Tuesday Morgan Hill Intero Real Estate Tour
Date: Tuesday January 27, 2009Posted in: real estate, Morgan Hill, Gilroy, listings, interest rates, Intero Real Estate
Our weekly office meeting and new listing tour began with a few words about changes to RESPA (Real Estate Settlement and Procedures Act - I see your eyes blurring already), and a discussion of current mortgage rates as of that moment. The quoted rate for a 30 year fixed, $417k or less conforming loan is 4.875%/5.060 APR, for a 30 year fixed, $417k-$625,500 loan is 5.625%/5.798 APR and for a 30 year fixed, $625,500-$3M loan is 5.75%/5.878 APR. These are for loans with a 1 point discount fee paid at closing and that are owner occupied with a 20% down payment and a 720 credit score. Rates are fluctuating hourly and vary from vendor to vendor.
There were four new office listings on our tour this morning. A stand-out listing is a newly constructed, single story home near the corner of Edmundson and De Witt Avenues in Morgan Hill.
1025 W. Edmundson Avenue, Morgan Hill is a marvelously laid-out 5,600 sq.ft. home with five bedrooms and 6 1/2 bathrooms on a 4 acre lot. There is a feeling of roominess and comfort in this bright and open floorplan. The unique creekside setting adds a lot to the lovely setting. This home is priced at $2,495,000. There is an easement for the Santa Teresa Extension to be built nearby, but I predict this won’t be built for many years in the future, if at all.
Other office listings toured this morning were 1600 W. Edmundson Avenue, Morgan Hill ($1,899,250), 9215 Vista Del Monte Court, Gilroy ($1,350,000) and 17408 Blue Jay Drive, Morgan Hill ($799,999).
For information or a showing of these or any other listings, please contact me at GMerrick@InteroRealEstate.com or 408-892-9015.
Lowering Mortgage Interest Rates
Date: Thursday December 4, 2008Posted in: mortgage, real estate, foreclosures, interest rates, mortgage industry, refinance
Mortgage interest rates are very attractive right now and could become absolutely irresistible in the near future. Interest rates are in the mid-5% for a thirty year fixed rate mortgage below the jumbo level of $729,750. Although the jumbo rate will be lowered to a cap of $625,500 beginning in 2009, it was in the news today that financial industry lobbyists are pushing a plan that could help send interest rates down to 4.5% to shake up the housing industry.
Should this plan be enacted, not only will it increase home sales, but the lending industry will be performing mortgage refinances like there’s no tomorrow. The lenders that I know are already up to their eyeballs in refi’s due to the great interest rates currently available.
Will this help curb foreclosures? It will most likely help those who need to refinance their loans - unless they are some of the unlucky ones who are no longer employed…
A Brief Primer on Distressed Properties
Date: Monday September 8, 2008Posted in: real estate market, mortgage, REO, real estate, short sale, Realtor, foreclosure, interest rates, refinance
Even with all of the buzz in the media regarding short sales and foreclosures, I still have people asking me basic questions regarding the difference between a short sale, pre-foreclosure, foreclosure and REO. So if you are completely educated on this topic, you might want to go onto my next post because this post will be just going over the basics on these topics.
The first step that a financially distressed homeowner should take is to call their bank and ask to speak to the loss mitigation department. They should ask for someone who can help them with a forbearance agreement or a loan modification agreement. Remember, the lender doesn’t want to foreclose but would prefer to work on options that would allow the homeowner to stay in their home.
Should these agreements not be obtainable, the homeowner should explore selling their home as a short sale. A short sale happens when the unfortunate situation arrises where the owner must sell but their mortgage amount is greater than the amount that they can net on the sale of their home in the current market.
Why do banks accept short sales? Simplistically, they do because the mortgage is in arrears, the property may be in poor condition, the homeowner has suffered a hardship (must be proved), the area or neighborhood has depreciated, or the bank simply has too many REOs (bank-owned) properties on their books.
Why do short sales get such a bad rap in the real estate market? Because of the time that it takes for the seller’s bank to agree to the contract price. This can take 30 to 90 days (I’ve seen longer.) Most buyers lose patience and look for another home to purchase.
What do banks require from the short seller? The package must contain, in addition to several other items, the most recent mortgage statement, hardship letter (for job loss - pink slip, for divorce - divorce filing, for excessive debt - consumer credit counseling, for illness - a letter from their doctor, for death - a copy of the death certificate, for a job transfer - the relocation order), completed financial statement, three months bank statement, three months pay stubs or P&L statements, two years past tax returns and current asset statements. If this is incomplete, the process will be delayed that much further.
If the short sale is unsuccessful, foreclosure is the next step. A foreclosure is the legal process of selling property to satisfy a defaulting borrower’s debt. The preforeclosure process has several steps: Notice of Default given to homeowner, Notice of Trustee Sale setting the auction date, the Trustee Sale auction, and the Trustee’s Deed which transfer the property title to the highest bidder or to the beneficiary (the bank).
The timeline for a foreclosure begins with the Notice of Default (NOD) recorded. On Day 14, the NOD is mailed to the borrower (homeowner). At this point in the preforeclosure timeline, some buyers may offer to buy the mortgage from the owner. Some owners are not accomodating and may not allow any inspections of the home. Also the burden is on the buyer to check whether any liens are on the property. On Day 91 the Notice of Trustee’s Sale is recorded and mailed. Day 115 is the deadline to cure default and Day 122 is the Trustee’s Sale.
There is no right to withdraw an offer made at the Trustee’s Sale. The buyer is responsible for any liens on the property. The minimum bid at the Trustee’s Sale covers the loan balance, accrued interest and the fees and costs associated with the foreclosure. These days, most often there are no bids on many of the properties due to the high minimum bids. At that point the bank becomes the owner and the house becomes a Real-Estate Owned property.
Short sales and foreclosures effect a distressed homeowner’s credit rating differently. Although there are not definite amounts that the scores will be lowered and these numbers may be optomistic, a general rule of thumb is that short sales will lead to a loss of 80 to 100 FICO points and that it will take approximately 18 months for the short seller to be able to buy real estate again at a decent interest rate. A foreclosure will lower the credit rating by about 250 to 280 points and it will take approximately 36 months after going through foreclosure to be able to purchase a home with a mortgage that has a reasonable interest rate.
Inspirational Mortgage Expertise
Date: Wednesday June 4, 2008Posted in: mortgage, Morgan Hill, interest rates, Darla Rowe, mortgage industry, Inspire One, refi, refinance
My friend and cohort, Darla Rowe, a mortgage industry professional, says that even though interest rates have inched up lately, (on average about 0.35% in the last couple of weeks), refi’s are certainly moving. ”Finally!,” she says. Darla, over at Inspire One Inc. here in Morgan Hill, is currently working on a book that will be wonderful to give to clients. The book will give straight-talking, honest advice about what really happens in the lending industry and who to trust when shopping for a loan. Darla specializes in residential purchase financing and refinancing. She can be reached at 1-888-360-7474.
South County Pending Sales Continue to Rise
Date: Wednesday May 21, 2008Posted in: real estate, South Santa Clara County, San Martin, Gilroy, statistics, contract, residences, listings, pending sales, interest rates
For single family residences, the percentage of pending sales to active listings in the south Santa Clara County region continues to grow - which is great news for serious real estate sellers. In our area of Morgan Hill, San Martin and Gilroy, the proportion of pending listings to overall listings on the market began the year 2008 at 7%, a remarkably low number. But that percentage has continued to increase from 7% in January, to 9% in February, to 10% in March, then to 14% in April and at the beginning of this week, May 19, 2008, we have 15% of our listings pending. The actual numbers are 148 pending sales and 834 active listings for a total number of 982 overall listings on the market.
This rise in the percentage of pending sales reflects the ideal marriage of low prices, low interest rates and motivated sellers. Buyers are finding that it may not make sense to wait any longer….
