The number of California homes that sold for $1 million-plus declined for the fourth consecutive year in 2009, the result of buyer reticence, a difficult mortgage market and several years of price drops that tugged the value of many homes below the million-dollar threshold, a real estate information service reported.

A total of 18,621 Golden State homes sold for a million dollars or more last year. That was down 23.8 percent from 24,436 in 2008. In 2007 it was 42,506; in 2006 it was 50,010; and in 2005 it peaked at 54,773. Last year was the lowest sales count since 2002, when 15,703 were sold, according to San Diego-based MDA DataQuick.

Total California home sales - including all price levels -increased 16.9 percent last year, to 460,166 from 393,703 in 2008. One in 25 homes sold for a million dollars or more last year, while the year before it was one in 16, and in 2006 it was one in nine.

"Prestige home sales are a unique sub-category of the real estate market. The buyers and sellers respond to a different set of motivations. In the multi-million-dollar price ranges, decisions are largely discretionary and aren't as dependent upon jobs, prices and interest rates the way they are for most buyers and sellers," said John Walsh, DataQuick president.

"Traditional million-dollar markets are holding up relatively well, while expensive markets that emerged four or five years ago are not," he said.

Million-dollar home sales in Riverside County dropped 48.6 percent last year, while they dropped 13.3 percent in Los Angeles County.

Statewide, there were 332 sales for more than $5 million last year, 228 sales were in the $4-$5 million range, 590 in the $3 million range, 1,902 sales in the $2 million range, and the rest - 83 percent - between $1 million and $2 million.

About 1,900 of the homes that sold statewide last year for less than $1 million had previously sold for $1 million or more. The median date of the prior sale was April 2006; the median price decline between the 2009 sale and the previously $1 million-plus sale was about $420,000. The median percentage decline was about 35 percent.

MDA DataQuick is a division of MDA Lending Solutions, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. MDA DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.

The numbers include home sales where it could be determined from public records that there was a buyer, a seller, that money changed hands, and that there was a legal transfer of property ownership. Not included were property swaps, sales of multiple lots, sales where no price or loan amount was available, teardowns, and large farm or ranch properties. Sales to companies and trusts were included.

The most expensive confirmed purchase last year was a 22,721-square-foot, 9-bedroom, 10-bathroom Bel Air house built in 2008 which went for $26,500,000 in July. It was also the largest million-dollar home sold last year.

The communities where virtually all home sales were in the million-dollar category were Portola Valley and Atherton in San Mateo County, Newport Beach in Orange County, Ross in Marin County and Rancho Santa Fe in San Diego County.

Newly-built homes accounted for 1,457 of last year's $1 million-plus sales, down 50.3 percent from 2,933 for 2008. There were 1,542 condo sales in the million-dollar category, down 34.7 percent from 2,362 the year before. Most $1 million-plus condos were sold in San Diego, Los Angeles and San Francisco.

The median-sized million-dollar home was 2,646 sq.ft., with 4 bedrooms and 3 bathrooms. The median price paid per square foot for all million-dollar homes was $605, down 10.1 percent from a revised $672 in 2008. For the overall market, the square-foot median declined 20.7 percent from $188 in 2008 to $149 last year, DataQuick reported.

Last year 4,925 Notices of Default, the first step of the formal foreclosure process, were recorded on homes that previously had sold for a million dollars or more. The number of Trustees Deeds, or the actual loss of a home to the foreclosure process, totaled 2,698 for those homes that previously sold for $1 million-plus.

Around 29 percent of the $1 million-plus buyers paid cash, up from 24 percent in 2008. In the over-$5 million category, two thirds of the purchases were cash. Of those who did finance their purchase, the median down payment was 39.4 percent of the purchase price. The lending institutions most willing to provide mortgage financing for $1 million-plus homes were Bank of America, Wells Fargo and Union Bank.

There are 8.52 million homes in California. Of those, 241,456 are assessed for more than a million dollars by county assessor offices, down 5.2 percent from 254,745 in 2008, DataQuick reported.

Source:Los Angeles Times.

The number of Los Angeles County homes slipping toward foreclosure increased by 15.2 percent in the fourth quarter of 2009, compared to the same period in 2008, a real estate information service reported today.

Lenders sent default notices to 16,595 homeowners in Los Angeles County in the fourth quarter, up from the previous year's fourth-quarter total of 14,410, according to La Jolla-based MDA DataQuick.

In Orange County, default notices were sent to 5,555 homeowners, up 24 percent from the 2008 fourth-quarter total of 4,481.

Statewide, default notices were sent to 84,568 homeowners in the fourth quarter of the year, DataQuick reported. That was a 24.3 percent decrease from the previous quarter's 111,689 notices and up 12.4 percent from the same quarter in 2008, when 75,230 default notices were sent.

"Clearly, many lenders and servicers have concluded that the traditional foreclosure process isn't necessarily the best way to process market distress, and that losses may be mitigated with so-called short sales or when loan terms are renegotiated with homeowners," said John Walsh, MDA DataQuick president.

Default notices do not always lead to a home foreclosure, according to DataQuick. Some homeowners emerge from the foreclosure process by bringing their payments current, refinancing or selling the home.

Source:Los Angeles Times

Although short sales are likely to increase in 2010, the jump in these transactions is unlikely to have any real impact on the housing market, according to a new study by Housing Predictor.

While more at-risk homeowners are turning to short sales as an alternative to foreclosure, Housing Predictor says the small number of short sales that are actually approved by banks represent less than 1 percent of all homes facing foreclosure. In the first half of 2009, only 40,000 short sales were completed, according to the most recent data available from the Office of the Comptroller of Currency shows.

In addition, Housing Predictor said only an estimated 8 to 12 percent of all homeowners who request short sales accomplish a completed transaction. Because lenders only write off short sales as a loss when a property is sold, this small percentage of completed transactions leaves a gaping hole in the troubled banking industry’s problem with short sales.

In possibly the first indication of a growing second wave of foreclosures, an increase in distressed properties listed for sale is already beginning to develop in Southern California. Dana Point has seen its inventory of foreclosures and short sales jump to more than 24 percent of all homes listed for sale, and nearby Laguna Beach and San Clemente have seem similar increases. While this rise

in troubled properties indicates that lenders have increased foreclosures, it may also signify that that they are showing more cooperation in the case of short sales, Housing Predictor said.

As DSNews.com reported, the Treasury Department recently passed a sweeping series of rules to expedite short sales, giving at-risk homeowners an alternative to foreclosure. Under the Home Affordable Foreclosure Alternatives program, bankers will get $2,000 in exchange for handling a short sale, but the program will not start until April. Housing Predictor said this plan is also beleaguered by the same flawed logic that the Obama administration has with bankers to modify mortgages only on a voluntary basis.

Above all else, Housing Predictor said the biggest problem with short sales is getting approval from bankers. While the number of approved sales increased in the third quarter of 2009, industry analyst still aren’t sure by how much, as they are awaiting final government figures. Real estate agents are trying to price properties at levels where they will get approvals, but bankers often believe the price being offered by a purchaser is too far under market to approve the sale, Housing Predictor said.

However, the longer payments fail to be made on a mortgage, the more a bank loses on its capital. As a result, major banks are preparing for an influx of short sales. Many claim to have hired extra staff to handle short sales, and some have purchased new software to assist in the process. JP Morgan, with one of the highest default rates in the industry, says it has hired 5,000 new employees to handle distressed sales.

Bank of America services about 14 million mortgages, including millions of troubled loans it acquired in the purchase of failed Countrywide Home Loans. The lender says it has also taken steps to prepare for an increase in short sales by upgrading its system to handle these types of transactions. However, Housing Predictor said Bank of America has driven many troubled borrowers further away from working with the bank by out-sourcing much of its process to an India call center.

Source:Los Angeles Times.

1.bp.blogspot.com/_1d8gzgmeHD4/S2hgEmvQ41I/AAAAAAAAAKE/rCbmO3bpEnE/s400/cahomes2010155813small.jpg

"An estimated 41,837 new and resale houses and condos were sold statewide last month. That was up 16.7% from 35,860 in November, and up 10.6% from 37,836 for December 2008 (see chart above). An increase in sales from November to December is normal for the season.

The median price paid for a home last month was $264,000, up 1.1% from $261,000 in November, and up 6.0% from $249,000 for December a year ago. The year-over-year increase was the second in a row, following 27 months of year-over-year decline. The median peaked at $484,000 in early 2007 and hit a low of $221,000 last April.

Of the existing homes sold last month, 41% were properties that had been foreclosed on during the past year. That was up from a revised 40.1% in November and down from 55.2% in December a year ago. It peaked at 58.8% last February."

Regional reports for California:

La Jolla, CA---"Southern California home sales in December remained above year-ago levels for the 18th consecutive month, bolstered by gains in many mid- to high-end communities. The median sale price rose year-over-year for the first time since summer 2007, reflecting a more normal distribution of sales across all price categories, a real estate information service reported.

The median paid for all Southland houses and condos sold in December was $289,000, up 1.4 percent from $285,000 in November and up 4 percent from $278,000 a year earlier. The last time the median increased year-over-year was in August 2007, when it rose 2.7 percent to $500,000, near its peak."

La Jolla, CA.----"The Bay Area housing market last month continued its step-by-step climb up from the bottom with upticks in sales as well as prices. Many of the underlying trends are shifting slowly, if at all, indicating sluggish change in market fundamentals, a real estate information service reported.

The median price paid for a Bay Area home was $380,000 in December. That was down 1.8 percent from $387,000 for the month before, and up 15.2 percent from $330,000 for December 2008. Last month was the third in a row with a year-over-year gain, after 22 months of decline. The median hit bottom at $290,000 last March, well off the $665,000 peak reached in June and July of 2007."

Source:Los Angeles Times

The number of homes entering the first stage of foreclosure fell in the fourth quarter compared with the previous quarter, MDA DataQuick says -- a sign that banks are working with delinquent borrowers.
The Obama administration's $75-billion program to help troubled borrowers hold on to their homes appears to be keeping more California families out of foreclosure, data released Wednesday showed, but the relief may be temporary.

The number of homes entering the first stage of foreclosure declined 24.3% during the fourth quarter from the previous three months, according to MDA DataQuick, a San Diego real estate research firm. The decline in the default number is significant because any new wave of foreclosures, which could swamp the housing market's recovery, would be preceded by a surge in defaults.

So far, thousands of California borrowers have had their mortgages modified through Obama's Making Home Affordable program, but only 7.8% of those modifications were permanent through Dec. 31, according to government data. If the majority of borrowers who have received temporary loan modifications are unable to make those changes permanent, another surge of foreclosures could follow.

"Given what we see in terms of the number of distressed properties that are in the pipeline, we do expect that foreclosures will mount as borrowers are not able to make it from a trial modification to a permanent modification," Celia Chen, senior director of Moody's Economy.com, said. "This will cause home prices to start falling again."

The foreclosure explosion began early in 2007 as home values began falling and adjustable-rate mortgages began resetting, putting payments out of reach for many homeowners. Rising unemployment has added to the problem.

Of particular concern is the number of people who are underwater, or owe more on their mortgages than their homes are worth. That number soared with the precipitous drop in home prices. At the end of September, about 1 in 4 U.S. mortgage holders was underwater, and more than a third of California mortgage holders were in that position, according to First American CoreLogic, a real estate data firm.

"If a borrower is deeply underwater, he doesn't want to be in the home," said Laurie Goodman, senior managing director of Amherst Securities. A loan modification would give the borrower more time, she said, "but there is no reason to stay in your home, and you save a lot by just walking away."

Consumer groups are calling for more aggressive measures to help struggling borrowers stay in their homes, such as cutting the amount borrowers owe on their mortgages.

"We believe strongly that principal reduction should be a component of an effective loan modification program, because principal reduction is going to be more effective keeping people in their homes," said Paul Leonard, California director of the Center for Responsible Lending.

Principal reductions are a part of the Obama administration's program, but most loan modifications have involved interest rate reductions and term extensions. The Obama administration has resisted calls to increase the number of principal reductions because such a move could encourage some borrowers to fall behind on their mortgages intentionally and increase the cost to taxpayers, Meg Reilly, a Treasury Department spokeswoman, said Tuesday.

"There are concerns about moral hazard," she said.

The Federal Deposit Insurance Corp. is considering how best to implement a principal reduction option into its loss share agreements with banks that have purchased mortgages of failed banks seized by the federal agency, according to spokesman David Barr. Under the proposals, principal reduction would be an option and the agency would share losses with the banks.

"We are analyzing the overall program," Barr wrote in an e-mail.

A key problem is that many mortgages were sold by the lenders that originated them and packaged into complex securities. Most lenders still act as servicers, collecting and dispersing payments on the loans to far-flung investors and may not control the terms of the contracts, complicating negotiations over modifications.

One major California bank, San Francisco-based Wells Fargo, has been actively reducing the principal balances of a batch of Wachovia loans that the bank inherited when it acquired Wachovia in 2008. The bank reduced about $2.6 billion worth of principal during 2009. Franklin Codel, chief financial officer of the bank's home-lending unit, said in an interview this week that the fact that the bank owns those loans made the changes easier.

"To us it is an important part of creating an affordable, sustainable modification for the borrowers," Codel said.

Alejandro Estrella, a 47-year-old postal carrier in Riverside, received a principal reduction of about $50,000 from Wells last fall on the two-bedroom house he bought in 2005. It is motivating him to stay in his home, he said.

"I am happy with what I have gotten," he said. "Now, whatever it takes, I make the payment."

Throughout California, 84,568 notices of default were filed at county recorders' offices in the fourth quarter, an increase of 12.4% from the same period of 2008, DataQuick said. Trustee deeds recorded, signifying the actual loss of a home to foreclosure, totaled 51,060 from October through December, up 2.1% from the third quarter and 10.6% from the fourth quarter of 2008.

For the full year, 190,360 California homes were lost to foreclosure, down 19.42% from 2008, when foreclosures topped 236,000. That was the most since DataQuick began tracking foreclosures in 1988.

"Clearly, many lenders and servicers have concluded that the traditional foreclosure process isn't necessarily the best way to process market distress," DataQuick President John Walsh said. He said banks have been negotiating with distressed borrowers to keep them in their homes and increasingly turning to "short sales" in which the banks accept an offer that is less than the value of the outstanding mortgage; banks end up taking a loss on such deals.

The worst may be over for California's hard-hit entry-level market, DataQuick said. The most affordable 25% of the state's housing stock accounted for about 35% of all foreclosure activity in the fourth quarter, down from 52% a year earlier.

Mortgages were more likely to go into default in inland areas such as Merced, Stanislaus and Riverside counties, which were ravaged by foreclosures during the downturn. The coastal counties of San Francisco, Marin and San Mateo had the least probability of default, DataQuick said.

Source:Los Angeles Times.

As stated in an article last week there are some 87,000 active foreclosures in California, more than ½ of those are in Southern California alone. Did you know that a fair number of those are voluntary? Yes! That’s right there are actually people choosing to walk away from their homes and risk the dreaded foreclosure mark on their credit score. This is the most devastating thing to happen in some families lives. Most would choose anything other than foreclosure and yet there are people who are just deciding to do it. They are choosing to walk way from their homes, walking away from pools that were meticulously put in, yards carefully designed and landscaped, and mortgages that they just no longer want to pay.

Yep that’s right among the 87,377 active foreclosures in California are voluntary foreclosures. The exact number of voluntary foreclosures has not been reported but we do know that some homeowners are doing this as they have stated so in various interviews or polls but because most of these people want to remain anonymous there is no way to get an exact number. These people see that their homes have plummeted in value so their financial cushion of equity in their home is gone and yet they see homes just like theirs selling for ½ of what they currently owe and pay on their home. You need to know that these homeowners are not in default, have no hardship they just feel indignant that they are stuck with their high mortgage when others are getting the same house at a smaller, more affordable price.

This is part of the problem and solution for some. This housing crisis is a double edged sword. People who legitimately have hardships due to job loss, pay cuts, unforeseen medical issues/bills, on top of losing their equity in their homes end up facing foreclosure not by choice and sometimes forcefully. Thankfully there is hope for homeowners who had these legitimate hardships and Fannie Mae homeowners who opt to short sale their house to avoid foreclosure can get a new home loan in as little as 2 years and those who are foreclosed can get a loan again in 5 years much better than the old rule of 7-10 years!

The flip side to this is that the non-distressed homeowners still feel the sting of lost equity but can still make their mortgage payments and are frustrated with that. They aren’t in a sinking ship like the rest, but more stagnant in a bog as homes in California, especially the Inland Empire won’t be building much equity for at least a year and certainly won’t be anywhere near their values in 2005/2006 for 12-15 years experts say (and I agree). So that flip side is the non-distressed homeowners opting for foreclosure to dump the old mortgage and take advantage of the lower prices today and buy again. Some of these are called “buy and bail” strategies where they walk away from the higher mortgage before missed payments are on their credit report and they get a new home loan at a much lower price and interest rate for the same size house and buy a house that has a chance at building equity much faster.

Do I agree with this tactic? No, not really. But I do understand it. But I don’t recommend it, it could be viewed as mortgage fraud and could bite you later.

Source:Los Angeles Times.

Southern California home sales in December remained above year-ago levels for the 18th consecutive month, bolstered by gains in many mid- to high-end communities. The median sale price rose year-over-year for the first time since summer 2007, reflecting a more normal distribution of sales across all price categories, a real estate information service reported.

A total of 22,328 new and resale homes sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was up 16.4 percent from November’s 19,181, and up 12.1 percent from 19,926 in December 2008, according to MDA DataQuick of San Diego.

Sales almost always rise from November to December. Last month’s gain was a bit higher than the average increase of 13 percent since 1988, when DataQuick’s statistics begin.

The December sales tally was the highest for that month since 24,209 homes sold in December 2006, but it was still 11.2 percent below the average for a December – 25,143 sales – over the past 22 years.

The sales pattern has changed a lot over the past year, with many mid-to high-end communities now contributing more transactions.

For example, relatively large annual sales gains were recorded last month in many well-known, higher-end markets including Beverly Hills, Santa Monica and Newport Beach – areas that saw very low sales a year ago. Meanwhile, some of the more affordable inland areas that saw robust 2008 sales recorded year-over-year declines last month. Those markets included Moreno Valley, Lake Elsinore and Palmdale.

The percentage of Southland homes sold above $500,000 last month rose to 20.2 percent of all sales, up from 16.5 percent a year earlier and the highest since it was 23.6 percent in August 2008. On average since 2000, $500,000-plus sales have made up 36.5 percent of total sales. Right before the credit crunch hit in August 2007, making larger “jumbo” mortgages more expensive and harder to obtain, $500,000-plus sales made up about 52 percent of Southland transactions.

More sales in once-dormant high-end communities helps explain last month’s year-over-year gain in the median sale price – the point where half of the homes sold for more, half for less.

The median paid for all Southland houses and condos sold in December was $289,000, up 1.4 percent from $285,000 in November and up 4 percent from $278,000 a year earlier. The last time the median increased year-over-year was in August 2007, when it rose 2.7 percent to $500,000, near its peak.

The median has increased or held steady for eight consecutive months, but in December it was still 42.8 percent lower than the peak Southland median of $505,000 reached during several months in early and mid 2007. In late 2008 and early 2009, the monthly declines in the median from a year earlier ranged from 30 to 40 percent.

“Several forces have pulled the region’s median sale price out of its nose dive and given it lift,” said John Walsh, MDA DataQuick president.

“We’ve seen the re-selling of foreclosed homes fall off its peak in newer lower-cost inland areas, while at the same time sales have started to pick up in some of the more established expensive areas. That simple shift in what’s selling, and what’s not selling, puts upward pressure on the median. That’s statistical. But we’ve also seen price floors, however temporary, form in many areas recently as the foreclosure inventory dwindled and buyers took advantage of lower prices, lower mortgage rates and tax credits. A meaningful comeback in the jumbo loan market would provide another big boost to the pricier areas.”

Last month there were only modest signs of improvements in the jumbo market. Mortgages above $417,000 – formerly the definition of a jumbo loan – accounted for 16.7 percent of all home purchase loans, the highest since 18.7 percent in January 2008. Such jumbo loans made up nearly 40 percent of purchases before the credit crunch.

Another form of financing critical to high-end sales also edged higher in December: 4.6 percent of purchase loans had an adjustable rate, which was the highest since adjustable-rate mortgages (“ARMs”) made up 7.2 percent of all home loans in September 2008. However, it was still far lower than the average monthly ARM rate of 51 percent since 2000.

December’s foreclosure resales remained well below peak levels but were still a large force in the market, edging higher than the prior month for the first time since last February. Foreclosure resales – houses and condos sold in December that had been foreclosed on in the prior 12 months – were 39.6 percent of resales, up from 39.0 percent in November but down from 53.5 percent in December 2008. They hit a high of 56.7 percent last February, then tapered or leveled off month-to-month until last month’s uptick.

First-time buyers and investors, including some paying all cash, continued to dominate the buy side of the market last month.

Government-insured FHA loans, a popular choice among first-time buyers, accounted for 39.6 percent of all home purchase mortgages in December.

Absentee buyers – mostly investors and some second-home purchasers – bought 19.2 percent of the homes sold in December. Buyers who appeared to have paid all cash – meaning there was no indication that a corresponding purchase loan was recorded – accounted for 24.9 percent of December sales, based on an analysis of public records. That’s up from 22 percent in December 2008 but lower than the 2009 peak of 26.9 percent in September. The 22-year monthly average for Southland homes purchased with cash is 13.8 percent.

The “flipping” of homes has also trended higher over the past year. Last month the percentage of Southland homes flipped – bought and re-sold – within a three-week to six-month period was 3.1 percent. It varied from as little as 2.4 percent in San Diego County to as much as 3.8 percent in San Bernardino County. A year ago all Southland counties had flipping rates under 2 percent.

MDA DataQuick, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates, monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.

The typical monthly mortgage payment that Southland buyers committed themselves to paying was $1,231 last month, up from $1,207 for November, and down from $1,239 for December a year ago. Adjusted for inflation, current payments were 44.4 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They were 54.4 percent below the current cycle’s peak in July 2007.

Indicators of market distress continue to move in different directions. Foreclosure activity remains high by historical standards, although mortgage default notices have flattened out or trended lower in many areas. Financing with multiple mortgages is low, down payment sizes are stable, and non-owner occupied buying is above-average in some markets, MDA DataQuick reported.

Source:Los Angeles Times.

The average 30-year loan remains above 5% for the fourth consecutive week, at 5.06% this week. The 15-year rate is 4.45%, down from 4.5%.

Fixed 30-year mortgage interest rates edged down but stayed above 5% for the fourth straight week, Freddie Mac said Thursday.

The government-controlled buyer and guarantor of home loans said 30-year fixed-rate mortgages were averaging 5.06% this week. That was down from 5.09% last week and up from 4.96% a year ago. Upfront lender fees averaged 0.7% of the loan amount.

The average interest rate for a 15-year fixed mortgage, a popular option for people refinancing loans to pay them off sooner, averaged 4.45% this week with 0.6% in lender fees, down from 4.5% last week and 4.65% a year ago.

The typical rate on a 30-year fixed-rate mortgage fell below 5% in November and stayed there for six weeks, triggering a wave of homeowners refinancing their mortgages. Refinancings continue to outnumber home-purchase loans by 3 to 1, Freddie Mac chief economist Frank Nothaft said.

Predicting that interest rates would rise later this year, the Mortgage Bankers Assn. said in a report this week that it expected total mortgage originations to decline to $1.28 trillion this year from $2.11 trillion in 2009 as refinancing drops off.

Source:Los Angeles Times.

Los Angeles foreclosed homes for sale softened their impact on home prices in December, as foreclosure activity slowed when a lot of lenders decided to suspend their foreclosure actions during the holiday season.

As a result, the sales prices of single-family homes and condo units climbed up on a year-over-year basis.

Based on data from New York-based real estate research firm HomeData, the median sales price for a single-family home in December was $348,000, marking a jump from the November median of $339,000 and from the December 2008 median of $345,000.

The median sales price of condo units was $315,000, an increase from the November median of $305,000 and the December 2008 median of $310,000.

The total number of houses sold in December 2009 was higher by 30 percent than December 2008, although it was lower by around seven percent than November 2009.

Analysts were encouraged by the price and sales improvements, but they are concerned that the improvements are only temporary because of the forbearance efforts by lenders.

Christopher Thornberg, chief analyst for Los Angeles-based real estate consulting firm Beacon Economics, said that the drop in Los Angeles foreclosed homes for sale in December was only temporary because lenders just suspended their foreclosure actions during the holidays. It is expected that they will continue to pursue home and land foreclosures in the first months of the year.

Thornberg added that the federal tax credit, the low mortgage rates and other federal policies are temporarily propping up the housing market. He reiterated that existing home and condo foreclosures need to be absorbed before new foreclosures enter the market so that property prices do not plunge further.

Meanwhile, based on data from another research firm, default notices in California fell by almost 18 percent in December, after dropping by more than 32 percent on a daily basis, as lenders suspended their foreclosure actions. Fannie Mae, sister company Freddie Mac and Citigroup are among those which suspended their foreclosure acquisitions and evictions.

Foreclosure auction sales were also temporarily suspended, as auction sales dropped by 3.5 percent on a daily basis. With these suspensions, research firms said that foreclosure figures in December did not represent housing sector realities, considering that mortgage defaults increased in November and in December.

Source:Los Angeles Times.

In a typically sluggish month, the median sale price rises 4% over the same period a year earlier, and sales jump 12.1%. The pace of sales is the best since 2006, aided by tax credits that end soon.Rock-bottom interest rates and stronger sales in higher-priced neighborhoods helped Southern California's housing market post robust gains in the typically sleepy month of December, new data show, and experts say the momentum is continuing -- ushering in an early start to the spring home-buying season.

The median price paid for a Southland home rose 4% to $289,000 last month from December 2008, the first time the closely watched figure has posted a year-over-year gain since the region's real estate market took a nose dive 2 1/2 years ago, according to data released Tuesday by MDA DataQuick, a San Diego real estate research firm.

Rebounding home prices could help the Southern California economy recover from its slump, as a stronger housing market could lead to hiring on construction sites and in real estate sales, title and escrow offices, said Esmael Adibi, director of Chapman University's A. Gary Anderson Center for Economic Research.

"The worst is behind us for sure," he said. "For the economy, the implication is, at least on the residential side, we don't expect more layoffs, and you might actually see some pickup in employment."

But Adibi noted that those gains could be tempered by continued weakness in the commercial real estate market, which includes office buildings, retail centers and hotels.

The increase in December home prices follows a dismal 2008. Even with the rise, the median price was still 42.8% lower than its $505,000 peak during several months in 2007, underscoring the steep decline in the latter part of the last decade. The median is the point at which half the homes sold for more and half for less.

Still, December's sales pace was the best since 2006, capping a year in which strong government support of the housing market helped stabilize prices for most of the last year and brought more buyers back into the market.

"It's time for me to move," said Soosan Saedi, 43, who is looking to sell her three-bedroom, 1,300-square-foot Woodland Hills house and trade up to something bigger. "I need the space, the mortgage rates are low, and fortunately I am not having trouble with loans, so it is time for me to buy."

The housing market's recovery began last year as first-time buyers and investors competed for steeply discounted foreclosed homes. Now foreclosure properties are making up a smaller part of the mix. The gains in December also reflect a more diverse market, experts said, as prices were bolstered by increased sales in many mid- to high-priced communities.

Part of that trend shows the increased affordability of high-end properties as more are taken back by banks or are sold "short," for less than what is owed on their mortgages, real estate professionals said.

"They have come down a lot," said Syd Leibovitch, president of Rodeo Realty in Bel-Air. "I think the sellers dug in for a while, and now they are accepting the reality that prices have dropped, and they are being a lot more flexible."

Beverly Hills, Santa Monica and Newport Beach were among the affluent areas notching healthy sales gains, according to DataQuick. Conversely, areas hard hit by foreclosures -- including Moreno Valley, Lake Elsinore and Palmdale -- saw a drop-off.

Christopher Cortazzo, a Coldwell Banker agent in Malibu, said he sold a home for $12 million in December, roughly $3 million below its listing price, and closed out the month with $26.5 million in sales, one of his best months of the year. Cash-rich buyers looking to capitalize on lower prices have rushed into the market in recent weeks, he said, and the sales pace has continued through January.

"Spring season is going to start early," Cortazzo said. "We are having a lot of cash deals, so there is a lot of money out there, and there is amazing opportunity and great deals to be had."

One thing driving sales is the April 30 expiration of tax credits for home buyers. First-time home buyers can get up to $8,000 in credit on their federal income taxes, and current homeowners can qualify for up to $6,500.

Low mortgage rates are also a factor. Thirty-year fixed-rate loans were below 5% through most of December and haven't risen much.

The role of the federal government in the housing market remains key. Some experts worry that once certain policies and programs wind down -- among them low interest rates, tax incentives for buyers and an increased accessibility of mortgages backed by the Federal Housing Administration -- the housing market could falter.

Christopher Thornberg, principal of Beacon Economics, predicts home prices will drop once those policies and programs expire.

"The bounce in the housing market is due to government policy, not due to fundamentals," he said. "None of these programs fix the underlying problem. They only delay the solution -- they only delay the healing process."

The percentage of Southern California homes that sold for more than $500,000 rose to 20.2% of all sales in December from 16.5% a year earlier, DataQuick said. That is well off the 52% level reached before the credit crunch hit in 2007, which made large mortgages difficult to obtain.

Richard Green, director of the USC Lusk Center for Real Estate, said buyers have sensed more security in Southern California's real estate market in recent months and have begun to get off the fence.

"We are getting a little bit of what we had six or seven years ago, where people are worried if they don't get in now they are going to miss out on an opportunity," Green said. "In a decent neighborhood, in the half-a-million-dollar range, we are back to lots of offers."

A total of 22,328 new and resale homes sold last month in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties, up 16.4% from November and 12.1% from December 2008, DataQuick said.

Still, uncertainty lingers. Unemployment and a potential wave of homes headed for sale because of foreclosure or delinquency loom over the U.S. housing market. Both could slow Southern California's progress toward recovery should the Obama administration fail in its efforts to aid struggling borrowers. California's budget woes could also bode poorly for the state.

"The fiscal picture is still really bleak, and that makes me worry," Green said.

The home-buyer tax credit motivated Jennifer Scholte, 31, to close on a Lakewood home in December. The teacher said she and husband Eric, 34, saved up for a 20% deposit on the $361,000 property.

"We are first-time home buyers, and with that credit, that was a big push," she said.

To take advantage of similarly minded buyers, Leibovitch of Rodeo Realty said he has hired 40 to 50 people in the last three months, including secretarial, marketing and administrative staff, to prepare for what he predicts will be one of the strongest sales years on record. Escrow of the West, a Beverly Hills company, said it would open a Sherman Oaks branch Thursday, creating 25 jobs.

Source:Los Angeles times.

Delinquencies on home equity loans and lines of credit jumped to record levels in the third quarter, a banking trade group said Thursday.

Home equity loan delinquencies rose to a record 4.3 percent of such accounts from 4.01 percent in the second quarter, the American Bankers Association reported.

Delinquencies on home equity lines of credit also hit a new record, climbing to 2.12 percent from 1.92 percent.

The troubles with housing debt contrasted with an improvement seen with other consumer loans, the bankers group said. Delinquency rates fell in the third quarter on loans for cars, home improvements and even boats and recreational vehicles, reflecting a stabilizing economy as well as efforts by recession-chastened borrowers pay down debts and moves by banks write off dud loans as uncollectible.

The bad news on home equity debt came as Freddie Mac, the government-controlled mortgage giant, reported that average fixed rate on a 30-year home loan this week was 5.09 percent, the third straight week it had been just above 5 percent, Freddie Mac said Thursday.

The average, which applies to loans taken out by borrowers with good credit and at least a 20 percent down payment or 20 percent home equity, was 5.14 percent last week and 5.1 percent two weeks ago. Borrowers paid an average of 0.7 percent of the loan amount in upfront lender charges, or points.

For much of November and December, the average 30-year fixed rate was below 5 percent, reflecting government support for the mortgage market, including heavy buying of mortgage-backed bonds by the Federal Reserve. Last year at this time, the 30-year fixed rate mortgage averaged 5.1 percent.

The 15-year fixed rate this week averaged 4.5 percent with an average upfront fee of 0.7 percent, down from last week’s 4.54 percent and 4.83 percent a year ago.

Source:Los Angeles Times.

The drop in the latest pending home sales index got a lot of press attention, but that blip downward shouldn't be your guide on what to expect for real estate in 2010.

The 16 percent decline in November pending sales from October's unusually high index was due almost entirely to buyers' behavior confronting what they thought was an expiring tax credit.
In October the pending sales index went off the charts. Buyers were scrambling to sign contracts before the $8,000 credit program expired at the end of the month.

In November, buyer behavior was just the opposite. When Congress extended the credit through next April 30, the pressure was off. Nobody needed to rush to sign contracts.

Not surprisingly, the November index hit the skids. Meanwhile, even November's pending sales number was a solid 16 percent above November 2008. That suggests that even without the extra incentive provided by the credit, the home sale market is gaining strength for its own fundamental reasons: huge pent-up demand, low prices and great financing.

But keep this in mind: Those fundamentals are dynamic - and buyers and sellers need to stay on top of them as they change in the weeks ahead.

For example, as we've noted before here at Realty Times, with the economy climbing slowly out of recession, and the Federal Reserve expected to throttle back on its mortgage securities purchases , interest rates are now trending upwards.

Last week's thirty year average fixed rate for new mortgages hit 5.2 percent, according to the Mortgage Bankers Association. That's still very low by historical standards, but it's up nearly a quarter of a percentage point just since mid December.

Fifteen year fixed rates averaged 4.6 percent -- a rise of one third of a point in the past few weeks.

Home prices are also beginning to trend upward in key markets, according to the latest recessionhome price index. In San Francisco and Minneapolis, the index is up by about 15 percent since the low point earlier in 2009, according to an analysis by Bespoke Investment Group.

The same analysis found the Case-Shiller index up 8.3 percent from last year's low point to the latest month in metropolitan Washington DC, 7.6 percent in San Diego, 7.2 percent in Denver, 6.9 percent in Chicago and Phoenix, 6.8 percent in Dallas and 6.1 percent in Boston.

With reports of fewer layoffs plus significant new gains in manufacturing outplut and retail sales don't be surprised to see prices-and mortgage rates -- continue to rise in the months ahead.

Source:Los Angeles Times.

With home prices beginning to flatten in many areas around the country, home sellers are slowly gaining ground in their quest to hold on to the asking price.

A new report from Trulia.com finds that of all homes on the market today, 21 percent have seen at least one price reduction. That's the second straight month that percentage has declined. Total home equity slashed dropped 14 percent, from $24.7 billion in December to 21.2 billion in January.

The South continues to improve the most with 20 percent of homes seeing price reductions. All other regions stand at 22 percent.

“Historically low interest rates currently available and tax credit incentives are the ultimate price reductions for home buyers. As rates rise throughout the course of the year, buyers will need to adjust their purchase price ceiling,” says Trulia co-founder and CEO Pete Flint. Los Angeles, CA and New York City are seeing the biggest improvements in the number of sellers reducing prices, but the luxury market is still being hit hardest. The average price discount on a luxury home (those listed at $2 million and above) is 15 percent, the highest since Trulia began tracking price cuts in April, 2009. The average price discount on homes under $2 million is 10 percent. While luxury homes make up just 2 percent of the total listings currently, they make up 24 percent of the total dollar value of price reductions.
While the numbers look promising now, recent data showing a slowdown in sales and rising foreclosures could put additional pressure on home prices. Government stimulus in housing in the form of the tax credit and lower mortgage interest rates will phase out by Spring, and experts believe a double dip in home prices is a real possibility.

Source:Los Angeles Times.

Home prices in Southern California hit bottom last April and the region's foreclosure-battered housing market is recovering with no second dip in the foreseeable future, a local economist predicts.

"The Inland Empire's housing market has passed the point of falling prices, signaling that the worse of the housing crisis appears to be over," Inland economist John Husing said in a quarterly economic report published this month by the San Bernardino County Associated Governments.

Husing, explaining his position in an interview Wednesday, said historic housing affordability in Riverside and San Bernardino counties has created demand from prospective buyers here and in the more expensive coastal counties that far exceeds the supply of houses available for sale. He noted that in the fourth quarter of 2009 the median price of existing homes in Riverside and San Bernardino counties had risen to an estimated $177,604, up from $155,319 at its low point in the second quarter.

Prices would be climbing even faster, Husing said, if it weren't that much of the housing stock is in foreclosure and that many would-be buyers are worried about job losses, another housing price decline or that the economy will not recover.

Another constraint on home sales and prices, Husing said, is difficulty in obtaining home loans. However, he said the price limit on mortgages eligible for funding by Fannie Mae and Freddie Mac works better in Inland Southern California than in higher priced regions.

Dispute among economists over whether there will be another dip in home prices before the end of the housing crisis, Husing said, arises from uncertainty about how lenders will deal with what housing experts are calling "a shadow inventory" of homes that have delinquent mortgages but which banks have not as yet foreclosed on.

Husing said according to reports by ForeclosureRadar, a foreclosure marketing firm, there are 111,625 homes in the foreclosure pipeline. In addition, he observed that there is a large but unmeasured number of properties with mortgages which are more than 90 days delinquent but on which the banks have not issued notices of default, which starts the foreclosure process.

Banks slowed the foreclosure process dramatically last year, and the amount of homes for sale has shrunk, leaving first-time buyers and investors to compete for what is left, frequently making offers above the list price. Husing, quoting ForeclosureRadar, said California lenders had just 95,471 repossessed houses available for sale in October, compared to 155,269 bank-owned houses on the market in September 2008, a decline of 29 percent.

At least one other economist, Chris Thornberg at Beacon Economics, forecasts that Inland home prices will drop further when these foreclosures hit the marketplace, with the median price reaching bottom in the fourth quarter of this year.

Husing disagrees. He said he expects that the banks will gradually repossess the houses that cannot be saved from foreclosure and release them into the market in a controlled stream so buyer demand will continue to outstrip supply and prices will continue a slow climb.

By 2013 Husing said he expects that houses with mortgages higher than their value and whose owners are unable or unwilling to keep up the payments will have gone to foreclosure. That's when the region's housing crisis will end, he said.

But he isn't predicting that Inland home prices will have been restored to their peak in the first quarter of 2007, when the median price of existing homes reached $389,924.

"It will be a long time before that happens," said Husing. "I am just happy to see them (prices) go up."

Source:Los Angeles Times.

With 2010 expected to bring an increase in the number of distressed home sales, and new federal regulations coming into effect, it is expected that the number of short sales will increase significantly. Still, experts believe that short sales will have limited impact on the housing market since most banks remain resistant to accepting offers they perceive as being too far below market value. See the following article from Housing Predictor for more on this.
Distressed home sales in which the lender cooperates to cut the amount of principal owed are likely to increase in 2010, but the number of “short sales” is unlikely to have any real impact on the housing market, according to a new Housing Predictor study.

The small number of short sales that are actually approved by banks represent less than 1% of all homes at risk of foreclosure. Data from the Office of the Comptroller of Currency shows that only 40,000 short sales were completed in the first half of 2009, the latest period available.

Only an estimated 8 to12% of all homeowners who request short sales accomplish a completed sale. The small percentage leaves a gapping hole in the troubled banking industry's problem with short sales since lenders only write off short sales as a loss when a property is sold.

An increase in distressed properties listed for sale is already beginning to develop in Southern California, which may be the first indication of a growing second wave of foreclosures. Dana Point has seen its inventory of foreclosures and short sales rise to more than 24% of all homes listed for sale and nearby Laguna Beach and San Clemente have seen similar increases. The rise in troubled properties indicates that lenders have increased foreclosures and may be showing more cooperation in the case of short sales.

As part of its program to repair the damaged housing market, the Treasury Department has passed a sweeping series of rules to expedite short sales. But the program, under which bankers will get $2,000 in exchange for handling a short sale doesn't start until April. The plan is also beleaguered by the same flawed logic that the Obama administration has with bankers to modify mortgages on only a voluntary basis.

Major banks claim they have hired extra staff to handle short sales, and purchased new software to assist in the process. JP Morgan, with one of the highest default rates in the industry says it has hired 5,000 new employees to handle distressed sales. The longer payments aren't made on a mortgage the more a bank loses on its capital.

Bank of America has also spent big on upgrading its system to handle short sales and foreclosures, but has also driven many troubled borrowers further away from working with the bank by out-sourcing much of its process to an India call center. The lender services about 14 million mortgages, including millions of troubled loans it got in B of A's purchase of failed Countrywide Home Loans.

Above all else the biggest problem with short sales is getting approvals from bankers. The number of approved sales increased in the third quarter of 2009, but industry analysts aren't sure how much yet, awaiting final government figures. Real estate agents are trying to price properties at levels where they will get approvals, but bankers all too often argue that the price being offered by a purchaser is too far under market to approve the sale.

Source:Los Angeles Times

Now is a great time to buy Los Angeles real estate. The Los Angeles monthly inventory went from a 10.2 months supply back in November of 2008 to a current 4.4 month supply today. What does this mean to the typical Los Angeles home buyer? Get ready to make that offer. If the bottom hasn't completely been reached, it's just about there.

Here are some indicators leading to this statement. From November of last year until now, inventory of Los Angeles homes on the market has declined a whopping 57%. These statistics are based according to Los Angeles MLS data. When inventory is low, buyers start scrambling to make an offer on a house as other buyers are competing against them.

Seller's begin to increase their prices due to heavier competition for their home. If inventory continues to decline over the next year as it has been, home buyers will compete even more for the home they desire. It's all about Supply and Demand.

This does not mean that Los Angeles homes are going to be selling like hotcakes. What it does mean is that it's likely that home prices increase slightly during the next year. The real estate market has definitely been picking up recently, with the median home sold price down 3 percent from last year. That's just one of the factors that is attributing to a more robust local real estate market.

Other factors include the extension of the federal tax credit for first-time buyers, government offering low-down-payment mortgages for these first-time home buyers, along with extremely low mortgage rates for all and high investor activity especially in the foreclosure marketplace.

Deals still abound in this market, due to a steady supply of foreclosures still available. Investors especially have become quite adept at acquiring distressed homes. There hasn't been this type of foreclosure activity in our generation's time frame. The investors who have cash available are actually having a hey-day in real estate purchases. The low prices make it affordable to buy low and rent out with monthly cash flow. This was extremely hard to do in the past, typically investors either had to put down a large down-payment or had to have acquired the property in the way distant past to have any sort of cash flow at all. The loan payments, insurance and maintenance costs made it just about impossible to have positive cash flow each month on newly acquired Los Angeles investment properties.

The current Los Angeles real estate market will not fully rebound until there is financing in place for the higher priced homes. The median price of a Los Angeles home is $377,000. Due to Los Angeles as a whole having more pricier real estate than most counties, it goes to follow that financing is harder to obtain. Financing is easier to get for the lower priced homes due to the government programs in place. The higher priced homes do not have that advantage, thus luxury home seller's are in a much more unpredictable state of affairs. Most luxury home seller's are sitting tight and waiting until a real estate rebound occurs. If they were to sell their home now, their sales price may be too low to even break even from what they bought it for. On a positive note, rent prices have steeply risen on luxury homes. Many high-end Los Angeleshome owners have opted to rent out their home until the market adjusts, to a point of being able to sell at a profit.

Let's see what this market does in the near future, it's an exciting time in real estate. Buyers are buying low and sellers are getting more optimistic for the rebounding market.

Source:Los Angeles Times.

It's part of an ongoing effort to update the list of high-risk areas. But the changes have met with resistance from tens of thousands of Southern California residents now being forced to buy coverage.
Tens of thousands of homeowners in Southern California are being forced to buy costly flood insurance because new maps issued by a federal agency say they live in a high-risk flood area. The federal government has informed property owners in more than 150 cities and unincorporated areas in Los Angeles, Orange, Ventura, Riverside and San Bernardino counties about the new requirement. Most live near rivers and creeks, below dams or in low- lying areas that are at greater risk of flooding than previously believed, according to maps developed by the Federal Emergency Management Agency.

Premiums range from $500 to more than $1,700 a year. Insurance is mandatory for anyone with a federally backed mortgage, and lenders will typically buy policies, sometimes at a higher cost, for property owners who fail to do so on their own. Fannie Mae and Freddie Mac own or guarantee more than half of all U.S. mortgages.

Angry homeowners in several parts of Southern California dispute the new maps and have formed groups to challenge them.

In some cases, local governments are paying for studies to challenge FEMA's maps, and in a few cases, the agency has backed down.

The new maps are part of a nationwide effort that FEMA began in 2003 to better identify properties that could flood in a so-called 100-year storm -- the type of deluge that FEMA calculates has a 1% likelihood of occurring in any given year. In much of the country, the redrawn maps greatly increase the number of homes included in flood zones.

Property owners in some areas, including parts of South Los Angeles, have already started paying higher premiums. Homeowners elsewhere in the region expect the new mandate to take effect early this year.

Nada Parham of South Los Angeles is one of many homeowners who have dug into their own pockets to show that their properties don't belong on FEMA's list.

Parham, 55, won her argument with the agency after paying $1,400 to a surveyor. She says she has lived in her 2nd Avenue home her whole life and has never seen anything more than street flooding. She doesn't live near a river or a creek, and the ocean is more than 10 miles away.

"Why would I pay this money for a claim I'm never going to make?" Parham said. "It's ludicrous. You are trying to keep a shelter over your head and trying to take care of the necessities of life, and then here comes a letter that says you have to do this."

FEMA officials say that the map-making process is supposed to be a collaborative one and that local flood-control divisions are given an opportunity to point out errors. Cities and counties are also encouraged to let homeowners know about proposed changes and provide a way for them to comment, said Clark Stevens, a FEMA spokesman.

Critics say that too often, that has not happened. Parham said the first she heard of the new designation was when she received a letter from her lender saying she had 30 days to get a flood-insurance policy.

Officials say they are performing a public service by examining flood risk in residential areas. Requiring flood insurance in high-risk areas could stave off financial disaster for homeowners in the event of a destructive storm, they note.

Through its National Flood Insurance Program, FEMA works with nearly 90 private insurance companies to offer coverage to property owners and renters. The program was created by Congress in 1968.

When FEMA began reevaluating its flood zones, maps in some areas were as much as 40 years old. The agency contracts with local surveyors and hydrologists who use digital mapping technology to combine the topographical environment of a locale with historical climate data, Stevens said.

The models take into account flood-control structures such as levees, canals and drainage systems. After Hurricane Katrina in 2005, levees nationwide were reviewed and many were deemed inadequate to keep floodwaters away.

When a levy is decertified, hundreds of new houses can be added to hazard zones. In Oxnard, a large rock levee protecting homes along the Santa Clara River was decertified when FEMA engineers found weaknesses in its ability to withstand large storms. FEMA proposed adding 1,800 homes to the flood zone.

Bert Perello, who heads the Floodzone Justice Assn., an Oxnard group that has protested the maps, said FEMA rushed its update. The agency's own maps contradict each other and include data that his group's findings dispute, he said. The association argues that half of the homes in the new flood zone should not be there.

Source:Los Angeles Times

More than 20,000 California homebuyers could get state tax credits of up to $10,000 this year under a new stimulus proposed Wednesday by Gov. Arnold Schwarzenegger.

The governor's plan to allocate $200 million in credits to buyers of new or existing homes is part of a job creation strategy. It goes now to state lawmakers for consideration.

"This is about helping eliminate extra housing to get construction back on tap," said Victoria Bradshaw, Schwarzenegger's secretary of labor and workforce development, in a call with reporters.

It's unclear how fast legislators might act. But last year, they handily approved $100 million in tax credits for buyers of new, unoccupied homes. The credits, claimed by 10,600 buyers from March through June, proved popular and ran out faster than expected.

Wednesday's announcement in the governor's annual State of the State address won praise from the state's struggling real estate sector.

"Wonderful," said Barbara Harsch, president of the Sacramento Association of Realtors. "Anything that will bring more buyers into the market, that allows more people to buy a home, is good for getting us out of the real estate slump. That eventually will get us out of the economic slump."

Building industry representatives said they wouldn't oppose extending tax credits to existing homes. But Allison Barnett, a lobbyist for the California Building Industry Association, said using credits for new home construction creates more jobs.

Would-be buyers hoped for quick passage.

"This has taken me from being on the fence to really wanting to take action," said Chris Harris, 32, of Roseville. "That can make a huge difference."

The tax credits -- which would provide up to $3,333 off state taxes for each of the next three years -- could be combined with an $8,000 federal tax credit. That credit for first-time buyers ends April 30.

Schwarzenegger administration officials said conditions of their proposal would be similar to last year's credit. That had no income limits, made all buyers eligible and required that buyers live in their homes. No dates have been set yet for eligibility. Buyers qualified last year by closing escrow after the credits became available on March 1.

The proposal has its critics. Some renters object to subsidizing homebuyers, and some economists think $200 million in a deficit-plagued state is better spent elsewhere.

"Housing isn't all that important of a driver of jobs," said Chris Thornberg, head of Los Angeles-based Beacon Economics. "Somehow, that the state should be spending its money to subsidize people to buy homes is nuts."

Thornberg said there is enough incentive with the federal tax credit and low interest rates.

But building industry officials think otherwise.

"We've been so hard-hit by this recession," said John Orr, president and chief executive of a builder trade group, the North State Building Industry Association in Roseville. "Our area needs jobs, and new home construction means very good jobs for the region."

Home builders counted 3,398 closed escrows in the eight-county Sacramento region during the first 11 months of 2009. That was just 9 percent of all area sales, according to San Diego County researcher MDA DataQuick. In 2005, new homes were 25 percent of sales.

Source:Los Angeles Times.

Hammered by a housing downturn that contributed to the state's budget crisis, California is boosting protections for home buyers and punishing brokers who mislead borrowers and steer them into costly loans.

Statutes requiring individual loan officers to register with the state, making it a crime to give inaccurate information during the mortgage-application process and ensuring that banks inform potential borrowers of all their loan products are among hundreds of California laws that take effect Friday.

Other new laws will ban restaurants from cooking with trans fats, honor gay rights activist Harvey Milk with a day of recognition, make it easier for celebrities to sue the media for invasion of privacy, ban the practice of cutting cow tails and establish a commission to promote blueberries.

The most high-profile legislation in a year dominated by budget cuts was a package of bills that seeks to change how the state uses water and manages the Sacramento-San Joaquin Delta, the estuary that funnels fresh water from north to south.

Part of that package is an $11.1 billion water bond that will appear on the November ballot. Lawmakers filled the bond with special-interest earmarks to win passage, a potential weak point as they try to persuade voters to pass it.

The mortgage bills crack down on what critics say was irresponsible subprime lending that left California among the states hardest hit by the meltdown in the housing market. That has led to higher unemployment and lower tax revenue, adding to budget crises for local and state governments.

"It was certainly in response to what we're seeing across the state with the increase in foreclosures and the economic downturn," said Dustin Hobbs, spokesman at the California Mortgage Bankers Association. "I think lawmakers were trying to make sure we didn't see it in future years."

A law by Assemblyman Ted Lieu, D-Torrance, will prohibit lenders from steering borrowers who qualify for fixed-rate loans into riskier higher-priced loans.

Source:Los Angeles Times.

C.A.R. extends its Mortgage Protection Program through December 2010

Program has benefited more than 3,100 first-time home buyers in California.

LOS ANGELES - The CALIFORNIA ASSOCIATION OF REALTORS (C.A.R.) today announced it is extending its Mortgage Protection Program (MPP) for first-time home buyers through Dec. 31, 2010. To date, C.A.R. has approved benefits for 3,122 first-time home buyers at no cost to the consumer.

Offered by C.A.R.’s Housing Affordability Fund (C.A.R.H.A.F.), MPP provides up to $1,500 per month, for up to six months, to eligible first-time home buyers who lose their jobs due to layoffs. The funds are intended to help consumers meet their mortgage payment obligations. Qualified co-buyers also can participate in the program, and receive monthly benefits of $750 per month for up to six months.

“The home-buying process can be one of the most stressful periods in a person’s life,” said C.A.R. President Steve Goddard. “It also is one of the largest financial transactions most people make in their lifetime. Our goal with the C.A.R.H.A.F. Mortgage Protection Program is to help alleviate some of the anxiety home buyers feel when purchasing a home by providing a layer of security.”

First-time home buyer Giovanni Sedda was in the process of purchasing a home in Sacramento, Calif. when he heard about the C.A.R.H.A.F. Mortgage Protection Program from his REALTOR®, Erin Attardi of Lyon RE Sierra Oaks in Sacramento.

“We are thrilled to be spending the holidays in a home of our own,” said Sedda. “The Mortgage Protection Program offers me and my family additional security in the event that I lose my job, and it’s even better that it’s a free program.”

To apply for the program, home buyers must request an application for the C.A.R.H.A.F. Mortgage Protection Program from their REALTOR®.

The CALIFORNIA ASSOCIATION OF REALTORS Housing Affordability Fund (C.A.R.H.A.F.) is a non-profit 501(c)(3) organization. It receives donations primarily from REALTOR® members and REALTOR® associations committed to addressing housing challenges in California. C.A.R.H.A.F. raises and distributes funds and partners with other groups to promote housing and homeownership, and address housing opportunities locally and statewide.

Leading the way...® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS is one of the largest state trade organizations in the United States, with more than 163,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

Source:Los Angeles Times.

C.A.R. reports November home sales increased 4.7 percent; median home price increased 5.8 percent

Quick Facts:
· Existing, single-family home sales increased 4.7 percent in November to a seasonally adjusted rate of 536,720 units on an annualized basis.
· The statewide median price of an existing single-family home increased 2.4 percent in November to $304,520 compared with October 2009.
· C.A.R.’s Unsold Inventory Index fell to 4.5 months in November, compared with 7.1 months in
November 2008.

LOS ANGELES (Dec. 22) – Home sales increased 4.7 percent in November in California compared with the same period a year ago, while the median price of an existing home rose 5.8 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.

“First-time buyers continued to drive the market in November, as many opened escrow to take advantage of the federal tax credit prior to its original Nov. 30 expiration,” said C.A.R. President Steve Goddard. “The extension and expansion of the tax credit until April 30, 2010, along with low interest rates, should continue to positively impact the market in coming months.

“Efforts by lenders and the government to assist homeowners at risk of foreclosure have led to fewer homes available for sale, and an increase in the state’s median home price. California’s median home price increased year over year in November for the first time since August 2007,” added Goddard.

Closed escrow sales of existing, single-family detached homes in California totaled 536,720 in November at a seasonally adjusted annualized rate, according to information collected by C.A.R. from more than 90 local REALTOR® associations statewide. Statewide home resale activity increased 4.7 percent from the revised 512,840 sales pace recorded in November 2008. Sales in November 2009 decreased 4.6 percent compared with the previous month.

The statewide sales figure represents what the total number of homes sold during 2009 would be if sales maintained the November pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

The median price of an existing, single-family detached home in California during November 2009 was $304,520, a 5.8 percent increase from the revised $287,880 median for November 2008, C.A.R. reported. The November 2009 median price rose 2.4 percent compared with October’s $297,500 median price.

“With sales bottoming out more than two years ago, and the median home price reaching its trough in February 2009, California remains ahead of the nation in market recovery,” said C.A.R. Vice President and Chief Economist Leslie-Appleton-Young. “The median price for most regions hit bottom during the first half of the year, and the statewide median home price now is nearly $60,000 higher than its lowest point in the current cycle.

“California home buyers have responded to the much-improved affordability over the last several months,” she said. “Despite November’s uptick in the median home price, affordability in the state remains near historic highs.”

Highlights of C.A.R.’s resale housing figures for November 2009:

. C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in November 2009 was 4.5 months, compared with 7.1 months (revised) for the same period a year ago. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.

. Thirty-year fixed-mortgage interest rates averaged 4.88 percent during November 2009, compared with 6.09 percent in November 2008, according to Freddie Mac. Adjustable-mortgage interest rates averaged 4.41 percent in November 2009, compared with 5.26 percent in November 2008.

. The median number of days it took to sell a single-family home was 33.1 days in November 2009, compared with 44.4 days (revised) for the same period a year ago.

Regional MLS sales and price information are contained in the tables that accompany this press release. Regional sales data are not adjusted to account for seasonal factors that can influence home sales. The MLS median price and sales data for detached homes are generated from a survey of more than 90 associations of REALTORS® throughout the state. MLS median price and sales data for condominiums are based on a survey of more than 60 associations. The median price for both detached homes and condominiums represents closed escrow sales.

In a separate report covering more localized statistics generated by C.A.R. and DataQuick Information Systems, 102 of the 362 cities and communities reporting showed an increase in their respective median home prices from a year ago. DataQuick statistics are based on county records data rather than MLS information. DataQuick Information Systems is a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. (The lists are generated for incorporated cities with a minimum of 30 recorded sales in the month.)

Note: Large changes in local median home prices typically indicate both local home price appreciation, and often, large shifts in the composition of housing market activity. Some of the variations in median home prices for November may be exaggerated due to compositional changes in housing demand. The DataQuick tables listing median home prices in California cities and counties are accessible through C.A.R. Online at
http://www.car.org/marketdata/historicalprices/2009medianprices/nov2009medianprices/

. Statewide, the 10 cities with the highest median home prices in California during November 2009 were: Los Altos, $1,475,000; Palo Alto, $1,222,500; Los Gatos, $1,166,500; Manhattan Beach, $1,163,500; Laguna Beach, $1,035,000; Newport Beach, $1,021,000; Cupertino, $985,000; Danville, $815,000; Santa Monica, $807,500; and Santa Barbara, $749,000.

. Statewide, the cities with the greatest median home price increases in November 2009 compared with the same period a year ago were: Cupertino, 37.8 percent; Poway, 35.8 percent; Morgan Hill, 33.2 percent; Lake Forest, 25.6 percent; Atwater, 24.4 percent; San Rafael, 23.8 percent; Atascadero, 22 percent; Vista, 21.2 percent; Tulare, 19.8 percent; Fountain Valley, 18 percent.

Leading the way...® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with more than 163,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

November 2009 Regional Sales and Price Activity*
Regional and Condo Sales Data Not Seasonally Adjusted

na - not available

* Based on closed escrow sales of single-family, detached homes only (no condos). Movements in sales prices should not be interpreted as measuring changes in the cost of a standard home. Prices are influenced by changes in cost and changes in the characteristics and size of homes actually sold.

sf = single-family, detached home

Source: CALIFORNIA ASSOCIATION OF REALTORS^®

Median Prices By Region – Current Month vs. Year Ago

na - not available

r - revised

Source: CALIFORNIA ASSOCIATION OF REALTORS^®

Source: Los Angeles Times

Mortgages have always been regarded as the best way to finance your home; this is absolutely true. However, mortgages can also be a source of financial constrains and unhappiness if proper planning is not taken into consideration.

If you wish to borrow first time home mortgage, it is important to consider very crucial factors that will help you make right decisions.

For your success on the first time home mortgage, you should consider preparing a budget as to how much you will require for your mortgage and stick to the budget. A good budget allows you to get the home of your choice without much strain.

It is great to have a house of your choice, but that should not lead to excess borrowing; when you over borrow, you will definitely work outside your budget limits. This is the cause of problems for many people.

Shopping around for the best deal is a crucial step for getting the affordable mortgage for your home, compare lenders and make the right choices. You should consider using a database of mortgage fees and rates to compare and make the right choice.

Before applying for your first time home mortgage, you should first check your credit reports. It is important to ensure that your credit history and credentials support your mortgage application.

Your credit reports will help you get the mortgage you need for your new home; important issues to look out is the late or missed payments. A good credit history will help you secure cheap loans.

Ensure that you gather all the necessary items before making an application. Always look out for new rules that have an influence on the decisions you will make, tax requirements will always increase the cost of your mortgages.

First home buyers are sometimes offered tax credits; make sure that you take advantage of these incentives to bring your overall costs down. For a first time home mortgage, you should consider paying points to lower your mortgage rates.

Discount point will help you buy down the interest rates on your mortgage plan. In most cases, one point will be equal to 1%, each point you buy can help you reduce the interest rate for your loan.

You should also consider having long term mortgage finance for your home.

Then, you should work to repay the mortgage within a shorter period to pay less interest. Good luck in your guest to own your first house.

Source: Los Angeles Times

HOUSING: Low supply, increased competition leading to a tighter market, higher costs for buyers

Limited supply pushed existing single-family home sales down 8 percent in November, but competition for the scarce properties boosted the median price by 5 percent, a trade association said Tuesday.

Despite the slip in November, home sales for all of 2009 are expected to finish strong, a full 8percent higher than the year before, according to the Van Nuys-based Southland Regional Association of Realtors.

"Our buyers are there. They're lined up and ready to purchase," said association president Ana Marie Colon.

"The only negative we have is that we don't have enough homes for the buyers waiting to purchase them."

By the end of November, the Valley had 2,888 homes listed for sale, about 50 percent fewer than one year earlier in what experts had deemed a balanced market.

With the decline of homes on the market came increased competition, which drove up the median price by 5 percent in November to $395,000.

"For every property that comes on the market, there's a long line of buyers and they overbid one another and they outbid one another," Colon said. "It comes down to who can offer the most."

Most homes listed under $500,000 get multiple offers, all of them at list prices, Colon said.

Despite the fierce competition to buy property, prices of single-family homes are down nearly 40 percent from their all-time median high of $655,000 set in June 2007.

More homes are expected to hit the market in upcoming months once banks release properties acquired through foreclosures.

The homes should be quickly absorbed by the regional market's appetite for real estate, said Jim Link, the association's chief executive officer.

"Yet the market will not return to normal until it works its way through all distressed properties and traditional sellers return in greater numbers," Link said.

For the first time in six years, condominium sales are on an upswing. Through November, sales of condominiums in the Valley jumped 4.5 percent from a year ago.

Intense competition for properties costing less than $500,000 fueled the surge of these sales, said Colon.

"Active listings are half of what they were a year ago, creating a situation where dozens of buyers are scrambling over each other every time a new listing hits the market," Colon said.

Today's median price for Valley condominiums stands at $225,000. That represents a 46 percent drop from the record-breaking median price set in February 2006 at $415,000.

In Santa Clarita, 162 previously owned single-family homes sold in November, an 18 percent slide from a year ago. The median price for these homes fell to $407,000 in November - a 3percent drop from October.

Buyers flocked to Santa Clarita for condominiums, with sales soaring 16 percent from October. Median prices for condos there rose nearly 2 percent in November to $239,200.

At their all-time high in April 2006, the median price for condominiums reached $397,000.

Source: Los Angeles Times

Without a doubt your Los Angeles home is of great importance to you because it is where you and yours live and this is a place that should always feel secure, but there are things that need to be looked at so you can maintain a safe and secure residence. The many items such as alarms and keys and locks are there for a very important reason, and that is to see to it that when you are gone and when you are there, all the people in the house, and all the possessions, as well, will be safe.

Locksmiths are most definitely a worker that comes to you in Los Angeles to just open doors. While this is something that gets done often there is also a lot more that the residential locksmith deals with on a weekly and daily level. What is seldom thought of, but very true is that the Los Angeles locksmith is one of the most important security experts around.

Your home not only has your things in it, but also you and your family and when you are serious about protection there is only one person you need to call for he best in security.Locksmith are happy to provide repairs, sales and installations of any kind of lock a person will need for their home. The more sophisticated a lock, the more likely there is to be additional hardware that must be installed, and if anyone other than a professional who knows what they are doing does this, things can go wrong.

There are many homes with alarms installed and you might find it interesting to learn that locksmiths highly recommends and gets each and every customers the correct system for them.A very popular item these days for Los Angeles homes is the intercom and locksmiths are the authority and have the skill to install, service and repair these extremely effective units. Just like doors, locks are also in place on windows, and you can find the best ones for your use by conferring with a locksmith. Home lockout is a very well known occurrence and is something that can cause quite a start in people.

Whenever there is a key that has been lost or misplaced you need a locksmith to let you in, and perhaps change locks if it’s lost so no one can gain access.Since you are more in the know about the work a locksmith does in the residential area of the business, you’ll find and discover better ways to make sure that your house is as protected as you need it. You can be sure that it’s a good thing to find a top notch locksmith and by keeping a good relationship with him or her you will be able to stay as on top of all your security needs.

Source:Los Angeles Times.

The slowest rate in more than a decade is blamed primarily on the recession, specifically high unemployment and foreclosures.California's population grew less than 1% in the last year, the slowest growth rate in more than a decade and a vivid indicator of the continued toll that the deep recession has taken on the state.

Demographers said the population slowdown was largely attributable to two of the main effects of the recession: high unemployment and the skyrocketing number of home foreclosures.

Hans Johnson, associate director of the Public Policy Institute of California, noted that the state's jobless rate of 12.5% was higher than the national rate of 10.2% and that the gap was even more noticeable when California unemployment was compared with the rates in Texas and Washington, two traditional sources of migrants to California.

Dennis Myers, a state Finance Department economist, said the collapse of the housing market was also a major factor in the slowdown. San Bernardino County, saddled with one of the highest home foreclosure rates in the nation, lost 11,519 residents to out-migration in the last year. The county had been among the fastest-growing in the nation earlier in the decade, gaining 30,000 or more annually. Riverside County, also plagued with a foreclosure crisis, posted its slowest growth rate this decade.

Myers and Johnson said the state historically has grown faster than the nation because of immigration, which has also slowed. California attracted a net increase of 179,493 immigrants in the last year, the second-lowest number this decade.

"There's a sense that California has limited opportunities and a high cost of living," Johnson said.

The slow growth mimics the pattern seen in the last major recession, in the mid-1990s.

Experts said the effect on the state could be mixed.

Dowell Myers, a USC demographer, said the slowdown in growth provided a welcome respite that state policymakers should use to look ahead and plan for the future.

He and others said, for instance, that policymakers must step forward to provide new public investments in the state's crumbling infrastructure. A new study by a transportation research group called TRIP ranked Los Angeles roads as the roughest in the nation, with 92% of major roads in the metro areas in poor or mediocre condition. Deficiencies in roads and other transit systems cost state motorists $40 billion annually because of higher vehicle operating costs, traffic crashes and congestion, the study found.

"This is a wake-up call," Myers said. "We have a brief breathing spell, but we should not be lulled into complacency because growth will resume, and we have to get ready for it."

But others point out that with the population continuing to grow, albeit slowly, the state will be under more pressure for services at a time of declining revenue.

"This is bad news for governments, because it means there are more people to take care of who will need health services, police and fire services, educational services," said Jack Kyser, economist at the Los Angeles County Economic Development Corp. "Given the very, very difficult financial situation of most governments . . . this is going to put more pressure on their budgets to stretch diminished resources."

Kyser added, however, that businesses would benefit from the continued population growth. Only 11 of 58 counties actually lost population, mostly those in the northeastern part of the state.

Across the state, natural increases rather than migration accounted for the largest source of population growth. Los Angeles County's population, for instance, grew slightly to 10.4 million from July 2008 to July 2009 by gaining 89,361 people through more births than deaths.

L.A. County lost a net 21,736 people through migration, as more people left than arrived for the fifth straight year. But fewer people are leaving than before; the departure of 81,158 residents in the last year was the lowest number since 2004.

Other Southern California counties also recorded slow rates of growth. Orange County's population grew to 3.1 million, San Bernardino County's to 2 million, Riverside County's to 2.1 million and Ventura County's to 841,000. The state's largest growth came in Imperial County, where both immigration and natural increases boosted the population by 2.2% to 181,772.

Overall, California's population hit 38,487,889, the state estimated. That amounted to a 0.93% growth rate, the lowest since the recession of the mid-1990s. The state's population estimates were based on birth and death counts, along with data on driver's licenses, housing, school enrollment and federal income taxes.

Los Angeles, San Diego, Orange, Riverside and Santa Clara counties posted the highest population gains and account for more than half of the state's growth.

Source:Los Angeles Times.

With sales stoked in recent months by factors like the first-time homebuyer tax credit, robust investor activity and distressed property deals, the region is beginning to emerge from the mire into which it had fallen. Read on for the most recent data reported by MDA Data Quick.
(12/21/2009)

Southern California’s housing market continued its step-by-step climb up from the seen in the early months of 2009 as both sales and prices saw gains last month, a real estate information service reported.

A total of 19,181 new and resale homes sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was down 13.3 percent from October’s 22,132, and up 14.7 percent from 16,720 for November 2008, according to MDA DataQuick of San Diego.

Sales almost always decline from October to November. The year-over-year increase was the 17th in a row. In DataQuick’s statistics, which go back to 1988, the average November had 22,312 sales.

Sales of newly built homes saw an unexpected jump last month. A total of 2,039 new homes were sold, the highest of any month so far this year, and 25.5 percent ahead of 1,625 for November 2008.

Sales have been stoked in recent months by several factors: A federal tax credit for first-time buyers, which had been set to expire last month before it was extended and expanded; robust investor activity, especially inland; super-low mortgage rates; the availability of government-insured, low-down-payment mortgages for first-time buyers; and the allure of a potential “deal” on distressed property.

“This market is still really lopsided. Foreclosures and short sales are huge factors. There’s still not a lot of discretionary buying and selling outside the more affordable markets. Anybody who can sit tight is doing just that. The market won’t fully rebalance itself until financing becomes available for the higher price ranges,” said John Walsh, MDA DataQuick president.

Mortgages above $417,000 — formerly the definition of a jumbo loan — accounted for 15 percent of all home purchase loans, roughly the same as it has been since June. Those loans made up nearly 40 percent of purchases before the August 2007 credit crunch hit.

Only 4.1 percent of last month’s home purchase loans were adjustable-rate mortgages. A higher ARM rate is part of a healthy market. From 2000 through 2005, 47 percent of the Southland home purchases were financed with an ARM.

Foreclosure resales — houses and condos sold in November that had been foreclosed on in the prior 12 months — made up 39.1 percent of all Southland resales. That was the lowest since May 2008 when it was also 39.1 percent. It hit a high of 56.7 percent last February.

Government-insured FHA financing continued to play a vital role in the Southland’s housing market. Last month, 38.1 percent of all purchase loans were FHA-insured mortgages, the same as in October and up from 34.5 percent a year ago. Two years ago FHA accounted for just 2.5 percent of purchase loans.

Absentee buyers purchased 19.1 percent of all homes sold last month, while buyers who appeared to have paid all cash — meaning there was no corresponding purchase loan — accounted for 24.4 percent of sales, based on an analysis of public records.

The median price paid for a home in Southern California was $285,000 last month. That was up 1.8 percent from $280,000 for the month before, and the same as November 2008. Last month was the first since September 2007 that did not see a year-over-year decline in the median.

Last month’s median was 43.6 percent lower than the peak Southland median of $505,000 reached during several months in early and mid 2007.

Because of a sales mix profile still tilted towards lower-cost foreclosure resales, the median’s fall from its peak overstates the decline in the value of the typical home. Generally, it appears that homes in more costly, established neighborhoods have come down in value by about half as much as homes in many newer, more affordable neighborhoods in inland growth areas.

Indicators of market distress continue to move in different directions. Foreclosure activity remains high by historical standards, although mortgage default notices have flattened out or trended lower in many areas. Financing with multiple mortgages is low, down payment sizes are stable and non-owner occupied buying is above-average in some markets, MDA DataQuick reported.

Source:Los Angeles Times.

Many of you that search or browse housing listings know what the MLS is. This is the Multiple Listing Service provided to realtors and those affiliated with real estate branches. In the past, the MLS might have been an excellent snapshot of market inventory. Many sites like Redfin and ZipRealty provide consumers excellent data for browsing inventory but they do not cover every city in the country. For the most part, home buyers and sellers have never been so educated on market dynamics. Then how in the world did this housing bubble happen with so much information? How was it possible to inflate the California market with Alt-A and option ARM products when so much data was available?

It is important to note that MLS data comes from listings that are represented by brokers who are both members of the MLS system and NAR. The list also expands to Canada. But with the massive amount of foreclosures many banks are dealing with bulk buyers directly. In Southern California last month 20 percent of all buyers went with all cash. Each MLS is geared to local markets but again many argue that the MLS forces membership into the real estate circles. To that I would agree. That is why companies like Zillow had to fight hard to break into this game. The Department of Justice did break some of this up in 2008 and many online brokerages now have better access to data. But how can you track something that isn’t reported?

I would argue that during the bubble access to information actually fueled the mania. For every one article talking about housing being over priced, you had 10 articles telling you how cheap homes were and how home prices never went down. And for a decade checking your estimated home price would have justified your own belief. In today’s market there is an underworld of information that isn’t easily accessible. Part of this is the shadow inventory. And this is a real issue as banks have admitted to holding homes off the market. The one argument against this data point is a narrow focus on REO data. Yet to get to REO (bank owned) you must go through various other steps. More on that later but let us first look at Southern California as our case study:

mls socal sales and nts reo

Now I want to spend a bit of time on the above chart. I pulled data from a variety of sources including the MLS, foreclosure records, and Southern California home sales data. What you’ll notice with the blue line is that MLS inventory for SoCal has fallen from over 160,000 homes to below 60,000. This you would think would be because of massive amounts of sales. If you look at home sales it is the case that this has increased but not anywhere close to the bubble heyday where we were seeing 35,000+ homes sold in a month. The big drop has more to do with sales occurring in the foreclosure market.

This is interesting because I was looking at homes that weren’t listed on the MLS and was dealing with a bank directly only a few months ago. This is happening many times over. You can see on the chart above REOs with the green line. It might look like this number has fallen drastically but this has more to do with programs like HAMP that are already proving to be inefficient. What these programs do is simply shift housing inventory into the shadows and hope that prices somehow go up in the next few months or year. Yet that isn’t working out.

Let us run a case study on a new area. Let us look at home of toxic mortgage superstar Countrywide Financial, Calabasas:

calabasas

We find that 215 homes are listed in distress. The MLS has 228 listings and only shows 30 of these. In other words 185 properties out of a sample size of 413 are hidden to the public. This is nearly as big as the actual MLS data. We see this two world scenario occurring in many places. In some areas it is even worse. Let us look at Agoura Hills for example.

The MLS has 140 listings and the shadow data is at:

ag hills

The neighbor of Calabasas and the same trend is spotted. In this case, the shadow inventory is larger than the MLS data. In some cities in Southern California the shadow data is enormous and doesn’t resemble anything that is shown on the MLS. Let us look at Cerritos for example:

cerritos

Cerritos has 262 homes listed in distress. The MLS has 70 homes listed. Last month Cerritos had 23 home sales. So you either have:

Public perception: 3 months of inventory

Real data: 14 months of inventory (big difference)

It is hard to quantify shadow inventory because many in the industry are too optimistic regarding bailouts. Unfortunately the industry was so corrupt and polluted for years in the state that Alt-A and option ARM products are going to be trickling out into the market for years. The only reason we are not seeing defaults hitting the MLS in mass is because of programs like HAMP and suspension of mark to market. This doesn’t mean there isn’t any problems of course. It just means that the issues will take longer and be more painful.

This is something we need to wrestle with. Do we pull the Band-Aid off quickly and deal with it once and for all or do we allow this to become a massive decade long disaster like Japan experienced? It seems like the bankers and real estate industry would rather prolong the misery for as long as possible. Because what is the worst case scenario? The market is flooded and homes sell for market prices. Banks fail as they should. But instead, banks become zombies and little by little their toxic balance sheet eats away at the productive sector of the economy. Just look at how well banks are doing:

bank stocks

Some are going to argue that notice of defaults should not be included in the above. In most normal markets I would agree. Yet with only 3 to 4 percent of notice of defaults curing this means much of the inventory will reach market. Could be in six months or as long as 24 months. But it will hit because home prices are massively underwater and prices haven’t gone up even close to bubble peaks:

socal home sales

And that boost comes at the cost of:

-FHA insured loans requiring only a 3.5% down payment

-Fed buying mortgage backed securities holding rates artificially low

-Moratorium programs like HAMP

-Banks holding inventory off the public view

Yet at a certain point people realize that the MLS is not a reflection of reality. It is the ideal dream world scenario. The fact of the matter is each day hundreds of people are unable to make their housing payments. You don’t need a crystal ball to make that prediction. You’ll know things are recovering when the shadow data starts thinning out. Until then don’t believe everything the MLS is telling you.

Source:Los Angeles Times

The median home price rises 1.8%, to $285,000, from October. The number of houses sold is up 14.7% from the same month last year.Southern California's real estate industry, decimated by the mortgage meltdown and housing bust, is stirring to life again -- even making hiring plans -- as home prices bounce back.

Data released Tuesday showed the Southland housing market gaining strength in the traditionally slow month of November. The median price paid for a Southern California home increased 1.8% in November from October, to $285,000, according to MDA DataQuick, a San Diego real estate research firm. It's the seventh consecutive month in which prices have improved or held steady.

Sales of new homes in Southern California also rose unexpectedly last month, and the percentage of foreclosures making up the total resale market continued to drop.

But the market hasn't returned to full health, and a glut of foreclosures remains a concern because a flood of cheap homes could slow the recovery next year. A separate report Tuesday showed that the number of California properties repossessed by banks in November continued to increase when measured on a daily basis.

Still, rising home prices have translated into some jobs for real estate professionals this year, and more will follow in 2010 if the economy continues to rebound, those in the industry said.

For instance, hiring of temporary workers at real estate firms in the region has picked up in the last six weeks, said JoAnne Williams, chief executive of JWilliams Staffing in Irvine.

"Things are starting to move in a positive direction, very slowly, very cautiously, but moving," Williams said. "They are gearing up. There is just a sense that the demand is there."

The official numbers don't reflect a hiring increase yet. In Los Angeles County, the number of jobs in the real estate sector -- which includes agents, property managers and appraisers in the commercial and residential property markets -- fell by 400 in the 12 months ended in October, according to government statistics, with 53,300 people employed in those professions.

Maria Trangelo-Molina, an escrow agent with Fidelity National Title in Van Nuys, said she had to lay off more than half her staff this year but was hoping to start hiring next year.

"More people will be buying homes next year, which means we can generate more jobs and we can start hiring again," she said. "The recruiting is very active."

Betty Graham, president of Coldwell Banker Residential Brokerage of Greater Los Angeles, said she was optimistic about the coming months but would be cautious about any growth.

"We don't have to close any more offices, and we are operating very efficiently," she said. "But will we suddenly start throwing money around? Absolutely not."

Workers in the residential construction industry, however, continue to suffer. Los Angeles County builders employed 18,700 in October, a drop from 21,400 in October 2008.

Some good news for residential developers came Tuesday. Sales of newly built homes in Southern California jumped unexpectedly in November, according to DataQuick, with 2,039 sold, the highest for any month so far this year.

The Irvine Co., responding to what it called pent-up demand, recently announced it would unveil 25 floor plans next year in some of its Irvine housing developments.

But Emile Haddad, principal of Five Point Communities, a development spinoff of Miami-based home builder Lennar Corp., said a full construction recovery is not likely soon. Some "primary" markets close to job centers in Los Angeles and Orange counties probably would recover first, he added, with places such as the Inland Empire lagging behind.

"We are coming to the bottom in some of these primary markets," he said. But "I would be surprised if we see a significant increase in new construction before 2011 and 2012."

November's uptick was the first time since September 2007 that the median -- the point at which half the homes sold for more and half for less -- didn't post a year-over-year decline. It was still 43.6% lower than the $505,000 peak in early and mid-2007, DataQuick said.

The total number of homes sold in November rose 14.7% from the same month last year, though it fell from the previous month, which is typical as the slower fall and winter seasons begin. Sales decreased 13.3% from October to 19,181 last month in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties, DataQuick said.

The recent improvement in home prices has been largely driven by first-time home buyers and investors snapping up deeply discounted foreclosed homes and other properties in distress. The number of foreclosure sales as a percentage of the entire resale market continued to drop in November, DataQuick said. Properties sold in November that had been repossessed by a bank in the previous 12 months constituted 39.1% of all resales in Southern California, down from 40.6% in October. Foreclosure sales peaked in February at 56.7% of the market.

Nevertheless, the average number of properties repossessed by banks on a daily basis in California continued to increase steadily, by 2.4%, in November compared with October, according to a report released Tuesday by Foreclosure Radar.com. The total number of foreclosures in the state scheduled for sale in November rose to 151,573. That was a 1.4% increase from October, and a 136% increase from November 2008.

The roles of the federal government and Federal Reserve in the housing market remain an issue. Many experts worry that once certain policies and programs wind down -- among them, low interest rates, tax incentives for buyers and an increased accessibility of mortgages backed by the Federal Housing Administration -- the housing market could again falter. The government in November extended a tax credit for first-time buyers through April and expanded it to include some existing homeowners.

"We are concerned that there are going to be more foreclosures in 2010, because you still have a lot of people that are upside down on their mortgages," owing more than their homes are worth, said Jack Kyser, an economist with the L.A. County Economic Development Corp.

"And you also have to be concerned about the housing incentive program that the government just extended," he said. "When that ends, is it going to take away some of the juice from the housing market?"

Source:Los Angeles Times.

America's home builders remain in a funk over the real estate market, with a key industry confidence indicator dropping to its lowest level in six months on Tuesday. But home buyers may finally be perking up a bit. Even in southern California, ground zero in the housing bust, there are signs of life. The median price paid for a home in November was $285,000, up 1.8% from October and the same as November 2008, according to research firm MDA DataQuick. The total number of homes sold in the region rose 14.7% from the same month last year.

In another measurement of the industry's strength, the National Association of Realtors said pending home sales, a forward-looking indicator based on contracts signed, have risen for nine consecutive months. Pending home sales were up 3.7% in October compared to September, and up 31.8% compared with October 2008.

Congress recently extended a tax credit for home buyers, giving first-time buyers until April to claim an $8,000 tax credit. Those who have owned a home for five consecutive years can claim a $6,500 credit for a new home purchase.

"The tax credit is helping unleash a pent-up demand from a large pool of financially qualified renters, much more than borrowing sales from the future," said Lawrence Yun, the association's chief economist.

Another factor in rising home sales is interest rates. The Mortgage Bankers Association said rates on a 30-year fixed-rate mortgage increased to 4.88% in the week ended Dec. 4 from 4.79% the previous week. But that was still below the 5% level, the lowest interest rates since the 1950s. Mortgage loan applications climbed 8.5% during the period.

But before real estate bulls get too excited, there is still reason for concern. Speaking about southern California, John Walsh, MDA DataQuick's president, said "the market is still really lopsided. Foreclosures and short sales are huge factors. There's still not a lot of discretionary buying and selling."

Home builders seem to be in the pessimists corner, with with the latest reading of the National Association of Homebuilders (NAHB)/Wells Fargo Housing Market Index falling one point to 16 from 17 in November to reach its lowest point since June. Readings below 50 indicate home builders view the current market as poor.

That didn't stop Robert Toll, chief executive officer of Toll Brothers home builders, from saying he believes housing may have bottomed. "We don't know how fast we're coming back, but we do know we're coming back," Toll told Bloomberg. "There's a pretty good reservoir of pent up demand."

Source:Los Angeles Times.

People have a hard time understanding that many counties in California are still overpriced. Massively overpriced. Now this is hard to reconcile for many because we hear about the 50 percent price drop for the entire state so many simply assume that this applies to each area. In many ways that is deceptive. This is similar to those using the median home price on the way up in the bubble to justify prices. Isn’t it fascinating that after one decade, you will hardly hear any real estate industry proponent talk about area incomes in relation to current home prices? Why would they? This would poke holes in their Swiss cheese theory of housing. Of course what blasted home prices upwards were toxic products like Alt-A and option ARM products. People would like to forget about this data like a wayward family member but the fact of the matter is many of these loans are going to haunt banks for the next few years.

Option ARMs are largely a California problem but also to drill down further, a problem attached to many of the overpriced counties. Many of the lower priced counties (the bulk of current sales) have washed out a tremendous amount of subprime mortgages. Yet these financially engineered housing products, the Alt-A and option ARMs, are linked to higher priced homes and carry higher average balances.

To say something is expensive we need to measure it with metrics. If you were looking at a stock to see if it were expensive, you would look at price to earnings ratios. In other words, how much are you willing to pay for a certain amount of earnings? With a home, you can look at local area lease rates but also look at local area household incomes. Some would like to argue against this metric but these people are usually the folks who say, “well that’s not what I’m seeing. I’m seeing plenty of people with money” as they stick around their one block radius in Santa Monica. Yet the bigger picture is vastly more important. I’ve put together 15 large California counties and gathered 1999 home price data and measured it up to 2009 data. I’ve also included a price/income category to see how expensive an area is:This chart should tell you the entire story of what is happening. In counties like Solano, Riverside, and San Bernardino prices have been slammed yet these areas have seen tremendous amounts of sales. Why? The price/income ratio seems to be within a fair level. Some may argue and say that these areas have always been cheap. Really? Riverside County had a median price at the peak of $432,000 (a ratio of 7.4 in 2007 but now it is down to 3.4). Solano and San Bernardino have price/income metrics of 2.7 and 3.3 respectively. I have argued for years that a good rule of thumb for housing prices is 3 to 3.5 times your annual gross income. So in these counties, prices may start making more sense. So why aren’t more buyers buying? Because unemployment in these areas is through the roof! The government and Wall Street would like to ignore income and jobs because this is really the driving force of any economy. Yet in this past decade our economy has become housing obsessed to the point that we are now dealing with the biggest economic crisis since the Great Depression.

So that covers the lower priced counties. But what about the more expensive areas? Ah yes. This is where the next round is bound to go off. The most expensive county based on local area household incomes is hands down San Francisco. With a price/income number of 9.3 there is no justifying the current price. This area is flooded with Alt-A loans and will have much explaining to do in the next few years. The next 4 counties are Marin, San Mateo, Los Angeles, and Orange. These areas will be the next rung on the housing correction. They all have price/income metrics that are above 5.5. This is incredibly unhealthy.

Source:Los Angeles Times

Southern California’s housing market continued its step-by-step climb up from the January-February bottom as both sales and prices saw gains last month, a real estate information service reported.

A total of 19,181 new and resale homes sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was down 13.3 percent from October’s 22,132, and up 14.7 percent from 16,720 for November 2008, according to MDA DataQuick of San Diego.

Sales almost always decline from October to November. The year-over-year increase was the 17th in a row. In DataQuick’s statistics, which go back to 1988, the average November had 22,312 sales.

Sales of newly built homes saw an unexpected jump last month. A total of 2,039 new homes were sold, the highest of any month so far this year, and 25.5 percent ahead of 1,625 for November 2008.

Sales have been stoked in recent months by several factors: A federal tax credit for first-time buyers, which had been set to expire last month before it was extended and expanded; robust investor activity, especially inland; super-low mortgage rates; the availability of government-insured, low-down-payment mortgages for first-time buyers; and the allure of a potential “deal” on a distressed property.

“This market is still really lopsided. Foreclosures and short sales are huge factors. There’s still not a lot of discretionary buying and selling outside the more affordable markets. Anybody who can sit tight is doing just that. The market won’t fully rebalance itself until financing becomes available for the higher price ranges,” said John Walsh, MDA DataQuick president.

Mortgages above $417,000 – formerly the definition of a jumbo loan – accounted for 15 percent of all home purchase loans, roughly the same as it has been since June. Those loans made up nearly 40 percent of purchases before the August 2007 credit crunch hit.

Only 4.1 percent of last month’s home purchase loans were adjustable-rate mortgages. A higher ARM rate is part of a healthy market. From 2000 through 2005, 47 percent of the Southland home purchases were financed with an ARM.

Foreclosure resales – houses and condos sold in November that had been foreclosed on in the prior 12 months – made up 39.1 percent of all Southland resales. That was the lowest since May 2008 when it was also 39.1 percent. It hit a high of 56.7 percent last February.

Government-insured FHA financing continued to play a vital role in the Southland’s housing market. Last month 38.1 percent of all purchase loans were FHA-insured mortgages, the same as in October and up from 34.5 percent a year ago. Two years ago FHA accounted for just 2.5 percent of purchase loans.

Absentee buyers purchased 19.1 percent of all homes sold last month, while buyers who appeared to have paid all cash – meaning there was no corresponding purchase loan – accounted for 24.4 percent of sales, based on an analysis of public records.

The median price paid for a home in Southern California was $285,000 last month. That was up 1.8 percent from $280,000 for the month before, and the same as November 2008. Last month was the first since September 2007 that did not see a year-over-year decline in the median.

Last month’s median was 43.6 percent lower than the peak Southland median of $505,000 reached during several months in early and mid 2007.

Because of a sales mix profile still tilted towards lower-cost foreclosure resales, the median’s fall from its peak overstates the decline in the value of the typical home. Generally, it appears that homes in more costly, established neighborhoods have come down in value by about half as much as homes in many newer, more affordable neighborhoods in inland growth areas.

MDA DataQuick, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates, monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.

The typical monthly mortgage payment that Southland buyers committed themselves to paying was $1,207 last month, up from $1,196 for October, and down from $1,380 for November a year ago. Adjusted for inflation, current payments were 45.6 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They were 55.4 percent below the current cycle’s peak in July 2007.

Indicators of market distress continue to move in different directions. Foreclosure activity remains high by historical standards, although mortgage default notices have flattened out or trended lower in many areas. Financing with multiple mortgages is low, down payment sizes are stable, and non-owner occupied buying is above-average in some markets, MDA DataQuick reported.

Source:Los Angeles Times

Southern California rents have dropped 4.9 percent since peaking in the third quarter of 2008, reversing a 12-year trend, it was reported last week.

Rents dropped from an average of $1,501 last year to $1,427 in this year’s third quarter, as occupancy rates fell eight-tenths of a percent to 93.7 percent, according to the real estate research firm RealFacts.

Falling rents benefit those who have lost homes due to foreclosure, but the phenomenon speaks ill of the economy at large, especially with Riverside County’s unemployment rate cresting at 15 percent and Los Angeles County’s rate nearing 13 percent, the Los Angeles Times reported.

"The fact that rents are coming down is of course favorable to those who need to rent," Stuart Gabriel, director of UCLA’s Ziman Center for Real Estate, told The Times. "But it is an artifact of larger economic weakness, and that larger economic weakness is not a good thing."

Typically, rents and home prices move in opposite directions. But the glut of foreclosures that has driven home prices to some of their lowest levels in years is also working with the ailing economy to send rents falling across the region, the newspaper reported.

Some lenders and policy experts are looking at the rental market as a tool to keep more foreclosures off the market.

Fannie Mae recently announced a program that would enable foreclosed upon homeowners to rent their properties at market rates. Another proposal the Obama administration is considering would encourage banks to sell distressed properties to investors who would agree to rent the home to the previous owner, the newspaper reported.

Rents are likely to keep declining or stay flat, The Times reported, as long as lenders continue to pursue foreclosures.

Source:Los Angeles Times

Teri Leahy has lived in her Northridge home for two decades.

She hopes to grow old and die there, if only the bank would just let her.

"I love this house," she said. "I just want to pay my bills. I want to do the right thing."

Leahy is one of 650,000 Americans who qualified for a trial modification loan as part of the Obama Administration's Home Affordable Modification Program that kicked off in February. The $75 billion program allowed borrowers to prevent foreclosure by entering a three-month trial modification program to prove themselves before adjusting to a permanent loan.

But, also like many Americans, Leahy has hit a snag in converting her loan.

The bank says she should qualify but has yet to process her paperwork. Now a collection agency has started to circle her home, saying she has until Jan. 4 before it goes up for sale.

Her stark circumstances are becoming more common as more people across the nation complain about lost documents, lack of communication between lenders and service companies and an overall slow process. The situation has prompted the Obama administration to release a new set of guidelines aimed at placing more pressure on lenders to convert those trial loans into permanent ones - or else.

The new guidelines, released last week, require lenders to report the status of each modification daily to the U.S. Treasury Department.

"We now must refocus our efforts on the conversion phase to ensure that borrowers and servicers know what their responsibilities are in converting trial modifications to permanent ones," Phyllis Caldwell, chief of Treasury's homeownership preservation office, said in a statement.

This week, the Treasury Department also plans to release a list of how many of the 650,000 loans have been converted so far, a maneuver meant to cast a glaring light on which lenders and services are doing their jobs.

The transparency is necessary so that people such as Leahy do not fall through the cracks and lose their homes, said Paul Leonard, the California director for the Center for Responsible Lending, a nonprofit, nonpartisan organization that works to eliminate abusive financial practices.

While Leonard believes there were good intentions behind the Obama administration's home program, the question is whether or not the government, lenders and those who provide services to process mortgages are truly ready for the work.

Lenders were already slow in processing the trial modification loans, he said.

The "announcement is to shine a bright spotlight on the efforts of the services to convert these trial modifications to permanent ones," Leonard said. "The Treasury Department is a little like a jockey on a racehorse, using their whips on the racehorse to get it going."

While banks say they are doing their best to help borrowers avoid foreclosures, they also say they have a difficult time collecting all the documents that are necessary.

And they blame service providers, those companies that act as the go-between and process the papers, for losing documents "not just once, not just twice" but many times, Leonard said.

"This could all be true, but ... the consequences of bureaucratic ineptitude is that real families are losing their homes and are having their lives traumatically changed."

And critics say there are other shortcomings with Obama's plan: it did not foresee the continued foreclosure crisis and soaring unemployment rates in areas such as California.

While home sales are beginning to rise, foreclosures also continue.

In the San Fernando Valley, home sales increased by almost 3 percent from September to October, but foreclosures also rose by 2 percent for the same period. Across Los Angeles County, foreclosures rose from 2,461 in October 2008 to 2,780 in October this year.

Meanwhile, the unemployment rate reached a modern record of 12percent statewide last month.

Among those who would like to modify a loan is Jason Gorowitz, an attorney and Sherman Oaks resident who was laid off in September.

The 34-year-old man said he would like to do the right thing and continue paying off his mortgage, but the longer he remains unemployed, the more he worries he will not be able to. His unemployment check barely covers his expenses, which include providing for his toddler son.

Gorowitz says the bank has told him his loan can't be modified because his current hardship is temporary and since he isn't close to defaulting, he doesn't qualify.

The response doesn't surprise Leonard, who said the banks are going by government guidelines.

"These programs weren't designed to specifically address disruptions in people's incomes," such as unemployment, Leonard said.

"It's akin to seeing someone bleeding, but telling that person, `We're not going to give you a tourniquet until you are finished bleeding,"' Gorowitz said. "God willing, I'll be able to find employment tomorrow and be a productive citizen to society, but right now my hardship is not temporary when it feels very permanent to me."

"This is not a home that I bought two years ago to fix, then flip and make money on," Leahy said.

"I want to die here if the bank will let me."

Source:Los Angeles Times.

Nine Los Angeles canyon homes were evacuated today and people in nearby foothill communities packed their cars and got ready to flee in case a rainstorm brought mud and rocks flowing down from fire-blackened slopes.

The National Weather Service predicted a cold storm from Canada would bring strong winds and an inch or two of rain in most areas of Southern California, with up to 4 inches in some locations.

Nine homes were placed under mandatory evacuation in Sunland, one of a chain of foothill communities northeast of downtown Los Angeles that were threatened by the huge Station Fire this summer.

That blaze charred 250 square miles of Angeles National Forest while burning 89 homes and reducing slopes of water-retaining timber and brush to stumps and ash.

A task force several months ago identified the nine canyon homes as being in a potential site of mudslides or flooding, but no problems had been reported by early afternoon, said Chris Ipsen, a spokesman for the Los Angeles Emergency Management Department.

People in 13 other homes were warned to be prepared to evacuate if the situation worsens, Ipsen said.

Sandbags and concrete barriers were put in place not long after the fire was doused.

Mudslide worries remained high in La Canada Flintridge, about 14 miles northeast of downtown Los Angeles.
n the Paradise Valley neighborhood, homeowner Gary Stibal kept watch on the burned mountain slope that rises sharply from his backyard. His yard was freshly cleared of 5 feet of mud that gushed down during a brief cloudburst earlier this fall.

"People are nervous," he said as raindrops pattered on his umbrella. "It's letting up a little bit now, but I guess there's more heavy stuff coming in later."

His car was packed and, like others in the neighborhood, was parked in the driveway facing the street for a quick getaway.

Stibal also kept an eye on runoff.

"It's starting to get a little muddy now; earlier this morning it was clear water coming down but now as the ground gets more saturated it's more of the ash," he said.

Residents who see signs of any problem shouldn't wait to be ordered to leave, said Bob Spencer of the Los Angeles County Department of Public Works.

"If they can see debris flowing down the street ... the best, wisest and safest thing to do is just get in the vehicle and just go down the hill and leave," he said.

Police officers went to the top of Haines Canyon and advised residents in a handful of homes that they should be ready to leave, said resident April Faieta. The homes are just below a flood control debris basin with towering denuded slopes.

Faieta said she and several other neighbors would remain in their homes, noting that she evacuated three times due to the Station Fire and the home was not affected.

"Everybody left a little too early. ... Everybody's just waiting," she said.

Elsewhere, the hills east of San Francisco Bay saw a rare overnight dusting of snow, with snow also predicted for Fresno and other Central Valley communities.

In the Central Valley, California's agricultural heart, a hard freeze was expected with lows in the upper 20s.

In the mountains, the storm could bring 1 to 2 feet of snow while falling as low as 1,500 feet, forecasters said.

In San Diego, the National Weather Service issued a warning of high winds. Gusts up to 60 mph were forecast.

Two storms from the tropical Pacific were expected to arrive on Thursday and Saturday.

Source:Los Angeles Times

The Los Angeles Basin’s new-home sales surged a whopping 172 percent this quarter, pushing total net sales volume back over the 1,500-unit mark for the first time since the second quarter of 2007. The attached sector alone saw a 236 percent net sales boost from last quarter while the detached sector’s sales volume declined 26 percent. Santa Clarita/Antelope Valley saw an overall sales volume increase of 54 percent despite no new projects entering the market for the third consecutive quarter. Robert Martinez, Director of Research for MarketPointe™ Realty Advisors, Inc., stated, “This increase was due to a 33 percent rise in the attached sector and a hefty 55 percent increase in the detached sector”. The detached output represents an improvement over each of the previous four quarters.

The Santa Clarita/Antelope Valley region also reported a slight drop of 1 percent in the attached value ratio. The Los Angeles Basin again made great strides posting a 10 percent increase in the weighted average value ratio in the attached sector as well as a strong 15 percent increase in the detached sector. ResidentialTrends™ reports that the weighted average value ratio is the best measure of home value.

Inventory continues to drop in the Los Angeles region; the LA Basin reported a 27 percent drop while Santa Clarita/Antelope Valley inventory rates fell 22 percent. According to ResidentialTrends™ research, there are just 29 unsold homes in Santa Clarita/Antelope Valley, the fewest on record. At current sales rates, unsold inventory would last just two month in the attached sector and less than two weeks in the detached. The Los Angeles Basin’s attached sector has close to one year of inventory, while in the detached sector there remains less than ten weeks of immediate supply.

MarketPointe™ Realty Advisors, Inc. provides new housing market statistics throughout California via its ResidentialTrends™ new-home database and its LandTracker™ proposed development database, as well as site specific, tailored housing market research and consulting services. Comprehensive “Housing Market Overviews” providing new home sales, pricing, housing inventory trends, future housing supply, and new and leading developments are available for regions across California.

Source:Los Angeles Times.

Southern Californians facing the loss of their homes are finding refuge in rentals. At larger apartment complexes, monthly rents have declined an average of 4.9% in the last year.Joyce Ann Cato is out of work and about to lose her San Bernardino home to foreclosure.

The 62-year-old special-education teacher filed for bankruptcy protection last April in a bid to keep her house, which is worth less than what she owes on a mortgage she can't afford anymore. As Cato searches for another job, she and her daughter, Minjoy, have landed in a Pomona house that they rent for $1,795 a month, substantially less than the old mortgage payment but still a hefty chunk of the mother's $2,500 monthly income.

"Well, it is reasonable because I don't have to pay the house now," Cato said. "I am able to pay that."

Joyce Ann Cato is one of the many housing-bust refugees finding haven in Southern California's weak rental market. Typically, rents and home prices head in opposite directions. But the glut of foreclosures that has driven home prices to some of their cheapest levels in years is also working in tandem with the ailing economy to send rents falling across the region.
For those like Cato who have emerged on the other side of the housing market's wreckage -- their equity gone, credit shattered and pride bruised -- this increase in affordability is a thin silver lining.

Southern California rents peaked at $1,501 in the third quarter of 2008 after 12 years of consecutive gains. Since then, rents have fallen 4.9%, to an average of $1,427 in the third quarter of this year, according to a survey of larger apartment complexes by property research firm RealFacts. The drop came as the occupancy rate of the buildings ticked down 0.8% to 93.7%. The data don't include homes converted into rental units or smaller apartment buildings.

Some lenders and policy experts are looking at the rental market as a tool to keep more foreclosures off the market.

Mortgage titan Fannie Mae recently announced a program that would allow homeowners who are foreclosed upon to rent back their properties at market rates. Another proposal being considered by the Obama administration would encourage banks to sell distressed properties to investors who would agree to rent the home to the previous owner.

The decline in prices marks a significant reversal from the boom years, when rents increased as people flooded into the Los Angeles area, attracted by a diverse economy. Now many of the region's key industries -- construction, trade, manufacturing, tourism and entertainment -- are reeling. Los Angeles County's unemployment rate soared to 12.8% last month, up from a revised 12.6% in September.

Job losses and competition from foreclosed homes have made concessions by large landlords common. Thomas Shelton, president of Western National Property Management in Irvine, said he was offering about a month of free rent for every 12-month lease signed. In some of the hardest-hit areas, particularly the Inland Empire, he said, he is competing with investors who are renting out condominiums and homes, undercutting market rates.

Timothy Suber, a real estate agent and investor, owns and rents out mostly two-bedroom condominiums in Riverside County's Lake Elsinore area. Though prices dropped enough in 2007 to get him back into the buying game after sitting out the boom, Suber said he has not survived the bust unscathed.

He has dropped his monthly rental rates by an average of $150 since 2007 to attract new tenants and keep old ones. Potential tenants who can secure a loan from a bank -- those with steady income and good credit -- are shunning the rental market to buy, he said, leaving him to deal with the rest.

"They have foreclosures, bankruptcies; they have questionable credit," he said. "That is kind of your captive market."

This is good news for renters such as Thomas DeLong, 40, who said he lost five homes to foreclosure, including investment properties, an inheritance and the house he lived in with his girlfriend.

DeLong, who works the night shift for United Parcel Service at Ontario International Airport and plays bass guitar in a Linkin Park- inspired band called the Almighty Grind, said renting was a relief after years of worry and a financial juggling act that came crashing down all around him.

He walked away from the mortgage on his final home in September and began renting a house for about $1,400 a month, with utilities, in the high-desert area of Perris.

"You are trying to pay all these people, and unfortunately, you have to go through a process of elimination, and even though we did that, we still lost everything," DeLong said.

Although the drop-off in rents is a boon for some, it's also a grim indicator, underscoring just how severely the recession has struck Southern California households. The low rents are likely to continue if lenders step up their repossession efforts.

"The fact that rents are coming down is of course favorable to those who need to rent," said Stuart Gabriel, director of UCLA's Ziman Center for Real Estate. "But it is an artifact of larger economic weakness, and that larger economic weakness is not a good thing."

Cato's story is typical of the heady bubble years and their aftermath. The widow refinanced her San Bernardino house to pay down debts in 2006, taking out an adjustable-rate mortgage. At the time, she was working in San Jose as a special-education teacher, pursuing a dream of becoming a high school counselor. Her sister lived in the house, and Cato said she kept up on her mortgage despite having to also pay rent in San Jose.

Source:Los Angeles Times.

At their recent fall meetings, directors of the California Association of Realtors® (CAR) adopted the following motion: "That C.A.R. in conjunction with NAR, "SUPPORT" the elimination of the FHA 90-day anti-flipping rule, and that C.A.R. write and publish a letter to the FHA Commissioner in opposition to the FHA 90-day anti-flipping rule." While support for the motion was not unanimous, it passed by a significant majority. Why would CAR oppose the anti-flipping rule?

In a 2006 Mortgagee Letter, the Department of Housing and Urban Development (HUD) described flipping and explained its opposition to it in the following way: "Property flipping is a practice whereby a property is resold a short period of time after it is purchased by the seller for a considerable profit with an artificially inflated value, often abetted by a lender's collusion with the appraiser. FHA's policy prohibiting property flipping eliminates the most egregious examples of predatory flips of properties with the FHA mortgage insurance programs"

The primary component of FHA's anti-flipping policy is the 90-day rule. No FHA funding will be provided for properties purchased within 90 days of the seller's acquisition of the property. The intent of this policy is to protect buyers from overpaying (and, of course, to protect FHA's insurance program). Now, being against that sounds like opposing motherhood and apple pie.

However, proponents of the CAR motion argued that, in the current environment, the effect of the anti-flipping rule was actually to harm potential FHA buyers and to shut them out of the real estate market.

The argument begins with the fact that buyers using FHA financing are less preferable to many sellers than are those who have cash or who are qualified for a conventional loan. This is especially true in the REO arena (i.e. bank-owned properties that were acquired through foreclosure). It is common for a listing of an REO property to state that offers with FHA financing will not be considered. Institutional owners of REOs want faster escrows than can be expected from FHA. Moreover, it is frequently the case that an REO property will be in poor condition, requiring repairs, and will not pass an FHA appraisal. Effectively, then, FHA buyers are out of the REO market.

Some investors buy REOs to hold; others buy to realize a short-term profit. The latter usually must do rehab work to bring the property into marketable condition. That work adds value and, of course, the investor(s) will seek to profit from it. Does that mean the property will be sold for "an artificially inflated value?" Of course not. Especially in today's appraisal environment where it is hard enough to get an appraisal to come in even at market value! (There will always be fraud, of course; but no set of rules is going to completely overcome that.)

Market realities shut FHA buyers out of the REO market. With the 90-day rule, they are also shut out of the opportunity to buy a rehabbed house, ones which are being snapped up by buyers – often first-time buyers – who have conventional financing.

During the debate at CAR there were impassioned arguments from agents who had seen their FHA buyers repeatedly excluded from legitimate purchase opportunities. While opponents of the motion did not deny this, they argued against it for primarily political reasons. They believed that opposition to the anti-flip policy made the organization (CAR) appear to be in favor of unfair profits being made at the expense of unwary buyers.

The argument about appearances failed to carry, and directors voted to oppose the anti-flipping rule. Now the organization needs to do what it can to convince FHA.

Source:Los Angeles Times.

Stung by complaints from Silicon Valley and across the country that a $75 billion government program to help refinance troubled mortgages is severely bogged down, federal authorities announced Monday they would increase the pressure on banks to speed up the process and save more people's homes.

But critics called the federal response insufficient and doubted the refinancing delays will be significantly eased unless the government gets tougher with mortgage lenders.

"It's been dismal to date," said San Jose lawyer James "Ike" Shulman who has been closely monitoring the program, which he considers overly lenient toward lenders . "If you just offer the banks carrots, they're just eating the carrots and they're
are not helping anybody save their home."
At issue is the federal Making Home Affordable Program, begun earlier this year to help stem the growing tide of home foreclosures. Under it, borrowers whose mortgage payments are reduced must make three payments on a trial basis before they are qualified for permanent refinancing.

But so far, the vast majority of people enrolled in the program remain in the trial phase, often having lingered there for months after having made their three payments, according to advocates with groups that help homeowners.

"We're seeing four, five and six months for people in the trial period," said Martin Eichner, director of the Department of Housing and Urban Development's counseling programs at Project Sentinel in Sunnyvale. "It's a serious problem in California."

Last month, a Congressional oversight panel reported that fewer than 2,000 of the 500,000 loan modifications then in the works had become permanent.

While not commenting directly on the plan disclosed Monday, Gary Kishner, a spokesman for Chase Bank, responded that "our goal is always to keep the borrower in their home" and, for those who qualify for refinancing, "to get them modified as quickly as possible."

Currently, about 650,000 mortgages are being modified under the program, with California accounting for 134,609 of them, more than any other state. Although the government hasn't disclosed how many mortgages here and elsewhere remain in the trial phase, the U.S. Treasury Department said 375,000 of them nationwide are scheduled to become permanent by the end of the year.

To help insure that, federal officials said Monday that they will begin keeping closer tabs on the status of mortgages being modified. And if banks or the so-called servicers employed to help banks process the refinancing applications fail to meet certain "performance obligations," the officials said, it could result in unspecified fines or other sanctions. And, to shame some companies into improving, the federal government next week plans to publish a list of the worst mortgage-refinance laggards.

"We are encouraged by the pace at which trial modifications are now being made to provide immediate savings to struggling homeowners," said Phyllis Caldwell, chief of the Treasury Department's Homeownership Preservation Office, in announcing the new plan. The goal now, she added, is "to ensure that borrowers and services know what their responsibilities are in converting trial modifications to permanent ones."

Experts offer a variety of possible explanations for the delays in getting people's trial refinancing made permanent. A few speculate that servicers may be dawdling in order to collect extra fees from the banks they work with or that banks may be delaying because they want to foreclose on the property.

But others say its not uncommon for a borrower's income to have dropped by the time their mortgage is considered for permanent refinancing, causing their application to be extensively reconsidered, and that many banks may lack the staff to quickly conduct the in-depth investigations needed to qualify people for permanent refinancing.

Whatever the reason, critics contend federal authorities have been too easy on foot-dragging lenders.

"There really have been no consequences for doing a bad job," said Kevin Stein, associate director of the California Reinvestment Coalition. "We don't have accountability."

Source:Los Angeles Times

Southern California home sales rose in October as prices showed more signs of firming. The median sale price fell by the smallest amount in two years, the result of a shrinking inventory of homes for sale and government and industry efforts to stoke demand and curtail foreclosures. Last month 22,132 new and resale houses and condos closed escrow in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties. That was up 2.8% from 21,539 in September and also up 2.8% from 21,532 a year earlier, according to MDA DataQuick of San Diego.

October marked the 16th month in a row with a year-over-year sales gain, although last month’s was the smallest of those increases. In October, the median price paid for a Southland home was $280,000, up 1.8% from $275,000 in September but down 6.7% from $300,000 in October 2008. It was the median’s smallest annual decline for any month since September 2007, when the median fell 4% from a year earlier. September 2007 – one month after the current credit crunch hit – marked the beginning of a 26-month streak of year-over-year declines in the median price.

The region’s overall median sale price has risen or held steady on a month-to-month basis ever since it dropped to a more-than 7-year low of $247,000 in April. Last month the median was 44.6% lower than the peak $505,000 median reached during several months in early and mid 2007.

More evidence from October sales data that the real estate market in California has stabilized and is now starting to show continued signs of gradual monthly improvements. With 16 consecutive months of year-to-year sales increases, and now six straight months of price increases, it's looking more and more like a gradual, but solid recovery.

Source:LosAngeles Time

October home sales in California were up slightly from September, however, they remained down from the same period last year. Sales of foreclosed properties were down from last year, but still made up more than 40% of the homes sold in October. See the following article below to know more on this.

An estimated 41,280 new and resale houses and condos were sold statewide last month. That was up 2.6 percent from 40,216 in September, and down 2.4 percent from 42,293 for October 2008. California sales for the month of October have varied from a low of 25,832 in 2007 to a peak of 70,152 in 2003, the average is 44,451. MDA DataQuick's statistics go back to 1988.

The median price paid for a home last month was $257,000, up 2.4 percent from $251,000 in September, and down 7.6 percent from $278,000 for October a year ago.

Of the existing homes sold last month, 41.2 percent were properties that had been foreclosed on during the past year. That is the lowest since May last year when it was 39.8 percent. In October 2008 it was 52.4 percent, it reached 58.8 percent last February.

The typical mortgage payment that home buyers committed themselves to paying last month was $1,097. That was up from $1,085 in September, and down from $1,362 for October a year ago. Adjusted for inflation, last month's mortgage payment was 48.6 percent below the spring 1989 peak of the prior real estate cycle. It was 58.3 percent below the current cycle's peak in June 2006.

MDA DataQuick is a division of MDA Lending Solutions, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. MDA DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.

Indicators of market distress continue to move in different directions. Foreclosure activity has declined somewhat but remains high by historical standards. Financing with multiple mortgages is low, down payment sizes are stable, and non-owner occupied buying is above-average in some markets, MDA DataQuick reported.

Source:Los Angeles Times.

(IRVINE, CA) -- According to John Burns Real Estate Consulting's November survey of home builders, the housing market chilled in October, but look for improvement now that the expanded tax credit appeals to a much wider range of buyer.

The national rating of current sales dipped as buyers remained in limbo awaiting the outcome of the tax credit extension. "Our channel checks and survey participants describe cooling traffic and sales in many locations, particularly those with no spec inventory," said Jody Kahn, a vice president with the firm. "Pricing power has also softened in the last 30 days."

This month's survey consists of 265 home building industry executives from public and private companies. In total, their insight is reflective of on-the-ground conditions in 91 MSAs and 1,768 communities.

Survey results showed that only 51% of this year's builder sales have been to the entry-level buyer profile that could benefit from the tax credit. Most of the buyers profiled as Young Families, Elementary Families and Singles tend to purchase entry level homes.

The remaining 49% of the new home market has been comprised of a typical move-up buyer - a segment that can now capitalize on a substantial tax credit as a part of the Worker, Homeownership and Business Assistance Act of 2009 which was signed while this month's survey was underway.


"Most builders were anxious to see this critical legislation pass," said CEO John Burns. "Especially those focused on move-up or active adult/retiree product. Now, those builders can anticipate a boost in sales. The looming question is whether the incentive is enough to motivate consumers to buy during the seasonally slow year end."


Survey Highlights:

* Average net sales per community held at 1.6 nationally, down from a recent high of 2.0 in September. Gains in net sales rates appeared in the three largest regions: Texas, Northern Florida and Southern California. Gains also appeared in Northern California and the Northwest, but were offset by declines in the Southern Florida, Southeast and Northeast regions.

* Southern California builders are reporting price increases, while the national average hovers near Flat. The lowest price ratings are from the Southeast and Northwest, which slid into the housing downturn later than most. Southern Florida builders reported much softer pricing, which is confirmed by our channel checks. In almost all markets, the lower price points are faring better than the higher price points due to FHA financing and the Federal tax credit.

* The average unsold, finished inventory per community was unchanged at 2.8 units, after a substantial decline in the prior month. Builders continue to report that they are converting the speculative starts from the summer to closings, although we hear many reports of public builders starting huge numbers of spec units in the larger metros. Private builders lack the capital to start spec homes, leaving many worried about how they can compete for sales in an environment that demands finished inventory.

* Only the Northeast region reported a modest increase in starts this month. Many private builders lack financing to start new construction, but we hear numerous reports of some public builders starting significant numbers of speculative units and discounting them to sell.

Source:LosAngeles Times

Silver Lake has seen several million-dollar home sales this year. But there is a limit as to how much people will pay for a Silver Lake address and an architectural landmark - especially in a weak real estate market. That's what the owners of the How House, regarded as a masterpiece by modernist master R.M. Schindler, have learned as they have chopped the asking price for the Silver Ridge Avenue home by more than a $ 1 million - the home's second such price chop. Still, that leaves the asking price for the four-bedroom house at a steep $2.79 million.


The home, built in 1925, originally hit the market in 2008 at $4.995 million, reports agent Matt Morgus. In June of this year, the home was re-listed at $3.995 million, reported Curbed LA. That substantial cut was apparently not enough, leading to the most recent $1.2 million reduction.

The house when originally listed at nearly $5 million did not come close to offering the privacy, seclusion, views, amenities and location that often come with properties in that price range, Morgus said.

"While this property has some major architectural significance in architectural history books, this house is still located in Silver Lake and a $5 million dollar price tag just doesn't make sense," Morgus said. "We've had a handful of homes sell in Silver Lake over the $2 million dollar mark in the last 3 or 4 years. I think with this price reduction, the seller is a lot more realistic.

Source:Los Angeles Times

Rate in October climbs 10.1% from the prior month, the fastest in two years, spurred by a trio of incentives.
Home buyers last month snapped up previously owned properties at the fastest pace in more than two years, a Realtors group said Monday.

Home resales increased 10.1% to a seasonally adjusted annual rate of 6.1 million units in October from a downward-revised pace of 5.54 million in September, according to the National Assn. of Realtors in Washington. The October figure was up 23.5% from the seasonally adjusted annual rate of 4.94 million units a year earlier. The last time the sales pace was that swift was in February 2007.

The buying was motivated by low interest rates, a credit for first-time buyers and cheap housing, the association said. The national median home price -- the point at which half the homes sold for more and half for less -- was $173,100 in October, down 1% from September and off 7.1% from October of last year. Whether the stabilization of the housing market will continue remains a subject of debate among housing analysts and economists.

In a note to clients Monday, Patrick Newport, U.S. economist for IHS Global Insight, predicted a sales plunge in December, with mortgage loan volume tracked by the Mortgage Bankers Assn. recently dropping to a level not seen in 12 years.

"This surge may last one more month" into November, he wrote.

The Realtors group lobbied heavily for the extension and expansion of the controversial $8,000 credit for first-time home buyers passed by Congress this month. The group contends that the credit has helped motivate buyers and spur sales. Others argue that the credit, which has been plagued by misuse and fraud, has simply been a giveaway to buyers who would have purchased a home anyway.

The expansion of the credit to include a $6,500 incentive for some current homeowners probably will spur some sales, though many are likely to come from people downsizing into smaller, more affordable homes, said Cameron Findlay, chief economist. Soaring joblessness is expected to weigh on the housing market for months.

"Certainly, unemployment will be a factor in this equation, and I don't see any short-term solution for that one," Findlay said.

In the West, including California, home resales rose 1.6% to an annual rate of 1.31 million in October and are 12% above a year earlier. The median price in the West was $220,200, which is 14.7% below that of October 2008. It was the weakest performance for sales and housing price improvement among the four national regions.

The selling pushed the resold-home inventory at the end of October down 3.7% to 3.57 million, which represented a seven-month supply at the current sales pace, according to the Realtors group.

Distressed properties -- foreclosures or homes whose owners are delinquent on their mortgage payments -- accounted for 30% of U.S. sales in October.

Source:Los Angeles Times.

A new report by the real estate information service MDA DataQuick (MDADQ) shows home sales in Southern California rising. November sales totalled 22,132 for Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties, up by 2.8 percent in October from the previous month.

MDADQ also saw "more signs of firming" in the region's house prices, with the median in this, California's most populous area, up 1.8 percent from September to $280,000. Year on year the median price showed a drop of 6.7 percent, the smallest such decline since September 2007.

"The [annualised] median sale price fell by the smallest amount in two years, the result of a shrinking inventory of homes for sale and government and industry efforts to stoke demand and curtail foreclosures," the report stated.

House prices in Southern California and elsewhere in the US have been driven by people seeking to take advantage of the federal tax credit for first-time buyers, a benefit the US administration has said it will eventually withdraw as prices firm. Also record low interest rates and bargain prices have helped to post a 16th consecutive month of year-on-year gains in sales.

"The government is playing a huge role in stabilizing and, to some extent, reinvigorating the housing market," said John Walsh, MDADQ president. "The real question now is how well can the market perform next year as some of the government stimulus disappears."

It seems analysts are split on how sustainable this housing recovery will prove to be.

"The more upbeat outlooks suggest a strengthening economy and job market will help pick up the slack, and that demand for lower-cost foreclosures will remain robust," said Walsh.

"The more negative forecasts assume, among other things, a much slower economic recovery, more foreclosures than the market can readily digest, and more turbulence in the credit markets," he continued.

Observers have noted that US house price stabilisation may be temporary and directly attributable to government efforts that may prove temporary. However you have to ask – would an administration prematurely reverse policy decisions that are having the desired effect? Do turkeys vote for Christmas?

Source:Los Angeles Times

Quick Facts:
· C.A.R. First-time Buyer Housing Affordability Index stood at 64 percent in the third quarter of 2009 compared with 55 percent (revised) in the third quarter of 2008
· The median price of an entry-level home in California was $247,150 in the third quarter of 2009
· The estimated monthly payment including taxes and insurance was $1,450 in the third quarter of 2009
· The minimum household income needed to purchase an entry-level home in California in the third quarter of 2009 was $43,500

C.A.R. reports entry-level housing affordability reached 64 percent in the third quarter of 2009

LOS ANGELES (Nov. 12) The percentage of households that could afford to buy an entry-level home in California stood at 64 percent in the third quarter of 2009, compared with 55 percent (revised) for the same period a year ago, according to a report released today by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).

C.A.R.’s First-time Buyer Housing C.A.R.(FTB-HAI) measures the percentage of households that can afford to purchase an entry-level home in California. C.A.R. also reports first-time buyer indexes for regions and select counties within the state. The Index is the most fundamental measure of housing well-being for first-time buyers in the state.

The minimum household income needed to purchase an entry-level home at $247,150 in California in the third quarter of 2009 was $43,500, based on an adjustable interest rate of 4.79 percent and assuming a 10 percent down payment. First-time buyers typically purchase a home equal to 85 percent of the prevailing median price. The monthly payment including taxes and insurance was $1,450 for the third quarter of 2009.

At $43,500, the minimum qualifying income was 19 percent lower than a year earlier when households needed $53,700 to qualify for a loan on an entry-level home. Recent decreases in home prices and mortgage rates have brought affordability into better alignment with income levels of the typical California households, where the median household income is $61,030.

The First-time Buyer Housing Affordability Index declined 3 percentage points in the third quarter of this year compared with the second quarter of 2009, due to a 10.2 percent increase in the price of an entry-level home.

At 85 percent, the High Desert region was the most affordable area in the state. The San Luis Obispo County region was the least affordable in the state at 47 percent, followed by the San Francisco Bay region at 49 percent.

Leading the way…® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTOR is one of the largest state trade organizations in the United States with more than 167,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

Source:Los Angeles Times

SAN FRANCISCO- Home sales in Southern California in October rose 2.8 percent from September and year-earlier levels and the region's home prices last month showed "more signs of firming," real estate information service MDA DataQuick said in a report on Tuesday.

Last month 22,132 new and resale houses and condominiums were sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties.

The median price for those sales in California's most populous region edged up to $280,000 on a rise of 1.8 percent from September. The area's median price fell 6.7 percent from a year earlier, its smallest annual decline for any month since September 2007, the report said.

"The median sale price fell by the smallest amount in two years, the result of a shrinking inventory of homes for sale and government and industry efforts to stoke demand and curtail foreclosures," the report said.

October marked 16 consecutive months in year-over-year gains in sales in Southern California, fueled by a rush to take advantage of the federal tax credit for first-time buyers, low mortgage rates and attractive home prices, the report said.

It added that the regional housing market's seeming stability following a vicious slump may be "contrived" and fleeting because of the extent of government efforts aimed at ending the broader national housing downturn.

"The government is playing a huge role in stabilizing and, to some extent, reinvigorating the housing market," said John Walsh, MDA DataQuick president. "The real question now is how well can the market perform next year as some of the government stimulus disappears."

"The more upbeat outlooks suggest a strengthening economy and job market will help pick up the slack, and that demand for lower-cost foreclosures will remain robust," Walsh said. "The more negative forecasts assume, among other things, a much slower economic recovery, more foreclosures than the market can readily digest, and more turbulence in the credit markets."

Though the housing market is displaying some signs of health, economists say they could be misleading.

Home prices in Los Angeles County edged up in October, while sales volume continued a slow downward drift after sizzling through the summer. The increasing prices represented the continuation of a trend that started in May after a slide of almost two years.

The median price of a home was $340,000, up $5,000 from the month before, according to data supplied to the Business Journal by HomeData of Hicksville, N.Y. Adjusting for the difference in the number of selling days per month, sales volume dipped slightly – about 1.2 percent – representing the second monthly decline in a row.

Experts viewed the rising prices as further evidence that the real estate market has stabilized, at least temporarily. But some cautioned that it may be falsely propped up by government stimulus programs that eventually will end.

“About 15 percent of the mortgages in California are not performing right now,” said Christopher Thornberg, principle analyst and founder of Beacon Economics, a West L.A. consulting firm specializing in real estate. “Eventually the properties that those mortgages represent will come on the market, and when they do all hell will break loose.”

According to Thornberg, the rising prices and sales volumes are indicative of an “artificial stability” in the housing market driven by, among other things, a logjam in the foreclosure process created by a state moratorium on foreclosures, the increasing reluctance of banks to move forward on foreclosures and the federal push for loan modification programs that allow homeowners to avoid foreclosure.

Additional factors, he said, include a temporary first-time buyer’s tax credit as well as “ridiculously low” mortgage interest rates created by the federal government’s massive purchase of bad loans.

“What I’m trying to point out is that the real estate market is not healthy,” Thornberg said. “This is a false bottom that will only get worse.”

The most dramatic change in the monthly data was in Palos Verdes Estates, where sales volume increased by 533 percent. Other notable spikes were seen in Maywood, Signal Hill, parts of Culver City and the Exposition Park area of Los Angeles.

Some experts attributed it to activity at both the high and low ends.

“We’re seeing an increase in low-end buyers benefiting from the one-time credit,” said Robert Foster, executive vice president and regional manager of Coldwell Banker Residential Brokerage in Los Angeles.

At the other end of the spectrum, he said, high-end buyers were still getting deals on what they previously couldn’t afford.

Los Angeles County’s most notable median price hikes occurred in South Park, up 213 percent, and Topanga, an increase of 138 percent.

Source:Los Angeles Time

NEW YORK -- The bleeding in the housing market seems to be stanched, at least temporarily, according to home price data released on Tuesday.

Most U.S. cities saw gains in the median price of single-family homes sold during the three months ended Sept. 30, according to the National Association of Realtors' quarterly report on home prices. This is the second consecutive quarter of gains.

The national median home price was $177,900 in the third quarter, up $7,000 from the previous quarter. And while that down more than 11% from the third quarter of 2008, the pace of decline is slowing. In the second quarter of 2009, home prices fell 15.4% from the same period last year.

"The decline in the national median price has moderated recently," Lawrence Yun, NAR chief economist, said in a statement.

Yun said a shrinking supply of unsold homes suggests the housing market is getting closer to price stabilization. But he cautioned that a steady stream of financially qualified buyers is necessary to keep the fledgling housing recovery going.
0:00 /1:231 in 5 homes still underwater

NAR attributed much of the recent increase in home prices to the government's first-time homebuyer tax credit, which has helped revive home sales from a deep slump.

"We can't underestimate just how powerful a catalyst the first-time homebuyer tax credit has been for the housing sector," Yun said.

While a glut of foreclosed properties will continue to weigh on prices in the months ahead, "rising sales from the expanded tax credit should stabilize home prices by next spring," Yun said.

Despite the positive report, many clouds dot the housing market horizon. The darkest of those is the current employment picture. The latest release from the Bureau of Labor Statistics reported a national unemployment rate of 10.2%.

"An unemployment rate of 10.2% is a strong psychological impediment for anyone thinking of buying a house," said Ingo Winzer, president of real estate research firm Local Market Monitor Inc.

"Housing markets respond as much to psychological factors as to economic ones," he said. "So we won't see much of a pickup in home buying until the unemployment rate has turned downward."

Cheapest and priciest areas

The Cape Coral metro area in Florida recorded the largest decline: 40% to $98,000. the Cumblerland area Maryland and West Virginia had the biggest gain: 19.2% to $122,100.

The lowest-priced market in the nation is now Saginaw, Mich., where the median home sold for $61,400 during the quarter, a 6.7% drop over last year. The most expensive market was San Jose, Calif., with a median price of $566,000 -- although that's still a 12.9% discount from a year ago.

Source:Los Angeles Time.

Los Angeles foreclosures for sale slowed in October as banks held off pursuing foreclosure actions on defaulting mortgages and complied with state moratorium and federal loan modification programs.

According to Christopher Thornberg, founder of Los Angeles real estate consulting firm Beacon Economics, around 15 percent of mortgage loans in California are in default, but banks have been reluctant in proceeding with foreclosures because of the expected adverse effects of another wave of foreclosures on price levels and on the whole housing sector, which has been showing signs of recovery.

Thornberg said that eventually, these distressed properties will enter the market, indicating the reality that the current rise in home prices and sales are artificial.

Los Angeles home prices increased in October, with the price median rising from September by $5,000 to $340,000, according to data from HomeData. Total home sales dropped by around 1.2 percent, the second consecutive month that sales declined.

There are areas however in the county where home sales soared. In Palos Verdes, total sales shot up by 533 percent. Sales also soared in Signal Hill, Maywood, Exposition Park and Culver City.

Analysts in the area said that first time home buyers taking advantage of the federal tax credit and lower-priced Los Angeles foreclosures for sale contributed largely to the increased sales in these areas.

Robert Foster of Coldwell Banker in Los Angeles, said sales increases occurred in both the low-end and high-end of the housing sector. He added that there were substantial price increases in South Park and in Topanga.

Paul Habibi, real estate professor at the University of California in Los Angeles, affirmed Thornberg’s analysis that government policies are propping up the housing market. Habibi contended that the government will have to support the market for a longer time because of the unemployment situation.

So far, there are signs of home price improvements in Los Angeles and in other U.S. cities. As discussed in a recent report released by Standard & Poor’s, Los Angeles was among ten cities where house prices improved.

However, in a report released this week, the National Association of Realtors pointed out the decrease in prices of previously owned homes in 80 percent of the country’s metro areas in the third quarter. NAT cited short sales and foreclosure sales, which comprised almost one-third of all home sales during the quarter, as the key factors for the price declines.

Source:Los Angeles Time

Despite falling housing prices, the limits on what are considered conforming mortgages won't change for 2010.

The Federal Housing Finance Agency has set the maximum amount on conforming mortgages for single family homes, condos and condominiums at $417,000 for 2010, unchanged from 2009.

It has also extended the high-cost loan limits for mortgages originated in high cost areas, including the Washington metro, allowing conforming mortgage amounts up to $729,750.

President Barack Obama signed a Continuing Resolution allowing the higher limits in high-priced markets on Oct. 30.

Outside of the continental U.S., loan limits also remain unchanged, at $625,500 in Alaska, Hawaii, Guam and the U.S. Virgin Islands.

Conforming limits are recalculated each year, and are based on sales price changes from the previous year. They represent the maximum loan amount that can be bought or guaranteed by both Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE).

Source:Los Angeles Times

The percentage of households that could afford to buy an entry-level home in California stood at 64 percent in the third quarter, compared with 55 percent for the same period a year ago, according to a report Thursday by the California Association of Realtors.

The minimum household income needed to purchase an entry-level home at $247,150 in California in the third quarter was $43,500, based on an adjustable interest rate of 4.79 percent and assuming a 10 percent down payment.

First-time buyers typically purchase a home equal to 85 percent of the prevailing median price. The monthly payment including taxes and insurance was $1,450.

At $43,500, the minimum qualifying income was 19 percent lower than a year earlier when households needed $53,700 to qualify for a loan on an entry-level home.

Recent decreases in home prices and mortgage rates have brought affordability into better alignment with income levels of the typical California households, where the median household income is $61,030.

The High Desert region was the most affordable area in the state at 85 percent. Riverside-San Bernardino also ranked high in affordability, coming in at 78 percent.

The San Luis Obispo County region was the least affordable in the state at 47 percent. Orange County was close to the top at 51 percent, with Los Angeles County just behind at 52 percent.

Source:Los Angeles Times

Extension of conforming loan limits through 2010 earns praise from C.A.R.

LOS ANGELES (Oct. 30) –The U.S. Congress late yesterday passed a congressional resolution extending through 2010 the current conforming loan limits of $417,000 for most areas in the U.S. and $729,750 for high-cost areas, including many in California. President Obama is expected to sign the resolution today or tomorrow as part of a broader piece of budgetary legislation that will prevent a government shutdown.

The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) and the NATIONAL ASSOCIATION OF REALTORS® (NAR) have long advocated making permanent higher conforming loan limits. As a result of C.A.R.’s and NAR’s efforts, a provision of the Housing and Economic Recovery Act of 2008 included temporarily raising the conforming loan limits from $625,500 in high-cost areas to $729,750 and extending the limits through 2009. Yesterday’s actions effectively extend the higher conforming loan limits for Fannie, Freddie, and FHA loans through 2010.

“There is no doubt that higher loan limits and the federal tax credit for first-time home buyers have helped stabilize California’s housing market over the last year,” said C.A.R. President James Liptak. “C.A.R. applauds our congressional representatives for their actions to extend the higher loan limits through 2010. They now should focus on making higher loan limits permanent.”

The conforming loan limit determines the maximum size of a mortgage that Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac can buy or “guarantee.” Non-conforming or “jumbo loans” typically carry higher mortgage interest rates than conforming loans, increasing monthly payments and hampering the ability of families in California to purchase homes by making them less affordable.

Leading the way...® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with nearly 163,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

Source:Los Angeles Time

Amid the market downturn, the public is welcome to see some properties listed for more than $10 million.
For Florence Mattar, each open house has a routine. She drives around the neighborhood placing signs, brings in fresh flowers, stocks the refrigerator with bottled water and sets out a sign-in sheet.

Similar scenes play out across Southern California every weekend, with one expensive exception. The Tuscan-style house she is "sitting," to use the industry term, is listed at $21.9 million. And anyone is welcome to see it. All 9,691 square feet of it.

Whether spurred by the down housing market, the opportunity to promote themselves or a determination to make a sale, a select group of area real estate agents has raised the bar on public open houses above $10 million -- to $12.9 million in Beverly Hills, Malibu and Brentwood Park, $18.9 million in Pacific Palisades and even higher in the "bird streets" area of the Hollywood Hills, where Mattar's reclaimed stone, brick and wood listing sits serenely at the end of a cypress-lined driveway.

"You get more people because they are curious," the Coldwell Banker agent said. "They've never stepped in a house that price."

Through bubbles and busts, the open house has remained a key tool for buyers and sellers, at least for properties with price tags that are less than gold-plated.

Nearly half of recent buyers used open houses for information during their home search, according to the National Assn. of Realtors, and 15% found a home through an open house, a number that has held fairly steady since 2001.

When prices were headed for the stratosphere, a certain amount of open-house upscaling could be expected. Yet now, with home-profit expectations tumbling back to Earth, the public showing has gone even more up-market.

Simon Beardmore of Sotheby's International Realty in Brentwood doesn't typically hold public open houses at higher price points, but made an exception recently for a newly built 10,300-square-foot gated estate in Brentwood Park listed at $12.95 million. The first week it drew about 150 visitors, the second 100 and the third from 60 to 70.

"It was very appropriate because it's a showcase for my client, who is a builder," he said. The open houses have brought work for builder Paul Morrow; Beardmore said it was a good business decision for him, too, because showings often attract curious neighbors."I'm very lucky to be able to hold an open house at this price because it gives me a lot of face time with the clientele of the neighborhood," he said.

A major reason to have an open house at a pricey property, agents agree, is to pick up more clients.

The showings attract people relocating from other states and countries, as well as locals, Beardmore said. "You'd be surprised at the high-profile people who come through on a Sunday open."

Richard L. Peterson of San Francisco-based Market Psychology Consulting conjectured that dropping in at top-dollar open houses could become a pastime for the well-heeled, adding that "there may be something to being seen at such an open house."

Before her foray into the $20-million-plus heights with the Hollywood Hills listing, the most expensive homes Mattar had ever held open were in the $6-million to $7-million range.

Built in 2006, the six-bedroom, eight-bathroom villa on a landscaped promontory of more than an acre is a second home. It was her idea to start holding the open houses and the owners agreed as long as they are out of town, Mattar said."They don't live in it permanently, so there's nothing personal," she said of the house, which was furnished by a designer and has no art or other valuables.

Mattar, who also markets the home through all the usual channels, is realistic about her chances of selling it through an open house. "The probabilities are very slim," she said, but in this market "you have to take that extra step. To go beyond the norm. To expose the property and show it and make it accessible to everybody."

Drew Fenton of Hilton & Hyland in Beverly Hills has held public open houses this year on properties priced as high as $19 million. But don't expect a genuine view of the occupants' opulent lifestyle.

"The homes are staged," Fenton said. "I even had a home owned by a celebrity in the bird streets we held open. There was nothing personal in the house."

Jade Mills of Coldwell Banker in Beverly Hills has turned to public open houses at a newly constructed $12.95-million home in the Beverly Hills Post Office area (since lowered in price to $10.995 million) and a 10,000-square-foot home listed at under $20 million in Beverly Hills. She approached the sellers of her Beverly Hills listing about using public showings to give the home more exposure.

Source:Los Angeles Time

President Obama on Friday, Nov. 6 signed a bill extending and expanding the Federal Tax Credit for Home Buyers. The bill passed the U.S. House of Representatives yesterday and the U.S. Senate late Wednesday.

The tax credit will be extended through April 30, 2010, with a 60-day extension if a binding contract is in place prior to the deadline. First-time home buyers will continue to receive a tax credit of up to $8,000, while existing homeowners will receive a reduced credit of up to $6,500. Existing homeowners will be eligible for the $6,500 if they have lived in their current residences for at least five years. The bill also will increase the qualifying income limits from $75,000 for single tax filers and $150,000 for joint filers, to $125,000 and $225,000, respectively. The purchase price of the home is capped at $800,000.

Under additional provisions in the bill, taxpayers can claim the credit on purchases completed in 2010 on their 2009 income tax returns. The bill maintains the provision that home buyers do not have to repay the credit provided the home remains their primary residence for 36 months after purchase, and waives this requirement for active duty military personnel who move due to a military order.

Source:Los Angeles Time.

Why didn't Wall Street firms tell potential investors that the bonds they were selling them were rotten? Why did their business partners, including subprime mortgage lenders, ignore glaring evidence that borrowers weren't qualified and give loans to virtually anyone with a heartbeat?

The answer is simple: Because they could.

In many cases, no law or regulation prohibited these firms from doing what they did. In others, former regulations that might have impeded them had been rolled back.
After 30 years of a national political culture that damned government regulation and celebrated unfettered markets, the lions of Wall Street were free to practice the social Darwinism at the heart of their world — survival of the fittest, and the winner feasts on the spoils. Smaller players down the financial food chain played by the same ethics-free ethos.

That's the back story to the U.S. financial crisis. At every turn where regulation was missing in action, the actors did the wrong thing, all along the long, interconnected trail of transactions that make up mortgage finance."This crisis started one household at a time. As much as everyone wants to talk about derivatives and shadow markets and rating agencies, it started as one lousy mortgage sold to one family, repeated millions of times," said Elizabeth Warren, a Harvard University business law professor whose thinking has helped shape the regulatory overhaul efforts now under way in Congress.

At the front of the chain were homeowners who took out loans with no documentation or little verification of income, bidding for more home than they could afford and betting that prices would keep rising forever. Mortgage brokers who originated their loans often received legal kickbacks from conscience-free lenders if they got borrowers into creative loans with high and adjusting interest rates.

The mortgage brokers churned volume for big subprime lenders such as New Century Financial and Ameriquest Financial, both now defunct. They exploited a regulatory gap to become nonbank lenders, which were regulated only on the state level, and spottily at that.

To address the "liar's loans" and mortgage-broker trickery, Congress is pushing to create a Consumer Financial Protection Agency. It would regulate consumer credit products such as mortgages, credit cards and payday loans.

The agency would force lenders to offer products with simpler terms and greater disclosure. It would regulate consumer credit in the interest of borrowers, not lenders. This agency, Warren's brainchild, would address directly the weakened lending standards that Wall Street exploited, and which led to the financial crisis.

Source:LosAngeles Time

Many first time home buyers have been rushing to complete purchases before expiration of the first time home owner tax credit at the end of November. Sales of homes in cities such as Los Angeles, San Diego and Las Vegas, where foreclosures are booming have been attributed to a combination of attractive prices, low interest rates and the first time home buyer tax credit.

The current tax credit provides for a credit of 10% of the sales price, up to $8,000 for first time home buyers. U.S. Senators recently agreed to extend this credit and offer a reduced credit of up to $6,500 to repeat buyers who have owned their current homes for at least 5 years. If approved, this tax credit would be available to buyers who enter into a contract to purchase a home by the end of April and close such purchase by the end of June. After passage by the Senate, the bill goes to the House for approval.

Approximately 1.4 Million homes buyers qualified for the existing credit through the end of the summer. The National Assoc. of Realtors estimates that 350,000 of them would not have bought their

homes without this tax credit.

New home sales fell 3.6% last month. Many builders said the drop was due to the uncertainty about whether the tax credit would be extended. Since it typically takes 45 to 60 days to complete a transaction, the purchase of a home today would probably not close by the November deadline. The tax credit is so important to some buyers that they are adding a clause to their contracts which would entitle them to cancel their sale if it is not able to close by November 30.

Nouriel Roubini, one of the few economists to accurately predict the financial crisis, predicts that huge losses in commercial real estate loans will add to our economic woes. Although the number of unsold homes may be stabilizing, he says prices are poised to fall further.

While the number of home sales have risen after hitting bottom earlier this year, many economists believe that the worst is not over for home values. These economists say prices will continue to dip because of rising unemployment. As a result, more people will be unable to make their mortgage payments. The chief economist at real estate web site Zillow.com expects more supply to come into the market and says “additional supply will outpace demand.”

Despite substantial unsold inventory, once a property on the Westside is reduced to what is perceived as current fair market value, the property can sell quickly and even generate multiple offers. Pricing in this market is critical in order to attract offers. As a seller, you do not want to chase what could be a down-trending market. Do not hesitate to contact Bess to discuss your options.

To find short pays and foreclosures in your area or for a free consultation to assess your real estate or financing options, please contact Bess. Bess Hochman is a Real Estate Broker & top producer for more than 15 years. Bess is also distinguished by holding a law degree. Her high-end clientele include celebrities, attorneys, and other professionals that understand the value of a real estate broker with legal expertise and experience. A native of Beverly Hills, Bess credits her success to repeat referrals by her satisfied clients.

Source:LosAngeles Time

In Los Angeles, two thirds of the families facing foreclosure who walk through the doors of our HUD-approved housing counseling agencies have been scammed by so-called mortgage modification consultants. These consultants promise the world to vulnerable homeowners desperate to stay in their homes, charge advanced fees as high as $5,000 and then take the money and run.

Today, I took a big step in increasing the resources that homeowners need in order to combat loan scams and foreclosure fraud. I announced the start of NeighborWorks America's national campaign against loan modification scams. I stood with Eileen Fitzgerald, Chief Operating Officer of NeighborWorks America, to deliver this simple message to Angelenos and the rest of country:

1. You don't need to pay for a loan modification.

2. If you are facing foreclosure, there are HUD-approved housing counseling agencies ready and able to assist you FOR FREE.

3. If a deal sounds too good to be true, it is!

I was honored that NeighborWorks America chose Los Angeles to launch this valuable campaign. Over the past two and a half years, more than 28,000 Angelenos have fallen victim to foreclosure. That's 28,000 friends and neighbors who lost their homes and their stake in the American dream.

Over the past year, we have worked tirelessly to get the message out about the dangers of loan scams to our residents. In fact, in this crisis, we were the first city in the country to ban mortgage modification consultants from charging advanced fees.

It's high time that elected officials, non-profit organizations, and banks work together to shut the door on loan scams and foreclosure fraud once and for all.

As they say, forewarned is forearmed. By giving our homeowners credible information and directing them to reliable resources, we can beat these scammers! To report a scam or to spot a scam, homeowners should go to the NeighborWorks campaign website.

Source:LosAngeles Times

The number of mortgage default notices filed against California homeowners fell last quarter compared with the prior three-month period, the result of lenders' evolving foreclosure policies, an uncertain legislative environment and an uptick in the number of mortgages being renegotiated, a real estate information service reported.

A total of 111,689 default notices were sent out during the July-through-September period. That was down 10.3 percent from 124,562 for the prior quarter, and up 18.5 percent from 94,240 in third quarter 2008, according to San Diego-based MDA DataQuick.

The number of recorded default notices peaked in the first quarter of this year at 135,431, although that number was inflated by deferred activity from the prior four months.

"It may well be that lenders have intentionally slowed down the pace of formal foreclosure proceedings. If so, it's not out of the goodness of their hearts. It's because they've concluded that flooding the market with cheap foreclosures in this economic environment may not be in their best financial interest. Trying to keep motivated, employed homeowners in their homes might be the most cost-efficient way to stem losses," said John Walsh, DataQuick president.

The median origination month for last quarter's defaulted loans was July 2006, the same as during this year's first and second quarters. A year ago the median origination month was June 2006, so the foreclosure process has moved one month forward during the past 12 months.

"There's a batch of truly nasty loans that were made in mid 2006. There's another batch made in late 2006. These are worse than the mortgages before and after, and it's taking a long time to process them," Walsh said.

The lenders that originated the most loans that went into default last quarter were Countrywide (7,583), Washington Mutual (5,146) and Wells Fargo (4,425). Along with Bank of America (1,979) and World Savings (4,237), they were also the most active lenders in the second half of 2006. Last quarter's default rate on loans originated in the second half of 2006 ranged from 1.7 percent for Bank of America to 11.9 percent for World Savings.

Smaller subprime lenders had far higher default rates for that period: ResMAE Mortgage was at 73.9 percent, Own it Mortgage 69.5 percent, BNC Mortgage 61.4 percent, Argent Mortgage 59.9 percent and First Franklin 59.4 percent. While these and most other subprime lenders are long gone, their loans were bundled, resold and now live on as "troubled assets".

Indeed, many, if not most, of the loans made in 2006 are owned and/or serviced by lending institutions other than those that made the loans. The servicers pursuing the highest number of delinquencies last quarter were ReconTrust Co, Quality Loan Service Corp and Cal-Western Reconveyance Corp.

While most foreclosure activity was still concentrated in affordable inland communities, the foreclosure problem continued to slowly migrate into more expensive areas. The state's most affordable sub-markets, which represent 25 percent of the state's housing stock, accounted for 52.2 percent of all default activity a year ago. In third-quarter 2009 it fell to 42.9 percent.

On primary mortgages, California homeowners were a median five months behind on their payments when the lender filed the notice of default. The borrowers owed a median $12,665 on a median $343,200 mortgage.

On home equity loans and lines of credit in default, borrowers owed a median $3,948 on a median $62,800 credit line. However the amount of the credit line that was actually in use cannot be determined from public records.

San Diego-based MDA DataQuick is a division of MDA Lending Solutions, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. MDA DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts. Notices of Default are recorded at county recorders offices and mark the first step of the formal foreclosure process.

Although 111,689 default notices were filed last quarter, they involved 108,372 homes because some borrowers were in default on multiple loans (e.g. a primary mortgage and a line of credit). Multiple default recordings on the same home are trending down, DataQuick reported.

Mortgages were least likely to go into default in San Francisco, Marin and Santa Cruz counties. The probability was highest in Merced, San Joaquin, and Riverside counties.

Trustees Deeds recorded, or the actual loss of a home to foreclosure, totaled 50,013 during the third quarter. That was up 9.5 percent from 45,667 for the prior quarter, and down 37.1 percent from 79,511 for third-quarter 2008, which was the all-time peak.

In the last real estate cycle, Trustees Deeds peaked at 15,418 in third-quarter 1996. The state's all-time low was 637 in the second quarter of 2005, MDA DataQuick reported.

There are 8.5 million houses and condos in the state.

Foreclosure resales continued to decline as a market factor, accounting for 42.8 percent of all California resale activity last quarter. It was 49.9 percent the prior quarter, and a year ago it was 47.5 percent. It peaked at 57.8 percent in the first quarter of this year. Foreclosure resales varied significantly by area last quarter, from 9.6 percent in San Francisco County to 70.2 percent in Merced County.

Of the homes foreclosed on statewide in an 18-month period ending this July, about 82 percent have re-sold on the open market, while 18 percent, or more than 57,000 homes, have not. Of those that have not re-sold, it cannot be determined from public records what portion is currently being marketed for sale, as opposed to, among other things, being used as rentals or being left vacant and not for sale. Over the past year California buyers have snapped up an average of nearly 18,000 foreclosure resales a month.

A year ago the percentage of foreclosures that had not yet re-sold was about twice as great, while the number of unsold foreclosures from the 18-month period ending in July 2008 was about 50 percent higher than it is now.

Source:Los Angeles Times.

As some urge that the first-time buyer tax credit be extended, Congress hears testimony about questionable claims.This year's $8,000 federal tax credit for first-time home buyers has attracted as many as 90,000 ineligible claimants -- including a 4-year-old child -- raising questions about efforts to extend the popular program.

In all, tax credit claims totaling more than $600 million are suspicious, tax officials testified Thursday before Congress.

The credit, on home sales to first-time buyers that close through Nov. 30, is an important piece of the $787-billion stimulus package enacted in February and is part of the Obama administration's effort to lift housing sales.

The housing industry has been pushing to extend the credit or even expand it to include more home buyers to keep momentum going in the nascent recovery of home sales and prices.

But the White House, eyeing the estimated $1-billion monthly cost, has been less eager.

"Based on the administration of the credit today, I am very concerned about the IRS's ability to effectively administer the credits that are claimed before the Dec. 1 deadline, let alone any credits that may be claimed within future extended deadlines," Treasury Inspector General J. Russell George testified before the House Ways and Means Oversight subcommittee.
The tax credit goes to buyers who had not owned a primary residence in the last three years and earned less than $75,000 as an individual or less than $150,000 as a married couple.

But through late August, more than 19,000 taxpayers had listed the credit for properties that hadn't been purchased, filing claims worth nearly $140 million, George said. Nearly 74,000, claiming nearly $504 million, appeared to have already owned a home, he said.

An additional 582 supposed first-time home buyers turned out to be younger than 18 years old, claiming nearly $4 million.

Although officials said some circumstances would allow minors to purchase a home, most of the suspicious cases seemed to involve parents pulling the strings because their own incomes were too high.

George said more than 3,200 taxpayers claimed nearly $21 million through tax returns filed with individual taxpayer identification numbers, often used by nonresident aliens, who are excluded from the program.

Several Internal Revenue Service employees were among the taxpayers who wrongly claimed the credit, he said.

Meanwhile, 48,580 taxpayers still working with the less-generous 2008 version of the credit may have claimed less than they were entitled to.

In direct response to Thursday's testimony, subcommittee Chairman John Lewis (D-Georgia) introduced legislation that would boost the minimum age of credit seekers to 18 and require claimants to include documents proving their eligibility.

The quick implementation of the tax credit program caused the IRS to process more than 1 million returns before new fraud filters were in place, he said.

"This tax credit is an important resource for families seeking to purchase a home and a vital part of our economic recovery efforts," Lewis said in a statement. "We must ensure that we are administering the credit accurately and strike a balance between issuing timely refunds of the credit and protecting federal resources."

The IRS has so far discovered 167 criminal schemes, opened 115 criminal investigations and temporarily frozen more than 110,000 refunds.

Some cases, officials said, could reveal innocent errors, but the agency has already agreed to the inspector general's recommendations to take corrective action.

"The IRS recognized that there is potential for both fraud and error whenever a new refundable tax credit, like the first time home buyers, is enacted," testified Linda Stiff, the agency's deputy commissioner for enforcement. "We cannot let fraudulent activity undermine a program that has benefited so many."

Through late August, more than 1.4 million claims have been made for the home buyer's credit, with hundreds of thousands more expected when tax returns are filed in 2010. Lewis estimated that Americans, 60% of them with incomes below $50,000, will end up claiming around $18 billion in tax credits.

Source:Los Angeles Time

The reason for the rise: Buyers taking advantage of the tax credit for first-time owners before it expires next month. The median price for an existing home was $174,900, down 9% from a year earlier.
Sales of existing homes surged in September as buyers raced to take advantage of the tax credit for first-time home buyers before it expires next month.

Nationwide, sales of previously owned homes jumped 9.4% in September to a seasonally adjusted annual rate of 5.6 million from a downwardly revised 5.1 million in August, the National Assn. of Realtors reported Friday.

It was the fifth increase in the last sixth months, and sales activity is at its highest level since July 2007, the association said. Sales typically drop from August to September.

On the downside, home prices continued to skid, weighed down by foreclosures and short sales. Nationally, the median price for an existing home was $174,900, down almost 9% from $191,200 a year earlier and slightly lower than August's median price of $177,300.Analysts noted that the strong sales pace helped pull the inventory of unsold homes down 7.5% from August. That left the industry with a 7.8-month supply of homes for sale.

Drawing down the inventory of unsold homes "is critical to stemming the decline in prices," Deutsche Bank economist Joseph Lavorgna wrote in a note to clients, adding that "we think the housing market has touched bottom."

Other analysts weren't so sanguine, noting that the home buyer tax credit of up to $8,000 is set to expire Nov. 30, and efforts in Congress to extend it are uncertain.

"This is basically a false bottom driven by a mad scramble caused by the end of the tax credit and artificially low interest rates," said Christopher Thornberg, a principal with Beacon Economics in Los Angeles.

Because the tax credit applies only to home sales that close by Nov. 30, "you basically would have to sign a contract to buy a house today to qualify," said Lawrence Yun, chief economist for the Realtors association.

The Western region, which includes California, notched the biggest sales increase -- 13% -- of the four regions tracked by the association. It also recorded the biggest year-over-year price drop. The median price in the West was $219,000 last month, 15% below September 2008's median.

Sales rose 4.4% in the Northeast, 9.6% in the Midwest and 9% in the South.

Source:Los Angeles Times

Standard & Poor's/Case-Shiller index rises 1% in August from July in its third consecutive monthly gain. Southern California cities, led by L.A. and San Diego, show notable increases.The nation's biggest cities are posting steady gains in home prices, a closely followed index showed Tuesday, adding fresh evidence that the U.S. housing market is stirring to life.

But economists are divided over whether the recent improvement is the result of temporary federal policies or a sign that homes have gotten cheap enough to spur a lasting recovery.

Home prices in 20 metropolitan areas rose 1% in August from the month before, according to the Standard & Poor's/Case-Shiller index released Tuesday. The index has posted three consecutive month-to-month gains, bringing home prices in August to pre-bubble levels of autumn 2003. The price index is down 30% from its May 2006 peak.

"We are seeing stabilization," said Patrick Newport, an economist with IHS Global Insight.

A variety of federal policies has contributed to the steadying of home prices. The federal government has offered an $8,000 tax credit for first-time buyers. Interest rates on mortgages have hit their lowest levels in years as a result of the Federal Reserve's campaign to keep credit flowing throughout the economy. And a dreaded wave of foreclosures appears to have been averted as banks responded to government pressure to work with borrowers facing foreclosure.
What remains uncertain is where the housing market will go if these policies ease.

Michael D. Larson, an interest rate and real estate analyst for Weiss Research, said he expects the real estate market to stumble with the expiration of the tax credit at the end of November.

Still, he said, relatively low prices will continue to spur demand from shoppers.

"You are going to see some give-back; you are probably going to see a pause in the recovery," Larson said.

"But I think the fundamental story is that housing got way too expensive and now you could argue that housing is cheap again, and that is what it boils down to."

Christopher Thornberg, a Los Angeles economist who was an early predictor of the housing bubble, disagreed.

"I can't emphasize enough how this rally in the market is being driven by policy and not fundamentals," he said.

August home prices declined 11.3% compared with the same month a year earlier, according to the index, although the year-to-year decline wasn't as steep as in recent months.

The index's annual rate of decline has been improving since early 2009, S&P said.

Looking at the seasonally adjusted monthly data, 17 of the metro areas tracked by the index showed improvements in August compared with July. Meanwhile, 19 of the 20 markets showed moderation in their year-over-year rates of decline.
Southern California cities -- San Diego and, in particular, Los Angeles -- have seen notable gains, separating themselves from other Sun Belt cities, including Las Vegas and Phoenix, Blitzer said.

Los Angeles-area prices in August improved 1.3% over July on a seasonally adjusted basis. The index for Los Angeles was down 12% compared with the same month a year earlier.

Home prices in San Diego rose 1.5% on a seasonal basis from July but fell 8.9% compared with August 2008.

San Francisco-area homes gained 2.6% on a seasonally adjusted basis over the month of July.
On a year-over-year basis, San Francisco-area homes declined 12.5% in August.

Only the cities of Las Vegas, Charlotte, N.C., and Cleveland reported monthly declines in August.

August home prices in the Las Vegas area dropped 0.8% over July on a seasonally adjusted basis. Las Vegas also had the biggest year-over-year drop, falling 29.9% in August.

Las Vegas has been hit hard by the drop in tourism, oversupply in housing, construction crash and high unemployment, said Larson, the analyst with Weiss Research.

Phoenix fared better, posting a 1% home price increase in August over July. But the city had the second-largest year-over-year drop with a 25.1% decline in August.

The index compares the latest sales of detached houses and accounts for factors such as remodeling that might affect a home's sale price over time.

Using those data, an index score is determined to show price changes, with a score of 100 reflecting January 2000 prices.

Source:Los Angeles Time

An estimated 40,216 new and resale houses and condos were sold statewide last month. That was up 1.0 percent from 39,811 in August, and down 0.3 percent from 40,317 for September 2008. California sales for the month of September have varied from a low of 24,460 in 2007 to a peak of 69,304 in 2003, the average is 44,816. MDA DataQuick's statistics go back to 1988.

The median price paid for a home last month was $251,000, up 0.8 percent from $249,000 in August, and down 11.3 percent from $283,000 for September a year ago.

Of the existing homes sold last month, 41.9 percent were properties that had been foreclosed on during the past year. That is the lowest in more than a year. In September 2008 it was 50.9 percent, it reached 58.8 percent last February.

The typical mortgage payment that home buyers committed themselves to paying last month was $1,085. That was down from $1,093 in August, and down from $1,363 for September a year ago. Adjusted for inflation, last month's mortgage payment was 49.1 percent below the spring 1989 peak of the prior real estate cycle. It was 58.8 percent below the current cycle's peak in June 2006.

MDA DataQuick is a division of MDA Lending Solutions, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. MDA DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.

Indicators of market distress continue to move in different directions. Foreclosure activity remains high by historical standards. Financing with multiple mortgages is low, down payment sizes are stable, and non-owner occupied buying is above-average in some markets, MDA DataQuick reported.

Source:LosAngeles Times

Looking to make home improvements to help keep energy costs down this winter? The federal government is offering some financial incentives in the form of tax credits.

The credits can be claimed on a homeowner's income taxes for 2009 or 2010, whatever year the improvements were purchased. With a credit, the amount comes off any taxes you owe. Also, the credit is nonrefundable, meaning it allows taxpayers to lower their tax liability to zero, but not below zero, according to the Internal Revenue Service.

It's a good time to be thinking about improvements, says Ronnie Kweller, spokeswoman for the Alliance to Save Energy.
[MarketWatch WSJ.com] Andy Rash

Upgrade your insulation, windows, doors, roofing, heating and air-conditioning system or water heater, and you could qualify for a federal tax credit for 30% of the purchase price of the product -- up to a $1,500 maximum credit.

To qualify for the credit, you must place those purchases in service between Jan. 1, 2009 and Dec. 31, 2010.

"The $1,500 cap applies to the aggregate amount of credits claimed in both years combined," says Robin Christian, senior tax analyst at the tax and accounting business of Thomson Reuters. "Also, only improvements made to your principal residence qualify -- vacation homes are not considered."

Details on which products qualify can be found on the Environmental Protection Agency's Energy Star program Web site. Some stores also post information. For instance, at Home Depot's Web site, there's a link to a list of specific products that qualify.

Source:LosAngeles Time

With a proposed ban on septic systems in central Malibu looming, the city today said residential property owners would be on the hook for $1,000 a month to pay for a centralized wastewater treatment system. Commercial property owners could be forced to pay significantly more, the city said.

Malibu said such a system would cost $52 million. That is more than three times the $16.7-million projection that the Los Angeles Regional Water Quality Control Board has mentioned at recent community workshops.

Upset at what it calls Malibu's slow pace of correcting water pollution issues in Malibu Creek, Malibu Lagoon and Surfrider Beach, the water board has proposed a prohibition on septic systems in the city's core. The agency says pollutants leaching from aging and overtaxed septic systems are a big cause of the pollution. It plans to consider the issue Nov. 5.

The city has been moving forward with a treatment plan, but its consultants say the operation and maintenance would cost $420,000 a month. Assuming the water board's prohibition zone would include 400 to 500 land parcels, the costs would result in payments of about $1,000 per month per parcel, the city said.

"We are deeply concerned that the regional board has not completed its due diligence and has not considered the overwhelming monthly cost to local homeowners and landowners," said Malibu Mayor Andy Stern.

The city has asked the water board to put the the proposed ban on hold.

Source:LosAngeles Time

The average last week, assuming a 20% down payment, rises to 5.02% from 4.89% the previous week, the Mortgage Bankers Assn. says. Applications for home loans decline.


The average rate on a 30-year fixed-rate home loan edged back above 5% last week as mortgage applications fell, the Mortgage Bankers Assn. said Wednesday.

The average rate on a 30-year fixed-rate loan, assuming a 20% down payment, increased to 5.02% from 4.89%. But upfront points paid to lenders, including the origination fee, averaged 1.11% of the loan balance, down from 1.13%, the trade association said.

The average 15-year rate rose to 4.44% from a record low of 4.32%, with average points paid unchanged at 1.04% of the loan amount.

The average rate on 30-year loans slipped below 5% in the middle of last month, based on the association's survey of lenders. That triggered a mini-boom in applications.

Applications for purchase loans slipped 5% last week from the previous week, the bankers group said. Applications for refinance loans, which have made up about two-thirds of the total recently, edged down 0.1%. The decline in overall applications was 1.8%.

The trade group said this week that it expected 30-year loan rates to average 5% this quarter but climb back to 5.6% by late next year.

Source:LosAngeles Time

Lenders filed nearly 112,000 mortgage default notices against California homeowners during the past quarter, a 10 percent drop from the previous quarter.

San Diego-based MDA DataQuick says in a report Tuesday that the decrease came as lenders renegotiated more mortgages and took other efforts to limit foreclosures, apparently to keep cheap homes from flooding the market.

The firm says the latest figures for the July-through-September period were down from a record high of more than 135,000 during the first quarter of 2009.

The latest figures marked a 19 percent increase from the nearly 94,000 recorded in the year-ago period.

Notices of default are the first step in the formal foreclosure process.

Source:Los Angeles Time

La Jolla, CA---Southland home sales edged higher last month, bolstered by late-closing summer transactions, low mortgage rates and buyers hoping to take advantage of a soon-to-expire tax credit. The region’s median sale price remained lower than in September 2008 but, for the first time in years, several counties logged year-over-year gains in the median price paid for resale houses, a real estate information service reported.

Last month 21,539 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties. That was up 0.2 percent from 21,502 in August and up 5.1 percent from 20,497 a year earlier, according to MDA DataQuick of San Diego.

September marked the 15th month in a row with a year-over-year sales gain, although last month’s was the smallest of those increases. Sales for the month of September have averaged 24,873, ranging from a low of 12,455 in September 2007 to a high of 37,771 in 2003, based on DataQuick’s statistics, which go back to 1988. Last month’s sales were the highest for a September since 2006, when 24,195 sold.

The small uptick in September sales from August was atypical. On average, sales have fallen 9.5 percent between those two months.

“There were more than just normal, seasonal forces at work in these September sales numbers. More attempts at short sales, which typically take longer, and new appraisal rules no doubt delayed some deals this summer, causing them to close in September rather than August. September probably also got a boost from people opting to buy sooner rather than later to take advantage of the federal tax credit for first-time buyers, which is set to expire next month,” said John Walsh, MDA DataQuick president.

The median price paid for a Southland home was $275,000 last month, the same as in August but down 10.9 percent from $308,500 in September 2008. It was the median’s smallest year-over-year decline for any month since November 2007, when it dipped 10.3 percent from a year earlier.

The region’s overall median sale price has risen or held steady on a month-to-month basis ever since it dropped to a more-than 7-year low of $247,000 in April. The median peaked at $505,000 in mid 2007.

Three Southland counties saw small year-over-year gains last month in the median price paid for resale single-family detached houses. Orange County also posted a small annual gain – 0.9 percent – in its overall median price, the first for any month since August 2007, when it rose 1.9 percent.

Orange County’s 4.2 percent year-over-year increase in its resale house median last month was also the first for any month since August 2007, when that median rose 3.6 percent. San Diego County’s median price paid last month for resale houses rose 1.5 percent from a year ago, the first annual gain since August 2007, when it rose 0.9 percent. Ventura County’s September resale house median rose 2.2 percent - the first year-over-year increase since October 2006, when it climbed 1.3 percent.

Recent month-to-month and year-over-year gains in the median sale price stem largely from a substantial market shift in recent months: There have been fewer sales of foreclosed homes in lower-cost neighborhoods, and more sales in higher-cost areas.

Foreclosure resales – houses and condos sold in September that had been foreclosed on at some point in the prior 12 months – made up 40.4 percent of all Southland homes resold last month. That was down slightly from a revised 41.7 percent foreclosure resales in August and down from a high of 56.7 percent in February this year.

As sales of lower-cost foreclosure resales have tapered off, sales of higher-cost homes have risen. Last month sales of $500,000-plus homes accounted for 21 percent of resale single-family house transactions, up from a low this year of 13.4 percent in January.

Although the financing environment for pricier homes appears to have improved in recent months, the “jumbo” loans that many high-end buyers require remain relatively expensive and difficult to obtain.

Mortgages above $417,000 – formerly the definition of a jumbo loan – made up nearly 40 percent of Southland purchases before the credit crunch hit two years ago. Last month they accounted for 15.1 percent, though that was up from a 2009 low of 9.3 percent in January and 13.3 percent a year ago.

The use of adjustable-rate mortgages (ARMs), often used for high-end purchases, has risen lately but remains far below normal. Over the past two decades ARMs accounted for nearly 40 percent of all home purchase mortgages. Last month ARMs made up 4.1 percent of purchase loans, up from 3.9 percent in August and a record-low 1.9 percent this April. A year ago ARMs were 7.2 percent of purchase loans; three years ago they were 71.2 percent.

A common form of financing used by first-time buyers in more affordable neighborhoods remained near record levels. Government-insured FHA mortgages made up 36.4 percent of all home purchase loans last month, down from 37.4 percent in August but up from 32.7 percent a year ago.

MDA DataQuick is a division of MDA Lending Solutions, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.

The typical monthly mortgage payment that Southland buyers committed themselves to paying was $1,189 last month, down from $1,207 for August, and down from $1,486 in September a year ago. Adjusted for inflation, current payments were 46.3 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They were 56.0 percent below the current cycle’s peak in July 2007.

Indicators of market distress continue to move in different directions. Foreclosure activity remains high by historical standards. Financing with multiple mortgages is low, down payment sizes are stable, and non-owner occupied buying is above-average in some markets, MDA DataQuick reported.

Source:Los Angeles Times.

LOS ANGELES (Oct. 7) –“California’s housing market continued its strong sales rebound this year, resulting from the continued pace of distressed properties coming to market,” said C.A.R. President James Liptak. “This follows two years of double-digit sales declines in 2006 and 2007. Looking ahead, we expect sales to moderate to a more sustainable pace.”

The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) "2010 California Housing Market Forecast" will be presented this afternoon during CALIFORNIA REALTOR® EXPO 2009 , running from Oct. 6-8 at the San Jose Convention Center in San Jose, Calif. The trade show is expected to attract more than 7,000 attendees and is the largest state real estate trade show in the nation.

“After experiencing its sharpest decline in history, we expect the median price to rise modestly next year,” Liptak added. “2010 will mark the beginning of the ‘new normal’ for California’s housing market. This ‘new normal’ likely will feature a steady stream of sales driven by distressed properties in the low end of the market, coupled with moderate home-price appreciation.”

The median home price in California will rise 3.3 percent to $280,000 in 2010 compared with a projected median of $271,000 this year, according to the forecast. Sales for 2010 are projected to decrease 2.3 percent to 527,500 units, compared with 540,000 units (projected) in 2009.

“Housing in California has become a tale of two markets,” Liptak said. “The low end continues to attract first-time buyers and investors, with a resulting shortage in the number of homes for sale. Sellers at the high end, however, continue to be challenged by the ability of home buyers to secure financing as well as their concerns about where prices are headed. While demand from first-time buyers for low-end properties will continue throughout next year, sales could be impacted if discretionary sellers do not return to the market by the second half of 2010.

“2009 marked a unique opportunity for first-time home buyers,” Liptak said. “Homes were more affordable than they have been in years, interest rates hovered near historic lows, and the federal tax credit helped more than 1 million people become homeowners nationwide. Now is the time for Congress to extend the federal tax credit and to expand it to all buyers, not just first-timers.”

“With distressed properties accounting for nearly one-third of the sales in 2010, inventory will be relatively lean, under six months during the off-season months, and a roughly four-month supply during the peak season,” said C.A.R. and Vice President Leslie Appleton-Young. “We expect the median price to decrease slightly through the remainder of 2009 and into next year, then rise before leveling off next summer. For the year as a whole, home prices are forecast to reach $280,000.”

“Although it appears at this time that lenders are closely monitoring the flow of distressed properties onto the market, there could be an exertion of downward pressure on home prices should a heavier than expected wave of foreclosures come to market next year,” she said.

“The wild cards for 2010 include foreclosures, loan resets, the labor market, and the California budget crisis, as well as the actions of the federal government,” Appleton-Young said.

Don’t miss “The ‘New Normal’: What Recovery Means in 2010” at the San Jose Convention Center in San Jose, Calif. on Thursday, Oct. 8, from 2:30 p.m. to 4p.m. Panelists include Richard Green, director of the Lusk Center for Real Estate at the University of Southern California; Glenn E. Crellin, director of the Washington Center for Real Estate Research at Washington State University; and Jack Kyser, chief economist for the Los Angeles Economic Development Corporation. C.A.R. Vice President and Chief Economist Leslie Appleton-Young will serve as moderator.

Source Los Angeles Times

Southern California's housing market took another small step toward recovery in September as the median sales price for homes in some areas rose above last year's levels -- the first such increases since the market crashed.

The median price paid for all homes in six Southland counties in September -- $275,000 -- was unchanged from August and 11% below the same month last year, according to San Diego-based MDA Data Quick.

But in Orange County, the median price rose modestly to $429,000 from $425,000 in the same month last year -- the first year-over-year gain since 2007, DataQuick said. If condominium sales are excluded, last month's median home sales prices in San Diego and Ventura counties also beat their September 2008 levels.

Christopher Thornberg, a Los Angeles economist who was an early predictor of the housing bubble, said several factors converged last month to give home sales a boost.

"Tax breaks, low interest rates and pent-up demand added up to create a surge in sales that's surely gone some way in stabilizing prices," he said.

But Thornberg cautioned that prices could fall again.

"The question continues to be, 'How is this going to stand up when the next wave of foreclosures hits the market?' " he said.

Even if the housing market takes another hit in the coming months, the bulk of the market correction is past, Thornberg said.

"If prices do fall again, it'll be another 10% to 15% max," he said.

The Southern California median price remains at 2002 levels, even without considering inflation, and is 46% below its peak level of $505,000 set in 2007. The median is the point at which half the homes sold for more and half for less.

Those relatively low prices and an $8,000 federal home-buyer tax credit set to expire at the end of November pushed the number of homes sold in September up by 5% over the same month last year and 0.2% above August.

Home sales in the last year picked up first in the lowest-priced inland areas, where a massive number of foreclosures pulled prices down. Last month's sales, with rising median prices in some areas, show that the mix of homes sold is normalizing.

Sales of homes priced at or above $500,000 constituted 21% of the total, up from 13% in January, DataQuick said.

Previously foreclosed homes are accounting for a smaller share of sales. In September, 40% of homes sold had been foreclosed within the last 12 months, down from a high of 57% in February.

Various studies show that the number of Southern Californians who are substantially behind on their mortgage payments is growing, suggesting more foreclosures are on the way.

But foreclosures in the region have been declining as banks backed off from repossessing homes either voluntarily or to comply with state or federal foreclosure freezes.

Statewide data released Tuesday by ForeclosureRadar, an online seller of default data, show bank repossessions in September were down 42% from the same month a year earlier. The slowing of bank repossessions has cut the supply of homes for sale in the upper-middle range of the market.

That has frustrated many buyers like Daisy Lee, who recently had an offer accepted on a Monterey Park house -- after losing to other bidders six previous times. Lee and her husband tried for a year to purchase houses priced from about $500,000 to $700,000 in various San Gabriel Valley cities.

"There's a lot of competition in the areas we've been looking," said Lee, an accountant. Lee said she and her husband offered slightly above the list price to get the house they hope to move into, with an offer of about $600,000.

"We were desperate. I didn't know how much longer we wanted to wait," she said.

Their frustration aside, buyers like Lee are raising the median by purchasing higher-priced homes.

"I think prices are fundamentally at a bottom," said Richard Green, director of USC's Lusk Center for Real Estate.

"There could be some weakness in the next year that brings things back down a little bit," he said, adding, "I wouldn't be jumping for joy yet, but these numbers are not bad."

Source:Los Angeles Times

Southern California’s housing market took another small step toward recovery in September as the median sale price for homes in some areas rose above last year’s levels – the first such increase since the market crashed.

The median price paid for all homes in six Southern California counties in September -$275,000 -was unchanged from August and 11% below the same month last year, according to San Diego-based MDA DataQuick.
But in Orange County, the median home sale price last month of $429,000 rose modestly from $425,000 the same month a year earlier - the first year-over-year gain since 2007, DataQuick said. If condominium sales are excluded, last month’s median home sale price in San Diego and Ventura counties also beat their September 2008 levels.

Christopher Thornberg, a Los Angeles economist who was an early predictor of the housing bubble, said several factors converged last month to give home sales a boost. "Tax breaks, low interest rates and pent-up demand added up to create a surge in sales that’s surely gone some way in stabilizing prices,” he said.
But Thornberg cautioned that prices could fall again.
“The question continues to be, how is this going to stand up when the next wave of foreclosures hits the market?” he said.
Even if the housing market takes another hit in the coming months, Thornberg said, the bulk of the market correction is past.
“If prices do fall again, it’ll be another 10% to 15% max,” he said.
The Southern California median price remains at 2002 levels, even without considering inflation, and is 46% below its peak level of $505,000 set in several months of 2007.

Those relatively low prices pushed the number of homes sold in September up 5% over the same month last year, and 0.2% above August. Home sales in the past year picked up first in the lowest-priced inland areas, where massive foreclosures pulled prices down.
Last month’s sales, with a rising median price over last year in some areas, show the mix of homes sold is normalizing. Sales of homes priced at or above $500,000 were 21% of the total, up from 13% in January, DataQuick said.

Source:Los Angeles Times

The average rate on a 30-year fixed home loan edged back above 5% last week -- and down went mortgage applications.

That's the word in a Mortgage Bankers Assn. survey released today, which said applications for purchase loans slipped 5% from the previous week. Applications for refinance loans, which have made up about two-thirds of the total recently, were essentially flat, falling by 0.1%. Overall decline: 1.8%

The trade group's statistics assume a 20% down payment -- a lofty amount for many people.

But for borrowers who could hurdle that barrier, the average 30-year fixed rate increased during the week from 4.89% to 5.02%, with upfront points paid to lenders (including the origination fee) decreasing from 1.13% of the loan balance to 1.11%, the trade association said.

The average 15-year rate rose from a record low of 4.32% to 4.44% with points unchanged at 1.04% of the loan amount.

Rates for the 30-year slipped below 5% in the middle of last month, the Mortgage Bankers Assn. said, triggering a mini-boom in applications. The trade group said this week that it expects rates to average 5% this quarter but climb back to 5.6% sometime late next year.

Some mortgage pros say 30-year rates beginning with a "4" are a magic trigger for borrowers. What do you think?

Source:Los Angeles Times

What does $1 million buy you in today's real estate market?

In many parts of the country, it can certainly go a long way. In other areas, however, even with the unprecedented drop in home prices over the the past three years, a seven-figure price tag doesn't necessarily get you an ultra-luxurious apartment or big house in the suburbs.
The most recent S&P/Case-Shiller Home Price Index shows that home prices today are comparable to levels seen in 2003, down approximately 33.5% from the all-time highs of 2006 prior to the recession.

The precipitous drop in US home values has taken a toll in personal wealth and well being. The number of homeowners underwater—meaning their home loan is worth more than the market value of the house—is now 23 percent of the 55 million outstanding mortgages, according to real estate information service.

With the fundamental stock market strategy of "buy low, sell high" in mind, many real estate buyers these days—whether ordinary consumers or investors—are getting into the game because of bargain prices. Affordability is the best in many years. Low interest rates and an $8,000 government tax credit for first time buyers have brought life back to quiet and depressed markets. Realtors in nearly every local market are increasingly optimistic about the future.

Thus far, that's helped the lower-end of the market, with a brisk trade in foreclosure properties in particular.

Source :Los Angeles Time

Mortgage Rates Fell yet again this week. The 30 year fell from 5.04 to 4.94. This marks the 5th week in a row where mortgage rates have either fallen or held steady. For the most part rates have been slowly falling. In fact this week accounts for half of the total fall in the last five weeks. So how does 4.94 look in a historical context. It is the lowest rate we have seen since May 28th. More importantly though it is lower than any rate we have seen prior to March 26, 2009 in the 40 years we have been compiling reliable data on average mortgage rates.

In addition to the 30 year rate the other major mortgage products fell as well. The 15 year fixed fell from 4.46 to 4.36. The 5 and 1 year arm fell from 4.51 to 4.42 and 4.52 to 4.49 respectively. Below are rates from the last few weeks.

Source:Los Angeles Times

The ups and downs of the mortgage business continue -- these days, with some benefit for consumers.

The Mortgage Bankers Assn. reported today that applications for home loans increased 16.4% last week, with refinance and purchase loans up by double digits.

The survey showed the average interest rate for 30-year fixed-rate mortgages remained below 5% for the third straight week, dipping to 4.89% from 4.94% a week earlier. (The rate assumes borrowers had good credit and made 20% or higher down payments.)

It looked as though borrowers were trying to maximize the benefit by paying more upfront lender fees, or points, to lower the rates. The bankers groups said the typical points paid rose from 0.94 to 1.13 (a point is 1% of the loan).

The 30-year rate was at its lowest level since May, when it was 4.81%. And the rate on 15-year loans continued to fall to all-time lows, dropping from 4.34% with 1.01 points to 4.32% with 1.04 points.

Source:Los Angeles Time

Southern California home sales rose for the 11th consecutive month in May as sales of $500,000-plus homes started to come back, according to the real-estate research company MDA Dataquick.

The median price paid increased slightly from the prior month for the first time since July 2007, the result of a shift in market activity where sales of deeply discounted foreclosures waned and mid- to high-end purchases rose, the company said.

A total of 20,775 new and resale houses and condos closed escrow in San Diego, Orange, Los Angeles, Ventura, Riverside and San Bernardino counties last month. That was up 1.3 percent from 20,514 in April and up 22.8 percent from 16,917 a year ago.

Sales have increased year-over-year for 11 consecutive months.

The median price paid for all new and resale houses and condos sold in the six-county Southland last month was $249,000, up 0.8 percent from $247,000 in April. The median price is still down, however, about 32 percent from a year ago.

May's sales were the highest for that month since May 2006, when 30,303 homes sold, but were 21.2 percent below the average May sales total since 1988, when DataQuick's statistics begin.

Foreclosure resales - homes sold in May that had been foreclosed on in the prior 12 months - accounted for 50.2 percent of all Southland resales. That was down from 53.5 percent in April and from a peak of 56.7 percent in February. May's figure was the lowest since foreclosure resales were 50.9 percent of all resales last October.

The remarkably sharp declines in the Southland's median sale price over the past year have been exacerbated by a shift toward an above-average number of sales occurring in lower-cost inland markets rife with discounted foreclosures. However, the number of homes lost to foreclosure declined over the winter, leaving fewer for bargain hunters to scoop up this spring. Meantime, sales have begun to rise a bit in many mid- to high-end markets, which could be due at least in part to sellers dropping their asking prices.

Source: Los Angeles Times

The price is still 45.5% below the 2007 peak and 16.7% lower than a year earlier. Sales are limited because fewer foreclosed homes are on the market.

Southern California's median home price continued to rise in August, to $275,000, up 2.6% from July, a San Diego real estate research firm reported today.

The number of homes sold, however, dipped from July due to a constricted supply of foreclosed homes and lingering uncertainty among buyers, MDA DataQuick said.

Foreclosure resales amounted to 38.8% of homes sold in August, down from a peak of 56.7% in February. DataQuick said most of the decline was the result of a rise in sales of non-foreclosed homes, but there is also a backlog of properties that have been repossessed by banks but have yet to be put on the market.

The median price is down 45.5% from its peak of $505,000, reached in 2007, and 16.7% below the same month a year ago. The median price for combined home sales in Los Angeles, Orange, Riverside, San Bernardino, Ventura and San Diego counties hit bottom in April at $247,000.

The median price is the point at which half the homes sold for more and half for less.

The typical monthly mortgage payment for a Southern California buyer in August, including principal and interest, was $1,207, up from $1,184 in July. The August figure is 55.4% below the July 2007 peak level, DataQuick said.

Orange County's median price was the highest among the counties, at $427,750, down 2.8% from the same month a year ago. Ventura County's $375,000 median price was down 6.1% from a year ago.

Los Angeles County's median price fell 13.3% from last year, to $329,500; San Diego's August median fell 7.1% to $325,000. The steepest year-to-year price declines were in San Bernardino County, which saw its median drop 32.6% to $145,000, and in Riverside County, where the median last month was down 23.2% to $190,000.

Source: Los Angeles Times

LOS ANGELES — Homebuyers scrambling to qualify for a temporary tax credit helped propel home sales in the Western region of the country last month nearly 5 percent higher than a year ago, according to two reports released Thursday.

Foreclosures continued to fuel much of the sales surge in the 13-state region, primarily in California, Arizona and Nevada. That helped drag down the region's median home sales price more than 12 percent from August last year to $220,500, according to the National Association of Realtors.

The national median declined almost 13 percent to $177,700.

"The story in the West is still very much one of foreclosure sales occurring," said Celia Chen, senior director at Moody's Economy.com. "Prices have fallen so much in the West that I think that's also encouraging some buyers — both investors and those who intend to actually live in their units — to come back into the market."

The West's sales edged up nearly 1 percent from July. That bucked the national trend, which saw sales tumble 6.2 percent from July to August, but rise 2 percent above prior-year levels, without adjusting for seasonal factors.

Several of the largest Western metros saw improved sales last month, according to The Associated Press-Re/Max Monthly Housing Report, which tallies all home sales in the metropolitan statistical area by all real estate agents, regardless of company affiliation.

Phoenix, Las Vegas, Boise, Idaho, Los Angeles and San Diego registered an increase in home sales in August. While Denver, Seattle, Billings, Mont., Honolulu, Anchorage, Alaska, San Francisco and Albuquerque, N.M., all saw sales slip last month from a year earlier, according to the AP-Re/Max report.

Many of the buyers who purchased homes last month were first-timers eager to close the deal before Nov. 30, the deadline to qualify for a tax credit of up to $8,000. The closing process can easily take more than a month, which leaves buyers less wiggle room as November nears.

"Some of them are getting a little freaked out about finding a house to get the tax credit," said Floyd Scott, broker-owner of Century 21 Arizona-Foothills in Phoenix.

Sales in Phoenix were up more than 44 percent compared to August last year. The median sales price, meanwhile, tumbled about 32 percent to $125,000, according to the AP-Re/Max report.

About a quarter of the buyers his firm dealt with in August were first-time buyers. Another 20 percent were investors, and the rest were homeowners moving to the area or looking to trade up.

Scott expects his September sales will be ahead of August's, but concedes the scheduled sunset of the tax credit could dampen traffic next month.

"I'm crossing my fingers and hoping sales don't drop too much starting in October," he said.

The average days a home was on the market fell between July and August in several Western metros, including Los Angeles, San Diego, San Francisco, Phoenix, Denver and Seattle.

Buyers have snapped up bank-owned homes while fewer foreclosures have been coming on the market, and that has helped cut down the number of unsold homes.

Foreclosures made up about 31 percent of all sales nationally in August, according to NAR. But in some Western states, they overwhelmed regular sales.

In California and Arizona, financially distressed sales made up more than half of all sales in August. In Nevada, four out of five were distressed.

Still, even in Arizona, the inventory of bank-owned homes has been falling as bargain hunters snapped up properties this summer. In Phoenix, roughly 15 percent to 18 percent of the houses on the market now are bank-owned properties, Scott said.

In San Francisco, where foreclosures haven't been nearly as common as they are in Oakland and other swaths of the Bay area, home sales have begun to slow.

Sales fell nearly 2 percent compared to August last year, while the median sales price dropped about 13 percent to $430,000, according to the AP/Re-Max report.

And yet, the inventory of unsold, single-family homes is down to a 2.6 month supply — the lowest level in more than two years, according to the San Francisco Association of Realtors.

Sales didn't dip for Century 21 Hartford Properties in San Francisco. They climbed about 10 percent in August, said sales manager Romeo Aurelio.

The worst period was between October through November last year, "so things have definitely rebounded since then," he said, noting September has been on par with August.

The majority of the sales are for homes under $400,000, because financing remains an obstacle for more expensive properties.

"People who should be qualifying just aren't able to get loans right now," Aurelio said. "And it's really making it tough to sell these properties between $800,000 and $1.2 million."

Many buyers looking to collar a bargain-priced foreclosed property are finding stiff competition from investors willing to pay cash and outbid newcomers.

In markets like Denver, real estate investors like Ramon Navarro are also beginning to pounce on homes that aren't distressed.

Denver sales plunged nearly 20 percent versus August last year, while the median sales price jumped 4.6 percent to $209,000, according to the AP/Re-Max report.

Navarro, a health insurance consultant who lives in the Denver suburb of Castle Rock, got into escrow last month on a four-bedroom, three-bath house in Aurora, about 15 miles east of Denver.

The 3,620 square-foot house was initially priced at $350,000, but the seller agreed to take $342,000. The appraisal came back too low, however, so Navarro lowered his offer to $335,000, and the seller accepted.

"It was a good deal and I already got a renter," said Navarro, 52, who has a bid on another property, which he plans to fix and flip.

"There's still some investments to be made out here," he said. "How much longer it's going to continue, I don't know."

Source: Los Angeles Times

California remains one of the weakest housing markets in the nation but its high inventory of foreclosures are attracting many buyers. Distressed homes have been driving sales gains in California and other Sun Belt states. Hudson & Marshall will auction about 120 bank-owned homes in 12 cities throughout California.

There are a variety of homes up for auction for every type of buyer, from
investors to families and first time home buyers, ranging from move-in ready
homes to those in need of improvements. Valued from about $18,500 to $850,000,
all the homes come with title insurance paid for by the sellers. Buyers will
be required to make a cash or certified check deposit of $5,000 for each
property which they are the winning bidder.

"As home prices continue to sink in California, foreclosures are sought after
purchases for homebuyers seeking great properties at discounted prices.
National home sales are rising slowly, indicating a light at the end of the
housing decline. Buyers should take advantage of these historically low prices
before the tide begins to turn," said Dave Webb, principal, Hudson & Marshall.


According to Realtytrac, during August, California posted the highest number
of foreclosures of any state, with 92,326 homes receiving a foreclosure
filing. According to S&P/Case Shiller Home Price Index report, in the second
quarter of 2009 Los Angeles home values dropped 17.8% from the same time a
year while San Francisco declined a staggering 22%.

All homes being auctioned by Hudson & Marshall are sold "as-is" and buyers
should inspect properties before placing any bids. Properties can be viewed
during the open house scheduled September 19th and 20th from 1:00 pm -- 4:00
pm or by contacting listing agents to schedule an appointment. Complete
property details and additional information may be found at
www.hudsonandmarshall.com or by calling 866-539-4172.

Hudson & Marshall will auction the homes on the following dates:
September 23rd -- Visalia (4 homes) at 1:00 pm -- Holiday Inn Visalia
September 23rd -- Bakersfield (11 homes) at 7:00 pm -- Hilton Garden Inn
Bakersfield
September 23rd -- Kelseyville (4 homes) at 7:00 pm -- Best Western El Grand
Inn
September 24th -- Victorville (6 homes) at 1:00 pm -- Holiday Inn Express
Hesperia
September 24th -- Palm Springs (10 homes) at 7:00 pm -- Hampton Inn & Suites
Palm Desert
September 24th -- Modesto (7 homes) at 1:00 pm -- Holiday Inn Express
Modesto-Salida
September 24th -- Fresno (8 homes) at 7:00 pm -- Hampton Inn & Suites Fresno
September 25th -- San Diego (4 homes) at 1:00 pm -- Courtyard San Diego Rancho
Bernardo
September 26th -- Los Angeles/Orange County (32 homes) at 1:00 pm -- Long
Beach Marriott
September 26th -- San Francisco area (8 homes) at 1:00 pm -- Walnut Creek
Marriott
September 27th -- Riverside/San Bernardino (18 homes) at 1:00 pm -- Riverside
Marriott
September 27th -- Sacramento (10 homes) at 1:00 pm -- Four Points Sheraton
Sacramento Airport

Prior to auction, buyers can purchase property online by visiting the website
and clicking on the Bid-Now icon. Sellers typically respond to offers within
24 hours. This is a reserve auction, which means sellers have the right to
accept, reject or counter any bid; however, in past auctions conducted by
Hudson & Marshall, the majority of offers have been accepted.

Having sold over 70,000 homes for sellers in the past eight years, Hudson &
Marshall of Texas, Inc is the most experienced, trusted leader in the REO
auction industry. The company's accelerated sales process enables it to
swiftly and efficiently sell large volumes of property in a way that minimizes
expenses for sellers and maximizes return. Over the past five years alone,
Hudson & Marshall's total sales have topped $1.2 billion and the company
anticipates selling another 30,000 homes through 2010.

About Hudson & Marshall of Texas, Inc.

H&M is America's Premier Auction Authority. Our 40-year history combined with
our continued process enhancements have allowed us to become one of the
largest and most respected real estate auction firms in the United States. H&M
has set the standard as a full service auction company and continues to
consistently raise the bar for our industry. Our number one priority is to
provide top-quality service to our customers. Buyers know they can count on
H&M to provide value and service from the initial property offering through
the closing process. This same approach provides sellers with a one stop
single solution to the disposition of real estate assets. Sellers particularly
appreciate H&M's streamlined approach that handles their assets from marketing
through closing and funding. The H&M process allows the seller to minimize
expenses and maximize return. H&M has assisted clients ranging from
individuals to large, medium, and small corporations, government agencies, and
financial institutions. Since 1999, H&M has sold and closed over 70,000 homes
throughout the country.

Source: Los Angeles Times

This is a sobering yet interesting article folks, on the state of our economy and the “American Dream”, published by the Los Angeles Times.

Reporting from Washington – Federal regulators, taking aim at a common tactic used in mortgage frauds, will look at a nationwide ban on companies’ charging upfront fees for helping homeowners modify loans to avoid foreclosures.

The move comes as federal and state officials plan to expand a crackdown on mortgage-related scams to other schemes that prey on debt-ridden consumers desperate to stay financially afloat during the recession.

“Working together, we can send a clear and straightforward message: If you perpetrate mortgage fraud . . . we will find you and we will charge you and we will put you in jail,” U.S. Atty. Gen. Eric H. Holder Jr. said Thursday as top federal officials met with attorneys general from 12 states to coordinate those efforts.

Federal officials have been working with state attorneys general nationwide since April to ferret out fraudulent mortgage modification offers. In July, for example, California Atty. Gen. Jerry Brown filed suit against 21 people and 14 companies allegedly linked to loan modification and foreclosure-prevention scams, part of a nationwide sweep known as Operation Loan Lies.

At the end of July, the FBI had more than 2,600 pending mortgage fraud cases under investigation, many in conjunction with state officials after the creation of the multi-agency effort in the spring, Holder said. Now, federal officials want to expand that effort to other consumer debt scams, said Treasury Secretary Timothy F. Geithner.

“You need to do it on a coordinated basis because these guys don’t respect state borders, don’t respect national borders,” Geithner said.

After the meeting, Jon Leibowitz, chairman of the Federal Trade Commission, said the agency might impose a nationwide ban later this year on upfront fees for mortgage modifications.

With foreclosures at record levels, the only way many consumers can stay in their homes is by reducing their mortgage payments. As often happens during economic downturns, scammers have tried to cash in on that desperation, this time by asking for large upfront payments for help seeking mortgage modifications.

“People are paying upfront and then have no real guarantee that the modification service will actually modify the loan,” said Pedro Morillas, consumer advocate for the California Public Interest Research Group, which supports a fee ban.

“There are just a lot of bad actors out there, and it’s going to take at the very least a statewide effort [to stop them]. And nationally, an effort like this would be great,” he said.

Such fees, which can be as much as $4,000, have been used by con artists to rip off consumers, yet they aren’t completely banned in most states. In California, for example, some services are allowed to charge them, though the city of Los Angeles has banned upfront fees and two bills awaiting Gov. Arnold Schwarzenegger’s signature would prohibit them in different ways.

Leibowitz said his agency would “closely examine whether to ban upfront fees for mortgage modification services” and also would consider rules aimed at stopping false advertising by those companies.

He expects the commission to propose rules on both issues by the end of the year.

“If they’re asking for advance fees . . . it’s a red flag. And the service is bogus,” Leibowitz said.

Highly publicized federal mortgage modification initiatives, such as the Obama administration’s Making Home Affordable program, have helped raise the profile of such services.

But the federal programs don’t require any upfront fees, said Housing and Urban Development Secretary Shaun Donovan.

According to the California Department of Real Estate, “foreclosure consultants” or those holding real estate licenses cannot charge an advance fee if a notice of default has been filed against a house, the first stage of foreclosure. But if there is no notice of default, a real estate broker can charge an advance fee, as long as the customer signs a state-approved agreement for the services.

In April, the Los Angeles City Council made it illegal to charge upfront fees on mortgage modifications in the city.

The state Legislature has passed two bills that also would prohibit upfront fees. One would prevent a company from collecting a fee unless all the contracted services have been performed. The other bill is tougher, preventing any fee collection until the homeowner obtains a mortgage modification.

Schwarzenegger spokesman Mike Naple said the governor had not taken a position on the bills, which have not formally reached his desk. He has until Oct. 11 to decide.

Banning upfront fees would help prevent mortgage modification scams by allowing authorities to shut down fraudulent companies quickly, said North Carolina Atty. Gen. Roy Cooper.

“Oftentimes they will pretend to do something — they will send a letter to the lender. They will [say], ‘Hey, send us your information and we’ll look over your loan.’ They’re not really doing anything, but they’re acting like they’re doing something, so it’s more difficult for us to prove that they’re ripping somebody off,” he said.

“But when you have this law . . . preventing the upfront fee, then we can immediately go into court and get an injunction and shut them down,” he said.

Source: Los Angeles Times

Sep. 6--James Seeley, a machine shop supervisor at the University of California, Davis, just wants a modified mortgage that he and his wife, Sandi, can better afford.

It's a common quest in this economy. Seeley's wages are being cut. His house in Natomas has lost almost half its value. And he owes more than it's worth, even with a $125,000 down payment in 2006.

"We want to get payments down to 31 percent of our income," said Seeley.

In Curtis Park, Hilary Egan is trying to do the same. Her contractor husband has seen a considerable drop in business. She wants a modification before their interest-only loan resets next year to higher payments.

The Seeleys and Egans, both current with their mortgages, have something else in common: Both their modification requests were denied.

Their rejections have aligned them with a broad and growing swath of public opinion: sore that a U.S. banking industry that has received billions of dollars in taxpayer support in the past year hasn't reciprocated on their behalf.

"I don't know a single person who has benefited from the money that was given to lenders," said Egan.

Added Seeley, "The taxpayers are the largest investor in these companies, so I would think they would be taking care of us first."

Banks and financial institutions aren't usually adored even in best of times. But after absorbing much blame for exuberant lending that created the housing bubble, they are increasingly absorbing a backlash for their response to the subsequent foreclosure crisis.

It's not hard to see why. While banks and loan servicers have promised for almost three years to better address rising stresses on their home loan borrowers, foreclosures and defaults still haven't seriously slowed.

The eight-county Sacramento region has counted more than 42,000 foreclosures since the start of 2007. Many area neighborhoods are scarred by vacant repos and dead lawns that pull down property values of other homeowners. Statewide, the foreclosure tally has passed 410,000, and it's believed thousands more are inevitable.

As a result, it's not just borrowers griping about the inability of banks to contain the crisis. Elected officials, besieged by complaints from constituents, are increasingly applying pressure as well.

This month, the League of California Cities, convening in San Jose, will consider a resolution urging 480 cities to yank deposits from banks that "fail to cooperate with foreclosure prevention efforts."

"If you count up the money cities have in banks, that's an amazing amount of power," said Los Angeles City Council member Richard Alarcon, a former state lawmaker. "We have never tried to seize it. I'm trying to seize it. If you're not a good player on the foreclosure front, we're not going to put our money in your bank."

Last week, the Elk Grove City Council voted 4-0 to back the notion and lobby for it at this month's convention. The city of 141,000, one of the fastest growing in California during the housing boom, in the bust became an epicenter of defaults and foreclosures.

"It's time. It's past due. We should have done this some time ago," said Vice Mayor Sophia Scherman, who lives next to a foreclosed home. "It's going to send a very strong message to these institutions."

Others aren't so sure. Tony Cherin, professor of finance at San Diego State University, said, "I can understand the frustration."

But he said cities would have fewer choices for investing because of bank failures and mergers during the meltdown. He said cities' options "may be limited even though they would like to divest themselves."

Two weeks ago, U.S. Rep. Doris Matsui, D-Sacramento, and more than a dozen other California House members applied their own pressure. They wrote Shaun Donovan, secretary of the U.S. Housing and Urban Development Department, urging him to turn up the heat on mortgage lenders to modify more loans. Matsui and others wrote that homeowners who use HUD-approved counselors to contact loan servicers are often "rebuffed or told they couldn't be helped until they were behind on their payments."

Said Matsui, "The economy will not come back the way it can until we take care of these foreclosures, and this is the way to do it. There are no excuses at this time, and that's why the letter went out."

Last month, the U.S. Treasury Department likewise issued a so-called "name and shame" list of lender performances. The report revealed that banking giants like Bank of America had modified only 4 percent of its loans that qualified for President Barack Obama's Making Home Affordable Program. (That program provides financial incentives to lenders to lower interest rates or stretch out loan payment times to make payments more affordable to borrowers.) The government said Wells Fargo had modified just 6 percent of its eligible loans.

Banking officials are quick to acknowledge they can do better. But they also contend that they are dealing with a crisis that keeps growing beyond efforts to staff for it.

"Unfortunately, our member banks, as committed as they are to working with their customers, still haven't found a big enough magic wand to wave over this thing," said Rod Brown, president and chief executive officer of the California Bankers Association. Brown noted that Wells Fargo hired 4,000 staffers in the first half of 2009 to deal with mortgages. He also cited U.S. Senate testimony by Bank of America that it handles 1.8 million calls a month about residential foreclosure issues.

In a statement last month, Wells Fargo Home Mortgage Co-President Mike Heid acknowledged frustration. He said, "While the majority of our customers who request help are getting through to us and receiving the help they need, we know we've fallen short of our customer service goals in some cases."

Banks, meanwhile, are also dogged by a widespread and often-mistaken perception that the purpose of so-called bailout funds -- hundreds of billions of dollars in the past year -- was specifically to help banks modify mortgages.

While the Obama administration budgeted $75 billion this year to help prod loan modifications, the much larger sums were designed to "better equip banks to make loans to help them get this economy out of the downturn," said Brown. "It was also to help banks, strong banks, to give them more capital, and to work with the regulatory entities to acquire weaker or failing banks." In other words, to prop up a banking sector reeling from losses as more Americans defaulted on residential mortgages, credit cards and commercial real estate.

"Those dollars had nothing to do with residential mortgages. They weren't directed to banks for that purpose," Brown said. He and others note that banks are paying back billions of dollars, with interest, to the government.

In the short run, that doesn't spell relief for James and Sandi Seeley. Their Aug. 19 letter from Wells Fargo said the investor who owns their loan balked at modifying it. The big bank suggested the Seeleys consider a short sale -- in which the bank would accept less than it's owed to avoid foreclosing. The Egans received the same option from a Wells Fargo subsidiary.

Neither couple wants to leave their houses. Both said they're reapplying for modifications. Said Egan, in a plea to banks, "I don't want you to bail me out. I don't want you to make my payment for me. Can you just play ball?"

Call The Bee's Jim Wasserman, (916) 321-1102. Read his blog on real estate, Home Front, at www.sacbee.com/blogs.

Source : Los Angeles Times

California Assembly passed AB 260, a measure that will “ban the worst predatory lending practices.”

The bill creates a stronger fiduciary standard for mortgage brokers in the California, across all mortgage products. It eliminates compensation incentives, including yield-spread premiums, that lenders pay to brokers for contracting higher- or adjustable-rate loans, such as those which prevailed in the subprime era. AB 260 directly prohibits guiding borrowers toward inferior mortgages and bars brokers and lenders from making deceptive statements regarding subprime loans. The bill also limits prepayment penalties, bans negative amortization loans, and establishes strong enforcement and punishment for abusive subprime lending. The measure would give the state Attorney General the power to revoke state licenses and impose a $10,000 fine per violation.

AB 260 further empowers state agencies, the Attorney General, and injured borrowers to enforce violations of the law and pursue relief.

Here’s the legislation: AB 260

INTRODUCED BY Assembly Members Lieu, Bass, and Nava

(Principal coauthor: Assembly Member Price)

(Principal coauthor: Senator Wolk)

(Coauthors: Assembly Members Carter, Chesbro, Coto, Eng, Furutani,

Huffman, Jones, Krekorian, Bonnie Lowenthal, Ma, John A. Perez,

Ruskin, Salas, Saldana, Swanson, and Yamada)

(Coauthors: Senators DeSaulnier and Florez)

FEBRUARY 11, 2009

An act to amend Section 10177 of the Business and Professions Code, to add Section 2923.1 to the Civil Code, and to amend Section 50505 of, to add Sections 1242, 14961, and 22346 to, and to add Division 1.9 (commencing with Section 4995) to, the Financial Code, relating to lending.

LEGISLATIVE COUNSEL’S DIGEST

AB 260, as introduced, Lieu. Lending.

(1) The Real Estate Law provides for the licensure and regulation of real estate brokers and salespersons by the Real Estate Commissioner. Existing law authorizes the commissioner to suspend or revoke the license of a real estate licensee or corporation, or to deny the issuance of a license to an applicant or corporation, for specified violations.

This bill would further authorize the commissioner to suspend or revoke those licenses, or to deny issuance of those licenses, upon a violation of specified federal lending laws or regulations.

(2) Existing law imposes certain limitations and prohibitions on licensed persons, as defined, with respect to the making of a covered loan, defined as a consumer loan in which the original principal balance of the loan does not exceed the most current conforming loan limit for a single-family first mortgage loan established by the Federal National Mortgage Association in the case of a mortgage or deed of trust, and as specified. Existing law does not regulate or define the term “higher-priced mortgage loan.”

This bill would establish “higher-priced mortgage loans,” as defined, as a new category of regulated loans. The bill would, among other things, limit prepayment penalties and prohibit provisions for negative amortization. The bill would prohibit a licensed person, as defined, from making false, deceptive, or misleading statements or representations in connection with higher-priced mortgage loans. The bill would also, among other things, prohibit a mortgage broker, as defined, who arranges higher-priced mortgage loans with prepayment penalties from receiving a compensation that exceeds certain amounts.

The bill would provide that a violation of the provisions regulating higher-priced mortgage loans by a licensed person is also a violation of the person’s licensing law. The bill would authorize a licensing agency or the Attorney General to enforce the provisions regulating higher-priced mortgage loans. The bill would authorize civil penalties in an amount up to $10,000 against a licensed person who willfully and knowingly violates the provisions regulating higher-priced mortgage loans, would nullify prepayment penalties or yield spread premiums that violate these provisions, would make a licensed person who violates these provisions liable to the borrower in the amount of the borrower’s actual damages, and would authorize the court to award court costs and attorney’s fees to a prevailing plaintiff. The bill would also establish specified duties for mortgage brokers performing mortgage brokerage services for higher-priced mortgage loans. The bill’s provisions would apply to higher-priced mortgage loans originated on or after July 1, 2010.

(3) Existing law imposes certain limitations and prohibitions on specified licensees, including commercial banks, credit unions, finance lenders, and residential mortgage lenders, with respect to the making of consumer loans.

This bill would provide that a violation of specified federal lending laws or regulations by those licensees is also a violation of the licensing law of the licensee.

The bill would also provide that a mortgage broker, as defined, providing mortgage brokerage services, as defined, to a borrower is the fiduciary of the borrower, and any violation of the broker’s fiduciary duties is a violation of the mortgage broker’s licensing law and specified civil penalty and liability provisions. The bill would further provide that this fiduciary duty includes a requirement that the mortgage broker place the economic interest of the borrower ahead of his or her own economic interest.

(4) Because a violation of the bill’s provisions by certain licensees may be punished as crimes under the licensing law of the licensees, the bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: no. Fiscal committee: yes.

State-mandated local program: yes.

THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

SECTION 1. Section 10177 of the Business and Professions Code is amended to read:

10177. The commissioner may suspend or revoke the license of a real estate licensee, or may deny the issuance of a license to an applicant, who has done any of the following, or may suspend or revoke the license of a corporation, or deny the issuance of a license to a corporation, if an officer, director, or person owning or controlling 10 percent or more of the corporation’s stock has done any of the following:

(a) Procured, or attempted to procure, a real estate license or license renewal, for himself or herself or a salesperson, by fraud, misrepresentation, or deceit, or by making a material misstatement of fact in an application for a real estate license, license renewal, or reinstatement.

(b) Entered a plea of guilty or nolo contendere to, or been found guilty of, or been convicted of, a felony, or a crime substantially related to the qualifications, functions, or duties of a real estate licensee, and the time for appeal has elapsed or the judgment of conviction has been affirmed on appeal, irrespective of an order granting probation following that conviction, suspending the imposition of sentence, or of a subsequent order under Section 1203.4 of the Penal Code allowing that licensee to withdraw his or her plea of guilty and to enter a plea of not guilty, or dismissing the accusation or information.

(c) Knowingly authorized, directed, connived at, or aided in the publication, advertisement, distribution, or circulation of a material false statement or representation concerning his or her designation or certification of special education, credential, trade organization membership, or business, or concerning a business opportunity or a land or subdivision, as defined in Chapter 1 (commencing with Section 11000) of Part 2, offered for sale.

(d) Willfully disregarded or violated the Real Estate Law (Part 1 (commencing with Section 10000)) or Chapter 1 (commencing with Section 11000) of Part 2 or the rules and regulations of the commissioner for the administration and enforcement of the Real Estate Law and Chapter 1 (commencing with Section 11000) of Part 2.

(e) Willfully used the term “realtor” or a trade name or insignia of membership in a real estate organization of which the licensee is not a member.

(f) Acted or conducted himself or herself in a manner that would have warranted the denial of his or her application for a real estate license, or has either had a license denied or had a license issued by another agency of this state, another state, or the federal government revoked or suspended for acts that, if done by a real estate licensee, would be grounds for the suspension or revocation of a California real estate license, if the action of denial, revocation, or suspension by the other agency or entity was taken only after giving the licensee or applicant fair notice of the charges, an opportunity for a hearing, and other due process protections comparable to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340), Chapter 4 (commencing with Section 11370), and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), and only upon an express finding of a violation of law by the agency or entity.

(g) Demonstrated negligence or incompetence in performing an act for which he or she is required to hold a license.

(h) As a broker licensee, failed to exercise reasonable supervision over the activities of his or her salespersons, or, as the officer designated by a corporate broker licensee, failed to exercise reasonable supervision and control of the activities of the corporation for which a real estate license is required.

(i) Has used his or her employment by a governmental agency in a capacity giving access to records, other than public records, in a manner that violates the confidential nature of the records.

(j) Engaged in any other conduct, whether of the same or a different character than specified in this section, which constitutes fraud or dishonest dealing.

(k) Violated any of the terms, conditions, restrictions, and limitations contained in an order granting a restricted license.

(l) (1) Solicited or induced the sale, lease, or listing for sale or lease of residential property on the ground, wholly or in part, of loss of value, increase in crime, or decline of the quality of the schools due to the present or prospective entry into the neighborhood of a person or persons having a characteristic listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those characteristics are defined in Sections 12926, 12926.1, subdivision (m), and paragraph (1) of subdivision (p) of Section 12955, and

Section 12955.2 of the Government Code. (2) Notwithstanding paragraph (1), with respect to familial status, paragraph (1) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for senior citizens.

Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph (1).

(m) Violated the Franchise Investment Law (Division 5 (commencing with Section 31000) of Title 4 of the Corporations Code) or regulations of the Commissioner of Corporations pertaining thereto.

(n) Violated the Corporate Securities Law of 1968 (Division 1 (commencing with Section 25000) of Title 4 of the Corporations Code) or the regulations of the Commissioner of Corporations pertaining thereto.

(o) Failed to disclose to the buyer of real property, in a transaction in which the licensee is an agent for the buyer, the nature and extent of a licensee’s direct or indirect ownership interest in that real property. The direct or indirect ownership interest in the property by a person related to the licensee by blood or marriage, by an entity in which the licensee has an ownership interest, or by any other person with whom the licensee has a special relationship shall be disclosed to the buyer.

(p) Violated Article 6 (commencing with Section 10237).

(q) Violated any provision of any of the following federal acts or regulations:

(1) The federal Real Estate Settlement Procedures Act, as amended (12 U.S.C. Sec. 2601 et seq.).

(2) The federal Truth in Lending Act, as amended (15 U.S.C. Sec. 1601 et seq.).

(3) The federal Home Ownership Equity Protection Act (15 U.S.C. Sec. 1639).

(4) Any regulation promulgated under any of the federal acts cited in paragraph (1), (2), or (3).

If a real estate broker that is a corporation has not done any of the foregoing acts, either directly or through its employees, agents, officers, directors, or persons owning or controlling 10 percent or more of the corporation’s stock, the commissioner may not deny the issuance of a real estate license to, or suspend or revoke the real estate license of, the corporation, provided that any offending officer, director, or stockholder, who has done any of the foregoing acts individually and not on behalf of the corporation, has been completely disassociated from any affiliation or ownership in the corporation.

SEC. 2. Section 2923.1 is added to the Civil Code, to read:

2923.1. (a) A mortgage broker providing mortgage brokerage services to a borrower is the fiduciary of the borrower, and any violation of the broker’s fiduciary duties shall be a violation of the mortgage broker’s license law. This fiduciary duty includes a requirement that the mortgage broker place the economic interest of the borrower ahead of his or her own economic interest. A mortgage broker who provides mortgage brokerage services to the borrower owes this fiduciary duty to the borrower regardless of whether the mortgage broker is acting as an agent for any other party in connection with the residential mortgage loan transaction.

(b) For purposes of this section, the following definitions apply:

(1) “Licensed person” means a real estate broker licensed under the Real Estate Law (Part 1 (commencing with Section 10000) of Division 4 of the Business and Professions Code), a finance lender or broker licensed under the California Finance Lenders Law (Division 9 (commencing with Section 22000) of the Financial Code), a residential mortgage lender licensed under the California Residential Mortgage Lending Act (Division 20 (commencing with Section 50000) of the Financial Code), a commercial or industrial bank organized under the Banking Law (Division 1 (commencing with Section 99) of the Financial Code), a savings association organized under the Savings Association Law (Division 2 (commencing with Section 5000) of the Financial Code), and a credit union organized under the California Credit Union Law (Division 5 (commencing with Section 14000) of the Financial Code).

(2) “Mortgage broker” means a licensed person who provides mortgage brokerage services. For purposes of this section, a licensed person who makes a residential mortgage loan is a “mortgage broker,” and subject to the requirements of this section applicable to mortgage brokers, only with respect to transactions in which the licensed person provides mortgage brokerage services.

(3) “Mortgage brokerage services” means arranging or attempting to arrange, as exclusive agent for the borrower or as dual agent for the borrower and lender, for compensation or in expectation of compensation, paid directly or indirectly, a residential mortgage loan made by an unaffiliated third party.

(4) “Residential mortgage loan” means a consumer credit transaction that is secured by residential real property that is improved by four or fewer residential units.

(c) The duties set forth in this section shall not be construed to limit or narrow any other fiduciary duty of a mortgage broker. SEC. 3. Section 1242 is added to the Financial Code, to read: 1242. Any licensee who violates any provision of any of the following federal acts or regulations violates this division:

(a) The federal Real Estate Settlement Procedures Act, as amended (12 U.S.C. Sec. 2601 et seq.).

(b) The federal Truth in Lending Act, as amended (15 U.S.C. Sec. 1601 et seq.).

(c) The federal Home Ownership Equity Protection Act (15 U.S.C. Sec. 1639).

(d) Any regulation promulgated under any of the federal acts in subdivision (a), (b), or (c). SEC. 4. Division 1.9 (commencing with Section 4995) is added to the Financial Code, to read:

DIVISION 1.9. HIGHER-PRICED MORTGAGE LOANS

4995. The following definitions shall apply for purposes of this division:

(a) “Higher-priced mortgage loan” has the meaning set forth in Part 226 of Title 12 of the Code of Federal Regulations.

(b) “Licensed person” means a real estate broker licensed under the Real Estate Law (Part 1 (commencing with Section 10000) of Division 4 of the Business and Professions Code), a finance lender or broker licensed under the California Finance Lenders Law (Division 9 (commencing with Section 22000)), a residential mortgage lender licensed under the California Residential Mortgage Lending Act (Division 20 (commencing with Section 50000)), a commercial or industrial bank organized under the Banking Law (Division 1 (commencing with Section 99)), a savings association organized under the Savings Association Law (Division 2 (commencing with Section 5000)), and a credit union organized under the California Credit Union Law (Division 5 (commencing with Section 14000)).

(c) “Mortgage broker” means a licensed person who provides mortgage brokerage services. For purposes of this division, a licensed person who makes home loans is a “mortgage broker,” and subject to the requirements of this division applicable to mortgage brokers, only with respect to transactions in which the licensed person provides mortgage brokerage services.

(d) “Mortgage brokerage services” means arranging or attempting to arrange, as exclusive agent for the borrower or as dual agent for the borrower and lender, for compensation or in expectation of compensation, paid directly or indirectly, a higher-priced mortgage loan made by an unaffiliated third party.

4995.1. Notwithstanding any other provision of law, the maximum amount of a prepayment penalty that may be imposed by a licensed person in connection with a higher-priced mortgage loan shall not exceed 2 percent of the principal balance prepaid, for prepayment of the loan during the first 12 months following loan consummation or 1 percent of the principal balance prepaid, for prepayment of the loan during the second 12 months following loan consummation.

4995.2. (a) This division shall apply to any licensed person who in bad faith attempts to avoid the application of this division by doing either of the following:

(1) Dividing any loan transaction into separate parts for the purpose and with the intent of evading the provisions of this division.

(2) Any other subterfuge.

(b) Notwithstanding any other provision of law, a licensed person shall not make, or cause to be made, any false, deceptive, or misleading statement or representation in connection with a higher-priced mortgage loan.

(c) A mortgage broker who arranges only higher-priced mortgage loans shall disclose that fact to a borrower, both orally and in writing, at the time of initially engaging in mortgage brokerage services with that borrower.

(d) A mortgage broker who provides mortgage brokerage services shall not steer, counsel, or direct a borrower to accept a loan at a higher cost than that for which the borrower could qualify based upon the loans offered by the persons with whom the broker regularly does business.

(e) (1) A mortgage broker who provides mortgage brokerage services for a borrower shall not receive compensation, including a yield spread premium, fee, commission, or any other compensation, for arranging a higher-priced mortgage loan with a prepayment penalty that exceeds the compensation that the mortgage broker would otherwise receive for arranging that higher-priced mortgage loan without a prepayment penalty.

(2) When providing mortgage brokerage services for a borrower, a mortgage broker shall receive the same compensation for providing those services whether paid by the lender, borrower, or a third party.

(f) No licensed person shall recommend or encourage default on an existing loan or other debt prior to and in connection with the closing or planned closing of a higher-priced mortgage loan that refinances all or any portion of the existing loan or debt.

(g) A licensed person shall not make a higher-priced mortgage loan that contains a provision for negative amortization. This subdivision shall not preclude a licensed person from entering into a subsequent agreement with a borrower to capitalize payments as a means of permitting a borrower to cure or prevent a delinquency.

(h) A licensed person who makes a higher-priced mortgage loan and who, when acting in good faith, fails to comply with this section, shall not be liable if the licensed person establishes either of the following:

(1) Within 90 days of the loan closing and prior to the institution of any action against the licensed person under this section, the licensed person did all of the following:

(A) Notified the borrower of the compliance failure.

(B) Tendered appropriate restitution.

(C) Offered, at the borrower’s option, either to make the higher-priced mortgage loan comply with the requirements of this division or change the terms of the loan in a manner beneficial to the borrower so that the loan will no longer be considered a higher-priced mortgage loan subject to the provisions of this division.

(D) Within a reasonable period of time following the borrower’s election of remedies, took appropriate action based on the borrower’s choice.

(2) (A) The compliance failure was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adopted to avoid those errors, and within 120 days after receipt of a complaint or the discovery of the compliance failure or the licensed person’s receipt of written notice of the compliance failure, the licensed person did all of the following:

(i) Notified the borrower of the compliance failure.

(ii) Tendered appropriate restitution.

(iii) Offered, at the borrower’s option, either to make the higher-priced mortgage loan comply with the requirements of this division or change the terms of the loan in a manner beneficial to the borrower so that the loan will no longer be considered a higher-priced mortgage loan subject to the provisions of this division.

(iv) Within a reasonable period of time following the borrower’s election of remedies, took appropriate action based on the borrower’s choice.

(B) For purposes of this subdivision, examples of a bona fide error include clerical, calculation, computer malfunction and programming, and printing errors.

4995.3. (a) Any licensed person who violates any provision of this division shall be deemed to have violated that person’s licensing law.

(b) The licensing agency may, by order and after appropriate administrative hearing, prohibit licensees under this division from engaging in acts or practices in connection with higher-priced mortgage loans that the licensing agency finds to be unfair, deceptive, or designed to evade laws of this state.

(c) A violation of Section 2923.1 of the Civil Code in connection with a higher-priced mortgage loan is a violation of this division. (d) A violation of the provisions of Part 226 of Title 12 of the Code of Federal Regulations, relating to prepayment penalties in connection with higher-priced mortgage loans, is a violation of this division.

(e) The provisions of this division may be enforced only by the Attorney General or the licensed person’s licensing agency. Any licensed person who willfully and knowingly violates any provision of this division shall be liable for a civil penalty of not more than ten thousand dollars ($10,000) for each violation.

(f) A prepayment penalty or yield spread premium provision of a higher-priced mortgage loan that violates this division shall be unenforceable.

(g) Notwithstanding subdivision (e), a borrower may bring a civil action against a licensed person to recover actual damages that occur as the result of a violation of this division and may recover reasonable attorney’s fees and costs if he or she prevails in the action.

4995.4. The provisions of this division shall apply to higher-priced mortgage loans originated on or after July 1, 2010.

4995.5. The provisions of this division are severable. If any provision of this division or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.

SEC. 5. Section 14961 is added to the Financial Code, to read:

14961. Any licensee that violates any provision of any of the following federal acts or regulations violates this division:

(a) The federal Real Estate Settlement Procedures Act, as amended (12 U.S.C. Sec. 2601 et seq.).

(b) The federal Truth in Lending Act, as amended (15 U.S.C. Sec. 1601 et seq.).

(c) The federal Home Ownership Equity Protection Act (15 U.S.C. Sec. 1639).

(d) Any regulation promulgated under any of the federal acts in subdivision (a), (b), or (c). SEC. 6. Section 22346 is added to the Financial Code, to read:

22346. Any licensee that violates any provision of any of the following federal acts or regulations violates this division:

(a) The federal Real Estate Settlement Procedures Act, as amended (12 U.S.C. Sec. 2601 et seq.).

(b) The federal Truth in Lending Act, as amended (15 U.S.C. Sec. 1601 et seq.).

(c) The federal Home Ownership Equity Protection Act (15 U.S.C. Sec. 1639).

(d) Any regulation promulgated under any of the federal acts in subdivision (a), (b), or (c).

SEC. 7. Section 50505 of the Financial Code is amended to read:

50505. Any person who violates any provision of the any of the following federal acts or regulations
violates this division:

(a) The federal Real Estate Settlement Procedures Act, as amended (12 U.S.C.A.

U.S.C. Sec. 2601 et seq.), or any regulation promulgated thereunder, violates this division. seq.).

(b) The federal Truth in Lending Act, as amended (15 U.S.C. Sec. 1601 et seq.).

(c) The federal Home Ownership Equity Protection Act (15 U.S.C. Sec. 1639).

(d) Any regulation promulgated under any of the federal acts in subdivision (a), (b), or (c). SEC. 8. No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.

Source : Los Angeles Times.

First-time home buyers are scrambling to qualify for a federal tax credit that expires Nov. 30 and has been driving up sales activity after the worst downturn in decades.

Now, the coming expiration will help show if the improvement will last.

The tax credit, worth as much as $8,000, is available to first-time home buyers who close deals by Nov. 30. That means they have only a few more weeks to sign contracts because the closing process can be lengthy.

"If you're not in contract within the next 30 days, your chances are pretty slim," said Dan Rider, a broker with Dickson Realty in Reno, Nev. Some buyers are "getting twitchy" because of the approaching deadline and are putting in multiple offers to be sure one sticks, he said.

Several congressional proposals to expand and extend the credit have been introduced. But lawmakers are under pressure to show fiscal restraint after spending hundreds of billions of dollars to combat the recession and prop up the financial and automobile sectors.

Some economists and housing analysts maintain that the credit sparked unneeded supply and drove sales higher partly by borrowing from future demand. Its absence could push the market back into the doldrums, with weakness stretching into next year, they warn.

Others say that without the Nov. 30 deadline, the current surge in sales activity will likely abate. "You have to have a deadline," said Christopher Thornberg, a principal with Beacon Economics, a Los Angeles-based research firm. "The fact that this program is ending is exactly what's necessary for the program to work."

The government engineered the credit to salvage a market nearly paralyzed after home values plunged. For deals done between Jan. 1 and Nov. 30, first-time buyers -- defined as those who haven't owned a principal residence in the past three years -- can claim 10% of the home's purchase price, to as much as $8,000.

Source : Los Angeles Times.

As the news today that housing resales dropped in August sent stocks spiraling downwards, those within the real estate industry were faced with a really interesting reality. The housing market rebound may not be as linear as hoped.

Existing home sales fell 2.7% in August after a record increase of 7.2% electrified the industry in July. However, there are many factors that likely played into the change. The federal tax credit of $8,000 for new home buyers is due to expire soon, likely contributing to the glut of deals in July. Jobless rates continue to be high, as do foreclosures. With many foreclosures yet to hit the market (likely knocking home prices down), it seems reasonable to think that the market may not climb steadily, but rather peak and valley as it restarts.

This may just mean that government programs and incentives (such as the tax credit) are important to getting consumers back in the market, and that sellers may just need to watch timing to match the ups and downs of the market. Even when home sales increase, the inventory of houses on the market is still high and unlikely to dissipate rapidly. But sellers can likely work within the curves of the market to best optimize when to sell their home (and at what price).

Finally, the coming winter means that it’s unsurprising that home sales will dwindle. Home sales generally increase during the spring and summer, with the warmer temperatures. Sales will probably decrease as fall changes to winter.

Source: Los Angeles Times

Whoever said that the housing market in California is nearing its bottom may be surprised to learn that foreclosed homes listings in the area continued to grow last month, particularly in the Los Angeles County.

According to the market data, one out of 150 homeowners in the county received a notice of foreclosure last month. Industry analysts said that bank foreclosed houses that received default notices totaled 22,540 properties last month, representing a 70 percent increase from the same month a year ago and 5 percent higher compared with June figures.

They pointed out that a flood of foreclosed properties on the housing market tend to wash out home values, forcing homeowners to sell their distressed properties quickly so as not to incur more losses brought about the drop of property values.

Industry analysts said that the market should expect more difficulties related to foreclosure before it could truly say that it is on its way to full recovery. While many of them agree that the market may be entering the bottoming stage, the high unemployment rate and volume of foreclosed houses that have been held off by moratoriums are expected to derail whatever recovery progress the market has achieved for the past several months.

Analysts said that there is still a large inventory of distressed properties that banks need to foreclose, adding that tons of bad assets are still out there.

They pointed out that the rising unemployment rate and growing number of homeowners whose properties are valued less than their mortgages are creating a whole new group of people who are in danger of losing their homes to foreclosure.

A market report stated that the Obama Administration's loan modification program designed to help thousands of distressed homeowners avoid foreclosure and remain on their homes has failed to meet its target numbers. The program has worked only on some areas in California.

The report noted that 70 percent of the total loans modified have re-defaulted after six months.

Meanwhile, the federal tax credit given to first-time buyers and the below market average prices of foreclosure properties have helped push the demand for foreclosure properties. In some areas, the increase in demand resulted to dwindling supplies and multiple bids from buyers. This pushed prices to inch up.

However, the coming flood of foreclosures is expected to halt the upward market trend.

Source : Los Angeles Times

Some investors are spying a good opportunity in Southern California real estate, where low median prices and enhanced financing is helping to fuel demand. Sales activity has recently spiked to a three year high. To learn more, see the following article by HousingWire.

Southern California posted the best July sales volume in three years and the fastest pace of any month since December 2006.

But as volume saw double-digit increases in all but one of the six Southern California counties, median prices saw double-digit declines from 2008 levels in the same number of counties.

A total of 24,104 new and resale houses and condos closed escrow in San Diego, Orange, Los Angeles, Ventura, Riverside and San Bernardino counties in July, MDA DataQuick reported, an increase of 18.6% from July 2008.

Sales volume increased for the 13th straight month, driven by low mortgage rates, the availability of both Federal Housing Administration financing for first-time home buyers and improved financing for jumbo loans, a strong investor demand, and increased affordability, DataQuick said.

But median prices in the six-county area were down 23% on average. San Bernardino County saw the greatest increase in sales volume (40.8%), but the July 2009 median price was down 39.1% from July 2008. In Ventura County, where sales volume decreased 3.8%, the median price was only 10.7% lower than 2008.

The average monthly mortgage payment for Southern California buyers was $1,180, down from $1,193 in June 2009 and $1,710 in July 2008.

Foreclosures made up 43.4% of house and condo sales in July 2009, down from 45.3% in June 2009 and the peak of 56.7% in February 2009. It’s the lowest percentage since June 2008.

This article has been republished from HousingWire. You can also view this article at HousingWire, a mortgage and real estate news site.

Source : Los Angeles Times

The unsold inventory index for existing, single-family detached homes -- which indicates the number of months needed to deplete the supply of homes on the market at the current sales rate -- was 3.9 months in July, down from 6.9 months for the same period a year ago.

The median number of days it took to sell a single-family home was 39.9 days in July, compared with 47.8 days for the same period a year ago, according to figures released Tuesday by the California Association of Realtors.

Closed escrow sales of existing, single-family detached homes in California totaled 553,910 in July at a seasonally adjusted annualized rate as statewide home resale activity increased 12 percent from the same period a year ago. Sales increased 8.1 percent compared with the previous month.

The median price of an existing, single-family detached home in California during July was $285,480, a 19.6 percent decrease from the revised $355,000 median for July 2008 and a 3.9 percent increase compared with June.

Statewide, the 10 cities with the highest median home prices in California during July 2009 were: Los Altos, $1.42 million; Palo Alto, $1.36 million; Saratoga, $1.35 million; Newport Beach, $1.30 million; Manhattan Beach, $1.26 million; Burlingame, $1.25 million; Palos Verdes Estates, $1.13 million; Los Gatos, $1 million; Cupertino, $952,000; and Rancho Palos Verdes $945,000.

Source: Los Angeles Times.

California had the third-highest foreclosure rate in the nation in August, down from second in July, according to RealtyTrac Inc.

A total of 14,590 California properties were in foreclosure in August, or one per every 144 households, according to data released by RealtyTrac, an Irvine-based marketer of foreclosed properties. That was down 14.6 percent from July and down 9.24 percent from August 2008.

Nevada had the nation’s highest foreclosure rate in August, or number of homes in foreclosure compared to total homes, with one in every 62 households in some stage of the foreclosure process RealtyTrac said. It was followed by Florida, California, Arizona, Michigan, Idaho, Utah, Colorado, Georgia and Illinois.

Nationwide, one in every 357 households was in foreclosure in August, down roughly a half-percentage point from July but up almost 18 percent from August 2008.

“The August report demonstrates that there is still an ample supply of properties filling the foreclosure pipeline even while the outflow of bank-owned REO [real-estate owned] properties onto the resale market is being more carefully regulated,” RealtyTrac CEO James Saccacio said in a statement.

“After hitting a high for the year in July, REOs dropped 13 percent in August, but we also saw a record high number of properties either entering default or being scheduled for a public foreclosure auction for the first time.”

RealtyTrac’s data covers foreclosure data in all three phases of foreclosure — default notices, scheduled auctions and bank repositions — according to the company. RealtyTrac collects data from more than 2,200 U.S. counties, which account for more than 90 percent of the country’s population.

Source : Los Angeles Times.

A quick update of the charts for Southern California real estate sales are in order after Tuesday's DataQuick report on August activity.

Judging from the trend in year-over-year prices, it looks like happy days are here again, though none of the six counties have posted a positive result for two years.

That may change in the months ahead as Orange County is only a few percent shy of break even, no doubt aided by an increase in sales at the high end that boosts median prices, all else being equal.

The median price paid for all of Southern California rose 2.6 percent, from $268,000 in July to $275,000 last month, however this is down 16.7 percent from a year ago.

Investors are said to be snapping up homes at a blistering pace, accounting for some 20 percent of all sales, up from 18 percent last month, and foreclosure sales are declining, down from a peak of almost 60 percent of all sales in February to just 39 percent in August.

There is a good deal of caution in both the DataQuick report and in other accounts of this latest California real estate sales data.

The surge in buyers who are looking to take advantage of the $8,000 home buyers tax credit which expires soon, the seasonally lower mix of foreclosures sales, the inventory of foreclosed homes now in the pipeline but still held off the market, and the upward pressure on median prices due to a sales mix that now includes more higher priced homes may all be contributing to a picture of rising prices that is not consistent with reality.

Maybe it's just me, but this is starting to feel like 2005-2006 all over again.

Source : Los Angeles Times

IN the last eight years, home prices in the United States have almost exactly kept up with inflation. But it has been a wild ride.

During the period, the Standard and Poor’s Case-Shiller 20-city composite index of home prices rose almost 21 percent. The Consumer Price Index also rose almost 21 percent.

The period, from June 2001 through the June 2009 figures that were reported this week, can be separated into two periods: the five-year boom and the three-year bust. There are limited indications that prices have started to rally in some areas, but the overall index’s move in June just kept up with inflation.

During the boom, home prices outpaced inflation by 10.7 percent a year for five years. During the bust, they plunged, trailing inflation by 13.6 percent a year.

The accompanying chart shows the pace of home prices, adjusted for inflation, and also shows the wide sectional variations. At one extreme is Detroit, where the boom never came but the bust has been severe. Adjusted for inflation, prices there are now down by almost half over the eight-year period.

At the other extreme is New York, where the boom was not nearly as strong as in some areas but a larger part of the gains have been retained. At the height of the period, New York prices had outpaced inflation by 62 percent. At the latest report, prices are still up by 20 percent more than inflation.

The Case-Shiller figures cover very large areas for each city. In New York, the region extends from Trenton up to New Haven. The figures reflect sales of single-family homes only, so Manhattan, a market that is dominated by apartments, has a very small impact.

The maximum performance of various areas reflects the differing housing markets.

In areas like Dallas, Denver and Charlotte, N.C., home prices never rose much more than inflation. Those areas had ample land available to spread out, enabling developers to meet demand without major price changes. In contrast, areas like Los Angeles, New York and Washington were largely built up, and developers had to go far from the city to find raw land. In addition, zoning and other rules sometimes limited or delayed building.

That explanation does not, however, help with the two desert booms and busts — Phoenix and Las Vegas, where speculation went wild despite ample land for expansion. At the height of the boom, new developments around Phoenix would announce plans to begin selling homes — as yet not even started — on a Monday and would-be buyers would spend the weekend in sleeping bags outside the development to get a chance to buy.

Many such “buyers” did not expect to ever move into the house, or even pay for it. Instead, they expected to sell their right to the house, at a profit, before construction was completed. When that strategy stopped working, it left a large supply of unoccupied houses to depress prices.

Now foreclosures are still rising, even as home sales and prices seem to have stabilized. If the worst is over, it will have been a wild ride that ended very close to where it began, but with many people much worse off for the experience.

Floyd Norris comments on finance and economics in his blog at nytimes.com/norris.

Source : Los Angeles Times

Homeownership rates in California and across the nation skyrocketed to new highs in recent years, but the bursting of the housing bubble is sure to bring them down — something economists say is a good thing.

“Maybe not everybody should own a home,” said Bill Watkins, executive director of the Center for Economic Research and Forecasting at California Lutheran University.

Though homeownership is often talked about as the crowning achievement of the American Dream, high homeownership rates have led to the economic troubles now facing the nation.

For young people, who may not have stable income or haven’t decided where to settle down, renting may be better, Watkins said.

For Jessica Hendrix, renting is the best option right now. The CSU Channel Islands graduate student is enrolled in an intensive program that includes student teaching while working toward becoming a social studies teacher for middle or high school.

Renting gives her the flexibility to move to where the jobs are once she graduates. And, frankly, homes remain expensive in Ventura County and it’s still a uncertain time for buying, she said.

“It’s scary to be thinking about buying with all the foreclosures on the market,” Hendrix said. “You don’t want to be one of those people who bought a house and now has to leave with nothing.”

Even though it’s easy to say that there should be a balance of homeowners to renters, finding that ratio is difficult. There’s no theory for the right rate, so it comes down to looking at the data, Watkins said.

For the U.S., it seems the right rate is about 64 percent to 65 percent homeownership. Build it up higher and you run into people getting loans by lying, unscrupulous lending and eventual collapse of the financial system, Watkins said.

In 2004, homeownership in the U.S. was at 69 percent. In California, it hit a high of 60.2 percent in 2006 — based on records going back to 1984.

Ventura County’s homeownership rate stood at 73.4 percent in 2005, so high in part because of areas such as Moorpark and Thousand Oaks that have predominately single-family homes and few rentals, Watkins said.

Research has been done on where it could go from here. A study released last month by a University of Utah professor forecast the national rate would fall to 63.5 percent by 2020 — a level it hovered above in the 1980s.

There does seem to be a sorting out going on now, though it’s a “very painful process,” Watkins said.

But foreclosures and short sales, while they have a negative effect on families and the economy in the short run, do help to turn owner-occupied homes into investor purchases that are then rented out. And that needs to happen, Watkins said.

“I hope we’ve learned from our experience,” he said.

It’s likely that there will be an overreaction at first, with the homeownership rate swinging lower than it needs to be before it settles at a good ratio, he said.

But while an increase in rentals is a good thing for the economy in the long run, more still needs to be done. Watkins, who is a commissioner on the city of Ventura’s Housing Authority, said there is a waiting list of thousands for housing and a strong need for low-income housing in the county.

“You definitely don’t want a whole community where people can’t afford their home,” he said.

That is a concern for California — particularly in areas like Santa Barbara and parts of Ventura County where the rental housing hasn’t kept up with demand.

Hendrix, the CSUCI graduate student, has run into the challenge of looking for an affordable apartment.

She currently lives with her sister in Simi Valley, but her sister is moving out and she needs to find something else — something she can afford as a full-time student.

“There’s really is nothing in the price range that I want to pay,” she said of her hunt for a studio or one-bedroom apartment in Simi Valley, Moorpark or Thousand Oaks.

She could go up as high as $800 — though she’d like something cheaper — but she’s finding studios start at more than that and one-bedrooms are even more.

“It seems a little steep for one person to pay,” she said.

She’s coming to terms with the possibility of having a roommate or even, at age 25, renting a room from her parents.

The shortage of affordable housing is something that continues around the state.

The state’s Department of Housing and Community Development is in the process of updating its statewide housing plan, but the plan estimated in 2000 that California would need to produce about 220,000 housing units a year to keep pace with population growth through 2020, said Cathy Creswell, deputy director for the department.

“We know there’s going to be a continuing need for housing,” she said.

The population is still growing and, over the next decade, the greatest population growth will be among those 55 and older who will have the greatest demand for housing, she said.

A report from the Department of Housing and Community Development states that, despite improved affordability, the state still lacks an adequate supply of affordable housing in the right locations because of prior decades of undersupply and price escalation.

In 2000, California had 1.7 million overcrowded households, with two-thirds of those renter-occupied. A Center of Housing Policy study in 2009 found that seven of the nation’s 12 least affordable rental markets were in California.

And foreclosures, while they have increased affordability, have created rental housing problems, with an estimated quarter of foreclosed units being rentals, according to the Department of Housing and Community Development.

Source : Los Angeles Times

La Jolla, CA---Southern California homes sold last month at the fastest clip for a July in three years and the fastest pace for any month since December 2006. The median price paid rose slightly from June – marking the third consecutive month-to-month gain – as sales in pricier coastal areas continued to rise and sales of lower-cost foreclosures waned, a real estate information service reported.

A total of 24,104 new and resale houses and condos closed escrow in San Diego, Orange, Los Angeles, Ventura, Riverside and San Bernardino counties last month. That was up 3.6 percent from 23,262 in June and up 18.6 percent from 20,329 a year ago, according to San Diego-based MDA DataQuick.

July’s sales total was 8.7 percent lower than the average number sold in July – 26,410 – since 1988, when DataQuick’s statistics begin. July home sales have ranged from a low of 16,225 in July 1995 to a peak of 38,996 in 2003.

Sales have increased year-over-year for 13 consecutive months. They’ve been driven higher by increased affordability, low mortgage rates, plentiful government-insured FHA financing for first-time buyers, robust investor demand and, more recently, improved access to the “jumbo” financing used to buy more expensive homes.

Last month the share of Southland purchase loans above $417,000 rose to 15.1 percent, the highest since it was 15.6 percent in August 2008. These “jumbo” mortgages became more expensive and more difficult to obtain after the credit crunch hit in August 2007. Before then, nearly 40 percent of Southland sales were financed with jumbo loans, then defined as over $417,000.

Although sales of lower-cost foreclosures have tapered off, the high end of the housing market has awakened this summer from a long slumber, during which sales had been at or near record lows. July sales of existing single-family houses rose above a year ago in many coastal towns, including Manhattan Beach, Redondo Beach, Huntington Beach, Newport Beach, Carlsbad, Encinitas and La Jolla. Among the higher-cost Southland communities not posting such a gain were Malibu, Rancho Palos Verdes, Beverly Hills, Brentwood and Del Mar.

Across the Southland, resales of single-family houses priced $500,000 and above rose to 20.1 percent of all existing houses sold in July, compared with a low this year of 15.0 percent in March. However, a year ago 27.2 percent of sales were for more than $500,000.

The recent shift toward more sales of higher-cost homes, in conjunction with the decline in sales of deeply discounted foreclosures, has put upward pressure on the median sale price. The median is the point where half of the homes sold for more and half for less. The dramatic declines in the median over the past two years were partly the result of the high-end housing market all but shutting down, just as resales of low-cost, inland foreclosures exploded.

Last month 43.4 percent of the Southland houses and condos that resold had been foreclosed on in the prior year – the lowest level since June 2008. July’s foreclosure resales figure was down from 45.3 percent in June and from a peak 56.7 percent in February 2009.

The median price paid for all new and resale houses and condos sold in the Southland last month was $268,000, up 1.1 percent from $265,000 in June but down 23.0 percent from $348,000 a year ago. July was the third consecutive month in which the median rose on a month-to-month basis.

“Have prices hit bottom? While some data continue to hint at that, it remains an especially risky call to make given the uncertainty over the magnitude of future job losses and foreclosures. The recent drop in foreclosure resales, coupled with the rise in high-end sales, has helped stabilize some of the regional home price measures. But there’s still quite a bit of distress out there, and plenty of unknowns with regard to how lenders and borrowers will choose to proceed,” said John Walsh, DataQuick president.

“Even if we are at or near bottom,” he added, “history suggests we could bounce along that bottom for quite a while.”

Last month’s median was the highest since it was $278,000 last December, but it stood 46.9 percent below the peak $505,000 median reached in the spring and summer of 2007.

In the region’s more affordable areas, many first-time buyers continued to choose government-insured FHA financing. Such loans were used to finance 37.2 percent of home purchases last month, up from 36.9 percent in June and 19.7 percent a year ago.

Investors and other absentee buyers, defined as those who will have their property tax bills sent to a different address, bought 19.4 percent of the Southland homes sold last month. That’s up from 15.5 percent a year ago and a monthly average since 2000 of about 15 percent. San Bernardino County had the highest share of absentee buyers in July: 27 percent.

MDA DataQuick is a division of MDA Lending Solutions, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. MDA DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.

The typical monthly mortgage payment that Southern California buyers committed themselves to paying was $1,180 last month, down from $1,193 the previous month, and down from $1,710 a year ago. Adjusted for inflation, current payments are 45.7 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 56.2 percent below the current cycle's peak in July 2007.

Indicators of market distress continue to move in different directions. Foreclosure activity remains near record levels, while financing with adjustable-rate mortgages is near the all-time low but has recently edged higher. Financing with multiple mortgages is low, down payment sizes are stable, and non-owner occupied buying is above-average in some markets, MDA DataQuick reported.

                                          Sales Volume                                    Median Price
All homes                Jul-08      Jul-09     %Chng         Jul-08          Jul-09          %Chng
Los Angeles            6,592       8,082      22.60%     $400,000    $321,000    -19.80%
Orange                     2,799       3,128      11.80%     $461,000    $420,000      -8.90%
Riverside                 4,116       4,699      14.20%     $260,000    $185,000    -28.80%
San Bernardino      2,521       3,549      40.80%     $230,000    $140,000    -39.10%
San Diego               3,431       3,809      11.00%     $364,000    $320,000    -12.10%
Ventura                        870          837       -3.80%     $420,000    $375,000    -10.70%
SoCal                     20,329    24,104      18.60%     $348,000    $268,000     -23.00%

DQNews.com Media calls: Andrew LePage (916) 456-7157 or John Karevoll (909) 867-9534

Source : Los Angeles Times

Los Angeles Business from bizjournals - from the Silicon Valley/San Jose Business Journal

Initial default notices in California spiked 15 percent in July over the previous month and the state registered the nation's second highest state foreclosure rate for the third month in a row, according to a report Thursday.

Irvine-based RealtyTrac, an online marketplace for foreclosure filings, said that one in every 123 California housing units received a foreclosure filing in July, nearly three times the national average. Scheduled auctions in California were down 1 percent from the previous month, but bank repossessions were up 4 percent -- leaving overall foreclosure activity up nearly 7 percent on a month-over-month basis.

Throughout the country foreclosure filings -- default notices, scheduled auctions and bank repossessions -- were reported on 360,149 properties during the month, an increase of nearly 7 percent from the previous month and an increase of 32 percent from July 2008. The report also shows that one in every 355 U.S. housing units received a foreclosure filing in July.

For the 31st consecutive month Nevada documented the nation's highest state foreclosure rate, with one in every 56 housing units receiving a foreclosure filing in July -- more than six times the national average. One in every 135 Arizona housing units received a foreclosure filing in July, the nation's third highest state foreclosure rate and more than 2.5 times the national average.

The top four state foreclosure activity totals in July were reported by California, with 108,104 properties receiving a foreclosure filing; Florida, with 56,486 properties receiving a foreclosure filing; Arizona, with 19,694 properties receiving a foreclosure filing; and Nevada, with 19,535 properties receiving a foreclosure filing. Together these four states accounted for nearly 57 percent of the nation's total foreclosure activity.

Seven California metro areas documented foreclosure rates among the top 10 in July. Stockton posted the nation's second highest metro foreclosure rate -- one in every 62 housing units received a foreclosure filing -- followed by Modesto at No. 3 (one in 63), Merced at No. 5 (one in 66), Riverside-San Bernardino-Ontario at No. 6 (one in 67), Bakersfield at No. 7 (one in 76), Vallejo-Fairfield at No. 8 (one in 83), and Sacramento-Arden-Arcade-Roseville at No. 10 (one in 105).

Source: Los Angeles Times

"Los Angeles real estate website offers unique features, full service and a perspective on the Los Angeles, California Real Estate market. Serving the Southern California cities of Los Angeles, Carson, Compton, Watts & Gardena"

Los Angeles real estate agent, Dwayne Wyatt is pleased to announce the launch of his new Los Angeles real estate website: http://www.DwayneWyatt.com The newly designed website is designed to bring those interested in Los Angeles, California real estate a wealth of information through a single online point of access. The user-friendly website provides information, insights and listings for prospective property owners and real estate investors covering all aspects of Los Angeles, CA real estate including, homes for sale, buyer's, sellers, first time home buyers, bank owned properties, condos for sale in Los Angeles and foreclosure properties in the Los Angeles California area.

The interactive real estate website features on http://www.DwayneWyatt.com include complete and searchable Los Angeles real estate listings for Los Angeles real estate, Los Angeles real estate, Gardena California real estate, Carson California and Compton California, and all of the Los Angeles California area. There are also unique articles on http://www.DwayneWyatt.com that help and give advice on all the steps on the selling, moving and the home purchase process. Wyatt Real Estate is a full service company operated by one of Los Angeles hardest working real estate brokers. Wyatt Real Estate continuously strives for excellence and the satisfaction of their clients. The enhancements to http://www.DwayneWyatt.com reflect their continued commitment to finding better ways to serve clients and prospects.

For more information
Call (323) 718-8953
Or visit: http://www.DwayneWyatt.com
Contact Information
Dwayne Wyatt
Wyatt Real Estate
http://www.DwayneWyatt.com

Source: Los Angeles Times

According to the Case Shiller index, which tracks home prices in 20 major metropolitan markets, home prices have fallen about 35% from their highs of three years ago in inflation-adjusted terms. Contrary to the widely-held view that the housing market is under tremendous downward price pressure due to a rising number of foreclosure sales, prices rose from March through June (though the lagging nature of this index means that home prices actually rose several months earlier).

While rising foreclosures may depress prices in coming months, I'm very tempted to say that we have now seen the bottom in housing prices, at least as measured by this index. That would be very good news for home builders, banks, and all those who hold mortgage-backed securities, since it means that the number of homeowners who are "underwater" and facing foreclosure will soon be decreasing.

This surprisingly good news is fully consistent with the recovery we have seen in the market these past several months (i.e., the market has been figuring this out). Home builders' stocks have already risen over 130% from their recent lows, according to Bloomberg's index of leading home builders stocks, and bank stocks are up 150% from their lows.

As a side note, a very close acquaintance recently secured a $900,000, 30-year fixed rate mortgage with a rate of 5.375% for the purchase of a home in the Los Angeles area. I was amazed at how low the rate was (the nationwide average for jumbo loans is 6%), but he got it by putting up a 30% down payment and paying 1 point.

On the margin, this all adds up to some important green shoots in a sector of the economy that has suffered the most in recent years.

Source : Los Angeles Times

Could the housing recession -- the worst slump in the U.S. housing market since the Great Depression -- be coming to an end?

If the analysis of one respected, independent housing market specialist is accurate, the dawn is approaching.

Yale's Shiller turning positive.

Yale University economist Robert Shiller, co-author of the now closely monitored S&P/Case-Shiller Home Price Index, and, to be sure, no friend of realtors, says the data suggests the housing market is on the mend. "The sense that something is changing is definitely in the air," Shiller told Bloomberg News after the release of June's housing data. "After three years of decline, we might be seeing a turnaround."

Shiller, along with economist Karl Case, developed the index, which tracks housing data in 20 U.S. metropolitan areas. In June, only two cities, Detroit, hard hit by auto lay-offs, and Las Vegas, slumping as consumers nix trips to the gambling capital, registered May-to-June price declines.

L.A., Miami, Phoenix start to rebound.

Meanwhile 18 cities registered May-to-June price increases. Just as telling: the hard hit metro-areas registered price gains: Los Angeles, up 1.1 percent; Miami, up 0.5 percent; Tampa, up 0.4 percent; and Phoenix, up 1.1 percent. Economists says that because the California, Florida, Arizona/Nevada regions sustained the largest and most extensive home price declines, they'll probably snap-back first and telegraph the start of the broader U.S. housing sector recovery.

Also, nationally, U.S. home prices increased 2.9 percent in Q2 compared to Q1 -- the first quarterly gain in two years, according to Case-Shiller data. On a seasonally adjusted basis, prices rose 1.4 percent in Q2 compared to Q1.

Source : Los Angeles Times

WASHINGTON — Sales of new homes surged 9.6 percent in July, another sign the housing market is climbing back from the historic bottom it reached early this year. Driven by falling prices, the fourth-straight monthly increase was greater than expected.

The Commerce Department said Wednesday that sales rose to a seasonally adjusted annual rate of 433,000 from an upwardly revised June rate of 395,000. Sales are now up more than 30 percent from the bottom in January, but are still off nearly 70 percent from the frenzied peak four years ago.

The median sales price of $210,100, however, was down slightly from $210,400 in June and was off 11.5 percent from year-ago levels. Prices are still up from March's low of $205,100.

Last month's sales pace was the strongest since September and exceeded the forecasts of economists surveyed by Thomson Reuters, who expected a pace of 390,000 units.

In a kind of Cash for Clunkers effect, homebuyers are rushing to take advantage of a federal tax credit that covers 10 percent of the home price, or up to $8,000, for first-time owners. Home sales must be completed by the end of November for buyers to qualify.

Builders and real estate agents are pressing Congress for that credit to be extended. If it isn't, sales could reverse their upward trend.

Some builders are already seeing sales dip.

At A.F. Sterling Homes in Tucson, Ariz., sales dipped in July because the builder said it couldn't guarantee the homes could be finished in time to qualify, said Randy Agron the company's vice president,

"The real estate market is really a fragile thing," he said. "It's not the right time to take (the tax credit) away."

But still, the economy is healthier now, so sales are unlikely to fall back to the lows of last winter, even if the credit is discontinued, said Wells Fargo economist Adam York,

"People don't have the sense of panic and dread," about their futures, he said.

As sales rise, that's likely to make builders more confident about getting going on new projects, and that's likely to eventually lead to more jobs in the construction industry, which has been hurt badly by the recession.

"These are crucial elements of a sustainable recovery," David Resler, chief economist at Nomura Securities, wrote in a research note.

Each new home built creates, on average, the equivalent of three jobs lasting one year and generates about $90,000 in taxes paid to local and federal authorities, according to the National Association of Home Builders.

There were 271,000 new homes for sale at the end of July, down more than 3 percent from May. At the current sales pace, that represents 7.5 months of supply — the lowest since April 2007. The decline means builders have scaled back construction to the point where supply and demand are coming into balance.

AP Real Estate Writer Alex Veiga contributed to this report from Los Angeles.
Copyright 2009 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Source: Los Angeles Times

LOS ANGELES — Home sales across the Western region of the country posted an annual increase of nearly 4 percent in July as buyers snapped up foreclosures and first-time homeowners rushed to take advantage of a temporary tax credit, the National Association of Realtors said Friday.

Those fire-sale prices helped drag down the median home price in the West by 28 percent to $202,300.

"In the West, it's still the economy that's determining sales," said Patrick Newport, an economist with IHS Global Insight, noting that the West was the only region to see a decline in sales from June levels.

That was largely a reflection of the job market. The West had a jobless rate of 10.5 percent last month, the highest of any region, the Labor Department said Friday.

"Since the economy is still getting worse, that's offsetting this extra kick that you're getting from lower house prices and the tax credit and low mortgage rates," Newport explained.

Despite the economic doldrums weighing on the West, many of the largest metros saw better sales last month than in July last year, according to The Associated Press-Re/Max Monthly Housing Report released Friday. The report tallies all home sales in the metropolitan statistical area by all real estate agents, regardless of company affiliation.

Phoenix, Las Vegas, Billings, Mont., Los Angeles, San Francisco, San Diego, Boise, Idaho, Portland, Ore., Anchorage, Alaska, and Albuquerque, N.M., registered an increase in home sales last month.

 Seattle, Honolulu and Denver each saw sales tumble in July from a year earlier, according to the AP-Re/Max report.

Home values plunged the deepest in Las Vegas, where the median sale price sank in July by more than 40 percent to $125,000. Sales climbed by nearly 50 percent, according to the AP-Re/Max report.

Nationally, the U.S. housing market is rebounding faster than expected.

The question is, can it last?

Home resales in July posted the largest monthly increase in at least 10 years as first-time buyers rushed to take advantage of a tax credit that expires this fall. Sales jumped 7.2 percent and beat expectations, the National Association of Realtors said Friday.

"We've got tens of thousands of homes perfect for the first-time homebuyer and we've taken advantage of that," said George Hackett, president of Coldwell Banker Real Estate in Pittsburgh.

Sales hit a seasonally adjusted annual rate of 5.24 million in July, from a pace of 4.89 million in June. It was the fourth-straight monthly increase and the strongest month since August 2007. Sales had been expected to rise to an annual pace of 5 million, according to economists surveyed by Thomson Reuters.

The risks to that healthy pace, however, are job cuts, mortgage rates and a homebuyer tax credit that is over at the end of November. And the last one could be a doozy because first-time buyers are snapping up one out of every three homes.

First-time buyers get a credit of 10 percent of the purchase price of a home, up to $8,000. Singles must earn less than $75,000, and for couples earning more than $150,000, the credit phases out with higher incomes. The real estate industry is lobbying to have the credit extended, but it is unclear if Congress will be swayed.

"I would not be at all surprised to see a dip at the end of the year once the tax credit expires," said Robert Dye, senior economist with PNC Financial Services Group.

The home sales report was another sign that the U.S. economy is on the verge of a long-awaited recovery after enduring a brutal recession and the worst financial crisis since the Great Depression.

Economic activity in both the U.S. and around the world appears to be leveling out and "the prospects for a return to growth in the near term appear good," Federal Reserve Chairman Ben Bernanke said Friday.

But fallout from the recession will linger for some time. Unemployment rose in July in 26 states and fell in 17, the Labor Department said Friday. That is driving up foreclosures, which are not expected to level off until sometime next year.

Sales of foreclosures and other distressed properties made up about a third of all transactions last month, down from nearly half earlier this year. In places like San Diego and Orlando, buyers are snapping up foreclosed properties at deep discounts, and inventories are low.

Those sales helped drag down the median sales price by 15 percent to $178,400.

Stephen Stoyko hunted off-and-on for two years before he bought a four-bedroom, two-story foreclosure this week for $320,000. The home in Roswell, Ga., north of Atlanta, was initially priced at $335,000.

Stoyko expects to spend about $7,000 to replace missing kitchen appliances and light fixtures — a cost will be at least partially offset by the first-time homebuyer tax credit. "It's bigger than I needed, but the price was right," he said.

The inventory of unsold homes on the market rose to 4.1 million, from 3.8 million a month earlier as buyers who had held their homes off the market in the past decided to list them for sale. That's a 9.4-month supply at the current sales pace, unchanged from June.

Source: Los Angeles Times

LOS ANGELES (AP) -- Home sales across the Western region of the country posted an annual increase of nearly 4 percent in July as buyers snapped up foreclosures and first-time homeowners rushed to take advantage of a temporary tax credit, the National Association of Realtors said Friday.

Those fire-sale prices helped drag down the median home price in the West by 28 percent to $202,300.

''In the West, it's still the economy that's determining sales,'' said Patrick Newport, an economist with IHS Global Insight, noting that the West was the only region to see a decline in sales from June levels.

That was largely a reflection of the job market. The West had a jobless rate of 10.5 percent last month, the highest of any region, the Labor Department said Friday.

''Since the economy is still getting worse, that's offsetting this extra kick that you're getting from lower house prices and the tax credit and low mortgage rates,'' Newport explained.

Nationally, sales last month surged by nearly 6 percent from a year earlier, and showed a surprisingly large gain over June. Affordability is the reason -- the national median price fell 15 percent to $178,400.

Despite the economic doldrums weighing on the West, many of the largest metros saw better sales last month than in July last year, according to The Associated Press-Re/Max Monthly Housing Report released Friday. The report tallies all home sales in the metropolitan statistical area by all real estate agents, regardless of company affiliation.

Phoenix, Las Vegas, Billings, Mont., Los Angeles, San Francisco, San Diego, Boise, Idaho, Portland, Ore., Anchorage, Alaska, and Albuquerque, N.M., registered an increase in home sales last month.

While Seattle, Honolulu and Denver each saw sales tumble in July from a year earlier, according to the AP-Re/Max report.

Home values plunged the deepest in Las Vegas, where the median sale price sank in July by more than 40 percent to $125,000. Sales climbed by nearly 50 percent, according to the AP-Re/Max report.

Rosa Herwick, a broker and owner of Century 21 JR Realty in Henderson, Nev., said her office handled nearly three times as many sales in July as it did in the same month last year.

The majority of Herwick's clients are first-time buyers, but many cash-carrying investors continue pounce for bargain properties, often beating out other buyers on sales.

''They're buying properties in the lower price ranges -- $150,000 or less -- and turning them into rentals,'' Herwick said.

She expects her August transactions will be slightly lower than July, but ahead of last year.

''Our market is very hot and if you're buying something less than $300,000, there's multiple offers on everything,'' Herwick said.

The inventory of homes in the Las Vegas market has been whittled down by more than 46 percent since July last year. And most of what's out there are foreclosures or short sales, when a seller asks the bank to take less than what is owed on the mortgage.

That's also true, though to a lesser extent, in California, where Cindy Hanvey just landed a five-bedroom, three-bath house for $243,000, about $57,000 less than the previous owners paid for it.

The customer service representative had tried for a year to buy a foreclosure in San Diego only to lose out to other bidders. So she went after a short sale in Winchester, some 75 miles north. The paperwork took three months, she said, but was worth it.

''I feel like I definitely bought at the right time,'' said Hanvey, 37. ''I'm hoping to stay in this home for the rest of my life, as long as we don't lose our jobs or anything like that.''

Source : Los Angeles Times

C.A.R. reports July home sales increased 12 percent, median home price declined 19.6 percent

Quick Facts:
· Existing, single-family home sales increased 12 percent in July to a seasonally adjusted rate of 553,910 on an annualized basis.
· The statewide median price of an existing single-family home increased 3.9 percent in July to
$285,480, compared with June 2009.
· C.A.R.’s Unsold Inventory Index fell to 3.9 months in July, compared with 6.9 months in July 2008.

LOS ANGELES (Aug. 25) – Home sales increased 12 percent in July in California compared with the same period a year ago, while the median price of an existing home declined 19.6 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.

“The federal tax credit for first-time buyers played a critical role in the purchase decision of many buyers,” said C.A.R. President James Liptak. “Nearly 40 percent of first-time buyers said they would not have purchased a home if the tax credit was not offered.

“Because the tax credit has helped so many first-time buyers become homeowners, it is critical that Congress extends the credit beyond the Dec. 1 deadline, and includes all buyers, not just first-timers.”

Closed escrow sales of existing, single-family detached homes in California totaled 553,910 in July at a seasonally adjusted annualized rate, according to information collected by C.A.R. from more than 90 local REALTOR® associations statewide. Statewide home resale activity increased 12 percent from the revised 494,390 sales pace recorded in July 2008. Sales in July 2009 increased 8.1 percent compared with the previous month.

The statewide sales figure represents what the total number of homes sold during 2009 would be if sales maintained the July pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

The median price of an existing, single-family detached home in California during July 2009 was $285,480, a 19.6 percent decrease from the revised $355,000 median for July 2008, C.A.R. reported. The July 2009 median price rose 3.9 percent compared with June’s $274,740 median price.

“July marked the fifth consecutive month of month-to-month increases in the median price,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “This was the largest increase on record for the month of July based on statistics dating back to 1979. The yearly decline in July also was the smallest in the past 19 months.

“Favorable home prices in the low end of the market continue to propel sales of homes priced less than $500,000,” said Appleton-Young. “This price segment now accounts for 74 percent of the market share compared with just 43 percent prior to the start of the credit crunch. The high-end segment continues to experience elevated inventories and declines in the median price as financing for jumbo loans and unrealistic sellers challenge the market.”

Highlights of C.A.R.’s resale housing figures for July 2009:

. C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in July 2009 was 3.9 months, compared with 6.9 months (revised) for the same period a year ago. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.

. Thirty-year fixed-mortgage interest rates averaged 5.22 percent during July 2009, compared with 6.43 percent in July 2008, according to Freddie Mac. Adjustable-mortgage interest rates averaged 4.82 percent in July 2009, compared with 5.24 percent in July 2008.

. The median number of days it took to sell a single-family home was 39.9 days in July 2009, compared with 47.8 days (revised) for the same period a year ago.

Regional MLS sales and price information are contained in the tables that accompany this press release. Regional sales data are not adjusted to account for seasonal factors that can influence home sales. The MLS median price and sales data for detached homes are generated from a survey of more than 90 associations of REALTORS® throughout the state. MLS median price and sales data for condominiums are based on a survey of more than 60 associations. The median price for both detached homes and condominiums represents closed escrow sales.

In a separate report covering more localized statistics generated by C.A.R. and DataQuick Information Systems, 23 of the 398 cities and communities reporting showed an increase in their respective median home prices from a year ago. DataQuick statistics are based on county records data rather than MLS information. DataQuick Information Systems is a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. (The lists are generated for incorporated cities with a minimum of 30 recorded sales in the month.)

Note: Large changes in local median home prices typically indicate both local home price appreciation, and often, large shifts in the composition of housing market activity. Some of the variations in median home prices