Fraud Alert: Forensic Loan Audits

A new type of foreclosure-rescue scam has come to light in recent months – Forensic Loan Audits.

In exchange for an upfront fee of several hundred dollars, so-called forensic loan auditors, mortgage loan auditors, or foreclosure-prevention auditors backed by forensic attorneys offer to review a troubled homeowner’s mortgage loan documents to determine whether their lender complied with state and federal mortgage lending laws.

The “auditors” claim the homeowner can use the audit report to avoid foreclosure, accelerate the loan modification process, reduce their loan principal, or even cancel the home loan.

Freddie Mac Expands First Look Initiative

Freddie Mac announced it is expanding its First Look Initiative, effective on September 17, 2010, so any home shopper can buy a HomeSteps® home as their primary residence during the first 15 days of the property's listing without competition from investors.

Nonprofit organizations may also buy during the 15-day window. The Freddie Mac First Look Initiative supports Freddie Mac's mission to stabilize communities and foster affordable homeownership opportunities.

Home shoppers should contact their local real estate broker or visit Freddie Mac's website for more information about the Freddie Mac First Look Initiative. Information on Fannie Mae's similar 15-day First Look policy for home buyers and nonprofits is available on Fannie Mae's website.

Multi-family Property Market is on the Mend

Sales of multifamily housing is picking up nationwide. Buyers believe the sector is a sound bet because current prices are below construction costs in many cases and rental business is improving. Plus, there has been little additional development in the past couple of years and some industry analysts believe that shortly there will be a shortage in some markets.

Financing for apartment buildings is at a 50-year low, with seven- to 10-year mortgages available for as little as 4 percent.

Even with the positive news, the sector could still face some pain. Yields are about 5 percent while a year ago investors were getting close to 6 percent with about a quarter of the transactions involving distressed sales.

Consumers see Mixed Outlook for Housing

A recent survey by Fannie Mae found that 70 percent of Americans think it is a good time to buy a house, with 47 percent of responsdents saying they believe home prices will hold steady over the next year.

A majority of Americans (67 percent) continue to believe that housing is a safe investment; however, that number is down 16 percentage points from a similar survey conducted in 2003, according to Fannie Mae.

Delinquent borrowers and renters are notably more discouraged than mortgage borrowers and underwater borrowers about a home's safety as an investment and the appeal of buying versus renting. More than 70 percent of all respondents believe it will be harder for the next generation to buy a home, an increase of three percentage points compared with the beginning of the year.

Other key findings in the survey include:

Seventy percent of Americans said it is a good time to buy a house, up six percentage points from January.

More than half of respondents think it would be very difficult or somewhat difficult to get a home loan today, down six percentage points since January.

Nearly one quarter of mortgage borrowers said they have reduced their mortgage debt significantly in the last year, and 27 percent of mortgage borrowers say they have reduced their non-mortgage debt significantly.

Have existing-home sales hit bottom?

According to a new economic study, the housing market may have hit bottom this summer and may be finally heading back into positive territory.  Two leading indicators, applications for purchase money mortgages and the number of homebuyers entering into contracts to purchase homes, suggest sales of resale homes hit bottom in July and will rebound this fall.

After hitting a low in the first half of July, purchase mortgage applications have edged up slightly, according to statistics gathered by the Mortgage Bankers Association. Because of the time it takes to approve a loan and close a home sale, loan applications submitted in August might not show up in statistics on existing-home sales until October.

Another leading indicator, which counts the number of homebuyers who have entered into purchase contracts was up 5.2 percent in July, according to the National Association of Realtors' pending sales index.

The improvement in purchase mortgage applications combined with the increase in pending home sales strongly suggest that sales have bottomed out, at least for now.

California Housing Comeback

The national housing market is full of uncertainty. But in California, the markets are stabilizing.

Home prices are rising in virtually every corner of the Golden State. Prices have climbed for nine consecutive months, and in July posted a 10.4% gain year-over-year. That puts the state's median price at $315,000 -- nearly twice the national median of $183,000.

And the news is even better in coastal cities.

San Francisco posted the biggest gain of any U.S. metro over the past year, rising 14.3%. The median price there is now more than $607,000. Meanwhile, San Diego has climbed 11.2% (median price: $389,000) and Los Angeles jumped 9.2% (median price: $345,000).

For more info on San Diego's housing market, click here.

Near-Record Affordability in Real Estate

The share of homes that families making the national median income could afford to buy remained above 70 percent for the sixth quarter in a row, according to the latest National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI).

Nationally, the HOI was at 72.3 percent in the second quarter, unchanged from the same time period last year and close to the index's record-high 72.5 percent, set in first-quarter 2009.

The HOI tracks the share of homes sold in a particular area that would have been affordable to a family earning the local median income. The index assumes a family can afford to spend 28 percent of its gross monthly income on housing, according to NAHB's website.

CalHFA introduces First-time Buyer 30-year fixed loan at 4%

The California Housing Finance Agency announced this morning that it's making new, less expensive 30-year fixed-rate loans for-first time homebuyers who meet low- and moderate income guidelines.

CalHFA Executive Director Steven Spears says the option helps qualified first-time buyers get around the some of today's extremely tight rules set by conventional lenders.

Spears said: 'Housing finance agencies around the country have historically played an important role in each state's housing market. With the disruption in the credit markets over the last two years, we have been limited in our ability to help finance home purchases. This new program offers California families another way to purchase their first home with reliable, fixed rate financing.'

Those interested can contact our office to learn more about this program at (619) 993-0687 or www.SDCoastProperties.com/contactus.