Mike’s Real Estate Show

Pete Phillippe  IndyMac Bank  Cell 707-481-2737 Reporting on the new conforming loan limits + Interest rates and guidelines:

 Sonoma County’s new conforming loan limit is $662,500 . . . but its at a higher rate then the “Old” conforming of $417,000. We’re calling the new rates, “Jumbo-Lite”.

Up to $417,000   30yr fixed is  6.25 at 1 pt  ,  5/1  is 5.50  at 1 pt  ,  7/1 is 5.625  at 1 pt

Up to $662,500 (this is the new higher conforming rate but is actually higher than the “old” conforming loan amount of $417,000) 30 yr fixed is  6.75 at 1 pt, all full documentation, no “stated” or made up income or jobs!!, SFD owner occupied only, 90%  ltv purchase with 700 ficos scores, 80% maximum Loan to Value with 660 fico,
On refinances–no cash out transactions or payoffs of second loans , 75% ltv max.  5/1’s and 7/1’s next week with pricing. Lenders are having a very hard time finding “buyers” or investor’s who will buy YOUR loan with the new rates and conforming loan amounts.  The shocker here is NO REFINANCING OF EXISTING SECONDS!!! These loans were geared up to resolve some of the defaulting issues as most of the defaulting loans got 80-10-10’s with 80% Loan, 10% of sales price seconds and 10% down payment. This eliminates or doesn’t help many of these folks.

the new “Super Jumbo” is now over $662,500. Rates:30 yr fixed is 7.25 1 pt, the 7/1 is at 6.375  1 pt   80% ltv to $2,000,000
Purchase .  75% to $3,000,000 on purchases

Napa and Marin are at $729,750, Lake is still at $417,000, Mendocino at $512,000
Aprs not calculated , information purposes only, 30 day locks on rates quoted as of 3/10/08.  680 fico scores used as example . Full doc pricing shown, stated income loans available  as well as other programs

I reccomend Lou Barnes as one of our radio show commentators for his sharp wit and dead-on takes of the mortage market. You can read his column by going to the following link and signing up for his weekly commentary: http://www.boulderwest.com/news/ Here is his take on this big gap:

“The spread between government guaranteed (or effectively so) mortgage-backed securities and 10-year Treasurys reach an all-time, utterly non-economic 3.00%. The spread between AAA-rated municipal bonds and Treasurys is out of linie by 2.00%. These and other cedit markets this week for teh most part ceased to function, the capital in teh banking system effectively exhausted. Scott Simon of bond-giant Pimco, a calm sort whose remarks are usually limited to time and temperature, said, “Everything is tell you that the financial system is broken.”  Not very confident words huh? If you read the rest of the column you’ll also hear comments from others in the know about the remedies to our financial, credit, mortage problems.

Listeners and Friends,

  This is for the month of February, 2008 and is gleaned from our Multiple Listing Service data. This concerns single family dwellings + Condos (not Multi-family,commercial, or Land sales). REO’s (Real Estate Owned or Bank owned, post foreclosure properties) now domiante the marketplace in Sonoma County.

Active Listings: 2477    Median Price: $477,170 with days on the market(DOM) of 109.

Properties in Escrow: Continue to Show (Properties still in the due diligence phase): 439  $399,950 Median, DOM 118

Pending (contingencies usually removed): 117.  $500,000 median, DOM 129

Total  of both Continue to show and Pending: 556

Or: We have a 4.5 months supply.   Or–roughly 23% of the listings are in escrow which means you have a 1 in 4 chance of getting your home sold! You need to ask yourself this question: Do you want to be in the 23% who are in escrow or the 77% who are still looking for a buyer? How you get your home in the 23% is by pricing, staging it to SELL!!

Solds for the Month of February: 200 even! Read the rest of this entry »

Flynn Investments, San Francisco investment group, has purchased the remaining 33 homes of the project called, “Streamside”. Here’s the BIG WHY they decided to purchase, for $15,000,000, these Santa Rosa townhomes: “It’s one of the nicest towns in Northern California. It’s close to teh ocean, it’s close to the City (SF),it’s in the Wine Country, it’s got a nice airport, it’s got everything. We probably wouldn’t buy this in Sacramento if the same deal came up.” Thems pretty powerful reasons to own real estate in our county! Mr. Flyn also stated he had no crystal ball, didn’t really know WHEN the market would turn around but feels his values will be preserved over the long haul.  They will be renting the units out and cited a strong rental market as a factor in the purchase. Now if these guys are willing to plunk down $15,000,000, do you feel purchasing your first home has a good chance of of being a stellar invesmtment in the long term? Give me a call if you want to chat about making this market your launching pad for long term financial success. 707-322-8503.

We now know what the new FNMA/  FHA  conforming  loan amounts are  . . .Sonoma county $662,500, Napa $729,700, Lake still at $417,000 and Mendocino at $512,000, Marin at $729,700 . . . we still don’t have the pricing  yet because there are no “buyers” of these loans on any secondary  market  . . . even with the guarantees of the government .   FHA loan amounts have gone up as well in these counties to similar loan amounts . Some restrictions we lenders know about , will be only owner occupied loans, rate and term refinances , 90% max. ltvs and no stated income deals . Pricing probably in between current jumbo ( which has really been going up lately) and conforming  . . . so I’m guessing around 6.75 at 1 pt for a 30 yr fixed  . . . 5/1’s and 7/1”s will  also be offered . . .I do not really see any “rush” for these loans . Read the rest of this entry »

If you use the C.A.R. contract you can set the time frame for ALL your inspections. This is called the “due diligence” phase of the contract where you can order any/all reports you feel necessary to make an informed decision to purchase the property. Sometimes reports are prepared in advance for you such as Pest Control and Home Inspections plus other “inspections” which may be required by the City you reside. You can then amass your reports and if they look acceptable to you, remove your contingency as per the particular clause in the contract for physical inspections. If you have some issues on the reports which have a dollar amount attached and our pretty black and white then you can remove your physical conditions “subject to” the Seller either having the work done or crediting you for the work to be performed. The Seller can then accepts, reject or come back with another number. If they accept your fine, reject, you can accept that or cancel the deal, or negotiate further. The lender will only allow so much credit towards Non-Recurring closing costs.  Check with your lender. You may not wish to stipulate which reports you wish to have done in the contract but keep it generic. This is done to not draw the attention of parties NOT of the transaction who may insist they see the reports. I would rather have the Seller/Buyer work out any issues on reports and not get the Lender involved in the process. Your Realtor should be savvy enough to know this!!
  When you remove your physical contingencies this is done in writing and therefore must be agreed to by the Seller also in writing. If they do not respond to you by either signing the contingency removal form or issuing a “counter-offer” then your Realtor should force the issue by either a “24 hour notice to perform” wherein the Seller is put on notice they need to respond. Read the rest of this entry »

“Short Sale” - FACT SHEET - What they are and how they work
- by: Donald J. Leske II / Senior Broker & Short Sale Consultant

  First of all, its a tough market for anyone who needs to sell a home right now. If you do not have to sell at this time or can avoid it, DO NOT sell your home unless it is unavoidable. Many thousands of home owners across the Nation are in or facing foreclosure right now. You may be one of the unfortunate home owners who are caught up in that struggle. If you are a home owner who wishes to avoid Foreclosure, you may qualify to use the Short Sale option. You will need qualified and knowledgeable expert assistance or help in putting together a “Short Sale Package” to present to the Lien Holder, such as:

      A). A qualified and licensed Real Estate Attorney, who will know the steps and paperwork required in most cases, but shockingly enough it has been discovered that many do not know how to effect the actual sale in terms of finding a suitable buyer or with at least 50% of Short Sale offers failing to even be looked at due to improper presentation of a short sale package that is incomplete.., or someone else offering a higher price, most Attorneys will want to be paid up front or they will not get paid at all.

      B). Hire a Licensed knowledgeable and qualified Real Estate Agent. A good, properly trained agent can do all the required paperwork plus most agents will not require any up front fees. Important fact; Most Listing Agents do not actually what they are doing when it comes to using this option. It has been calculated in training classes on this subject that up to 90% of Licensed Real Estate Agents do not know what a “Short Sale” really is, or simply do not know the fundamentals of how to manage one. Its a very tough way to go for home owners and if not done right they will loose their home to Foreclosure anyway. No one benefits from that. - In my humble opinion this is the most favorable choice, if you are able to choose a good & qualified Agent/Broker. Read the rest of this entry »

Rates as of 03/7/08       

 The Federal Housing Administration (FHA) announced their temporary change in lending limits.  In Sonoma County it is now $662,500.  We have yet to receive the information from Fannie Mae and Freddie Mac, but the FHA increases will give a large contingency the opportunity to refinance and purchase homes that wouldn’t have qualified before.  Please call me to discuss FHA financing for your clients, I can help!  Today’s rates quoted are a small sample of current rates  – all quoted without points- call me about rates with point(s), different loan products and requirements!  (707) 284-2718

 Conforming                 fully amortized                        interest only

30 year fixed               6.25%                                      6.50% Read the rest of this entry »