Fort Knox Bullion Depository

Why Mortage Lending is so tight in 2012.  This is a song that many realtors/loan officers and buyers are singing daily.  Sometimes the buyers state that getting a home mortgage is like taking a shopping spree at Fort Knox.

The housing market continues to struggle as Realtors report one in three contracts now fail, up nearly 10 percent from the year prior and now the top challenge of the housing industry. Failures are due to declined mortgage applications or failed underwriting as appraised values are coming in below the negotiated price, according to the National Association of Realtors.

But why is mortgage lending so tight? Why are banks making things so difficult? It seems that now, more than ever, contract failures is the last thing the housing sector needs.

In a recent unsolicited and unplanned letter from the Federal Reserve chairman to Congress suggested that the housing market has the potential to be fixed and while Republican Senator Hatch publicly asserted that Bernanke was stepping out of bounds by influencing policy, the letter explained in detail why lending is so tight.

In the letter, the Fed notes, “Other data show, for instance, that less than half of lenders are currently offering mortgages to borrowers with a FICO score above 620 and a down payment of 10 percent – even though these loans are within GSE parameters. This hesitancy on the part of lenders is due in part to concerns about the high cost of servicing in the event of loan delinquency and fear that the GSEs could force the lender to repurchase the loan if the borrower defaults in the future.”

The Texas Real Estate Center (RECON) explains that the Fed asserts concerns about the high cost of mortgage servicing stem from:

• the realization of how expensive it is to resolve a nonperforming loan,
• uncertainty about what it will cost to comply with new mortgage servicing-related regulations and
• the potential change in the way Mortgage Servicing Rights (MSRs) are treated for capital requirements under Basel III (new international banking regulations).

RECON analyst, Gerald Klassen writes, “The good news is that we can understand the reasons. The bad news is that self-preservation may prevent the problem from being fixed.”

Klassen notes recent reports that it costs a servicer 75 basis points or more to service a defaulted loan compared with the 25 basis point servicing fee it receives, making it a losing business.

FHA loans are also difficult to obtain, with various factions, including the Department of Housing and Urban Development calling for a loosening of credit score minimums. According to the Asset Securitization Report, “Lenders are telling HUD officials the agency must first change FHA’s lender/monitoring system known as Neighborhood Watch so they aren’t stigmatized for making loans to borrowers with lower credit scores.” Lenders with higher default rates will have higher Neighborhood Watch ratios than other which RECON says could lead to audits and indemnification demands.

“Don’t forget to add the risk of government and private lawsuits and judicial foreclosure proceedings to the list of concerns about making loans that are more likely to default,” Klassen says. “If you were a lender facing all these challenges, would you make the loan? Demonization of mortgage lenders and servicers makes for great political theatrics. But it doesn’t want them to lend more.

This article is a reprint from AG Beat. Author is Tara Steele.

San Diego Home on Fire

Notice of Fire Prevention Fee: The Governor signed AB 29 of the First Extraordinary Session (ABX1 29) into law on July 7, 2011. ABX1 29 imposes a $150 annual wildfire protection fee per habitable structure for property owners in the SRA. SRA lands cover about 31 million acres in 56 counties, and include an estimated 1.1 million to 1.5 million individual parcels, and approximately 800,000 habitable structures. Public Resources Code Section 4210 provides a legislative finding and declaration that the presence of structures within the SRA can pose an increased risk of fire ignition and an increased potential for fire damage within the state’s wildlands and watersheds and that the costs of fire prevention activities should be borne by the owners of these structures.

The State Board of Equalization (BOE) is required to annually assess and collect the fee from property owners on behalf of the California Department of Forestry and Fire Protection (CDF) in accordance with the Fee Collection Procedures Law. CDF is responsible for providing the BOE with a list of property owners who are liable for the fire prevention fee, and the amount to be assessed. However, the BOE is currently waiting to receive funding from the State of California in order to begin its collection duties, so the BOE has not yet finalized its method for the billing procedure of the Fire Prevention Fee.

How do we market a San Diego Victorian Home during the Holidays?  

During the first week in December we are planning to list a very cute Victorian home in San Diego.  It is a Registered Historical Residence and it has been completely remodeled to code with  the latest improvements. It is charming and attractive.    A buyer could move their antiques into this charmer (build 1915) and live close to downtown San Diego.  After 26 years selling a wide range of properties during all times of the year and economy environments this will be the most interesting. 

The question is how should we market this San Diego Victorian Home during the Holiday Season?

San Diego Victorian Home

We will use the normal marketing, upload videos to all of our social media sites, utilize QR codes to spread the video and property specific information. 

Does anyone had any ideas or creative marketing to successful market a Victorian Home? 

There’s more to a mortgage refinance than lowering your monthly payments.

1. Change your mortgage term

If you decrease the term of your mortgage in a refinance by going from a 30-year to a 15-year, you’ll pay a lower interest rate and shorten your total interest costs. You’ll build home equity more quickly, and pay off your loan sooner, even though your monthly payments go up.

2. Move from an adjustable rate to a fixed rate

ARMs offer low introductory rates, but they also offer long periods of uncertainty that make it hard to budget. It makes sense in a mortgage refinance to go from an ARM to a fixed-rate loan during a low-interest rate environment. You’ll get emotional security and your rate won’t fluctuate with changing economic conditions.

3. Take out cash

With a cash-out mortgage refinance, you can turn an intangible asset—accumulated home equity—into a tangible one—cash. It makes sense for a project that will generate long-term benefits, like a home improvement or funding a child’s college education. However, don’t do it for frivolous reasons. Unless you’re extremely disciplined, you could find yourself in even deeper debt.

4. Consolidate two mortgages

When interest rates are low, a mortgage refinance lets you consolidate your main mortgage and an outstanding home equity loan to realize a lower overall monthly payment. Plus, you’ll have only one mortgage payment to make each month.

5. Recover from divorce

If your home is jointly owned with your soon-to-be ex-spouse, a mortgage refinance will turn a joint obligation into the responsibility of the person keeping the home. Nothing is more frustrating than tracking down a former spouse who doesn’t keep up with his or her end of the mortgage payment.

Lay the groundwork

If one of these reasons resonates with you, contact your current lender to see if it’ll offer you preferred rates or reduced closing costs on a mortgage refinance. But don’t assume the current lender is best: Leave no stone unturned by searching for lenders online and calling community banks and local credit unions.

No matter which lender you choose, a mortgage refinance for the right reasons can save you lots of money—and that’s the best reason of all.

By: Barbara Eisner Bayer Compliments of NAR

By: Karin Beuerlein

Published: March 28, 2011 by the National Association of Realtors

Surprise: Your utility may offer big-time energy rebates to offset the cost of energy-efficient retrofits.

Because regulations now give them financial rewards for meeting energy-efficiency goals.

Even though it costs about one-third to one-fourth less to save a kilowatt hour through conservation than it does to build, fuel, and operate a new power plant, utilities resisted conservation programs for years, says Martin Kushler, senior fellow with the American Council for an Energy-Efficient Economy (ACEEE). Instead, they opted to finance new plants over the long term and pass along the costs to all of us as higher rates—until regulators stepped in.

What energy rebates are available through your utility?

Some are small—say, a $20 rebate after you purchase a programmable thermostat. Others range into the thousands of dollars, especially for expensive items such as solar panels.

A few examples of home improvements that can qualify for energy rebates from utilities:

• Installing Energy Star appliances

• Adding insulation

• Weatherizing

• Sealing ducts

• Installing programmable thermostats

• Installing geothermal heating

• Replacing water heaters with high-efficiency models

• Getting a home energy audit (see below)

What does my utility offer?

• Check your utility’s website for a list of any incentives.

• Visit the Database of State Incentives for Renewables & Efficiency. DSIRE’s search function allows you to filter results for residential rebates offered by utilities.

Get your utility to slash home energy audit price

Paralyzed by all the potential rebate options? Get an energy pro to come to your house and tell you exactly which energy-efficient retrofits will be cost-effective for you.

Some utilities:

• Offer free in-home energy evaluations performed by utility staff.

• Give a rebate against the price of an energy audit conducted by an independent pro.

• Rebate part of the cost of any recommended improvements. In California, for example, Pacific Gas & Electric offers up to $4,000 in rebates for any household that receives an energy audit, implements the recommended changes, and achieves a 15% reduction or more in energy consumption. 

The auditor will advise you on the potential cost of recommended improvements vs. the money they’ll save you on your energy bills. If your utility rebates part of the cost of those improvements, the return on your investment will come much faster.

It’s definitely worth checking out—especially if the audit is free or at a reduced cost.