Signs that Economic Recovery Gaining Traction in New Year

The real estate market is so closely aligned with the fate of the overall economy, this week gave us reason for encouragement. Fed Chairman gave a more upbeat assessment of the economy saying, "we have seen increased evidence that a self-sustaining recovery in consumer and business spending may be taking hold." Also the S&P 500 and the NASDAQ rose 10% and 12% respectively. And U.S, retailers posted the strongest revenue growth since 2006.

Specific to real estate, buyers are coming back into the market already. Rates are still good and expected to rise over the year so I see this as a push for buyers. What we need is inventory and I have a sneaking suspicion that it's coming. My carpet cleaners and other vendors are getting booked up - love these signs!

For information specific to your neighborhood, email me.

Tracy

A Year in Review and 2011: A Real Estate Forecast

Tax credit. Historically low mortgage rates. Increased affordability of homes. Thosw were the factors that defined the housing market in 2010. But all of that leaves us wondering, what is next for real estate. Is the worst behind us? Are we finally on the road to recoery? Will sales bounce back? Will the luxury market recover sooner or late than the rest of the market? Our REALITY CHECK NEWSLETTER writer recently sat down with Coldwell Banker President Rick Turley to answer these questions and more as they discussed the 2010 housing market and what we expect in 2011. Click here to read this newsletter...10DecArticle

New Law Regarding Carbon Monoxide Detectors

CA Senate Bill 183 became effective January 1, 2011. It requires the installation of Carbon Monoxide detectors in rental units and dwellings that are being transferred (sold) as of Jan 1st. It will also require all homes to have CO detectors by January 1, 2013.

For home sellers and buyers, there is a new disclosure item that covers the installation of CO detectors and home inspectors will be checking for them and commenting whether they are there or not, just like they test and cover smoke detectors and water heater strapping - the two previous mandated items that homes must be in compliance with at time of sale.

The details of SB 183: Applies to homes being sold AND to rental units. Landlords must install and ensure a CO detector is operable at time of occupancy, tenant myst notify Landlord if it becomes inoperable.

A carbon monoxide detector must be installed in dwellings intended for human occupancy that have a fossil fuel burning appliance, fireplace, or an attached garage.

If you have questions or would like more information email me.

Tracy Pina

Eleanor Roosevelt Inspires

With the new day comes new strength and new thoughts. - Eleanor Roosevelt, Jan 8, 1936, after parts of her husband's New Deal were shut down by the Supreme Court.

NEW HELP FROM FHA FOR UNDERWATER HOMEOWNERS

Great Information from...

Strombotne Law Firm
Real Estate Legal Update

NEW HELP FROM FHA FOR UNDERWATER HOMEOWNERS
March 2010

On March 26, 2010, the Obama Administration announced adjustments to the Federal Housing Administration (FHA) program that will seek to address one of the major drivers of foreclosure: borrowers who are financially underwater in their home mortgages.

The new FHA Refinancing program will permit lenders to provide additional refinancing options to homeowners who owe more than their home is worth because of large declines in home prices in their local markets. These adjustments will provide more opportunities for qualifying mortgage loans to be restructured and/or refinanced, and should be available by the fall of 2010.

FHA Refinance Option for Underwater Homeowners

· Participating lenders must write-down the principle balance due on the loan by a minimum of 10% of the unpaid balance of the original loan.

· The interest rate on the new loan must be reduced to the current low FHA interest rate

· Total monthly mortgage payment, including for second mortgage, must not be greater than 31% of income, and total debt service including all forms of household debt must not be greater than 50% except for some borrowers with especially strong credit histories.

· The new FHA loan must be equal to no more than 97.75% of the value of the home

· If there is an existing mortgage that is not extinguished, holders must agree to re-subordinate and write off any amount over 115% of the current value of the home

· Standard FHA mortgage insurance premium structure will apply

· As with any loan forgiveness, the short refinancing should be reflected on borrowers’ credit score

Existing lenders/investors holding the first lien must agree to the principal write-down requirement. Thus, not all homeowners who meet above criteria will receive an FHA refinanced loan.

Homeowner Eligibility

· Homeowners must be current on their existing mortgage payment
· Homeowner must occupy the home as their primary residence and fully document their income
· Homeowners must qualify under standard FHA underwriting guidelines
· Homeowners must have a FICO credit score of at least 500
· This program is available to homeowners with mortgages that are not currently insured by the FHA.

Lender Incentives

Up to $14 billion in TARP funds will be made available for incentives to support write-downs of second liens and encourage participation by servicers as well as the provision of coverage for some share of potential losses on loans. TARP funds will be used to provide coverage for a share of losses on loans up to a specified amount. The FHA will provide remaining loss coverage up to the maximum insurance coverage. Thus, the new lender will have a loan that is backed by the United States for up to 97.75% of the home value, as with other FHA refinance loans.

Want more info? Contact me and I'll put you in touch with Strombotne Law Firm.

Tracy Pina

FHA Loan Guidelines and Highlights

The Basics

$729,750 Loan Amounts in Santa Clara County
Only 3.5% down, which can be gift money
Up to 6% seller concessions
620 Minimum credit score
No reserve requirements
Non Occupant Co-Borrowers are accepted to help qualify
Rate Buy Down available

FHA Changes for 2010

No longer require a 90 day seasoning for “flipped” properties

Loan officers can no longer order the appraisal directly; it is now similar to how appraisals have to be ordered on Conventional loans.


Here are some of the proposed changes for the future…

Minimum Down Payment being raised to 5%
Insurance Premium may be raised to 3% of the loan from the current 1.75%
Annual Premium Insurance, now 0.55 could be rising
Lowering maximum seller concessions allowed

Questions? email me.

Tracy Pina

What I'm Seeing in the Market Right Now

Multiple offers and multiple interest in many price ranges - anything under $1MM is moving. Even just over, up to $1.3MM for the right property. Inventory is low on the Peninsula. Palo Alto, Los Altos, and Cupertino homes are selling well over ask, several are selling with zero contingencies (crazy but yes, it's like a few years back). If you are contemplating selling now is the time. Overall inventory is low and buyers are ready and qualified.

Here's a goodie I saw today, it'll go fast though so if you like it get busy. It's listed for $1,049,000 - 3/2 very charming in Los Gatos Schools.

Virtual Tour: www.tourfactory.com/440781 Listed by Jennifer & Kris, Alain Pinel Realtors

Questions or interest? email me.

Tracy Pina