Standard & Poors released its Case-Shiller Index Wednesday. The report shows that, on a seasonally-adjusted basis, between December and January, home prices rose in more than half of the index's tracked markets. The strength of this month's Case-Shiller report, however, should be put in context. For one, the report is on a 2-month delay; it's showing data from January, before the start of the Spring Buying Season and before the rush to beat the tax credit. Anecdotally, buyer interest has been strong since, leading to the types of multiple offer situations that drive home prices northward. In other words, home values may be even higher than what's reflected in the January Case-Shiller data above. Furthermore, the Case-Shiller Index measures home values in just 20 cities nationwide and t... 03/31/2010

Starting Monday, April 5, 2010, getting an FHA mortgage will be more expensive for borrowers. In new guidelines set forth earlier this year, the FHA announced plans to raise additional revenue and reduce the overall risk of its mortgage portfolio.  The changes include the following: Increase Upfront Mortgage Insurance Premiums from 1.75% to 2.25% for everyone A plan to reduce seller concessions from 6 percent to 3 percent An increase in minimum downpayment for FICOs 580 or lower For your own loan, to avoid being subject to higher loan costs, make sure to have your FHA Case Number assigned prior to Monday, April 5, 2010.  That means you'll want to give a full mortgage application before the weekend so your lender can register your loan in time for the deadline. But don't leave your appl... 03/30/2010

Short Sales are Rapidly Becoming Both Easier and Faster NEW YORK (CNNMoney.com) -- Short sales are the hottest thing going in the distressed-property market, and the trend is expected to get even hotter in coming weeks, when the government starts handing out cash to encourage lenders to close these deals. "Banks have ramped up short sale approvals," said Duane Legate of House Buyer Network, which connects short sellers with buyers. "They're hiring a lot of the people who once worked in the mortgage-lending industry and moved them over to short sales." These transactions, where lenders allow homeowners to sell their houses for less than they owe, accounted for 17% of all residential real estate sales in February, up from nearly 13% in November, according to a monthly real estate market s... 03/29/2010

Mortgage markets tanked last week, raising rates to their highest levels in a month.  Most of the losses occurred Wednesday in what was the worst 1-day mortgage market performance in more than 6 months. Even Friday's rally could barely dent the losses. Most of the movement was tied to geopolitical concerns and worries of a ballooning federal debt load.  The best time to lock a conventional or FHA mortgage rate last week was Tuesday morning. This week, markets should remain volatile. There's a large set of economic data due for release, plus trading volume will thin as the week goes on because markets are closed Friday for Good Friday. Coincidentally, Friday is also the day that the March jobs report is released. The non-farm payroll report is expected to show net job growth of 187,000 i... 03/29/2010

Economists at IHS Global Insight and PNC Financial conclude that Orange County homes were priced 5.6% too low in 2009’s fourth quarter. Comparing local house-sale prices to historical real estate and economic trends, IHS-PNC estimates that Orange County homes were undervalued for the 7th consecutive quarter after being overvalued for the previous 20 quarters. The latest 5.6% undervaluation — on par with the likes of Louisville, Ky.; Jefferson City, Mo.; Fairbanks and Abeline, Texas — was a roughly equal to the previous 5.5% in Q3. The current wave of Orange County undervaluation peaked at 11.4% in Q4 of 2008. Also  in the IHS report … For historical memory sake, Orange County overvaluation peaked at 33% in 2006’s Q2.Atlantic City, N.J., was the most overvalued nationally (33% too high)... 03/27/2010

The Administration's Making Home Affordable Program has put a couple of great tools on their website that can help answer your questions about a possible Loan Modification. ( Part of HAMP - the Home Affordable Modification Program.)There is an Evaluator Tool and a Questionnaire. If you can no longer afford to make your monthly loan payments, you may qualify for a loan modification to make your monthly mortgage payment more affordable. Millions of borrowers who are current, but having difficulty making their payments and borrowers who have already missed one or more payments may be eligible.  To see if you may be Eligible fill out a brief questionnaire.  For the evaluator tool go here.If you are having difficulty - you are not alone - check out some of these resources, for some solutions... 03/27/2010

There is an interesting wrinkle with the new bill just signed by Governor Schwarzenegger, regarding tax credits for California home buyers - state bill AB 183.Here is some language from that bill: "Requires buyers to close escrow between May 1 and Dec. 31 to qualify." ( For an up to $10,000. tax credit.)The interesting part of that is this: The Federal first time homebuyer tax credit of up to $8000. clearly states that "The credit is available for homes purchased after November 6, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, the home purchase qualifies provided it is completed by June 30, 2010." ( From the Government's Making Home Affordable website: http://www.federalhousingtaxcredit.com/glance.php )So, if I read th... 03/27/2010

For the 22 business days ending March 8 – DataQuick’s latest homebuying report — Orange County saw … For the 22 business days ending March 8 Slice Price Yr. ago Sales Yr. ago Houses $500,000 +13.6% 1,559 -4.1% Condos $288,750 +11.5% 812 +15.7% New $523,500 +6.5% 101 +26.3% All O.C. $420,000 +10.5% 2,472 +2.7% $420,000 median selling price that is +10.5% vs. a year ago and -35% below June 2007’s peak of $645,000. The most recent median is 14% above the cyclical low hit in January 2009 at $370,000 — a current bottom that was -43% below the peak. Prices fell on a year-over-year basis from Sept. 2007 through August. (Worst at -31.5% in August 2008.) Single-family homes resell for 32% less than their peak pricing (June ‘07) while condos sell 39% below their peak in March 2006. Builder prices... 03/26/2010

Home values fell again in January, according to the Federal Home Finance Agency's Home Price Index. Values were reported down 0.6 percent, on average. We say "on average" because the Home Price Index is a national report. It doesn't capture the essence of a local market , or even a city market. The most granular that the monthly Home Price Index gets is regional and January's report shows that: Values in the Mountain states rose 2.0% Values in the Pacific states were flat Values in the East North Central states fell 1.8% It's hardly helpful for home buyers entering the market, or home sellers trying to properly price a home.  Furthermore, because the Home Price Index reports on a 2-month delay, its data fails to reflect the current market conditions. Versus January -- the period from w... 03/26/2010

Gov. Schwarzenegger signs new homebuyer tax credit Gov. Arnold Schwarzenegger has signed a new bill providing up to $10,000 in tax credits for both new-home buyers and for first-time buyers of existing homes. An earlier round of state tax credits offered last year, were for new-home purchases only. That program was so popular that homebuyers depleted the full $100 million eight months before the deadline. Under the latest plan, the state doubled the amount of credits to $200 million. Standing before a Fresno housing project, Schwarzenegger said the tax credits will help meet his administration’s goal of creating “jobs, jobs, jobs.” He added: “We are the eighth largest economy in the world. It would be absolutely insane for us to sit back and wait for the economy to come back.” The state... 03/25/2010

The Average Household Will Get $2,800 In Tax Refunds. Will You?   April 15 is Tax Day and the IRS estimates that the average U.S. household will receive a $2,800 tax refund this year.  If you're among the Americans expecting a refund, this 4-minute piece from NBC's The Today Show may be helpful. It's a talk about how to receive a refund and what to do with it. Some of the key points discussed include: Why state-issued tax refunds may be delayed this year How wage-earning people can claim their "Making Work Pay" tax credit of up to $800 How to direct a tax refund to a 529 college savings plan for an even bigger tax refund There's also some sensible pointers on using tax refunds to pay down credit card debt, and to fund retirement plans, among other purposes. If you haven't started your t... 03/25/2010

The California legislature on Monday passed AB 183, providing $200 million for home buyer tax credits. The Governor is expected to sign the bill into law this week. C.A.R. supported this important legislation since its inception.  Part of a package of four bills passed at the request of the Governor, AB 183 is designed to help stimulate the economy and create jobs.  It allocates $100 million for qualified first-time home buyers who purchase existing homes and $100 million for purchasers of new, or previously unoccupied, homes.  The eligible taxpayer who closes escrow on a qualified principal residence between May 1, 2010 and December, 31, 2010, or who closes escrow on a qualified principal residence on and after December 31, 2010 and before August 1, 2011, pursuant to an enforceable con... 03/24/2010

Orange County Market Report – Demand Springs Forward. Here is the latest market report from my friend Steven Thomas, of Altera Real Estate: Orange County is taking “Spring Forward” to a whole new level with an increase in demand for the first time in six weeks. Demand, the number of new pending sales over the prior month, increased by 216 homes over the prior two weeks and now totals 3,270, the highest level thus far in 2010. Demand is 600 pending sales stronger than last year at this time and 1,187 stronger than two years ago. After looking at developing trends, I had been wondering whether or not demand was going to surge or if it would ignore cyclical market fundamentals. It would not have been the first time that this downturn ignored the conventional Southern California housing cyc... 03/24/2010

Today, Bank of America announced that it will introduce “principal forgiveness” which will look to reduce loan balances of qualifying distressed homeowners with adjustable rate mortgages or subprime loans in an effort to make their payments more affordable. While smaller banks have already began taking this position, B of A is one of the first large banks to attempt this highly criticized loan modification option. The Obama administration has been pushing to improve their Home Affordability Modification Program, but rather than push for principal reduction, HAMP was simply extended.  This program has been gaining momentum in the past 4 months. With more homeowners becoming distressed and considering their limited options, banks currently offer a lengthened term or a change in interest r... 03/24/2010

Homeowners defaulting on mortgages today may be surprised to learn years from now that they still owe thousands of dollars—and a collection agency is coming after them to get it. That’s because lenders have been quietly selling second mortgages and home equity lines left unpaid after foreclosures and short sales. The buyers: collection agencies, which in some states have years to make a claim. If they win court judgments, these collectors could have years to pursue borrowers with repayment plans, and even garnish their wages, said Scott CoBen, a Sacramento bankruptcy attorney. “The only relief a consumer will have is entering into a debt negotiating plan or filing for bankruptcy,” said Sylvia Alayon, a vice president with the New York-based Consumer Mortgage Audit Center. The firm provi... 03/23/2010

CNNMoney.com recently published its 2010 forecast and projections for home prices in the country's largest metro markets.  Listed as "Top 25" and also comprehensively by state, CNNMoney.com's home price forecasts puts Santa Rosa, California at the top of 2010's home appreciation list and Hanford, California at its bottom. The 10 cities projected for highest home appreciation in 2010 are: Santa Rosa, CA : +6.0% Cheyenne, WY : +4.7% Kennewick, WA : +4.6% Merced, CA : +4.4% Bremerton, WA : +4.2% Fairbanks, AK : +4.2% Corvallis, OR : +4.1% Tacoma, WA : +3.9% Anchorage, AK : +3.8% Bend, OR : +3.3% The Pacific Northwest is the region most heavily-represented among price gainers. The Southeast and Middle Atlantic are most represented on the under-perform list. However, just because a city's ho... 03/23/2010

Mortgage markets closed unchanged last week, but that's not say mortgage rates were calm. Monday through Wednesday, rates improved steadily before a swift, late-week sell-off unwound the gains. Mortgage rates have been very low for a very long time -- against the expectations of most market experts.  The speed of the Thursday-Friday reversal may signal that markets are preparing for change. One key story from last week was the Federal Open Market Committee's scheduled Tuesday meeting. Upon adjournment, the Fed voted 9-1 to hold the Fed Funds rate in its current target range near 0.000% and reiterated its plan to keep rates low for "an extended period of time".  Kansas Fed President Thomas Hoenig was the lone dissenting vote. For rate shoppers , take note.  The Fed specifically mentioned... 03/22/2010

Homes are more affordable across the nation as the housing market emerges from a slow winter season with mortgage rates still near 5 percent. Soft housing and low rates are an excellent combination for home buyers but whereas home values rise with a gradual pace, mortgage rates change in an instant.  It's something worth watching. Each 0.25% increase to conventional or FHA rates adds approximately $16 per month for each $100,000 borrowed. Mortgage rate volatility can change your household budget. If you're trying to gauge whether rates will be rising or falling, one keyword for which to listen is "inflation". Mortgage rates are highly responsive to inflation. By definition, inflation is when a currency loses its value; when what used to cost $2.00 now costs $2.15. As consumers, we perce... 03/20/2010

Wednesday, March 17th, 2010, 9:51 am, from HousingWire.com HOPE NOW, an alliance between mortgage service professionals and non-profit counselors, reported 99,499 modifications in January, compared to 50,364 new permanent modifications under the Home Affordable Modification Program (HAMP). January HOPE NOW modification numbers dropped only slightly from 104,423 non-HAMP modifications in December, compared to roughly 35,000 permanent modifications under HAMP in that same month. The US Treasury Department launched HAMP in March 2009 to provide incentives to servicers for the modification of loans on the verge of foreclosure. Through February 2010, the 113 participating servicers provided 170,000 permanent modifications. HOPE NOW reported 74% of its January modifications involved interest ... 03/18/2010

Friday, March 12th, 2010, 1:01 pm  -  From HousingWire.com A year into the Home Affordable Modification Program (HAMP), servicers converted 170,207 permanent modifications through February, up from 116,297 in January, according to the US Treasury Department. The Treasury launched HAMP in March 2009 to provide capped incentives to servicers for the modification of loans on the verge of foreclosure. To address critics that claim HAMP isn’t having the effect of reaching its target 3m to 4m borrowers, a House Committee on Oversight and Government Reform in February began an investigation of HAMP on concerns of the “effectiveness and efficiency” of the program. According to the latest Troubled Asset Relief Program (TARP) transaction report, the 113 participating servicers under HAMP can earn... 03/17/2010