Harvey Realty, Inc.

Effective immediately, if a project has been previously FHA approved, the lender must certify that it has no knowledge of circumstances or conditions that might have an adverse effect on the project or cause a mortgage secured by a unit in the project to become delinquent.

Lender to Obtain a completed HOA Questionnaire to determine that the project is still in compliance with the following:

· Investor ownership: No more than 10% of the units may be owned by one investor.

· HOA Dues: No more than 15% of the total units be in arrears (no more than 30 days past due.)

· Owner Occupancy Rate: At least 50% must be owner occupied.

· FHA loan Concentration Rate: No more than 50% concentration level (for cases assigned through December 31, 2010). See the concentration level when you pull the FHA Approved Condo list.

· No Pending special assessments.

· No Pending legal action against the condominium association, or its officers.

Obtain a “walls in” coverage policy (HO-6 policy) if the master policy does not include interior unit coverage.

Affordable home prices, tax credits for home buyers, historically low interest rates, and a large number of distressed properties prompted many first-time home buyers to enter the market in 2009, according to California Association of Realtor's 2009-2010 “State of the California Housing Market” report released today.

California’s median home price hit bottom in February 2009 at $245,170. Since then, the median home price has increased steadily in month-to-month comparisons, but remained below 2008 levels throughout 2009. The annual median price is projected to increase to $280,000 in 2010 from $271,000 in 2009.

Homes priced $500,000 or less dominated the sales mix throughout 2008 and early 2009, but peaked at 85 percent in January 2009. Meanwhile, the market share of homes sold for more than $500,000 increased from 15 percent in January 2009 to 25 percent in July 2009, holding steady around that figure for the remainder of last year.

The number of homes listed for sale increased in many metropolitan areas in February.

The supply of homes available for sale in 27 major metropolitan areas at the end of February was up 4.2% from a month earlier, according to figures compiled by ZipRealty Inc., a real-estate brokerage firm based in Emeryville, Calif. The ZipRealty data cover all single-family homes, condominiums and town houses listed on local multiple-listing services in metro areas where the firm operates.

On a national basis, inventories typically rise in February from the January level as people put houses on the market in anticipation of the busy spring home-shopping season. Over the past 27 years, the average increase in February has been 3.4%, according to Ivy Zelman, chief executive of Zelman & Associates, a research firm.

Inventory Data

View Interactive

Compared with the year-earlier month, the February inventory in the 27 metro areas covered by Zip was down about 19%.

These inventory data don't capture the entire potential housing supply. Around eight million households are behind on their mortgage payments or in the often lengthy process of foreclosure. Many of those homes eventually are likely to be put on the market as banks foreclose or owners are forced to sell.

Builder confidence in the market for newly built, single-family homes declined one point to 18 in October, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI).

NAHB attributes the decline to the quickly approaching deadline of the Federal First-time Home Buyer Tax Credit. Industry groups, including NAR and C.A.R., are calling on their members to contact their congressional representatives and urge them to extend this home-buying incentive.

“This is the first time since November of 2008 that all three component indexes of the HMI have declined,” noted NAHB Chief Economist David Crowe. “Clearly, builders are experiencing the effects of the expiring tax credit on their sales activity, since it would be virtually impossible at this point to complete a new home sale in time to take advantage of that buyer incentive before Nov. 30.”

Crowe also noted that immediate congressional action to extend the tax credit and expand its eligibility beyond first-time buyers could substantially boost sales activity. “In a special questions section of our HMI survey, 85 percent of respondents said that expansion of the tax credit would have a positive impact on their sales,” he said. “That would amount to a very effective stimulus to housing demand and a needed boost to the overall economy.”

The above is curtesy of the Califorinia Association of Realtors.

Oct. 22 (Bloomberg) -- Mortgage rates for 30-year fixed U.S. home loans rose for a second consecutive week, making borrowing more expensive and threatening signs of stabilization in the housing market.

The average 30-year rate climbed to 5 percent from 4.92 percent last week. The 15-year rate increased to 4.43 percent from 4.37 percent, mortgage buyer Freddie Mac of McLean, Virginia, said today in a statement.

Rising borrowing costs reduced mortgage applications last week. The Mortgage Bankers Association’s index of applications to purchase a home or refinance fell 14 percent and homebuilders broke ground on fewer homes than anticipated in September. A government tax credit for first-time homebuyers is set to expire at the end of November.

“It’s going to be a long road to recovery,” said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida. “It’s going to be pretty gradual.”

The Federal Reserve set out last year to encourage lower mortgage rates by pledging to buy bonds backed by home loans. It increased the size of the program to $1.25 trillion in March.

The bond purchases from Fannie Mae, Freddie Mac and Ginnie Mae brought down yields on mortgage-backed securities and allowed lenders to reduce rates on new loans while still selling the securities backed by them at a profit. The plan helped drive mortgage rates to a record low of 4.78 percent twice in April.

The central bank plans to slow the pace of buying. The purchasing program is scheduled to end in the first quarter next year, the Federal Open Market Committee said in a statement Sept. 23.

Mortgage applications for homes fell 7.6 percent in the week ended Oct. 16 and refinancings decreased 17 percent, according to the Mortgage Bankers Association.

Housing starts rose 0.5 percent to an annual rate of 590,000 in August. That was lower than previously estimated, figures from the Commerce Department showed yesterday. Permits, a sign of future construction, fell for the second time in the past three months.

To contact the reporter on this story: Brian Louis in Chicago at blouis1@bloomberg.net.

For mortgages, 620 is the new magic number
Near historic low mortgage rates, favorable home prices, and the federal tax credit for first-time home buyers have contributed to home purchases in the past year. However, the onset of the credit crisis, new regulations for home appraisals, and more stringent guidelines for purchases and refinances have resulted in confusion for some potential home buyers.

While using a mortgage broker to find the best loan may work for some buyers, it may not always be the best route. In the past, mortgage brokers could “shop” a loan to multiple lenders to help find the best deal. However, new practices and procedures under the Home Valuation Code of Conduct (HVCC) have hampered mortgage brokers’ abilities, namely that lenders may no longer accept home appraisals commissioned by brokers. As a result, consumers may have to pay for new appraisals with each lender, which costs time and money. However, consumers who are very busy or need guidance may find that working with a mortgage broker is the easiest solution.

Qualifying for a mortgage under current lender standards is more difficult nowadays than in years past. Beginning Nov. 1 or Dec. 12, depending on the type of loan, Fannie Mae is tightening its lending standards to the 620 credit score benchmark—including loans backed by the Federal Housing Administration and Veterans Affairs. Borrowers with credit scores of less than 620 will find it very difficult to qualify for a mortgage. However, to qualify for the best rates, consumers generally need credit scores of 720 and must have verifiable, steady income.

As for loan type, most real estate professionals agree that a fixed-rate mortgage is the best choice for buyers and refinancers.

LOAN MODIFICATION ATTORNEYS UNDER INVESTIGATION

The State Bar of California has recently launched numerous investigations against attorneys for misconduct related to loan modifications. In a rare move, the State Bar has released the names of 16 attorneys under investigation, by opting to waive investigation confidentiality in favor of public protection. These attorneys have allegedly taken fees for promised services, but failed to perform those services or even communicate with their clients who face the possible loss of their homes. Their non-attorney staff may also be under investigation for unlawfully practicing law.

Not all attorneys engaged in loan modifications are unscrupulous. However, this announcement from the State Bar serves as a good reminder for REALTORS® and their clients to be careful when dealing with attorneys and others for loan modifications. Scam artists may intentionally associate or affiliate themselves with attorneys in an attempt to lend credence to their fraudulent schemes. The list of attorneys currently under investigation is available at http://calbar.ca.gov/state/calbar/calbar_generic.jsp?cid=10144&n=96395.