Positive signs are seen in housing

August 19th, 2008

Prices, sales point to healing sector, economist reports
By Jenni Mintz (Contact)
Tuesday, August 19, 2008  

As ugly as the housing market looks, there are encouraging signs that the sector is healing, an economist said Monday.

Prices don’t appear to be falling as rapidly as they were, sales are rising, and default notices appear to be leveling off, said Mark Schniepp, executive director of the California Economic Forecast Project in Goleta.

For the first time since November 2005, monthly sales in Ventura County increased over the previous year, MDA DataQuick reported Monday. A total of 870 properties sold last month, up 11 percent from 784 in June 2007.

While that appeared promising, the median price paid for new and existing homes and condominiums remained flat at $420,000 in July, unchanged from the previous month but down 27.9 percent from $582,500 a year ago, according to the San Diego-based real estate information service, previously known as DataQuick Information Systems.

The median is the midpoint, where half the homes sell for more and half for less.

Just 21 percent of the mortgages were financed with jumbo loans last month, compared with 50.7 percent a year ago. That is partly because jumbo loans are harder to obtain and are more expensive relative to conforming loans, said Andrew LePage, DataQuick analyst.

In July, Southern California home sales rose to the highest level in more than a year, as more buyers swooped in to purchase distressed properties, according to DataQuick.

Rising year-over-year sales are the first sign that the market is healing, Schniepp said.

There were 20,329 properties sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in July, up 16.7 percent from the previous month and 13.8 percent from the same month a year ago.

Last month’s sales total was the first since September 2005 to rise above the year-ago level, DataQuick reported.

The uptick in sales was mostly driven by inland markets that posted the biggest depreciation and are now having the greatest sales appreciation, LePage said.

For example, July sales rose 48.6 percent in Riverside County from a year ago, while the median price dropped 34.8 percent, from $399,000 to $260,000.

“It’s not like there’s this real broad sales recovery from the Inland Valley to the beach,” LePage said. He added that the closer you get to coastal regions, the weaker sales are.

‘A fire sale of properties’

The median price paid for a Southern California home was $348,000 last month, down 2 percent from $355,000 in June and 36 percent from $505,000 a year ago.

Foreclosed properties accounted for 43.6 percent of the existing homes sold in the six-county region last month.

“What we’re looking at is a fire sale of properties in newer, affordable neighborhoods that were bought or refinanced near the price peak with lousy mortgages,” John Walsh, MDA DataQuick president, said in a news release. “What we’re still not seeing is this level of distress spreading to more expensive or established neighborhoods.”

Laurie Rutledge, a Realtor with Coldwell Banker Residential Brokerage in Ventura, says she’s seen an increase in activity, but mostly in the lower-end market — the $350,000 to $500,000 range.

“That price range is very hot right now,” she said.

While values are expected to remain flat for some time, Rutledge believes it’s a great time to buy.

“For one thing, there’s a lot of inventory, and interest rates are still low, and that situation may not exist when the market begins turning,” Rutledge said.

Distressed sales a factor

If notices of default fall now, then foreclosures will peak and then start to decline in December, Schniepp said. Though he does not believe prices will drop much more, he predicts more year-over-year price declines for as long as foreclosures continue to rise.

“Much of the declines we’re seeing right now is influenced heavily by distressed sales,” he said. “Those are the things that are beating down prices.”

About 36 percent of the county’s existing homes and condominiums sold in July had been foreclosed on at some point in the past year, compared to 7.7 percent a year ago.

Once inventory of distressed property has been cleared, prices will stabilize, which will lead to a sharp increase in sales by the second quarter of 2009, Schniepp said.

“Then the real estate market will become a lot healthier,” he said. “We are in the initial stages of recovery.”

Still, Schniepp cautioned that the market is still far from normal. He projects 2009 will have a solid increase in transactions and “will feel much better.” However, “we are likely not to see a normal market until 2010.”


Potential for West Nile virus has county on the offensive

August 14th, 2008


By Roger Showley

August 14, 2008
From a sheriff’s helicopter, every San Diego neighborhood sparkles with patches of light-blue backyard pools and spas, symbols of the good life in the Sun Belt.
Only these days, an increasing number of pools are turning slimy green from the algae that grow once owners turn off the filters to save cash or lose their properties through foreclosure. On weekly flyovers, county environmental health officers have spotted nearly 900 of these “green” pools since May.

In this case, green is not good. The algae attract mosquitoes that lay their eggs on the surface, and in a few days adult insects emerge, bothering residents and potentially spreading the deadly West Nile virus.

“If people don’t tell us they have a green pool, they are at risk to get West Nile virus,” said Chris Wickham, one of 40 county staff members combating the virus and other diseases borne by mosquitoes, rats and other sources or “vectors.”

Last year, the county’s vector-control program received 2,149 mosquito-related complaints or service requests. To get a handle on all potential mosquito breeding grounds, the county has stepped up its aerial surveillance and visits to properties with green pools.

So far this year, the number of green pools sighted by helicopter has sometimes reached 80 to 100 in a two-or three-hour flight compared with 20 a year ago, Wickham said. Many are found in Chula Vista, Escondido and Oceanside, where foreclosures have been high.

“It sure seems like there are more green pools out there than last year,” Wickham said.

The problem is not restricted to San Diego County, officials said. Urban counties throughout the state are reporting more problem pools. And in Clark County, Nev., home of Las Vegas, the total so far this year is 2,000.

Bill Reisen, a research entomologist whose lab at the University of California Davis is testing 1,000 groups of mosquitoes weekly for West Nile virus, said swimming pools may be a growing source of virus-carrying mosquitoes. Dry conditions should have eliminated the normal breeding grounds found in wetlands, riverbeds and other such habitats.

“The end of the issue will be to have someone buy these houses and take care of the pools properly,” Reisen said.

Such was the case of a property on Tait Street in Linda Vista seen by Wickham last week. The telltale green tinge was spotted from the air, so he went out Saturday to investigate and found a for-sale sign outside the property, which was tented for termite control.

As allowed by law, Wickham entered the backyard, deposited about a half-dozen “mosquito fish” to feed on mosquito larvae and left a notice that reads, “Mosquito Fish at Work – Do Not Add Chemicals,” and asks the residents to contact the vector-control program for more details.

“Right now, our charge is to protect the public health,” Wickham said. “Our cause is to kill every mosquito we can – no mercy, take no prisoners.”

Coincidentally, the 1,850-square-foot property closed escrow yesterday, and the new owner plans to empty the pool and cover it, said the listing agent, Ellen Wang of Re/Max Associates.

Next door, Wickham also found a green pool in the backyard of a home that is occupied but where the owner did not respond to his knocks at the door. He threw a handful of mosquito fish over the fence in the hope that any breeding problem would be controlled.

“As far as I’m concerned, that’s now a pond, not a swimming pool anymore,” Wickham said.

Jean Listar, a neighbor, said the owner’s wife had died recently and that he had stopped maintaining his landscaping and pool. Listar said she had not seen any mosquitoes – “not yet, anyway.”

The county has been fighting mosquitoes for more than 30 years, and since 1989 has charged a mosquito-, vector-and disease-control assessment on property tax bills to cover the costs. This year the charge is $7.92 per house – or $1 more for coastal properties – and an equivalent amount for other property types.

The current budget of $893,609 supports a staff of 28 full-time and 12 seasonal workers who do surveillance, visit homeowners and conduct educational campaigns to alert the public to the danger of West Nile virus and other diseases. The budget includes $25,000 for flyovers in sheriff’s helicopters at the rate of $700 per hour.

The virus, first detected locally in 2003, infected 15 humans in the county last year and three so far this year. Symptoms resemble the flu but can become severe, resulting in polio-like disability and sometimes death. There have been no deaths so far in San Diego County.


Information: The county Department of Environmental Health operates the region’s vector-control program with the goal of eradicating mosquitoes carrying the West Nile virus and other diseases. Information is available at (888) 551-INFO and sdfightthebite.com. The California West Nile virus Web site is westnile.ca.gov.

Free fish: Free mosquito-eating fish are available from the vector-control program’s office at 9325 Hazard Way, Kearny Mesa; (858) 695-2888.

Personal protection: Officials recommend that residents protect themselves by using insect repellent containing the active ingredient DEET, wearing long-sleeve shirts and long pants, repairing window and door screens to keep mosquitoes outside, and dumping containers of stagnant water. Mosquitoes generally are active from dusk to dawn.


How to buy a foreclosed home

August 8th, 2008

Sure, there are bargains to be had, but there are also plenty of pitfalls awaiting anyone brave enough to wade into real estate’s maelstrom. Here’s what to consider.
By Les Christie, CNNMoney.com staff writer
Last Updated: August 8, 2008: 11:17 AM EDT

NEW YORK (CNNMoney.com) — Hoping to score a house on the cheap by buying a foreclosed property? There are good deals out there, but the process is complicated and risky. Here’s what you need to know.

There are certainly plenty of Foreclosed Homes on the market. In California, 40% of existing homes sold in the second quarter were foreclosures, according to DataQuick, a provider of real estate information, compared with 5.4% a year earlier.

Indeed, Fannie Mae CEO Daniel Mudd said Friday that the company is pushing hard to sell more foreclosed properties, to get them off the books. “I don’t think this is a time to be holding onto REOs and hoping for a better day,” he said.

Steve Dexter, author of “Prospering in the Rising Wave of Foreclosures,” has bought dozens of foreclosed homes and thinks now is a good time to dive in. “It’s the best way to buy, and it’s time to buy again,” said

There are three different stages of foreclosure, each of which presents different opportunities for buyers. The first step is to figure out which one makes the most sense for you.

A home goes into pre-foreclosure when a borrower has fallen behind on his payments, but the house has yet to be auctioned off.

Buyers can find pre-foreclosures by poring over the delinquency notices that lenders file with county courthouses when a borrower misses a payment.

Armed with prospects, buyers should go scouting. If they see homes they like, they should contact the owners to see if they want to sell.

“You call them or knock on their doors and say, ‘I know you’re having a problem and I think I can help you,’ ” said Alexis McGee, co-founder of Foreclosures.com.

McGee only buys when she figures she can make a profit of 30% or more; marketing and other expenses wipe out about half that by the time she resells. But people buying a house to live in might be happy with a 20% discount from market value.

Cold calling and making low-ball offers on people’s homes can be difficult: Some owners are emotional, even angry. Many are trying to hold onto their houses and don’t appreciate what they consider scavengers sniffing around.

“But you’re not taking advantage of these homeowners,” said Duane LeGate, president of HouseBuyerNetwork.com, which puts together buyers and sellers of distressed properties. “All many of them want is financial relief from bad mortgages, and you’re offering it.”

Indeed, some owners are open to doing what’s called a short sale, which is when a buyer pays less for a house than the mortgage that is owed on it. Lenders must agree to a short sale, and will then forgive the rest of the debt.

Often, banks are reluctant to do such deals, since it requires them to take a loss. It can take months and a lot of badgering before a deal goes through, and not every buyer is up for that kind of hassle.

But as the housing market deteriorates, lenders are warming up to short sales, according to Foreclosure.com founder Brad Geisen. “It makes a lot more financial sense for them to liquidate early rather than go through the foreclosure process,” he said, which can cost lenders about $50,000.

Gabe Cera recently bought one through an associate of LeGate, Raul Pineyro, owner of Cacophony Group Real Estate Services in Dade County, Fla. Cera purchased a four-bed, three-bath in Miami for about $60,000 less than what the owner’s mortgage was worth.

“I’m very satisfied,” Cera said. “The transaction was very smooth and quick and I think I saved a lot of money.”

In buying any pre-foreclosure, LeGate advises buyers to not be turned off by dirty carpets or ugly paint jobs. That’s where the best deals are.

“Anybody can go the Home Depot (HD, Fortune 500) and buy some paint and a new rug,” he said.

Sheriffs’ sales
In the next stage of foreclosure, homes in default are auctioned off on the county courthouse steps. These homes can be real bargains, but the process is a crap shoot.

 Bidders can’t inspect the property, so there’s no telling how much work it needs. And there is also no telling what kind of liens there are against the home, due to unpaid taxes and so forth, which can also jack up the cost of these homes. Finally, Buyers need to come with cash, ready to put 10%-20% down on the spot, and able to pony up the rest in a matter of days.

“If you want to buy on the courthouse steps,” said LeGate, “you’d better be a pro.”

Even after a purchase, a deal can fall through if the current owner can come up with enough cash to repay the buyer the amount of the winning bid.

LeGate himself has bought several homes at auction, with mixed results.

“The first time, I bought, renovated and sold the house all within 29 days and made a killing,” he said. “I thought I was a mini-Donald Trump. The second time, the previous owner poured cement into the pipes before he left and when I turned on the water, it clogged everything. I lost more on the second house than I made on the first.”

After a lender takes back a house, the property goes back on the market as what’s called an REO (real estate owned) property. These are treated like ordinary sales, listed with a broker. Typically, bargains are not as sharp.

Author Steve Dexter advises house hunters to go to the Web sites of all the major lenders and look for REOs in their communities. Alternatively, “Get a young, hungry real estate agent who’s screening REOs all the time and put them to work for you,” he said. Foreclosures for sale may also be found on the sites of Freddie Mac (FRE, Fortune 500) and Fannie Mae (FNM, Fortune 500), as well as eBay (EBAY, Fortune 500).

Dexter prefers to buy REOs because the process is so clean; the title is clear and the property is delivered vacant, even if the prices aren’t as good. He says one bank manager told him he usually sells REOs for 95% of listing prices, on average.

“You might not think that’s too great for buyers,” said Dexter, “but the listing prices are lower [than market value],” usually by 10% or more. The total discounts often exceed 15%.

Another way to buy an REO is through an REO auction. As bank portfolios of these properties have swollen, they’ve started to unload them en masse. Pam McKissick, chief operating officer of Williams & Williams, an auction company based in Tulsa, said her company buys big portfolios of post-foreclosure properties from lenders and then auctions them to individual buyers.

The REOs that Williams & Williams pick up are usually sold within 30 days; successful bids can be quite low. “It’s a very rapid process,” said McKissick, ” You want to put a family back into a home quickly and bring the neighborhood back. This does that.”

First Published: August 8, 2008: 11:06 AM EDT

Freddie Mac posts $821M loss

August 7th, 2008

In yet another sign that the nation’s housing market continues to slump, Freddie Mac posted a loss of $821 million for the second quarter, slashed its quarterly dividend 80 percent and promised investors that it would raise at least $5.5 billion in new capital, the financial institution announced Wednesday.
It’s the fourth quarterly loss in a row for the company, a government-sponsored entity that buys mortgages on the secondary market from lenders.

The magnitude of the loss, five times worse than what Freddie reported for the first quarter of 2008, stems primarily from the implosion of the real estate market in Florida and the Southwest during the past two years.

Like its sister organization, Fannie Mae, Freddie is bleeding from the massive number of low-quality subprime mortgages underwritten during the real estate bubble, a large number of which are no longer performing.

Freddie also lost money on its investments in securities backed by subprime mortgages. In the larger world of finance, the collapse of subprime-backed securities has already forced some of the biggest U.S. and European banks to write off more than $200 billion the past year.

In a conference call with investors, CEO Richard Syron warned that the country’s real estate woes were far from finished.

“Today’s challenging economic environment suggests that the housing market is far from stabilizing,” he said. “We are halfway through the overall peak-to-trough decline.”

But critics say Syron has to move faster. Freddie’s stock dropped $1.55, or 19 percent, to $6.49 Wednesday, eroding its capital base. Syron says he doesn’t want to raise more capital now, which would dilute the holdings of current shareholders. “That value’s already gone,” says Paul Miller of FBR Capital Markets. “They need capital, and they need it fast.”

Freddie shares traded at nearly $75 at their peak at the end of 2004 and have tumbled 90 percent from a 52-week high of $67.20 last August.

Freddie’s losses aren’t just a problem for shareholders. Like Fannie, Freddie makes money buying mortgage loans from underwriting banks. In today’s tighter credit market, the current mortgage loans are profitable, but Freddie’s losses are preventing it from investing more capital in the area.

In a conference call Wednesday, Freddie executives said they would hold steady or cut back on the company’s existing loan portfolio, which could make mortgages even more expensive for aspiring homeowners.

The Bush administration and Congress have expressed concern about the health of Fannie and Freddie this summer, noting that problems sustained by those institutions could worsen the economic problems currently facing the nation.

“These guys can’t be turned around until the housing market bottoms out,” says Dan Seiver, finance professor at San Diego State University. “There’s no sign of that happening. If the economy weakens, more homeowners are going to have trouble making payments.”

Greg Farrell • USA TODAY • August 7, 2008

The Window of Opportunity for San Diego Homebuyers Quickly Disappearing.

January 8th, 2008


San Diego is one of the hardest hit markets during the sub-prime meltdown, resulting in a large number of foreclosed properties.  The consumers purchasing these homes in many instances have received up to a 30 percent discount from the peak of the market in 2004.  With the high cost of housing in San Diego the sub-prime loan with stated income was commonly used to buy homes with 100% financing.  By stating their income the buyer didn’t have to validate their income with pay-stubs and W-2s many of these consumers elected to take riskier two or three year adjustable rate mortgages for the lower initial payment, with hopes of refinancing before the time of the adjustment.  These sub-prime borrowers found themselves unable to refinance and trapped with declining market values and the disappearance of almost all of the sub-prime loan products.  Most of the borrowers were advised by the media to ask their banks to extend out their notes with the same rate until the market conditions improved and they could refinance.  As is evident by the number of foreclosed homes, very few homeowners were successful in renegotiating the terms of their loan.  In many cases the homeowner was faced with a payment increase of up to $1000 a month which left only one option, walking away from their home.

Article after article has been written describing the record number of foreclosures and further declines in value that will be taking place in 2008.  These numbers have all been based on one fact.  President Bush felt that the sub-prime mortgage problem was an individual homeowner’s problem and that the federal government was not there to bail them out.  After realizing the sub-prime meltdown has shaken financial markets throughout the world government intervention was needed. With President Bush’s new plan in place, it will allow the borrower to fix their initial interest rate for a five-year term as long as the consumer is current on their mortgage.  An evaluation will be done to determine a borrower’s ability to handle the higher payment if their loan adjusts.  I suspect that most homeowners will qualify for the freeze of their interest-rate.  In San Diego estimates show over 10,000 homeowners could be saved from foreclosure in 2008 and allowed to keep their homes.

After the existing inventory of foreclosures disappears the consumers that are waiting for the bottom of the market will be in for a big surprise.  Already local agents are experiencing multiple offer situations on the bank owned properties that are offered for the best prices.  In many cases the sales prices on these properties are going above the initial prices they were listed at.  A combination of declining prices and 100% financing readily available to consumers through FNMA at conforming loan limits of up to $417,000 is creating a buyer’s paradise.  Additionally appraisers are starting to see values leveling off throughout Southern California.  It is looking like this window of opportunity to purchase a bank owned a home will be short-lived.

Unfortunately for many consumers fear will drive them to sit on the sidelines of the market until the media starts to report that we have a recovering market.  A recovering market for the consumer means higher prices, the loss of many seller concessions like having their closing costs paid, many competing homebuyers, and a lower level of inventory available.  With the federal government lowering the discount rate and mortgages that are below 6%, now is the window of opportunity to buy a below-market home.  When the news about the market is at its worst the opportunity for profit is at its best, but not for long.

Co-written by Randy Nathan and James Dedolph, creators of HomeSniffer.com where you can find Homes for Sale in San Diego and LoanSniffer.net where you can find the best rate and terms for Homes Loans in San Diego .  Both of these sites are a good resource for information about San Diego Real Estate .

Can Bush Make the Foreclosure Crisis Disappear?

December 4th, 2007


2007 has been labeled the year of the sub-prime meltdown and the exploding ARM.  With the high cost of housing in Southern California many homebuyers elected to take on mortgages with a two or three year fixed terms would later turn into an adjustable mortgage.  For many households this adjustment could mean increases as much as $1000 for even entry-level borrowers, hence the term exploding arm.  Many articles have been written advocating that the borrower contact their bank and attempt to renegotiate extension on their introductory interest rate, which would allow the sub-prime borrower to continue paying a payment that was affordable.  Very few homeowners were successful with this strategy, which is exemplified by the number of foreclosures in today’s real estate market.

Normally real estate markets have slumps when the underlying economic picture of an area has slipped, causing higher unemployment.  This has certainly not been the case in the 2007 real estate market.  After one year of shock waves throughout the financial communities around the world, the Bush administration has finally awoken.  The shock waves were large enough to close most mortgage banks including the 10th largest bank in the United States.  For the most part that be of B of A’s, Wells Fargo, Washington Mutual, Chase, and Citigroup are some of the remaining banks while others like New Century, First Magnus, and Fremont are examples of those that failed.

With many communities dealing with bank foreclosures on their streets and falling real estate prices, which in some neighborhoods have seen declines of as much as 30% in value.  Something needed to be done.  Initially the Bush administration’s attitude toward the problem was that it was up to the individual homeowner to solve their problem and the government wasn’t going to bail out individual homeowners.  But Banks took a hard line on allowing for extensions on the initial start rates of the adjustable loans.  This created a situation with a large number of people walking away from their now unaffordable homes, and declining values which led to the current credit crisis in the financial markets.  With a huge number of sub-prime ARM’s adjusting in 2008, the Bush administration has finally taken action.  A plan is being negotiated with most major banks to allow for borrowers to extend their mortgage at the rate they have, which will give them motivation to continue making payments on their homes rather than walking away.  The plan calls for an evaluation on the borrower’s ability to make a higher payment.  With California’s high cost of housing most families could barely afford the payments at the time when they purchased their homes two or three years ago.  It is very likely that most families can qualify for this kind of extension.

With this type of plan in place there is a high probability we could see a major shift in the number of foreclosures in the real estate market and possibly a rebound in home values as fewer and fewer bank owned homes are available.  Unfortunately for many homeowners who lost their homes, the banks and the Bush administration were slow in responding to this crisis which has been felt around the world.

Co-written by James Dedolph and Randy Nathan, creators of HomeSniffer.com where you can find Homes for Sale in San Diego and LoanSniffer.net where you can find the best rate and terms for Homes Loans in San Diego .  Both of these sites are a good resource for information about San Diego Real Estate .

San Diego Homes › Create New Post — WordPress

November 23rd, 2007

San Diego Homes › Create New Post — WordPress

Could Sub-Prime Lending in California Turn Deadly?

November 23rd, 2007


In the last seven years sub-prime lending has become very popular in southern California.  With the high cost of housing in California was a temporary fix for many home buyers have a more affordable house payment.  This group of loans was made very attractive by offering options such as interest-only payments, lower initial start rates, and 100% financing.  For many consumers qualifying was not as tricky as a Fannie Mae product allowing the borrower to just state their income compared to the Fannie Mae conventional loan which requires full documentation providing pay-stubs hands W-2s. 
The downside to these loan products is that after two or three years they would become adjustable-rate loans, which is how the term exploding ARM loan came about.  The borrower was told in two or three years that it would be a will to refinance their loan and this is very true until the mark in Southern California stopped appreciating.  Many homeowners were now faced with payment increases of as much as $1000 per month.  On top of the lack of equity that homeowners now faced, the sub-prime market collapsed leaving only Fannie Mae type products on the market.  This left many homeowners without any options for refinancing their home.

One way that borrowers attempted to deal with this crisis was to attempt to renegotiate with their lender to keep the payment the same for another year or two even if they owed more on their home than it was currently worth with declining values.  Very few homeowners were successful with this approach even though many articles have been written as though this was a great option available to anyone.  Another common way that borrowers have attempted to deal with this exploding ARM crisis is to do a short sale.  This is when a seller places their home on the market for sale at market price and as the lender to set less than a full payoff on the mortgage, which would possibly do less damage to their credit than a foreclosure.  In many instances the homeowner was not successful in completing a short sale and renegotiating the payoff of their mortgage.

Because for many homeowners just walking away from a home and a mortgage that they couldn’t afford was the only possible route, southern California now has more than its share of foreclosed homes.  Once the bank takes the home back it may be several months before it goes on the market with a realtor.  Then it may sit for several more months before the home sales and escrow closes.  In most cases electricity, water, and gas are turned off by the utility companies when the foreclosed homeowner no longer pays their bills or cancels the services.  In addition to the lack of utilities most of the banks are not keeping their properties up from a maintenance standpoint, but the most dangerous problem starts in a vacant home with a pool. 

 Pools are a very common amenity in Southern California homes and it only takes a couple weeks with no chlorine and no active filtration for a pool to become a green algae pit, the perfect breeding ground for mosquitoes.  For months now the health department has been telling everyone to make sure that all standing water is removed from their home.  Now it is very common to find bank owned properties with pools, hot tubs, and other standing water breeding mosquitoes.  While you may think that mosquitoes are only a nuisance, they are actually a transmitter of the deadly West Nile virus.

A mosquito becomes infected with West Nile by biting an infected bird and anyone with a compromised immune system has a very high risk of developing serious complications after being written by one of these infected mosquitoes.  About 1 in 150 people who are bitten develop serious complications.  While 80% of people in show no symptoms, the other 20% will have fevers, headaches, body aches, nausea, vomiting, swollen lymph glands, or a skin rash.  San Diego has had 16 cases reported to the department of health already and 102 dead birds have also been reported. The threat of the West Nile virus has now become such a significant threat to public health that officials are having any reported sources of breeding mosquitoes treated to prevent an epidemic of West Nile virus.  With no concern for public safety or the vast expense put on the backs of taxpayers the banks are allowing their foreclosed homes to become breeding grounds for this deadly disease. 

Unlike the firestorm of 2007 in California which has had a dramatic and visual impact on the state.  This type of problem is not visible to the general public and the magnitude of this deadly disease will not be apparent until the number of infected people starts hitting the news.  New laws at the state level need to go into effect prevent banks from allowing pools to remain un-maintained end becoming a breeding ground for the West Nile virus.  Legal action needs to be taken to save lives even when people’s homes could not be saved from foreclosure.  West Nile virus has not yet made the front page, but if this continues it will.


Co-written by Randy Nathan and James Dedolph, creators of HomeSniffer.com where you can find Homes for Sale in San Diego and LoanSniffer.net where you can find the best rate and terms for Homes Loans in San Diego .  Both of these sites are a good resource for information about San Diego Real Estate .

Reverse Mortgages - Using the Equity in Your Home to Retire in Style.

June 7th, 2007

The reverse mortgage is a special type of home refinance for a person 62 years old or older.  This is a way that a person can pull money out of his home without having to make payments on the line of credit or lump sum that they receive.  With this type of program there is no payment or repayment of the loan and the money may be distributed in one lump sum payment, used to create a fixed income for the duration of life, or it may be used as a line of credit to be drawn upon as needed.  These options can also be combined depending upon the homeowner’s particular situation.

Down and out financially doesn’t need to be your situation in life to use this type of loan.  You may just want to pay off an existing loan balance and not have any more payments.  Freeing up the equity in your home can improve the quality of your life.  The money can be used for vacationing, paying medical bills, sending a grandchild to college, or just supplementing retirement income.  You have worked hard to build the equity in your home, why not enjoy it now!

Unlike a conventional loan, there are no credit standards or income qualifications.  The two most important factors are your age and the value of your home.  The reverse mortgage process usually will take about 30 days before you can receive your money.

When you use this type of program the title to the property will stay in your name, you are not transferring the ownership of the home.  If at some point you choose to sell your home and move to another residence, you can.  What goes to the bank would be the closing costs, principle borrowed and interest on the loan calculated daily.  The remaining equity in the home is all yours.  Another commonly asked question is, are there any negative tax consequences for using a reverse mortgage?  The answer is that it is just like any other type of refinance and is not taxable income.

When your heirs receive your home they will need to either refinance the house, if they choose to retain it, or they will need to sell it.  They will receive the remaining equity in the home, which would be the difference between the principal borrowed, the accrued interest, closing costs, and commissions.

One of the safeguards the federal government has put in place to make sure the consumer understands exactly how this type of product works is the requirement that you participate in a HUD-approved counseling session.  This can be done over the phone and there are several different agencies who can offer this service to you free of charge.  Once you have completed the counseling session, you will be mailed a certification to validate that you have met the federal government requirements to be counseled by an independent third party.

In conclusion, if you would like to use the equity in your home to more thoroughly enjoy your golden years, it is a fairly simple process to find out how much a reverse mortgage can benefit you.  All you need to know is the approximate value of your home and your age and you will be able to examine all different types of products with a range of options.

Co-written by Randy Nathan and James Dedolph, creators of HomeSniffer.com where you can find Homes for Sale in San Diego and LoanSniffer.net where you can find the best rate and terms for Homes Loans in San Diego .  Both of these sites are a good resource for information about San Diego Real Estate .

Get the best price on a mortgage - Improving your credit score the easy way

May 21st, 2007



Your FICO score is the most important determining factor in saving money when you buy a home .  The FICO score you have will determine the loan-to-value ratio or percentage of the purchase price you may borrow.  The interest rate you pay on the life of the loan is dictated by your score; in other words, the impact can translate to hundreds of dollars a month more that you will pay on your mortgage.  The FICO score is an automated system designed to evaluate your payment history, derogatory marks (late payments, delinquencies, etc.), active accounts, types of credit used, and the percentage of used credit compared to available credit.  A computer software program will bring all this information down to a number to assist an underwriter in evaluating your credit report.  With this universal system in place for underwriting credit reports, subjectivity in the process of determining a borrower’s eligibility for credit is limited.

With the significant changes that have occurred in the sub-prime and even prime lending market, the demand for borrowers with high FICO scores has become greater today than ever before.  For a full documentation loan, in which case pay-stubs and W-2s are provided, the requirements have gone from a 600 FICO score to a score of 660.  For stated income loans where no income documentation is required, the required FICO score has gone from 620 all the way up to 700.  These numbers all pertain to 100% financing and coming in with a down payment will allow for slightly lower FICO scores.

The first thing you want to look at is the accuracy of the report.  Are all the accounts properly reflected?  If not, you’ll want to contact each of the major credit reporting agencies to correct any mistakes.  Paying down the balances on credit cards will produce the greatest improvement in your credit profile because the system calculates the ratio of used credit to available credit on the credit cards.  However, this does not apply to installment debt, like student and car loans.  If you cannot raise enough extra money to pay down your debt, the next best course of action is to increase the credit limits on your cards.  Again the system will calculate the ratio between available credit and used credit, therefore reflecting an improvement in your credit score.

Another technique that can work well is opening another card and transferring the balances.  This can free up additional credit and improve your FICO score.  When you have a husband and wife with substantially different credit scores an opportunity exists.  By adding the spouse with the lower scores on to the credit cards of the spouse with the higher scores, an increase in the lower FICO scores should occur.

It may seem like these changes will take a long time to occur; fortunately, however, when working with a mortgage broker, once the changes are in place the credit report can be rescored.  This process is called a rapid re-score and with letters from the credit card companies the changes can occur in one week.  Another tool available to mortgage brokers is called a what-if simulator.  This allows potential modification scenarios to be played on your credit report, to see what the end result will be before you spend the money and time to make those changes.

In conclusion, as you can see, much can be done to make improvements on your credit score and an experienced mortgage broker can be an extremely valuable asset to have while you are attempting to maximize or repair your credit report.


Co-written by Randy Nathan and James Dedolph, creators of HomeSniffer.com where you can find San Diego Homes for Sale and LoanSniffer.net where you can find the best rate and terms for First Time Home Buyer Programs in San Diego .  Both of these sites are a good resource for information about San Diego Real Estate for Sale .