estate agents' experience working with lenders in on short sale transactions.

"Despite promises by lenders to improve their short-sale processes, clearly, they are not doing enough," said CAR President Beth L. Peerce.

Kim DiBenedetto, a real estate agent with Coldwell Banker Del Monte Realty in Carmel says the problem stems from lenders kowtowing to bottom-line thinking investors, who may see a foreclosure as a better deal.

"I think the lenders are trying, but they have so many different investors and limited authority," DiBenedetto said.

"We have to stop thinking of Wells Fargo, Bank of America, CitiCorp, etc. as the 'lender.' They are the servicer for as many as 2,500 investor groups. How much authority the servicer has to negotiate with the home owner, depend upon which investor group owns a particular loan, which is why short sales are so hard to get processed," she added.

CAR said real estate agents' most frequent obstacles in the short-sale process were communication issues during the slow response time to package a short-sale (cited by 66 percent of agents); poor communication with lender representatives (55 percent); and repeated requests for documentation (51 percent).

More than 15 percent of the agents polled in June this year said the lender foreclosed on the home before the short-sale transaction could be completed.

Two-thirds (67 percent) of agents said it took more than 60 days for lenders or servicers to return a written response on the approval or disapproval of the short-sale agreement submitted; 43 percent of agents said it took the lender more than five days to return any form of communication and fewer than 20 percent of agents said lenders responded "within one business day" or less to agents' communication attempts.

Real estate agents' overall satisfaction with lenders in their most recent short-sale transaction remained extremely poor, with 75 percent saying they were "not satisfied" or "not at all satisfied," up from 67 percent in December.

Because of their dissatisfaction, 78 percent of real estate agents said they were "not likely" or "not at all likely" to refer buyers to the lender for future home purchases.

ForeclosureRadar.com's Short Sale Report offers a five-star rating system for lenders' short sale success or lack thereof and CAR offers ShortSalesCalifornia.org to rate lenders, but DiBenedetto says it's still a crap shoot. (http://www.foreclosureradar.com/short-sale-report)
(http://www.shortsalescalifornia.org/)

"This is what slicing and dicing home loans (bundling mortgages as securities sold to investors) on the secondary market has done to the process. You are no longer talking with the actual owner of the loan. You can have one short sale with a particular servicer that goes really well and another with the same servicer that doesn’t go well at all," she said.

The latter is the norm, according to CAR's survey.

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Under the DeadlineNews Group umbrella:

Perkins was the first Examiner to cover three beats for the Examiner.com news service:
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Wall Street, not Fannie, Freddie to blame for housing, economic meltdown

Research from the Center for Responsible Lending (CRL) "Wall Street, Not Fannie Mae & Freddie Mac, Created & Led the Toxic Mortgage Market," says toxic subprime loans started the foreclosure crisis and the disaster spread to other mortgages approved without properly qualifying borrowers.

by Broderick Perkins
© 2011 DeadlineNews.Com

Unauthorized use of this story is a copyright violation -- a federal crime

Deadline Newsroom - A recent study puts much of the blame for the mortgage meltdown squarely at the feet of Wall Street, rather than the federal government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac.

Research from the Center for Responsible Lending (CRL) "Wall Street, Not Fannie Mae & Freddie Mac, Created & Led the Toxic Mortgage Market," says toxic subprime loans started the foreclosure crisis and the disaster spread to other mortgages approved without properly qualifying borrowers.

"The facts show that Fannie Mae and Freddie Mac were followers, not leaders, in the events leading up to today's foreclosure epidemic," the report says.

"During the 2000s, subprime mortgage lending grew rapidly as Wall Street seized on the opportunity to invest in riskier, higher-interest mortgages. 'Securitization' ... made it possible for loosely-regulated lenders to make loans and then immediately sell them to private firms that created mortgage-backed securities."

CRL's report says:

• GSEs were prohibited from buying subprime mortgages because the loans were outside the prescribed GSE guidelines. Subprime mortgage-backed securities were created in the private sector by Wall Street firms.

• GSEs did purchase subprime mortgage-backed securities as investments, but not in a volume that matched Wall Street purchases.

• GSEs eventually guaranteed and created investments with "Alt-A" loans which went to relatively wealthier borrowers with higher credit scores. The loans did have risky features, such as limited documentation. These investments are primarily why the GSEs were placed into conservatorship. GSEs investments were generally less risky than Wall Street's, but the private market and the GSEs share responsibility for supporting the loans.

• Mortgage loans purchased by Fannie Mae and Freddie Mac - including loans to lower-income borrowers - are performing better than those on the private market. As of June 2010, 13.35 percent of GSE loans to borrowers with credit scores under 660 were 90 or more days delinquent or in foreclosure, compared to 28 percent for subprime loans, according to Mortgage Bankers Association statistics.

• Affordable housing loans weren't the problem. GSEs' losses were generated by risky loans, primarily Alt-A loans that generally went to borrowers with higher incomes.

• GSEs' support of the Alt-A market, in a drive for profit and market share, actually weakened their performance on meeting affordable housing goals.

• The vast majority of subprime loans, 94 percent of them, were made by lenders who were not subject to the Community Reinvestment Act (CRA). The CRA covers banks and thrifts, which didn't make many subprime loans.

• Abusive loan terms were far more responsible for the foreclosure crisis than risky borrowers.

"Recent studies have shown that, comparing borrowers of similar risk characteristics, loans with sensible terms had significantly lower foreclosure rates than explosive subprime loans made by non-bank lenders," CRL's report says.

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Perkins was the first Examiner to cover three beats for the Examiner.com news service:
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Housing bust withered California's economy, job market

Nov. deadline looms for
emergency BP oil claims

New home construction contributed only $13.8 billion to California's economy in 2009 and nearly 77,000 jobs, down 80 percent from $67.7 billion in economic output and a whopping 84 percent from 487,000 jobs when the home-building boom peaked in 2005 statewide.

by Broderick Perkins
© 2010 DeadlineNews.Com


Unauthorized use of this story is a copyright violation -- a federal crime


Deadline Newsroom - When housing went down in the Golden State it took Californian jobs and a chunk of the economy with it.

The bust has cost the Golden State hundreds of thousands of jobs, and $54 billion in economic output.

According to "The Economic Benefits of Housing," study by the California Homebuilding Foundation, an economic research and consulting group, every newly constructed single-family home generates 3.24 jobs during construction and supports another 1.2 jobs, and each dollar spent building a home generates another 80 cents in total economic activity.

With deep fissures in the housing market, an economic cornerstone, new home construction alone contributed only $13.8 billion to California's economy in 2009 and nearly 77,000 jobs, down 80 percent from $67.7 billion in economic output and a whopping 84 percent from 487,000 jobs when the home-building boom peaked in 2005 statewide.

In Monterey County, in 2008, builders constructed 456 new homes and only 194 in 2009. Monterey's new home construction generated 811 jobs in 2008 but only 372 last year. New home construction generated nearly $140 million in economic output in 2008 in Monterey County, but only about $64 million in 2009.

At the peak statewide, the 205,000 new homes permitted accounted for almost 3 percent of the state's total economic output. That fell to 0.4 percent in 2009, when only 35,000 new homes were permitted statewide, the study says.

Even at the peak, the number of new homes permitted fell below the 220,000 that the state Department of Housing and Community Development said are needed annually to meet normal population growth.

It's not just the direct economic effects of the new home building industry's construction efforts.

Toss in a range of related services including remodeling, repair, brokerage, property management and financing and the industry generates more than $347 billion of economic output and supports nearly 1 million jobs statewide, according to the study.

Nearly 11 percent of California's total economic output is from the entire housing industry, ranking it first among the state's leading output industries. Even after the downturn the industry's economic output outpaces wholesale and retail trade; professional scientific and technical services and information.

While the output contributes to all counties, benefits are highest in the largest regions, including Los Angeles, Orange and San Diego Counties.

The study was designed to reveal the significance of the housing industry on two levels:

• The full range of economic impacts of new housing construction, including support industries and consumption of expenditures generated through the multiplier or ripple effect.

• The still greater significance of the entire housing industry including residential real estate, financing, maintenance and repair, additions and alterations, construction, homeowner expenditures, property manage and all other aspects of the entire stock of owner- and renter-occupied housing.

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Perkins is managing editor of HomeAway.com's Gulf Coast Response Center.

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Most say it's a good time to buy, fewer see housing as a good investment

Peter Taffee, attorney
with firm restaurateurs
hired for BP claims

Most Americans believe the housing market has hit the bottom and that it's a good time to buy, but they are aware prospects for fast returns on a home as an investment are slim.

by Broderick Perkins
© 2010 DeadlineNews.Com


Unauthorized use of this story is a copyright violation -- a federal crime


Deadline Newsroom - Most Americans believe the housing market has hit the bottom and that it's a good time to buy, in part because many also think rents will rise faster than home prices.

Fannie Mae's latest nation housing survey found that 70 percent of Americans think it's a good time to buy a home, up from 64 percent in January.

By an overwhelming majority, 78 percent, also believe home prices will either hold steady or increase over the next year, compared to 85 percent believing the same thing about rental increases.

While Americans expect rents to rise by 3.6 percent on average, home prices are expected to turn up only by 0.9 percent, Fannie Mae found.

"Given the remaining level of shadow inventory, as well as the high number of adjustable rate resets still looming which could in turn lead to further defaults, it is difficult to see the supply of housing falling in an amount sufficient to move prices upwards in many parts of the country," said Nancy Osborne, chief operating officer of Erate.com, a Santa Clara, CA-based financial information publisher and interest rate tracker.

Also 67 percent believe housing is a safe investment, down three points since January and down 16 percentage points from a similar 2003 survey and the largest drop by far among all investment types tracked since then. Housing ranked second behind putting money into a savings or money market account (76 percent).

"Our survey shows that consumers see a mixed outlook for housing and homeownership," said Doug Duncan, Fannie Mae's vice president and chief economist.

"These findings indicate a return to a more balanced and realistic approach toward housing. While this will likely weigh on the housing recovery in the near-term, it should, over time, help to build a stronger and healthier market focused on sustainable homeownership," he added.

The Fannie Mae National Housing Survey polled homeowners and renters between June 2010 and July 2010 and compared the findings to similar surveys released earlier this year and 2003.

The survey also found:

• Mortgage borrowers (74 percent) and underwater borrowers (69 percent) are more likely to say owning a home is a safe investment than delinquent borrowers (57 percent) and renters (54 percent). However, this measure has fallen among all sub-groups since January, with delinquent borrowers and renters showing the largest declines, down eight and seven points, respectively.

• More than 70 percent of all respondents believe it will be harder for the next generation to buy a home, up three points from the beginning of the year.

• Fifty-four percent think it would be very difficult or somewhat difficult to get a home loan today, down six points since January.

• Thirty-three percent of all Americans said they would be more likely to rent rather than buy if they were going to move, up from 30 percent in January.

• Among renters, 60 percent said they would rent again if they were to move, up from 54 percent in January. However, 69 percent of renters think it makes more sense to buy a home than to rent.

• Mortgage borrowers (83 percent) and underwater borrowers (77 percent) remain bullish on housing and said they are more likely to buy in the future than rent — both groups increased two points from January.

"If you couple this (high inventories and rate resets) with the reality that it is far more difficult to obtain a mortgage as well as a job, when selling a home to someone who presumably needs financing to buy it, housing is still facing a conundrum." Osborne added.

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Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group, including DeadlineNews.Com, a real estate news and consulting service and Web site, and the Deadline Newsroom, DeadlineNews.Com's news back shop.

Under the DeadlineNews Group umbrella:

Perkins is managing editor of HomeAway.com's Gulf Coast Response Center.

Perkins was the first Examiner to cover three beats for the Examiner.com news service:
• National Real Estate Examiner
• National Consumer News Examiner
• National Offbeat News Examiner

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California gets $700 million slice of special $1.5 billion homeowner bailout pie

Spontaneous orgasms real

Earlier this year, President Obama announced a $1.5 billion infusion for state housing agencies in Arizona, California, Florida, Michigan and Nevada. The Golden State scored $700 million of it.

by Broderick Perkins
© 2010 DeadlineNews.Com


Unauthorized use of this story is a copyright violation -- a federal crime


Deadline Newsroom - California struck gold, receiving the biggest chunk of a special $1.5 billion federal fund pie for programs that target struggling homeowners in states hardest hit by the housing crash.

California Housing Finance Agency (CalHFA) recently announced the fat $700 million slice would go toward four different programs ultimately assisting 40,000 homeowners.

Earlier this year President Obama announced the $1.5 billion infusion for state housing agencies in Arizona, California, Florida, Michigan and Nevada, where home values have fallen more than 20 percent from peak 2006 and 2007 markets.

The $1.5 billion will be withdrawn from funds set aside for housing under the Emergency Economic Stabilization Act of 2008 (EESA).

The money is earmarked for state agency programs that reduce so-called "preventable" foreclosures faced by unemployed home owners, so-called "underwater" home owners and home owners struggling with second mortgages.

In addition to California's $699.6 million stake, Florida gets $418 million; Michigan, $154.5 million, Arizona, $125.1 million and Nevada, $102.8 million.

"We are very grateful that the Obama Administration recognizes that California and several other states have been severely impacted by the twin problems of unemployment and home price depreciation," said Steven Spears, executive director of CalHFA

The details aren't finalized and homeowners, who needn't be CalHFA loan holders, must otherwise quality before approval. CalHFA's federally approved "Keep Your Home" programs are:

• Mortgage payment assistance for jobless. Up to six months of mortgage payment assistance, with a $1,500 cap for homeowners who have lost their jobs.

• Mortgage payment assistance for past-due homeowners. Up to $15,000 each, with a mandated match from the mortgage lender, the help those with past-due payments.

• Mortgage principal reduction. Underwater borrowers, who owe significantly more on their loans than their homes are worth, get a mortgage principal reduction to "market levels."

• Transition assistance. For those who can't afford to stay in their homes and are completing a short sale or handing over the deed in lieu of a foreclosure, financial assistance for the transition will be provided.

For more details contact CalHFA's Keep Your Home program online or by phone (916) 373-2585.


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Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group, including DeadlineNews.Com, a real estate news and consulting service and Web site, and the Deadline Newsroom, DeadlineNews.Com's news back shop.

Perkins was the first Examiner to cover three beats for the Examiner.com news service:
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California home prices golden again, sales rusty

Since the home price trough in February 2009, single-family, detached home prices in California have risen a golden 32.3 percent from $245,230 to $324,430, as of May 10, according to the California Association of Realtors.

by Broderick Perkins
© 2010 DeadlineNews.Com


Unauthorized use of this story is a copyright violation -- a federal crime


Deadline Newsroom - California's home prices are literally skyrocketing again, soaring in some of the Golden States' largest metro areas by 30 percent to more than 50 percent in little more than a year.

The price surge may be an indication of California's readiness to take the lead again in the nation's housing recovery -- if it can only get its sales engine going.

Fence-sitters and those looking to go West and put down stakes?

Take note.

California's home prices have been known to take off like wildfires, burning buyers who waited for the bottom only to find it long gone and themselves priced out of the market -- again.

California led the nation as one of the states hardest hit by foreclosures and did not fully hit bottom until February last year, according to the California Association of Realtors (CAR).

However, since that home price trough in February 2009, single-family, detached home prices have risen a whopping 32.3 percent from $245,230 to $324,430, as of May 10, according to CAR.

Get the full story here: "California home prices shine golden again, sales rusty"


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Perkins was the first Examiner to cover three beats for the Examiner.com news service:
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Gulf Coast homeowners get mortgage relief

Father's Day in the 'man cave'

With livelihoods and home values threatened by the Gulf oil disaster, it's a good thing lenders and others are coming forth to offer special relief for homeowners in the area.

by Broderick Perkins
© 2010 DeadlineNews.Com


Unauthorized use of this story is a copyright violation -- a federal crime


Deadline Newsroom - With livelihoods and home values threatened by the Gulf oil disaster, its a good thing lenders and others are coming forth to offer special relief for homeowners.

Fannie Mae this week announced that servicers may immediately suspend or reduce mortgage payments for borrowers impacted by the nation's greatest environmental disaster.

Under the company's "Special Relief Measures" policy, servicers can suspend or reduce a borrower's payments for up to 90 days. During that time, servicers will determine the nature and extent of the impact the disaster is having on properties and homeowner's financial condition.

Once servicers conclude the assessment they have additional leeway to evaluate any loss mitigation alternative, including an additional three months of forbearance, a loan modification or other customized solution.

Also see:
• "More bad news for Gulf area home values"
• "HomeAway helps Gulf area vacation property owners brace for oil spill fallout"

"We want to give homeowners every opportunity to weather this unprecedented disaster, including relief from their mortgage payment if that will help them get back on their feet and stay in their homes," said Michael J. Williams, President and CEO of Fannie Mae.

"Our policy is in place to support those who are experiencing a disaster-related hardship through no fault of their own and are acting in good faith to meet their mortgage obligation," Williams added.

Borrowers seeking relief under Fannie Mae's measures should contact their mortgage servicer.

Freddie Mac offered similar relief.

In addition to rank and file homeowners, there are an estimated 150,000 private vacation rental property owners in the Florida white-beach panhandle area alone who could experience lost income, even if oil doesn't come ashore and that could affect their ability to pay the mortgage, according to HomeAway.com an online portal for vacation rental owners.

The draw of the beaches and vacation home facilities are a major asset for the region's tourism economy, especially in Florida's Northwest region where the beaches and travel accommodations are often assets of individual vacation property owners, rather than hotels and resorts.

Citigroup CEO also this week announced a foreclosure suspension program for CitiMortgage home loans in coastal areas hard-hit by the oil spill in the Gulf of Mexico.

During a three-month suspension, effective Thursday through September 17, qualified borrowers with first mortgage loans owned by CitiMortgage will not be subject to foreclosure sales or foreclosure notifications, the bank said.

CitiMortgage will also waylay evictions on its real estate owned properties during the period.

The program aims to allow distressed homeowners to remain in their homes as Gulf communities respond to the oil spill and its economic repercussions.

"We hope that with this suspension we can help ease some of the financial stress for our customers in the affected Gulf region," said Sanjiv Das, President and Chief Executive Officer of CitiMortgage.

Meanwhile, the Louisiana Realtors Association (LRA) also recently announced it is prepared to use its Louisiana REALTORS Association Relief Fund (LRARF) to assist members and other Louisiana residents affected by the growing oil crisis.

LRA established LRARF in 2005 after Hurricane Katrina to assist its members and other Louisiana residents affected by major disasters. The program's guidelines online explain qualifying requirements.

Other help for homeowners may be available through the federal government's DisasterAssistance.gov program.

Anyone can keep apprised online of the official Deepwater Horizon Response unified command, including related disaster relief efforts.

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You are reading a sample of "News that really hits home!", now available from several beats and published in a growing number of locations.

Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group, including DeadlineNews.Com, a real estate news and consulting service and Web site, and the Deadline Newsroom, DeadlineNews.Com's news back shop.

Perkins was the first Examiner to cover three beats for the Examiner.com news service:
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Housing's hard landing due third quarter 2010

Credit score myths

Despite continued tight market conditions, housing should stop bleeding in the third quarter this year according to Zillow, a real estate information provider and home listings portal. Healing is another matter.

by Broderick Perkins
© 2010 DeadlineNews.Com


Unauthorized use of this story is a copyright violation -- a federal crime


Deadline Newsroom - Nearly one-in-four homeowners were underwater on their mortgage, foreclosures reached a new peak and home values in most U.S. market continued to slide, all in the first quarter this year.

But, says Zillow, the end is near.

Despite continued tight market conditions, housing should stop bleeding in the third quarter this year according to Zillow, a real estate information provider and home listings portal.

Healing is another matter, reports Zillow, in its first quarter Real Estate Market Reports covering 135 metropolitan markets.

"We believe national home values are more likely to reach bottom in the third quarter of 2010, rather than in the second quarter, as we had hoped. When we do get there, we expect the high rates of negative equity and foreclosures to keep national home value appreciation near zero for some time, possibly as long as five years," said Zillow Chief Economist Dr. Stan Humphries.

Zillow may be a bit conservative. Some sources predict a much longer recovery.

Humphries is, however, bullish on a third quarter landing for the housing market because home values in several large California markets have stabilized significantly, and they show tentative signs of reaching market bottom.

"As goes California, so goes the nation," is a long recited phrase of both hope and doom, depending upon which way the market is moving, given the sheer size of California's housing market and the state market's past impact on nearby states.

Erate.com has the full story "Zillow: Housing's hard landing due July-September 2010"


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Consumers remain bullish on home as safe investment

Despite an epic downturn that could leave the housing market reeling for years to come, the vast majority of consumers, 70 percent, remain bullish on home buying as one of the safest investments, according to a recent Fannie Mae report.

by Broderick Perkins
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Deadline Newsroom - Just because homes aren't selling like hotcakes doesn't mean consumers have lost their appetite for a slice of the American Dream pie.

Despite an epic downturn that could leave the housing market reeling for years to come, the vast majority of consumers, 70 percent, remain bullish on home buying as one of the safest investments, according to a recent Fannie Mae report.

With only a handful of housing markets poised to recover and most housing markets still feeling around for the bottom, 65 percent of those surveyed continue to prefer owning over renting. And 64 percent say it's a good time to buy, a level surprisingly similar to the 66 percent voicing the same sentiment in 2003 -- just before the onset of the last boom market.

The optimism is, however, tinged with some pragmatic caution, according to findings of Fannie Mae's National Housing Survey, conducted between December and January.

But even as one in three of those surveyed said it is a very good time to buy a home, they also know it isn't easy. Sixty percent believe getting a mortgage is more difficult than it was for their parents, and 68 percent believe it will be even more difficult for their kids.

You've got news....news that really hits home here: Americans Still Favor Homeownership As Safe Investment

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California's improved home buyer tax credit a day late, but still great

Horse-drawn cart art down payment

California's new and improved home buyer tax credit provides $200 million in home buyer tax credits, double the original $100 million and the new version is not just for first-time home buyers.

by Broderick Perkins
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Deadline Newsroom - A repeat windfall for home buyers, and once considered as hopeless as a balanced budget in the Golden State, California's popular home buyer tax credit is back -- and it's better than ever.

In fact, it's twice as good as it was before.

The Golden State's home buyer tax credit sequel, AB 183, recently signed by movie star Governor Arnold Schwarzenegger, is back and it's upstaged the original deal by providing $200 milliion in home buyer tax credits, double the original $100 million for qualified first time home buyers who purchased new homes, and the new version is not just for first-time home buyers.

"I have been up and down the state pushing this important housing bill that will get people off the fence and into homes while creating jobs and stimulating our economy and today I am proud to take action and put it into law," said Governor Schwarzenegger at the legislation's signing ceremony.


At 12.5 percent, California has the fifth highest unemployment rate in the nation.

The new law's $200 million allocations is split 50/50 between eligible first time home buyers who purchase an existing home and anyone purchasing a new home. First-time buyers are defined as those who have not owned a home in the past three years.

"The American dream is on sale. It's the Blue Light Special of home buying in California!" exclaimed Julie Larsen Wyss, a broker associate with Intero Real Estate in San Jose, CA.

Unfortunately, the immediately obvious flaw in California's home buying carrot is that it takes effect May 1, 2010 the day after the existing and also expanded federal home buyer tax credit is scheduled to end, April 30, 2010.

When both the California and federal home buying tax credits were available simultaneously, Californians struck a mother lode of a home buying tax credit up to a maximum total of $18,000.

The first $100 million tax credit, approved in February 2009 was only for first time home buyers who purchased only new homes. Funds ran out after just four months with 10,659 Californians claiming the credit.

Under the new California home buying tax credit there's $100 million for first-timers purchasing resale homes and $100 million for anyone buying a new home. There's no limit on the price of the home and no income limitations on buyers.

The tax credit is equal to the lesser of 5 percent of the purchase price or $10,000. It is not a refundable tax credit like the federal tax credit but must be taken in equal installments over three consecutive years to offset state taxes due.

Home buyers taking the credit will be required to live in the home as their principal residence for at least two years or forfeit the credit by repaying it to the state. Buyers also must be at least 18 years old and be unrelated to the seller.

First come-first served eligible taxpayers must close escrow between May 1, 2010 and Dec. 31, 2010, or after December 31, 2010 and before August 1, 2011, pursuant to an enforceable contract executed on or before December 31, 2010.

Watch for clarifications from the states Franchise Tax Board

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California home sellers' losses become first-time home buyers' gains

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Sixty-seven percent of all home sellers in California did so in 2009 because they had a tough time making the mortgage payment. The first-time home buyer share of the buying market, 47 percent, exceeded the state's long-run average of 38.6 percent and was the highest since 1995.

by Broderick Perkins
© 2010 DeadlineNews.Com



Unauthorized use of this story is a copyright violation -- a federal crime


Deadline Newsroom - As economic turmoil forced most California home sales last year, doors opened to a near record share of first-time home buyers.

According to the California Association of Realtors' (CAR) "2009-2010 Survey of California Home Sellers", 67 percent of all home sellers in California did so in 2009 because they had a tough time making the mortgage payment.

Unemployment and adjustable rate mortgage (ARM) resets, along with tough underwriting and equity losses preventing refinanced bailouts, converged on home owners, forcing them to sell, the report said.

Meanwhile, CAR's "2009-2010 "State of the California Housing Market" said first-time buyers enjoyed the spoils. First-timers represented nearly half, 47 percent, of all Golden State home buyers in 2009.

The first-time home buyer share exceeded the state's long-run average of 38.6 percent and was the highest since 1995, when more than half of all buyers were first-timers.

"It is clear that the federal tax credit for home buyers worked well in 2009 and is continuing to drive home sales," said CAR President Steve Goddard.

"The home buyer tax credit is arguably the most successful strategy employed by the government's efforts to stimulate the economy," Goddard added.

Some qualified Californian home buyers enjoyed both a federal and state home buying tax credit totaling as much as $18,000. The state version, for new homes only, ran out of cash months after it was introduced last year.

Home buyers also cashed in on distressed properties. More than half of all first-time buyers purchased a foreclosure or short sale property. Distressed properties accounted for almost half of all the state's sales in 2009, an increase from 35.6 percent in 2008.

"2009-2010 Survey of California Home Sellers" also found:

• On average, homes sold for $20,958 less than the original asking price in 2009. The median difference between the selling and listing price was $32,315. The list-to-sold-price ratio was $30,000 below list for first-time sellers, but only $8,000 below list for those who had sold before.

• Among sellers, 44 percent were first-time sellers, a 33 percent increase from 2008, and nearly three times the 2007 percentage of 15 percent.

• Sellers in 2009 cited difficulty meeting the monthly mortgage obligations (30 percent); job loss (18 percent); and a higher mortgage payment (15 percent) as the primary motivation to sell. In 2008, only 20 percent cited the ability to meet their mortgage payment obligation; while 11 percent sold due to financial difficulties.

• Financial difficulties caused 63 percent of homes to fall out of escrow prior to closing often because the buyer could not land mortgages, the buyer backed out, buyer's remorse and home prices declined, among other reasons.

2009-2010 "State of the California Housing Market" also found:

• One-third of sellers experienced a net cash loss in 2009, the highest level on record since CAR started tracking the statistic in 1989.

• The median net cash gain from home sales declined 50 percent last year to $50,000 from $100,000 in 2008.

• Nearly 40 percent of buyers were prompted to buy by the federal tax credit.

• Lower home prices boosted affordability. CAR's First-Time Buyer Housing Affordability Index rose to a record 64 percent in the third quarter of 2009.

• Lower-priced distressed properties prompted more than half buyers to take the plunge. More than 70 percent of properties purchased by investors were either short sales or foreclosures.

• Low-down payment Federal Housing Administration (FHA) loans were also a lure. The percentage of home buyers using an FHA-insured loan increased to 32 percent in 2009, compared with 18.9 percent in 2008. The median down payment for FHA-insured loans was $9,888 compared with $92,000 for conventional purchase loans.

• The median price of distressed properties declined nearly one quarter to $250,000 in 2009 compared with $330,000 in 2008; non-distressed property prices decreased only 10.4 percent to $485,000 in 2009 compared with $541,000 in 2008.

• Over all, California's median home price hit bottom in February 2009 at $245,170; for the year 2009, the median was listed at $271,000 and is projected to increase to only $280,000 in 2010.

• Statewide, annual sales of existing homes are projected to reach 527,500 units in 2010, a 2.7 percent decline compared with 2009's annual rate of 540,000 units.


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Suffering states to share $1.5 billion in home owner aid

Credit Card Act confusion

Select state housing finance agencies are anxiously awaiting a small windfall to help as many as 125,000 struggling home owners in five states hardest hit by the housing crash.

by Broderick Perkins
© 2010 DeadlineNews.Com



Unauthorized use of this story is a copyright violation -- a federal crime


Deadline Newsroom - Select state housing finance agencies are anxiously awaiting a small windfall to help as many as 125,000 struggling home owners in five states hardest hit by the housing crash.

President Obama announced late last week a $1.5 billion infusion for housing agencies in Arizona, California, Florida, Michigan and Nevada, where home values have fallen more than 20 percent from peak 2006 and 2007 markets.

Looking for their share, officials from state housing finance agencies (HFAs) were scrambling Monday to come up with the required program proposals that target unemployed home owners, so-called "underwater" home owners with homes worth less than their mortgage and home owners struggling with second mortgages.

"We don't have any details, just the announcement that was made Friday, but we are working on proposals even without the knowledge of how much we'll receive and that's hard to do without knowing," said Mary Lou Keenon, spokeswoman for the Michigan State Housing Development Authority (MSHDA).

State housing agencies engage in public and private partnerships to promote affordable housing and community economic development activities. Low cost loans, grants, education and other efforts typically target needy low- and moderate-income households.

The $1.5 billion will be withdrawn from funds set aside for housing under the Emergency Economic Stabilization Act of 2008 (EESA).

The money is earmarked for state agency programs that reduce so-called "preventable" foreclosures. The U.S. Treasury must approve any programs before they begin.

Programs can vary, but mortgage modification has been the primary tool to help home owners stay in their homes.

A mortgage modification occurs when the lender reworks the terms of an existing home loan, typically to lower payments and make the home more affordable. To get the payment down, lenders lower the interest rate, extend the loan term, reduce the principal (rarely) or use any combination of those approaches.

Treasury estimates are putting the cost of modifying troubled loans at approximately $12,000 each, which would provide help to around 125,000 homeowners. That's not much considering some 1.5 million homeowners are in need of help.

Other programs could include financial assistance for unemployed home owners and using funds to pay cash incentives to second mortgage holders, in an effort to encourage first mortgage holders to provide mortgage modifications.

"I've got to again repeat — government can’t stop every foreclosure. There's not enough money in the Treasury to stop every foreclosure. And we shouldn’t be using tax dollars to reward the same irresponsible lenders or borrowers who helped precipitate the crisis," Obama cautioned during a town meeting with 1,800 residents Feb. 19 at Green Valley High School in the Las Vegas suburb of Henderson, NV.

"During these difficult economic times, we will work to help responsible homeowners stay in their homes and stabilize the housing market so home values can rise," the president added.

Las Vegas had the nation's highest metro area foreclosure rate, with one in every 82 housing units receiving a foreclosure filing in January, according to RealtyTrac.

The high rate came despite a nearly 2 percent decrease in foreclosure activity from the previous month and a nearly 21 percent decrease in foreclosure activity from January 2009, RealtyTrac reported.

On the state level, four of the states awarded the $1.5 billion fund, also have the nation's highest foreclosure rates. One in every 95 Nevada housing units received a foreclosure filing during in January — more than four times the national average. The rate was one in every 129 for Arizona; and one in 187 for both California and Florida. Michigan's foreclosure rate was 1 in 258 and not among the top five, according to RealtyTrac.

"We are really excited and grateful for this help, and we intend to hit the ground running as soon as we know how much we will receive," said Evan Gerberding, assistant director of marketing for the California Housing Finance Agency (CalHFA).

"We have a loan modification program in place, but we will develop new programs to help borrowers who are unemployed or under employed or are underwater because that's the administration's goal," Gerberding added.

There will be a formula for allocating the funds among the five states based on home price declines and unemployment.

HFAs must submit programs that target struggling home owners as well as affordable home programs. Funded programs and programs' efficacy ratings will be posted online to promote transparency and accountability.


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Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group, including DeadlineNews.Com, a real estate news and consulting service and Web site, and the Deadline Newsroom, DeadlineNews.Com's news back shop.

Perkins is also the first Examiner to cover three beats for the Examiner.com news service:
• National Offbeat News Examiner
• National Consumer News Examiner
• National Real Estate Examiner



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