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Today I want to talk about my opinion of buying foreclosures.

 People from all over the world know about the mortgage crisis Americans are going through, so I am assuming all Americans should know about it by now, thanks to the hard work of our media. They don’t stop talking about the recession, or how bad the market is, and how the banks are going under. I honestly don’t see how this can help our economy. Don’t get me wrong, I am not saying that the media should keep the truth from us. But how true do you think what they’re telling us is?

Recession? Really? I just went to Las Vegas twice in Oct. And guess what, I saw people gambling, and every casino hotel was still busy at nights. I was trying to book an airline ticket the other day, it was pretty hard to find a flight on the day I am planning to travel. Thinking about the recession that actually happened in the past, were people spending money like we are now? People are just nervous about the news they heard. It doesn’t necessarily make it true.

 People are afraid of the recession so they tend to stop spending money on investments. I am not really into stocks, but I believe a lot of people have lost money in the stock market and now they’re afraid to buy more. I don’t want to invest in anything that I don’t understand how it works regardless of what other people say. There will always be people telling you what can make money. But you know what, I actually believe everything could make people money, but it’s not true that you can do everything profitable. Just do what you are good at and let others worry about the rest. Besides, if you could make all the money in the world, and nobody made any money, they wouldn’t be able to afford what you were selling anymore, would they? Okay, I’m little off track now. Let’s get back to stocks. What I was trying to say is, although I don’t understand how the stock market works, I do know that you shouldn’t follow the crowd. If everyone is selling and losing money, perhaps this is a good time for you to buy (again, don’t take my word for it. )

 So, you may be wondering why I brought up the stock market if I am not interested in it personally. Because I want to make a point. People are losing faith in investing their money. I totally understand, but I really hope you don’t lose faith. There are many reasons, just off the top of  my head, if everyone is “saving” money, that can only worsen the market and perhaps cause recession ( if you are thinking it’s already happening right now, then guess what, “saving”  money certainly can’t help at all.) And, please take a moment here and think about this, if all you do now is “save money”, how is that going to help your financial situation, how is that gonna make you wealthy enough retire and never worry about the financial crisis again. If you only save money, it won’t last long, it will run out pretty quickly with “help” of inflation. So, please hear me out, you don’t have to believe me now, but you will someday.

 Earlier, I mentioned that you shouldn’t follow the crowd. When everyone else is selling, you should buy. I’m a real estate person. And I can’t tell people enough that it’s always a good time to buy. Right now, it’s one of the best times in history. The media makes people scared to buy but encourages them to sell. In a way, the media is making it an ideal buyer’s market. Why not take advantage of that “negative news” and profit from it.

 The truth of the matter is, there are always gonna be fewer people who will buy when the market is like this. And I honestly think, that’s the same reason why 10% of the population is holding 90% of the wealth in the entire world.

 Okay, so let’s move on.  Now let’s talk about the people who have guts and belief in the market. Some of them can’t qualify for a loan, and that makes them give up buying pretty quickly. Some can, but don’t know how. Like they heard in the news, banks are in trouble, banks are going under and all those things. It makes them THINK they are saving the banks or the world by making an offer. So they ask everything they think they can in the offer. Let me explain a bit more. They ask for seller concessions or closing costs, repairs and all the reports even home warranty. And they wonder why their offers aren’t accepted. They think banks are being unreasonable. Well, there’s a reason why foreclosures are cheaper than regular sales. Have you thought that maybe the banks don’t want to do all the disclosures or spend time dealing with all the reports or repairs? For any business, I think there’s a simple reason why it exists. I think if your business is something people want or need, and you can provide it to them, then you can do well. So, let’s crack the bank owned properties code together, shall we? Banks are busy already, and they are NOT in the business of doing real estate. So, let’s give them what they want and make the transaction go smoothly by taking over the “work”. On your second page of the Purchase Agreement, don’t ask banks to take care of everything. I can tell you this, this is something they care about more than the purchase price. So, you do the work, and pay less for the purchase price. I think that’d work for me.

 So, learning how to draw a good purchase contract can be a key to making a “good” deal happen. Take a moment to think about how this works, other than just listening to the news or what others say. After all, you want to be better than average, don’t you? So, have some faith in yourself, and do what you think is right.

This post is only about my own opinion, if you’d like to share yours, please write to us by leaving a comment now. Thanks.

The foreclosure crisis has hit California pretty hard. One of the big challenges with foreclosures is that they can create instability in the communities. Nobody in the whole neighborhood benefits if there are many foreclosures on the market, especially often times the foreclosed properties are not in  good condition.  This makes less buyers willing to move into that neighborhood. This hurts the existing homeowners equity, which is about 60% of American wealth.

CalHFA want to help stabilize these communities and recently launched the new program called Community Stabilization Home Loan Program, which provides $200Million dollars to help first time home buyers purchase foreclosed properties.

Community Stabilization Home Loan Program offers first time homebuyers in many high-risk areas in CA the opportunity to buy bank owned properties at low prices with a low interest rate. Many homes in Contra Costa, Merced, Monterey, Riverside, Sacramento, San Benito, San Joaquin and Stanislaus counties, and parts of Alameda, Los Angeles  and San Bernardino counties are also available under this program. 

Please go to Subscribe to my newsletter and find out how to get involved in this program. I also have a list of the properties under this program for sale. The process is very simply, offers are accepted and properties are sold. Please take a minute and fill out this search criteria form, and note Community Stabilization Home Loan Program before submit the form. I will email you back shortly. My Email Address is EmailLucyDavis@Gmail.com, feel free to email me if you have any questions. My name is Lucy Davis, and I am committed to helping California families achieve the American Dream of the homeownership.

Rates on 30-year mortgages remained at the same level for a 3rd week while rates on other types of home loans posted small declines.

Freddie Mac reported Thursday that 30-year, fixed-rate mortgages averaged 6.52% this week which was the same rate as the two previous weeks and represented the second highest rate of the year.

The highest rate so far this year was 6.63% hit for the week ending July 24.

Rates on 15-yr, fixed-rate mortgages, a popular choice for refinancing, fell to 6.07%, down from 6.10% last week.

Rates on 5-yr, adjustable-rate mortgages averaged 6.02% this week, down slightly from 6.05% last week. Rates on 1-yr, adjustable-rate mortgages dipped to 5.18%, down from 5.22% last week.

The mortgage rates do not include add-on fees (points). The nationwide average fee for 30-yr mortgages and 15-yr mortgages was 0.7%. 5-yr mortgages had an average fee of 0.6% while 1-yr mortgages carried an average fee of 0.5%.

A year ago, rates on 30-yr mortgages were at 6.62%, 15-yr mortgage rates averaged 6.30%, 5-yr adjustable-rate mortgages were at 6.35% and 1-yr adjustable-rate mortgages stood at 5.67%.

The housing market continues to struggle with the deepest downturn in decades. Home prices and sales are falling sharply and the glut of unsold homes is rising as more mortgages go into foreclosure.

Lenders and investors should refine their underwriting rules so more potential home buyers with good credit can once again qualify for financing. Lenders should make it easier for borrowers who continue to make their payments even though they owe more than their homes are now worth to either refinance or obtain loan modifications.

The mortgage brokers group says that lenders have tightened the rules so much that some otherwise creditworthy borrowers, particularly those who are self-employed or have part-time jobs, can no longer qualify.Unless teachers and police officers have had the same second job for at least two years, that income can no longer be counted. And entrepreneurs with multiple sources of income are now having trouble documenting their earnings to the satisfaction of lenders.

To help homeowners who are not yet delinquent, the group called on lenders and investors to devise payment modification plans and create streamlined refinancing programs without having to have their properties reappraised.

The mortgage brokers also pointed out the opportunity to obtain financing at favorable rates will close at the end of the year unless efforts to persuade Congress to declare California a high-cost market are successful.

On Jan. 1, the temporary $729,750 limit on loans in high-cost markets that can be insured by the Federal Housing Administration or purchased by Fannie Mae and Freddie Mac will DROP back to $625,000.

Loans above the conforming loan ceiling are priced anywhere from 1.5% to 2% points higher than those under the limit.

Affordability concerns continued to impact Ca. residential real estate market, with the share of first time home buyers declining to their second lowest level from 30.5% in 2005 to 27.1% in 2006,a  transition year in which statewide sales of existing single-family homes decreased 23%, while price appreciation slowed dramatically.  As well as the share of buyers who used a second mortgage climbed from 38% in 2005 to 43% in 2006, more than triple the percentage since 2001 and the highest percentage since 1982. The use of alternative loan products also registered a sharp increase.

Home sales in California fell in 2006 after 4 years of expansion. Home sales in the Southern California region followed the general direction of the state, declining 23% from the record level of 2005. Inventory levels in this part of the state nearly tripled from a year ago. The Central Valley had the largest decline in sales activity among the three regions in California. 

More facts about Ca. Real Estate Market: Continue reading ‘California Real Estate Market’ »