Shopping for low mortgage rates is a game of luck.  Some days, mortgage rates are favorable.  Other days, they're not.  And while you can sometimes make an educated guess about where rates might be headed, you're not always going to guess right. Even the experts get it wrong more often than they'd like. But some parts of the rate shopping process can be predicted and one of them is the future of mortgage guidelines.  In general, the more often homeowners default on their respective mortgages, the harder it is for future mortgage applicants to be approved. This is why "now" may be the best time to apply for a FHA mortgage.  Defaults are climbing, suggesting that FHA underwriting guidelines are about to tighten. Indeed, the FHA has implemented two major changes since last summer: The mini... 04/14/2009

In 2003, the Department of Homeland Security launched Ready.gov, a government website aimed at family, business and community disaster readiness. Now, when the Ready.gov website talks about disaster readiness, it's referring to more than just physical attacks on the county -- it's talking about natural disasters, too.  This includes hurricanes, tornados, earthquakes and floods and these weather-related events impact the different parts of country each year. The Ready.gov website is loaded with tips, notes and checklists, including the 3-minute "It Takes Just Three Steps To Get Ready For An Emergency" video featured above.  If you've never watched it, take the time to watch it today.  Then, test your home's disaster readiness, take this 10-question quiz.  There's no "passing grade", per... 04/13/2009

A lender friend sent me an article that I just had to share.  It was written by Damien Caves, for the New York Times.  Here's a link:   https://tinyurl.com/falling-prices And here's the print version: "While her friends ran up credit card debt and bought show homes beyond their means, Taina Goldman saved for a down payment. She moved back in with her parents, sharing a room with her young daughter, ate in and worked two jobs. "I don't live dangerously," said Ms. Goldman, 42, a nurse. "You can't live on ‘what if.' Now, she is reaping the rewards. She and her daughter recently moved into a three-bedroom, two-bathroom ranch-style house, with a pool, after putting 20 percent down and persuading the seller to cover most of her closing costs. She paid $187,000 for a house that sold in July 20... 04/10/2009

When conforming mortgages adjust, they're often tied to an interest rate index called LIBOR. LIBOR is an acronym for London Interbank Offered Rate. But what LIBOR stands for isn't as important as the role it plays. LIBOR is an interest rate at which banks borrow money from each other.  Therefore, when banks feel the banking system as a whole is unsafe, LIBOR rises to compensate.  It's why LIBOR spiked last October after Lehman Brothers failed.  Financial institutions wondered what other institutions would fail and that added risk to the system. Since October, however, and because of massive government interventions worldwide, LIBOR has been on a steady retreat.  Moreover, with close to $30 billion in conforming mortgages scheduled to adjust by Labor Day, the timing couldn't be better fo... 04/09/2009

There are 138 million taxpayers in the United States and, according to the IRS, 20 percent of them file their taxes within 7 days of April 15.  In a holiday-shortened week, that means that 27 million people had better get a move on. And while a portion of this year's last-minute filers will file with storefront operations like Liberty Tax Service or H&R Block, many others will self-prepare with the help of tax software from TurboTax or TaxCut. If you're a member of the do-it-yourself crowd, consider taking a review of this year's tax law changes before starting your returns.  The stimulus package signed into law this past February made a profound impact on tax liability and the list of changes may be helpful for you. A few of the new, allowable income tax deductions for 2008 include: M... 04/08/2009

April 4, 2009, marked the official start of the Making Home Affordable refinance program. Expected to help 5 million homeowners, the Making Home Affordable program "looks the other way" with respect to falling home values, approving mortgage applications based on borrower payment history and benefit to the homeowner. Not every homeowner is eligible for a Making Home Affordable refinance, however.  There are 3 basic criteria that must be met. First, your existing home loan must be backed by either Fannie Mae or Freddie Mac.  Thankfully, both companies provide online lookup services.  Start with the Fannie Mae site because Fannie has a greater market share and because Freddie Mac's site requires your social security number. Next, you must have a perfect mortgage payment history over the l... 04/07/2009

Well, there are a couple of big deadlines coming up in the month of April.  We all know about the 15th, for income tax purposes - unless you stall for a few months.  But, did you know that Orange County homeowners have a deadline of the 30th of April in order to try for a re-assessment of their property taxes?  Here is a recent development with our County's Assessor's office.  You no longer have to provide 3 comparable properties along with your request for a review of your property tax assessment.  Here is a link to an article from this morning's Orange County Register: ( Which includes a link to the form needed, and a link to the Assessor's website.) Assessor says no comps needed for property tax reviews While this is good news, it is my opinion that providing comps along with your re... 04/05/2009

Thursday morning, homeowners in different parts of the country awoke to find similar-sounding newspaper headlines: Rates on 30-year mortgages sink to 4.78%, a new low (LA Times) Mortgage rates at record low for 2nd week (Miami Herald) Mortgages hit another record low (San Francisco) The underlying story was that Freddie Mac's weekly Primary Mortgage Market Survey showed the lowest, average 30-year fixed rate mortgage in its 38-year, rate-tracking history. Once again, however, the headlines came too late for homeowners. Prior to Thursday's market open, mortgage markets had already worsened from their record-setting levels.  Slowly at first, and then with momentum.  The shift pressured rates higher so that when lenders issued their Thursday morning rate sheets, most showed an 1/8 increase... 04/03/2009

The number of homes under contract to sell is rising, another signal that the housing market may be regaining its footing. As reported by an industry trade group, the Pending Home Sales Index gained 2 percent in February.  The report measures MLS-listed homes in "pending" status -- sold but not yet closed. Pending Home Sales is not a perfect statistic, though, by any means.  For one, the Pending Home Sales Index doesn't account for non-MLS listed homes including For Sale By Owner properties and mass foreclosure auctions.  In certain markets nationwide, these two categories represent a large percentage of the overall transaction volume. Secondly, Pending Home Sales samples just 20 percent of all MLS-based transactions -- hardly a complete listing. But most importantly, a "pending" home s... 04/02/2009

A report published Tuesday showed that home values fell nearly 3 percent in January 2009 versus the month prior and by 19 percent from last year. On the surface, data from the study looks like more bad news for housing.  With deeper inspection, though, we uncover reasons to discount the report's finding. For one, the report includes home price data from just 20 cities around the country -- and they're not the 20 most populated cities, either.  For example, data from #4-ranked Houston is not included and neither is #7 San Antonio nor #10 San Jose. #54 Tampa, however, is included. Secondly, the report is two months lagging.  Published March 31, its data is only accurate as of January and a lot has happened in the last 2 months. This includes a record-drop in interest rates and the introdu... 04/01/2009

With mortgage rates are hovering near all-time lows, lots of Americans are taking advantage of refinance and home buying opportunities.  The downside of today's unexpectedly-low rates, though, is that mortgage lenders are ill-equipped for the rush of new business.  As a result, the process of underwriting and approving new mortgage applications is taking some conforming lenders as long as 2 months to complete.  This is double the time needed as recently as six months ago. Because there may be 60 days between the application date and the closing date, it's important for applicants to remember that mortgage approvals can be revoked at any time prior to funding.  As mortgage applicants, there are many events that are out of our control -- job security and health matters, for example.  But ... 03/31/2009

Hello again, I was just looking at the listing inventory of available houses for some potential buyer clients of mine, and was struck by the thought in my headline - Whatever happened to the old adage of "Sell high, and buy low"?  That has always been a preferred position to be in, with regard to just about any financial investment, including that of your residence.  For the past couple of years though, that - selling high - has not been a realistic goal for most home sellers.  The adage IS working fine now, for most buyers, especially with the number of distressed properties that have been - and will continue to be - on the market in the past 5, 6 months, and probably for the next year.  The biggest issue that most of my prospective buyers face is, unfortunately, most of them need to b... 03/28/2009

If you're in want of a cash out refinance, the most liberal cash-out program in town is about to make qualification more difficult.  Effective April 1, 2009, the FHA is reducing the maximum loan-to-value on cash-out refinances by 10 percent, dropping the loan size limit from 95% of the home's value to 85%. In its official press release, the FHA days it's making the change to "limit its exposure to undue risk".  It also lists the following cash-out requirements: With less than 12 months since the purchase date, a home's value cannot exceed its original purchase price -- even if home improvements were made. A homeowner must be current on his mortgage payments to qualify A second, verifying appraisal may be necessary, depending on loan traits Co-signers may not be added to the mortgage not... 03/27/2009

The national housing market got its third piece of good news in 3 days: Monday: Existing Home Sales up Tuesday: Home values appear higher nationally Wednesday: New Home Sales up And although national real estate statistics are irrelevant to the local markets in which real estate transactions happen, to a country of would-be and wanna-be home buyers, repeated positive news on housing can be a strong signal that it's time to get off the sidelines. At least, that's what the data is showing us.  According to an industry trade group, first-time home buyers accounted for half of all sales of previously-owned homes.  The stimulus package's $8,000 tax credit likely played a role in this 50 percent figure, as well as sagging home prices in most markets and low mortgage rates nationwide. But lest... 03/26/2009

Don't look now but oil prices are climbing. This should worry today's home buyers and would-be refinancers because some of the same forces that helped to push crude past $50 for the first time in 4 months also cause mortgage rates to rise. March 18, the Federal Reserve committed an additional $1.15 trillion to support the economy.  Since the announcement, investors have questioned whether the Fed is purposefully spurring inflation.  The Fed's total debt purchases now total $1.75 trillion. And to finance its purchases, the Federal Reserve is printing new money, devaluing the U.S. dollar along the way.  This then leads to inflation which, all things equal, causes oil prices to rise, gas prices to rise, and mortgage rates to go with them. As we've seen the last few summers, oil prices and ... 03/25/2009

I've just read the latest Orange County Market Report, by my friend Steven Thomas, the President of Altera Real Estate Services.  Steven has a degree in quantum economics and for the past couple of years his bi-weekly report has been the most comprehensive compilation of real estate activity and data for our area - regularly cited by all the major news media in Southern California, as a source for excellent, up to the minute real estate information.  Here is a link to his latest report:  Orange County Housing Report: 21% Fewer Distressed Homes on the Market  My conclusions upon reading it pretty much validate what I have been seeing first hand, in open house activity, and in conversations with prospective buyers and sellers.  There is a burgeoning realization that real estate interest i... 03/24/2009

Each month, the National Association of REALTORS® releases the Existing Home Sales report.  It's a detailed look at "used" home sale data from all four regions of the country. Among the key findings of each Existing Home Sales report is something called the "median sales price", the statistical price point at which half of the homes in the U.S. sold for more, and half sold for less.  Last month, the median sales price in the United States fell to $165,400, down 15.5 percent from a year ago. Nevertheless, just because the median sales price is lower from last year doesn't mean that the housing market is losing steam. The median sales price is just the middle point of all home sales in all U.S. markets.  By definition, it groups New York City and Danville, Illinois; Los Angeles and Cheyen... 03/24/2009

With the official start of Spring last week comes the official start of Spring Cleaning Season nationwide. In some homes, Spring Cleaning is an annual ritual, tackled within one sweat-filled, rubber-gloved weekend.  In other homes, it's a less serious endeavor.  Either way, it helps to have a game plan. Courtesy of Martha Stewart's website, the Spring Cleaning Organizer is a 9-step checklist covering all of the basics.  Clean shades and windows Sort through wardrobes Clean and rotate mattresses and cushions Most of the checklist items can be retired with household cleansers and vacuums.  A few, however, require heavy-duty appliances that you may not have at-home.  For example, cleaning carpets and rugs is best-handled with a steam cleaner; and, washing windows may be too dangerous, depe... 03/23/2009

For the fifth time in a year, rate shoppers learned an important lesson this week: When mortgage rates plummet unexpectedly, they often recover just as fast. Wednesday, the Federal Reserve's newest $750 billion mortgage market pledge helped to push conforming mortgage rates near their lowest levels since WWII.  24 hours later, however, those rates were expired. After considering the long-term implications of the Federal Reserve -- literally -- printing new money to service the recession, markets grew fearful that the Fed's interventions will eventually lead to inflation.  Inflation, of course, is the enemy of mortgage rates. So, if you're looking for the explanation of why rates rose as suddenly Thursday as they fell the day prior, this is it.  And, in hindsight, rate shoppers might hav... 03/20/2009

The Federal Open Market Committee voted to leave the Fed Funds Rate unchanged today, within the target range of 0.000-0.250 percent.  This doesn't mean the Fed stood pat, however. On plan to resurrect the economy using "all available tools", today, the Fed announced a new, $1.5 trillion round of fiscal support for the treasury and mortgage markets. The stimulus will likely be Thursday morning's headline story. In its press release, the FOMC touched upon a few of the prevailing economic issues, using these points as a legitimizing backdrop for its newest debt load: Job losses and wealth loss are dragging down consumer spending Some U.S. trading partners are falling into recession Businesses are cutting back on investment and inventory Of interest is that the FOMC said today's inflation ... 03/18/2009