Sunday, April 26, 2009
San Clemente Real Estate
The San Clemente market is starting to see a large number of homes come on the market as typically happens this time of year. I just noticed that there are 19 homes for sale in the Sea Pointe Estates area of San Clemente which is a very high number of homes for sale in San Clemente. Interest rates are still low and there is a general feeling that we have hit the bottom of this market so things are optimistic for the remainder of the year. As a San Clemente Realtor, I can answer any questions regarding the San Clemente Real Estate marketplace.
Wednesday, April 8, 2009
Obama's New Plan: Making Home Affordable Refinance
Do you Qualify for a "Making Home Affordable" Refinance? On March 4, 2009, guidelines were released under President Barack Obama's Making Home Affordable initiative, which is designed to help up to 9 million homeowners stay in their homes through refinanced mortgages or loan modifications.
To qualify, you must:
1) Owe between 80-105% of your mortgage.
2) Have a loan backed by Fannie Mae or Freddie Mac. Approximately 60% of single-family loans are backed by Fannie or Freddie, but a homeowner may not know this about their own loan. If you don't know, call Fannie at 1-800-7FANNIE and Freddie at 1-800-FREDDIE or submit online forms with Fannie and Freddie.
3) Have a conforming loan. That means a loan under $417,000 in many areas or up to $625,500 in high-cost areas like San Francisco, Boston or Washington, DC. Even still, the Zillow Home Value Index (median home value) for the city of San Francisco is $724,244, which says that lots of people have loans higher than the conforming limit. (Note: the conforming loan limit for certain high-cost areas of the U.S. for 2009 mortgage originations is now $729,500.)
Take this financialstability.gov Q&A to see if you qualify. If you don't think you qualify for a refinance, you might qualify for a loan modification under the plan.
Refinance Loan Overview
If You have an Adjustable Rate Mortgage (ARM) which was doing fine enough that you bragged about it but your loan is going to reset to a higher interest rate amidst market uncertainty and everyone is buzzing about it. Lying awake at night is interfering with your job, so you figure you'd better say goodbye to that low but fluctuating interest rate, and get a nice secure fixed-rate loan before the swing hits the sky.
This is a common scenario these days as interest rates inch up and many homeowners who opted for ARMs in the past 10 years are hoping to switch to a traditional loan.
Switching types of mortgages, as described above, is one reason people refinance, which is simply replacing a current mortgage with another. But there are others.
Reasons to Refinance Lower your interest, but keep your term: When rates drop you want to take advantage of it and lower your monthly payments, but keep the length of your mortgage.
Take care of that balloon payment: You opted for a short-term ARM with a balloon payment and the due date is looming, so you have to come up with a longer-term loan.
Shorten your term: Lower interest rates (or an increase in your income) mean you can pay down your principal faster.
Credit rating change: Take advantage of an improved credit rating and get out from under that high rate you had to accept when you bought.
You need cash: In some cases, you can refinance for an amount more than what you still owe on your home. Lenders limit the Loan to Value at no higher than 70 percent for this type of loan.
To qualify, you must:
1) Owe between 80-105% of your mortgage.
2) Have a loan backed by Fannie Mae or Freddie Mac. Approximately 60% of single-family loans are backed by Fannie or Freddie, but a homeowner may not know this about their own loan. If you don't know, call Fannie at 1-800-7FANNIE and Freddie at 1-800-FREDDIE or submit online forms with Fannie and Freddie.
3) Have a conforming loan. That means a loan under $417,000 in many areas or up to $625,500 in high-cost areas like San Francisco, Boston or Washington, DC. Even still, the Zillow Home Value Index (median home value) for the city of San Francisco is $724,244, which says that lots of people have loans higher than the conforming limit. (Note: the conforming loan limit for certain high-cost areas of the U.S. for 2009 mortgage originations is now $729,500.)
Take this financialstability.gov Q&A to see if you qualify. If you don't think you qualify for a refinance, you might qualify for a loan modification under the plan.
Refinance Loan Overview
If You have an Adjustable Rate Mortgage (ARM) which was doing fine enough that you bragged about it but your loan is going to reset to a higher interest rate amidst market uncertainty and everyone is buzzing about it. Lying awake at night is interfering with your job, so you figure you'd better say goodbye to that low but fluctuating interest rate, and get a nice secure fixed-rate loan before the swing hits the sky.
This is a common scenario these days as interest rates inch up and many homeowners who opted for ARMs in the past 10 years are hoping to switch to a traditional loan.
Switching types of mortgages, as described above, is one reason people refinance, which is simply replacing a current mortgage with another. But there are others.
Reasons to Refinance Lower your interest, but keep your term: When rates drop you want to take advantage of it and lower your monthly payments, but keep the length of your mortgage.
Take care of that balloon payment: You opted for a short-term ARM with a balloon payment and the due date is looming, so you have to come up with a longer-term loan.
Shorten your term: Lower interest rates (or an increase in your income) mean you can pay down your principal faster.
Credit rating change: Take advantage of an improved credit rating and get out from under that high rate you had to accept when you bought.
You need cash: In some cases, you can refinance for an amount more than what you still owe on your home. Lenders limit the Loan to Value at no higher than 70 percent for this type of loan.
Friday, April 3, 2009
First Time Buyer Mortgage Protection Program
On Thursday, April 2, 2009 the Housing Affordability Fund has launched a new program designed to provide peace of mind to first-time buyers who are hesitant to enter the housing market due to concerns about potential job loss, and subsequently being unable to meet their monthly mortgage obligations.
To qualify for the Mortgage Protection Program, Applicants must:
· Be a first-time home buyer – someone who has not owned a home in the last three years.
· Open escrow April 2, 2009, or later, and close on or before Dec. 31, 2009
· Use a California REALTOR® in the transaction
· Purchase the property in California
· Be a W-2 employee (cannot be self-employed)
What is the Mortgage Protection Program?
The Mortgage Protection Program provides a combination of involuntary unemployment,
accidental disability and accidental death protection for qualified first-time home buyers.
The program is being offered by the California Association of REALTORS® Housing
Affordability Fund (“CARHAF”), to help build confidence in the purchase of a home and
to reduce the fear of foreclosure in the event of a job loss or accidental death or
disability. CARHAF has committed $1 million to provide this program to qualified home
buyers.
What are the benefits?
Through the program, first-time home buyers who lose their jobs or become accidentally
disabled may be eligible to receive up to $1,500 per month for up to six months to help
make their mortgage payments. A qualified co-buyer can also participate in this program,
for a reduced monthly benefit of up to $750 per month for up to six months in the event
of a job loss or disability. In addition, the program offers a one-time $10,000 accidental
death benefit.
How much does it cost?
It costs the home buyer absolutely nothing! If the home buyer is granted an insurance
policy, the insurance premium is prepaid for one year by CARHAF.
Who qualifies for this program?
An applicant must:
• Be a first-time home buyer who hasn’t owned a home in the last three years;
• Open and close escrow between 4/2/2009 and 12/31/2009;
• Purchase a primary residence in California;
• Be represented by a California REALTOR®; and
• Be a W-2 employee (i.e. not self-employed) but can not be a sole proprietor,
partner or controlling stockholder in the business in which you are employed, or a
dependent of a sole proprietor, partner or a controlling stockholder in the
business in which you are employed.
There are no income or home price caps under this program.
Are there any exclusions under the policy?
Yes. You cannot be self-employed, an independent contractor, a business owner, a
temporary or seasonal worker, an educational employee on a scheduled break, or work
for your immediate family. There are other exclusions such as voluntarily choosing to
become unemployed, expiration of employment contracts, willful misconduct, criminal
misconduct, death, disability, family leave, childbirth, pregnancy and war. See the
insurance policy for specific definitions of these exclusions.
How do home buyers apply?
Home buyers must apply through a California REALTOR®. The REALTOR® will submit
the completed application to CARHAF on the home buyer’s behalf. The application can
be downloaded at http://www.carhaf.org/.
When does the home buyer get the insurance contract?
An e-mail confirming coverage under the insurance policy will be sent to the insured and
a special web address and password will be included to use in order to access and
review the insurance policy within thirty (30) days after eligibility has been verified.
Must the monthly benefit amount be used to pay for the mortgage payment?
Yes. Under the CARHAF Mortgage Protection Program, a home buyer agrees to use the
insurance proceeds first to pay the mortgage, and the remainder however he/she sees
fit.
Are the benefit payments taxable?
It is possible that unemployment benefits may be taxable. Home buyers should consult
their tax advisor about any benefits received and determine what tax rules apply. The
plan pays regardless of any other coverage a home buyer may already have.
For general customer service questions, who do I contact?
Call Monica Rodriguez at (213) 739-8380, or email Ms. Rodriguez at monicar@car.org.
Be sure to mention that you are a CARHAF Mortgage Protection Program customer.
When can the home buyer receive program benefits?
The insurance policy requires a “vesting” period of six months before becoming eligible
to apply for benefits and a one month “elimination” period before payments begin. More
information about the policy can be found at www.carhaf.org or by calling Della Romero
at RealCare at 800-939-8088 or emailing her at dromano@realcare.biz.
How long will this program last?
Applications will be reviewed and insurance policies will be awarded on a first come, first
served basis until the program funds are depleted or until CARHAF discontinues the
program, whichever occurs first.
Questions about the Insurance Benefits
What is meant by Involuntary Unemployment?
Under this plan, Involuntary Unemployment is defined as totally and continuously losing
full-time employment as a result of:
(1) a permanent involuntary termination of employment; or
(2) an involuntary layoff or suspension of employment; or
(3) an authorized, unionized strike or labor dispute by a chartered or previously
organized trade or labor union; or
(4) a lockout, discharge of employees or temporary closing of business in response to
organized employee activity; or
(5) a state or federally declared disaster caused by a geological or weather-related
natural event.
Involuntary Unemployment does NOT include quitting, resigning, retiring, expiration of
an employment contract, being fired for cause, or being on leave due to accident,
sickness, disability, family obligations, childbirth, pregnancy, or due to scheduled
seasonal or temporary breaks.
What are the waiting periods?
Initial Vesting Period and Actively at Work Requirements. Before involuntary
unemployment insurance can be utilized, there is an initial Vesting Period of six (6)
months and a four (4) month "actively at work" requirement. These periods can run
concurrently, so you must be enrolled for at least six (6) months and also be working for
at least 4 consecutive months immediately prior to the date your involuntary
unemployment begins before you can have an unemployment event qualify for a claim.
If you become unemployed anytime before the initial vesting period is over, you will not
be eligible to file a claim, and you will have to return to work for at least 4 consecutive
months before eligibility begins. The unemployment claims procedure requires
documentation of registration with your state's unemployment office which will verify the
date of your unemployment.
Elimination Period. Once the vesting period and "actively at work" requirement has
been met, there is also a 30-day "Elimination Period" before cash benefits are paid. The
first 30 days of involuntary unemployment are not covered.
How long do I get involuntary unemployment cash benefits?
There is a six (6) month "Maximum Benefit Period" per unemployment occurrence. You
will be paid 1/30th of the monthly benefit amount for every day you are unemployed
(beyond the vesting and elimination period) up to a maximum of 6 months. You will be
paid in arrears, not in advance.
If you go back to work after having a claim paid, you have to return to work for at least
four (4) months consecutively, to "requalify" for benefits. But this will only apply if you
renew the coverage beyond the first year.
How do I file an unemployment claim with the insurance company?
Contact 1-800-888-2738 for a claims package. Please mention that you are a CARHAF
Mortgage Protection Program customer when doing so to ensure that your call is
forwarded to the appropriate personnel. You will need to complete the claims package
and submit it according to its instructions. You must register with your state's
unemployment division. The claims administrator will verify your coverage and start the
claims payment process. If the waiting periods are over and your claim is otherwise
valid, you will be paid a benefit equal to 1/30th of the monthly benefit amount for every
day beyond 30 days that you are out of work due to unemployment for up to six (6)
months. The insurance company does not pay claims benefits in advance.
If I get sick and am out of work do I qualify for Accidental Disability?
No, it only pays if you miss work due to an accident.
Is there a vesting period for the Accidental Disability?
There is no initial vesting period for this coverage but it does contain a 4 month "Actively
at Work" requirement among other conditions, exclusions and limitations.
Can I upgrade my benefits or renew the coverage at the end of the one year
program?
Prior to the end of the first year, you may be given the voluntary option to renew at a
"contributory" rate, which may include the same benefit package or an enhanced
package. Renewal of the product is subject to insurance company and/or CARHAF
Mortgage Protection Program availability. Methods for payment and other terms and
conditions will be provided along with the renewal offer.
The descriptions above are intended to serve as a summary and are not part of the
insurance contracts. You should consult your own insurance policy or certificate for the
specific terms which apply to you.
To qualify for the Mortgage Protection Program, Applicants must:
· Be a first-time home buyer – someone who has not owned a home in the last three years.
· Open escrow April 2, 2009, or later, and close on or before Dec. 31, 2009
· Use a California REALTOR® in the transaction
· Purchase the property in California
· Be a W-2 employee (cannot be self-employed)
What is the Mortgage Protection Program?
The Mortgage Protection Program provides a combination of involuntary unemployment,
accidental disability and accidental death protection for qualified first-time home buyers.
The program is being offered by the California Association of REALTORS® Housing
Affordability Fund (“CARHAF”), to help build confidence in the purchase of a home and
to reduce the fear of foreclosure in the event of a job loss or accidental death or
disability. CARHAF has committed $1 million to provide this program to qualified home
buyers.
What are the benefits?
Through the program, first-time home buyers who lose their jobs or become accidentally
disabled may be eligible to receive up to $1,500 per month for up to six months to help
make their mortgage payments. A qualified co-buyer can also participate in this program,
for a reduced monthly benefit of up to $750 per month for up to six months in the event
of a job loss or disability. In addition, the program offers a one-time $10,000 accidental
death benefit.
How much does it cost?
It costs the home buyer absolutely nothing! If the home buyer is granted an insurance
policy, the insurance premium is prepaid for one year by CARHAF.
Who qualifies for this program?
An applicant must:
• Be a first-time home buyer who hasn’t owned a home in the last three years;
• Open and close escrow between 4/2/2009 and 12/31/2009;
• Purchase a primary residence in California;
• Be represented by a California REALTOR®; and
• Be a W-2 employee (i.e. not self-employed) but can not be a sole proprietor,
partner or controlling stockholder in the business in which you are employed, or a
dependent of a sole proprietor, partner or a controlling stockholder in the
business in which you are employed.
There are no income or home price caps under this program.
Are there any exclusions under the policy?
Yes. You cannot be self-employed, an independent contractor, a business owner, a
temporary or seasonal worker, an educational employee on a scheduled break, or work
for your immediate family. There are other exclusions such as voluntarily choosing to
become unemployed, expiration of employment contracts, willful misconduct, criminal
misconduct, death, disability, family leave, childbirth, pregnancy and war. See the
insurance policy for specific definitions of these exclusions.
How do home buyers apply?
Home buyers must apply through a California REALTOR®. The REALTOR® will submit
the completed application to CARHAF on the home buyer’s behalf. The application can
be downloaded at http://www.carhaf.org/.
When does the home buyer get the insurance contract?
An e-mail confirming coverage under the insurance policy will be sent to the insured and
a special web address and password will be included to use in order to access and
review the insurance policy within thirty (30) days after eligibility has been verified.
Must the monthly benefit amount be used to pay for the mortgage payment?
Yes. Under the CARHAF Mortgage Protection Program, a home buyer agrees to use the
insurance proceeds first to pay the mortgage, and the remainder however he/she sees
fit.
Are the benefit payments taxable?
It is possible that unemployment benefits may be taxable. Home buyers should consult
their tax advisor about any benefits received and determine what tax rules apply. The
plan pays regardless of any other coverage a home buyer may already have.
For general customer service questions, who do I contact?
Call Monica Rodriguez at (213) 739-8380, or email Ms. Rodriguez at monicar@car.org.
Be sure to mention that you are a CARHAF Mortgage Protection Program customer.
When can the home buyer receive program benefits?
The insurance policy requires a “vesting” period of six months before becoming eligible
to apply for benefits and a one month “elimination” period before payments begin. More
information about the policy can be found at www.carhaf.org or by calling Della Romero
at RealCare at 800-939-8088 or emailing her at dromano@realcare.biz.
How long will this program last?
Applications will be reviewed and insurance policies will be awarded on a first come, first
served basis until the program funds are depleted or until CARHAF discontinues the
program, whichever occurs first.
Questions about the Insurance Benefits
What is meant by Involuntary Unemployment?
Under this plan, Involuntary Unemployment is defined as totally and continuously losing
full-time employment as a result of:
(1) a permanent involuntary termination of employment; or
(2) an involuntary layoff or suspension of employment; or
(3) an authorized, unionized strike or labor dispute by a chartered or previously
organized trade or labor union; or
(4) a lockout, discharge of employees or temporary closing of business in response to
organized employee activity; or
(5) a state or federally declared disaster caused by a geological or weather-related
natural event.
Involuntary Unemployment does NOT include quitting, resigning, retiring, expiration of
an employment contract, being fired for cause, or being on leave due to accident,
sickness, disability, family obligations, childbirth, pregnancy, or due to scheduled
seasonal or temporary breaks.
What are the waiting periods?
Initial Vesting Period and Actively at Work Requirements. Before involuntary
unemployment insurance can be utilized, there is an initial Vesting Period of six (6)
months and a four (4) month "actively at work" requirement. These periods can run
concurrently, so you must be enrolled for at least six (6) months and also be working for
at least 4 consecutive months immediately prior to the date your involuntary
unemployment begins before you can have an unemployment event qualify for a claim.
If you become unemployed anytime before the initial vesting period is over, you will not
be eligible to file a claim, and you will have to return to work for at least 4 consecutive
months before eligibility begins. The unemployment claims procedure requires
documentation of registration with your state's unemployment office which will verify the
date of your unemployment.
Elimination Period. Once the vesting period and "actively at work" requirement has
been met, there is also a 30-day "Elimination Period" before cash benefits are paid. The
first 30 days of involuntary unemployment are not covered.
How long do I get involuntary unemployment cash benefits?
There is a six (6) month "Maximum Benefit Period" per unemployment occurrence. You
will be paid 1/30th of the monthly benefit amount for every day you are unemployed
(beyond the vesting and elimination period) up to a maximum of 6 months. You will be
paid in arrears, not in advance.
If you go back to work after having a claim paid, you have to return to work for at least
four (4) months consecutively, to "requalify" for benefits. But this will only apply if you
renew the coverage beyond the first year.
How do I file an unemployment claim with the insurance company?
Contact 1-800-888-2738 for a claims package. Please mention that you are a CARHAF
Mortgage Protection Program customer when doing so to ensure that your call is
forwarded to the appropriate personnel. You will need to complete the claims package
and submit it according to its instructions. You must register with your state's
unemployment division. The claims administrator will verify your coverage and start the
claims payment process. If the waiting periods are over and your claim is otherwise
valid, you will be paid a benefit equal to 1/30th of the monthly benefit amount for every
day beyond 30 days that you are out of work due to unemployment for up to six (6)
months. The insurance company does not pay claims benefits in advance.
If I get sick and am out of work do I qualify for Accidental Disability?
No, it only pays if you miss work due to an accident.
Is there a vesting period for the Accidental Disability?
There is no initial vesting period for this coverage but it does contain a 4 month "Actively
at Work" requirement among other conditions, exclusions and limitations.
Can I upgrade my benefits or renew the coverage at the end of the one year
program?
Prior to the end of the first year, you may be given the voluntary option to renew at a
"contributory" rate, which may include the same benefit package or an enhanced
package. Renewal of the product is subject to insurance company and/or CARHAF
Mortgage Protection Program availability. Methods for payment and other terms and
conditions will be provided along with the renewal offer.
The descriptions above are intended to serve as a summary and are not part of the
insurance contracts. You should consult your own insurance policy or certificate for the
specific terms which apply to you.
Wednesday, April 1, 2009
Jumbo Loans Are Back
Syndicated real estate columnist Kenneth R. Harney reported in a recent column that jumbo mortgage money is flowing back into the home loan market. This is great news for agents and their qualified luxury home prospects.Jumbo loans are generally mortgages exceeding Fannie Mae and Freddie Mac's statutory high-cost market purchase limit. At the beginning of this year, the ceiling was $625,500, compared to $417,000 a year earlier. Congress has raised the upper limit in high-cost areas for Fannie, Freddie and the FHA to $729,750, a figure extended by Congress through the end of 2009.
According to Harney, new money is starting to flow into mortgage loans which are too large to be purchased or backed by Fannie Mae, Freddie Mac or the Federal Housing Administration. Major banks are starting to fund programs offering "jumbo loans between roughly $730,000 and $1.5 million, with fixed 30-year rates starting in the upper five percent range," said Harney.
Tim Kruger, a Westlake Village (CA) based Private Mortgage Banking officer for Wells Fargo, told a recent Institute training class in Beverly Hills that Wells Fargo is once again offering jumbo loans. Bank of America reports they will offer jumbo loans through their retail network and also through their Countrywide Home Loans subsidiary. Amsterdam-based ING Group has also begun offering jumbos. Rather than spinning these loans off to Wall Street, the lenders are expected to hold them in their own portfolios. Expect stringent qualifying requirements and minimum required down payments from 20% to 30%
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