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Jeero Habeshian The Glencrest Team's Blog

By Jeero Habeshian | Managing Broker in La Crescenta, CA
  • Home Buying Bidding Wars?

    Posted Under: Home Buying in La Crescenta  |  May 5, 2009 5:50 PM  |  2,036 views  |  No comments

    A Wall Street Journal article echoes our resent experience in our market area with entry level homes. We are seeing more competition from buyers, multiple offers, and disappointment when buyers don’t get their offer accepted.

    Click the link below to read The Wall Street Journal article.

     

    http://online.wsj.com/article/SB124044612611045827.html
  • More Mortgage Assistance for Troubled Homeowners

    Posted Under: Financing in La Crescenta  |  April 30, 2009 5:38 PM  |  1,981 views  |  No comments

    Today's Los Angeles Times included an article about the federal government's newest mortgage loan assistance program.

    "The Obama administration, stepping up efforts to stem foreclosures, will offer lenders and homeowners incentives to cut payments on second mortgages, write down balances on first mortgages that are underwater, and repay loans in a timely fashion.

    The new measures include incentives to lenders to modify second mortgages and write down balances on first mortgages that are underwater. The new measures announced Tuesday would especially help many distressed homeowners who have both first and second mortgages -- and can't afford either. The Treasury Department now wants lenders and their customer-service agents to agree to modify both loans as part of a comprehensive solution."


    Click on the link below to read the full article.

     

    http://www.latimes.com/business/la-fi-hud29-2009apr29,0,504513.story

  • Low Rates put some Borrowers in a Quandary

    Posted Under: Financing in La Crescenta  |  April 27, 2009 2:59 PM  |  1,992 views  |  No comments

    Borrowers with hybrid adjustable-rate mortgages - loans that carry a fixed-interest rate for a certain number of years and then reset annually to rates tied to market benchmarks - are questioning if they should refinance to lock in a low rate for the long term, or if they should keep their adjustable-rate mortgages, currently at interest rates lower than their initial fixed rates.

    Some mortgage experts say it's best to refinance out of adjustable-rate mortgages if the borrower plans to live in the home for more than two years.  Adjustable-rate mortgages are tied to myriad indices, and today's low rate could jump as the economy recovers and inflation kicks in.  The increase would result in borrowers paying more in the long term for an adjustable-rate mortgage than they would if they refinanced into a fixed-rate mortgage.

    California Association of REALTORS

  • Home Buyers and Sellers Beware; Some Corrupt Agents Are Manipulating Offers!

    Posted Under: General Area in La Crescenta  |  April 26, 2009 2:04 PM  |  2,875 views  |  No comments

    Home Buyers and Sellers Beware; Some Corrupt Agents Are Manipulating Offers!

     

    There’s an epidemic tainting real estate sales. Listing agents are cheating sellers and buyers by manipulating offers. Agents across the country are complaining about their unethical counterparts’ practices!

     

    I am beginning to see an ugly side of the real estate turnaround. A couple of our buyer clients, both families, have to buy ASAP and we have been seeing houses and submitting offers as fast as possible. Multiple offers are again the norm. “This is good and bad,” said a local mega agent colleague when I asked him about the seemingly overnight turnaround. The good is obvious, and I ALWAYS write about the good. That’s my nature! However, because it is imperative that consumers are aware of what is happening, this blog is about the bad! Please allow me to re-create one of our resent experiences.

     

    We submit an offer on a property that, per the agent, has been approved by the bank for a short sale. Understanding the market, the buyers agree to offer more than the bank’s approved short sale price. The agent prefers e-mail offers and we submit ours on a Friday. I call to ask if offer has been received and agent says “I’m sure I have. I will call you if not.” Monday afternoon I follow up and agent says they never got our e-mail and have accepted another offer. I say this is unacceptable and the buyers want an explanation. Agent begrudgingly agrees to present our offer to the seller, and then e-mails back to say that the seller accepts the other offer. I ask why? Agent says the seller nets more with the other offer. I ask who submitted the other offer, and agent asks “Why do you need to know that.”

     

    I need to know that because the bank, the seller, and our buyers have a vested interest. If you were the bank and the seller, wouldn’t you counter all parties soliciting a best and final offer? Can you imagine a bank or the investor leaving money on the table when they are already taking a $200,000 hit? The agent either did not submit our offer, or steered the seller towards another that is in agent’s best interest!

     

    A second breed of corrupt agents work another way; they are invisible! They place a property in the Multiple Listing Service, and if possible, not the one in the area of the property listed. They often don’t provide photos of homes, and they offer a telephone number with a voice mail box that is usually full. You are more likely to get a call from the International Space Station. This just in…Now some of these agents refuse to give you a phone number. E-Mail only please, and then they don't reply to e-mails!

     

    So, sellers and buyers, I ask you: Do you want these agents representing your interests?

     

    CA Civil Code Section 1102.3 states that “the general laws of agency require a real estate agent to disclose to his or her principal any material fact the agent knows (or should know) which will affect the principal’s decisions in a transaction. In this regard, a good policy is: when in doubt, disclose.”

     

    Further, California Department of Real Estate law requires MLS regulations to define presentation of offers. These regulations state that unless Instructed Not To by a seller, a listing agent must continue to submit all offers to a seller until transfer of title and the close of escrow.

     

    Here is what I would do as a Seller or Buyer:

     

    Interview REALTORS® and work with one that promises to work for you. Obvious? It is the law, but so is the 65 MPH speed limit. Ask for testimonials and contact them. Be engaged and involved in the transaction. Sellers: Demand to see all offers. Agents are required to present all offers to you until escrow close or you instruct them not to. Remember if something goes wrong, you are liable!

     

    If you suspect misconduct from a real estate agent, click on the link below and file a complaint with the CA Department of Real Estate.

     

    CA DRE Complaint

  • Qualifying for a low-down FHA loan

    Posted Under: Home Buying in La Crescenta  |  April 16, 2009 7:26 PM  |  2,086 views  |  No comments

    Mortgages insured by the Federal Housing Administration can be a lifeline for low-income or high-risk borrowers. These loans have tiny down-payment requirements, competitive rates and easy credit-score hurdles.

    In fact, terms are so attractive that some may ask why all home buyers don't use FHA mortgages. Well, a lot more of them do. Since the housing bust began, FHA lending has soared to account for 20% of the total dollar volume in home loans - up from just 3% in 2006.

    There were 384,451 home purchase loans issued during the first two months of 2009, nearly four times the pace of 2008 when 631,649 were issued, and far more than the 278,393 issued for all of 2007. The number of authorized FHA lenders skyrocketed 500% over the past two years.

    "FHA stays active in volatile and declining markets, continuing to make mortgage credit available to borrowers, even when private mortgage providers are withdrawing," said the Secretary of Housing and Urban Development, Shaun Donovan, in Senate Appropriations Committee testimony on Thursday. "During difficult times, it is critically important to have an entity like FHA play this role - offering families access to near-prime rate financing."

    FHA loans are especially attractive for homebuyers with steady incomes who cannot scrape together a 20% down payment because FHA lenders will finance up to 96.5% of the home price. According to Maryland-based mortgage consultant Allen Hardester, the other attractions of FHA loans include:

    • A better loan modification program. The agency has a long history of helping borrowers who fall behind on payments. In two-thirds of default cases the agency figured out a plan to keep borrowers in their homes. And 90% of those mitigations were still working after two years.
    • They're cheap to refinance. FHA loans can be easily - and often cheaply - converted to similar FHA mortgages if interest rates drop.
    • Borrowers with weak or limited credit histories may still qualify. Mortgage applicants can have very short credit histories or a late payment or two on their records and still get approved with low interest rates. The FHA guidelines set the credit score minimum at 620, but exceptions may be made for people with even lower scores.
    • Low rates. For months, interest rates on FHA loans have been lower than conventional loans. Plus, rates don't vary with credit score; you pay the same whether you're a 620 or a 700.

    Although these loans target low- and moderate-income Americans, there are no income restrictions. However, FHA does limit the amount that can be borrowed, based on area home values. For example, the most that can be borrowed in a high-cost area such as New York City is $729,750; meanwhile, in Buffalo, N.Y., a purchaser can borrow no more than $276,250. Check the cap limits in your home town.

    In addition, borrowers must pay an up-front insurance premium totaling 1.75% of the loan, which goes into FHA's fund for repaying lenders if borrowers default. So if you take out a $200,000 loan, you would need $3,500 at closing, in additional to normal costs. Otherwise, there are few restrictions to getting an FHA loan. However, there is a perception that they are difficult to obtain. And they once were.

    Few lenders would originate FHA loans during the housing boom because the underwriting and appraisal process was so strenuous. "If there was a crack in the sidewalk, they wouldn't approve the loan," said George Hanzimanolis, a mortgage broker in Pennsylvania and past president of the National Association of Mortgage Brokers.

    That all changed a few years ago when HUD rethought its guidelines. Now, the process can be nearly as fast and painless as conventional loans. The one class of borrowers who may be slightly better off with conventional mortgages are ones with very high credit scores who make substantial down payments. Keith Gumbinger, of HSH Associates, a publisher of mortgage information, said they may save an eighth of a point on their rates.

    By Les Christie, CNNMoney.com staff writer

  • Tips For When Your Mortgage Application is Rejected

    Posted Under: Financing in La Crescenta  |  April 11, 2009 11:28 AM  |  2,482 views  |  No comments

    Have you had your mortgage loan application rejected? You have options. Bankrate.com has posted suggestions to help you better understand the process and get approved. Here's how:

    1. Get a read on the reason
    If you've submitted a formal application, federal law dictates that you're entitled to a formal rejection.

    Expect an "adverse action" notice, spelling out the reasons for turning you down, which these days is likely to state that the loan amount you're seeking is too large compared to the current appraised value of your home, says Joe Theisen, president of the Wisconsin Mortgage Professionals Association and branch manager of Fairway Independent Mortgage Corp. in Madison, Wis. If it's not your home's value that's the issue, it may be your personal credentials, such as your creditworthiness, work history or debt load.

    When credit is the issue, an adverse-action notice is required, naming the credit reporting agency that provided the data on which the lender based its decision, according to Federal Trade Commission rules. You're also entitled to a free credit report; see the FTC Web site for more information. Given the odds of acceptance, a lender may not require you to pay a few hundred dollars to submit a formal application, which includes the cost of a professional appraisal on the property. Instead, he may pull a credit score, and tell you what you're likely eligible for, says Marc Savitt, president of the National Association of Mortgage Brokers.

    2. Find a fix
    Qualifying for a mortgage isn't a black-and-white issue. Rather, different loans at varying rates may be available, depending on how risky a lender thinks a particular mortgage will be. If you don't qualify at 5.5 percent, for instance, you may be able to get the nod for a loan at 6 percent or 6.5 percent.

    However, many borrowers, especially those who are refinancing, need a certain rate to reach the monthly payment they want. Not only are rates higher for risky loans, but there are now upfront "point" charges dictated by Fannie Mae and Freddie Mac, the two big mortgage guarantors currently under government control, Savitt says. To get a good rate, some borrowers may be able to make changes — like lowering the amount of the loan they seek.

    When a borrower isn't far from the qualifying mark, he may be able to reapply and be approved relatively quickly. For instance, if you're within reach of a 740 credit score, which is usually required for the best rate, you might pay down a balance on a credit card and hit the target, Theisen says.

    3. Seek out other opinions
    Not every lending firm adheres strictly to the same playbook, and one lender may approve what another rejects, says Savitt, who recently had a borrower with good credit turned down for a low down payment, government-insured loan, but found another firm giving the green light.

    A local "community bank," meaning a smaller, hometown institution, may be more flexible, contends Diane Scriveri, chief lending officer at Bogota Savings Bank in Teaneck, N.J., and vice chair of the affordable housing committee of the New Jersey League of Community Banks.

    "Because we're local, we may know home values better. We still use independent appraisals of course, but we may look at comparable (home values) differently because we know what's really happening in different neighborhoods," she says.Credit unions, which only offer loans to consumers who qualify for credit union membership, may also be more forgiving, says Tony Emerson, president of the Credit Union League of Connecticut. "It would be foolhardy to suggest that in every case, you can go to a credit union and get a loan," Emerson says.

    Still, he says, some credit unions may judge loan eligibility based upon the unique relationship they have with their members. For instance, many credit unions offer membership to employees of specific companies and would know more about a member's job stability, he says.

    4. Give it another try
    The Mortgage Bankers Association is predicting that 30-year fixed rates will hover near the 5 percent range through 2009. So if predictions hold and interest rates stay relatively low, you should have time to try again if the factors behind your rejection improve.

    Fortunately, a rejection shouldn't bring down your credit score, says Craig Watts, public relations director for Fair Isaac Corp. Making a formal application and then reapplying more than a month later could lower your score, but only by about 5 points. Most scoring systems allow consumers to make multiple mortgage applications within a 30-day period without any negative impact on their credit score. But mortgage inquiries older than 30 days will count as a single inquiry if they're made within a 14-day or 45-day window, depending on the scoring model used.

    Bankrate.com

  • To Rent or Buy in California?

    Posted Under: Home Buying in La Crescenta  |  April 9, 2009 12:50 PM  |  1,992 views  |  No comments

    The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) analyzed the difference between renting and buying a home.  Housing costs and tax implications of buying a home and renting a home were computed as a part of the analysis. 

     

    Based on C.A.R.’s calculations and assumptions, the monthly PITI for a first-time buyer purchasing an entry-level home would be $1,630.  The monthly expense of renting a 3-bedroom, 2-bathroom apartment would be $1,875. For more information about the tax benefits and costs of owning versus renting, C.A.R.’s assumptions, and to view data charts, CAR Rent vs Buy Article
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