Orange-County-Home.Net

 A California agency is offering below-market-rate loans to first time homebuyers who purchase certain foreclosed properties in beleaguered areas, including parts of Alameda and Contra Costa counties.The California Housing Finance Agency, which helps finance home ownership for people of modest means, has received a $200 million allocation of bond funds to use for the Community Stabilization Home Loan Program, which it estimates will help 800 to 1,000 Californians purchase their first home.The program is available only for specific foreclosed properties owned by one of the institutions participating in the program. The participating lenders - Wells Fargo, HomeEq, CitiMortgage and Fannie Mae - have agreed to price the properties at 12% below market value. CalHFA said other lenders are likely to join the program.Areas covered by the program include the counties of Merced, San Joaquin, Riverside and Stanislaus, as well as a number of ZIP codes in Alameda, Contra Costa, Los Angeles and San Bernardino counties.The program will offer 30-year loans at a 5.5% fixed interest rate and does not require a down payment, although borrowers must pay for mortgage insurance. Families must meet CalHFA’s income limits.

To learn more about home buying, please go to Buyer’s Guide.

 Please also visit website First Time Homebuyer Forum  Post your questions there, and we will have professionals answer them shortly.  (Mortgages, home inspection, appraisal, etc)

Live real estate auctions are gaining popularity as a method to purchase homes for sale in a competitive and exciting atmosphere.  Attending a real estate auction allows you to experience a quick purchase and closing, and eliminates lengthy negotiations.  I recommend attending at least one auction just to get the feel of what’s going on before you go prepared to make a purchase.

Benefits to the Buyer:

• See a variety of homes for sale in the same place at the same time.

• Highly motivated sellers. Owners make a business decision to sell property in a one-day sale rather than continuing to incur carrying costs. Sellers are motivated to sell and offer you an opportunity to purchase desirable property at the best price.

• Buyers determine the purchase price in an impartial bidding environment.

• Long negotiation periods are eliminated.

• Closing takes place within 30 days of the auction, if not sooner.

Continue reading ‘Real Estate Auctions’ »

Mortgage giant Freddie Mac is considering raising capital by selling as much as $10 billion in new shares to investors, according to people familiar with the matter.

The selling of new shares would have the potential to avoid a full-blown government rescue for Freddie Mac and Fannie Mae. The publicly traded, government-sponsored companies own or guarantee about $5.2 trillion of home mortgages, or nearly half the total outstanding, and are at the center of government efforts to prop up the sagging housing market.

Both companies’ stock fell about 45% last week amid worry about whether they have enough capital to cover mortgage losses. The depth of their troubles spurred the Treasury Department on Sunday to unveil an unusual plan to temporarily extend an unspecified credit line to both companies — as well as buy stock in them if necessary.

The past two days have raised hopes at Freddie for a sale of shares to investors other than the Treasury. Freddie and Fannie shares both surged more than 29% on Wed., a day after the Securities and Exchange Commission set emergency rules limiting the ability of bearish investors to place aggressive bets that their stocks would keep falling.

A sale by Freddie of common and preferred stock could be tough to pull off. For starters, the preferred shares would require Freddie to offer a very high rate of return to attract buyers.

Analysts expect that Freddie and Fannie both will face significant losses in the months ahead as the housing crisis shows no signs of slowing. Both companies, which were originally chartered by acts of Congress, buy mortgages from lenders. They package those loans into securities for their own investment portfolios and for sale to investors world-wide.

Federal Reserve Chairman Ben Bernanke told Congress Wednesday that troubled mortgage giants Fannie Mae and Freddie Mac are in “no danger of failing.”

The Fed and the Treasury Department on Sunday came to the rescue of mortgage giants Fannie Mae and Freddie Mac, offering to throw them a financial lifeline.

The two companies hold or guarantee more than $5 trillion in mortgages — almost half of the nation’s total, and are major sources of financing for the mortgage market. The Bush administration is asking Congress to temporarily increase lines of credit to Fannie and Freddie and to let the government buy their stock. The Fed has offered to let the companies draw emergency loans.

The pledges of aid have raised concerns on Capitol Hill and elsewhere about the government’s role in intervening to ease such financial troubles and the risk posed to taxpayers.

The two mortgage giants are “adequately capitalized,” Bernanke said. However, “weakness of market confidence is having an effect” on the companies, making it difficult for them to raise capital.

The companies’ shares have plunged as losses from their mortgage holdings threatened their financial survival.

The government’s rescue plan was intended to send a signal to nervous investors worldwide that the government is prepared to take all necessary steps to prevent the credit market troubles that started last year from engulfing financial markets and further weakening the economy and housing markets.

Treasury Secretary Henry Paulson told Congress on Tuesday that he hoped this lifeline won’t need to be used. He said the pledge was aimed at boosting eroding investor confidence in the companies.

Bernanke said the “best solution” is to keep Fannie and Freddie “in their current form” as opposed to having the government take them over. It is also vital for Congress to boost regulatory oversight on the two companies. Such powers are contained in a sweeping housing-rescue package. Congressional leaders plan to add to the bill the provisions Paulson is seeking to aid Fannie and Freddie.

The Fannie and Freddie troubles came on the heels of the failure of IndyMac Bank. Earlier this year, a run on investment bank Bear Stearns pushed the company to the edge of bankruptcy and into a takeover by JPMorgan Chase, backed financially by the Fed.

The Fed can’t afford to lower rates again to shore things up because it will aggravate inflation. On the other hand, boosting rates to fend off higher prices would deal a setback to the fragile economy and the already crippled housing market.

IndyMac Bancorp Inc., the failed thrift, reopened its doors under federal control Monday and promptly moved to toss ailing homeowners a lifeline by halting all foreclosures on the mortgages it owns.

Federal Deposit Insurance Corp. Chairman Sheila Bair, calling for banks to ease up on struggling homeowners, said that the agency is “really focused” on keeping borrowers in their homes for both their sakes and to maximize IndyMac’s value for taxpayers. “We will very aggressively pursue loan-modification strategies for unaffordable loans to make them affordable on a long-term, sustainable basis,” Ms. Bair said in an interview Monday.

The FDIC’s move came as hundreds of depositors lined up to withdraw funds at the branches of the thrift, now renamed IndyMac Federal Bank. At the thrift’s Santa Monica, California, branch, a line extended down the street and around the corner. Some people waited for hours to get their money at IndyMac’s Pasadena, California, headquarters, but the crowd remained orderly.

The FDIC typically insures as much as $100,000 per depositor, but nearly $1 billion of IndyMac’s roughly $19 billion in deposits was uninsured, affecting about 10,000 people, according to the FDIC. Officials have said they would be able to make 50% of customers’ uninsured funds available.

In its effort to halt foreclosures, the FDIC has much more flexibility to intervene with the roughly $15 billion of loans that were owned by IndyMac. But IndyMac also was handling another roughly $185 billion in mortgages in its servicing business. Ms. Bair said that FDIC officials also were looking at the troubled loans in the broader portfolio to see if there was a way to help borrowers avoid losing their homes.

IndyMac was the 10th-largest mortgage lender by loan volume in the country, according to industry newsletter Inside Mortgage Finance. It specialized in so-called Alt-A loans, a category between prime and subprime that frequently included loans in which borrowers didn’t fully document their incomes or assets. Such loans, which have become known as “liars’ loans” because of the frequency in which borrowers’ incomes were overstated, contributed to IndyMac’s financial troubles.

Home sales increased 18.1% in May in California compared with the same period a year ago, while the median price of an existing home fell 35.3%, the CALIFORNIA ASSOCIATION OF REALTORS® reported today.

Closed escrow sales of existing, single-family detached homes in California totaled 423,700 in May 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 18.1 percent from the revised 358,640 sales pace recorded in May 2007.

The median price of an existing, single-family detached home in California during May 2008 was $384,840, a 35.3 percent decrease from the revised $594,530 median for May 2007, C.A.R. reported. The May 2008 median price fell 4.7 percent compared with April’s $403,870 median price.

I know sales increasing is a good thing, but it’s relative to the same month a year ago (which was a very troubled year, I think), but overall, it’s still depressing that we had only slightly over 400,000 sales. Also home price fell 35.3%, compared to May 2007.  That’s even more depressing.  I personally expect even larger home-price declines in the near future.

You may have heard the news that Fannie Mae and Freddie Mac are having trouble, too. The stock prices for both of these companies are down.  These companies are major players in the secondary mortgage market which supplies direct lenders with the funds they need to make more loans.  Without these 2 large lenders, it would  make it much harder for people to qualify for a loan.  I can’t imagine what the market would be like.  I’m very concerned about the market, and I wish there was more that I could do to help.