December 6, 2011 By

Statewide News Is Much Different Than Porter Ranch and other San Fernando Valley Towns.

 

 

Statewide news of moderate drops in valuation do not reflect accurately what is going on locally in towns throughout San Fernando Valley.

Last month in the Valley the median price of a previously owned home was $350,000, down 9 percent from a year earlier. And it is just 3 percent above the low for this cycle of $339,900 reached in February of 2009.

And 3 percent is not much distance to cover in this market. October’s median fell by that much from September.

October’s numbers also show just how this once high-flying housing investment has tanked, too.

 

The median price, the point at which half the homes cost more and half less, topped out at $655,000 in June of 2007. By October it was 46.6 percent, or $305,000 under that level.

The condo market is faring a little better.

Last month’s condo price settled at $225,000, up 21.6 percent from the low point of $185,000 reached in May of 2009.

But it is 45.8 percent, or $190,000, under the record high $415,000 in February of 2006.

The local market is not mirroring the state activity which has San Francisco to keep to  correction statewide from being so dramatic.

the lesson to be learned if you want to know history of local towns of Porter Ranch, Granada Hills, Chatsworth, Woodland Hills etc, you need to pay attention to local news.

Filed Under: Business, City News, Foreclosure Information, Investment Real Estate, Porter Ranch, Real Estate, San Fernando Valley, Selling a home, Short Sale Information

Porter Ranch Expensive Homes get a Break.

November 28, 2011 By

 

 

More Expensive Home Areas Like Porter Ranch go a Break.

President Obama signed into law a bill that will reinstate higher limits for Federal Housing Administration-backed mortgages in high-cost areas. In expensive housing areas such as Porter Ranch, the limit for these FHA-backed loans had dropped to $625,500 from $729,750 on Oct. 1. The change will enable home buyers to get reasonable loans at rates they can afford. Since over 90% of loans are backed by the U.S government, it is important to see higher loan limits again until the rest of the loan market recovers.

Filed Under: Business, Investment Real Estate, Mortgage, Porter Ranch, Real Estate, San Fernando Valley

Lower Price Homes Sell Better in Porter Ranch and greater Los Angeles Area

November 16, 2011 By

By Dave Friedman, Realtor at 818Myhouse.com licensed by Keller Williams Realty

The United States government is starting to back out of guaranteeing some residential mortgages which impacts the Porter Ranch and surrounding neighborhoods.

IMPACT ON SIZE HOMES SOLD IN PORTER RANCH, CHATSWORTH, GRANADA HILLS AND SURROUNDING AREAS:

The government guarantees about 90% of new mortgages — essentially propping up the home loan market after credit dried up and home sales plunged in the wake of the subprime mortgage crisis. The loan limit determines the maximum size of a mortgage that the Federal Housing Administration, Fannie Mae and Freddie Mac can buy or guarantee.

So-called nonconforming jumbo loans that are offered on the private mortgage market typically require bigger down payments and carry a higher interest rate, resulting in higher monthly payments for borrowers. In Los Angeles and Orange counties, the limit for FHA, Fannie and Freddie loans dropped from $729,750 to $625,500.

If the real estate market remains soft there may be political pressure to raise the limit back up to $729,750.

Short Sale Home Impact in San Fernando Valley areas such as Porter Ranch, Granada Hills and Chatsworth:

It is becoming more difficult to sell a more expensive short sale home.  Buyers need to come into escrow with larger down payments for homes  priced at over $650,000.  Short selling a home is much more beneficial as compared to allowing a bank to foreclose.  Short sale home buyers can come into the market to buy a home in 2-3 years in many cases with lower costs as compared to foreclosed home buyers.

Time will tell whether the government is pressured into raising the limit of loan guarantee.

Filed Under: Foreclosure Information, Short Sale Information

Loan Modifications, The Good, Bad and the Ugly

November 8, 2011 By

By Dave Friedman, Realtor and Certified Foreclosure Specialist

With an estimated $7 trillion dollars lost in the real estate market since the “Big Recession”, many Americans want to look at loan modifications. There are limited situations where a loan modification makes sense and may turn out good for the homeowner, which may be construed as good such as when your home is slightly upside down compared to the debt and your interest rates are high. The bad loan modifications have no real principle reduction. The ugly can be a process of applying for a loan modification that drives the homeowner straight into foreclosure with time running out for a short sale.

The Good: If your home is slightly upside down, then it may make sense to obtain a loan modification with lower interest rates such as President Obama’s Home Affordability and Stability Plan. According to the new program that may roll out in the near future there needs to be at least 80% loan debt to value or higher. There have been other similar loan modification programs such as HAMP (home affordability modification program) that are at the option of the banks which has temporarily worked for about 8% of the distressed homeowners. Most of those modifications turn into short sales or foreclosures if the home owner is still struggling financially. If you are not making payments the banks are more motivated to create a loan modification. Many banks do want to see that you are now working with monthly expenses and income within a few hundred dollars of each other. Unemployed need not apply.

The Bad: Some lenders will work with reducing payments based on a lower loan principle which sounds exciting but isn’t. If a home owner has $200,000 of debt over the home value, some banks will make the payments based on a principle reduction of $200,000. When the time comes to sell your home the bank will require you to pay them back the original full principle which is the remaining principle plus the principle reduction of $200,000 out of escrow.

The Ugly: The worst case is a bank sucks the last amount of money from you under the temporary payment plan and then turns down your loan modification. A trial period is frequently required for your loan modification with the criteria listed above. The banks can then turn your permanent loan modification down forcing you into foreclosure with limited time permitted for a short sale if you can not make the loan current. The clock in many cases of when the home is to go to trust deed sale does not stop. It may get postponed by one or two months at a time. This is an abuse of the distressed homeowner when the recommendation should have been a short sale for everyone’s best interest.

Before deciding whether a loan modification is a good option, you need to see if your home is worth less than the loan. If your home is upside down by a large sum to your standards and you have endured a hardship of lower income or increased expenses, then you have two choices to cut off excess home loan debt. A foreclosure will wipe your debt clean when you return the house back to the lender which includes a large credit hit. A short sale is the best tool which will allow the debt to be wiped clean and allowing you back in the home purchasing market (in a few years) at a lower cost than a foreclosure on your credit report.

Many distressed home owners fall into the category of large debt above their home value. Some homeowners are waiting out of fear. There is a window closing by the end of 2012 which waves tax liabilities on the forgiven owner occupied debt. The short sale process is a great opportunity for families to start fresh with no house debt. Be very careful about whether a loan modification is the best solution since your family should not put themselves second to a bank. It is important to discuss your options with a certified short sale and foreclosure specialist such as myself.

Your property sale, purchase, investment or distressed loan resolution will be a comfortable and stress free experience from my over 20 years in the real estate business. You can call me with any Real Estate Questions at 818-Myhouse (694-6873). 818MyHouse.com with Keller Williams Realty – My Experience Turns Your Real Estate Dreams Into Reality.

Filed Under: Foreclosure Information, Investment Real Estate, Porter Ranch, Real Estate, Short Sale Information

Life After A Short Sale Versus a Foreclosure

September 20, 2011 By

Life After A Short Sale Versus a Foreclosure

By Dave Friedman, Realtor and Certified Foreclosure Specialist

You very well may know someone who has gone through a home short sale or foreclosure.  There is not a great social stigma with homeowners who have to deal with leaving a home that has more debt than value if there is a drop in family income.  Not only do families get rid of over $100,000 of upside down debt in many cases, they may be eligible in a few years to purchase a new home for a much lower price.  The key to positioning oneself to purchasing a home again is how the process is handled.

Homeowners who speak to a certified foreclosure Realtor can get to the bottom line of whether a short sale is a good option. The short sale is selling a home through a Realtor with the banks approval versus making the bank spend $50,000 in the foreclosure process.  The key in a short sale is showing more expenses than income as well as not having a large sum of cash in the bank, i.e. tens of thousands of dollars.  An attorney should be used to review their situation especially if loan fraud is of concern by the lender.  Do not fall into the trap of paying an attorney to negotiate for lower payments while praying the bank will reduce the total debt owed while keeping the home.  I have seen to many home owners spend thousands while wishing a short sale was handled in the first place which costs nothing in most cases.

There are federal and state laws in the homeowners favor.  There is no tax and no carry forward debt on the deficiency or the difference on the sale revenue a bank receives compared to the higher total loan debt.  This forgiven debt can amount to hundreds of thousands of dollars.  I often educate home owners the fact that this nontaxable gift of debt forgiveness often means the difference of paying the bank back for many years on the upside down debt versus applying the savings for a good use such as your families retirement.  Homeowners should always consult with their tax expert.

The reason a short sale is preferred over letting a home go into foreclosure pertains to the ability to purchase another home in a few years.  The short sale is bank approved and is viewed in a better light.  The time frame to restore much of the fico score is about 3 years for either avenue but the cost of a new loan will be higher with a foreclosure on a credit report.
Your property sale, purchase, investment or distressed loan resolution will be a comfortable and stress free experience from my over 20 years in the real estate business.  You can call me with any  Real Estate Questions at 818-Myhouse (694-6873).  818MyHouse.com with Keller Williams Realty – My Experience Turns Your Real Estate Dreams Into Reality.

Filed Under: Foreclosure Information, Real Estate, Short Sale Information

Interest Rates Dropping To Multi Decade Lows

August 25, 2011 By

How Does This Affect Real Estate Prices?
By Dave Friedman, Realtor

The recent concerns of Europe resolving their budgets along with the U.S. showing signs of a slow recovery has caused interest rates to drop to the low 4% range for 30 year real estate mortgages. The low interest rates which keeps the payments more reasonable can create an opportunity for buyers in areas where inventory is rising.

Many people are looking to put their money in safe investments without the volatility of the stock market. The increased demand for safe U.S. Treasuries drives interest rates down. The interest rates tend to move down with a bearish stock market and increases with a bullish market. Home buyers who understand how interest rates move along with historical rates, can do very well.

Housing Prices Attractive or Not?

Current attractive real estate prices along with multi decade low 30 year loan rates creates an ideal real estate investment opportunity. Prices can benefit from low interest rates. The counter balance is the fact buyers are being cautious about any type of purchase with a slow economy. Although, Warren Buffet says opportunity is buying when there is fear.

The following are updates for the North San Fernando Valley:

Granada Hills and Chatsworth presently show price stability while their number of months to sell present inventory is rising (5.5months) We will keep an eye to see if pricing becomes softer.

Porter Ranch also has a stable price presently while their inventory is rising to 9 months. More expensive area home owners expect their properties to be on the market longer relative to lower cost areas. We need to see if the inventory keeps growing relative to sales. This could cause a softening of the market.

Northridge (citywide) has seen some decreases in median price since their inventory has been growing. That town has 7.5 months of real estate inventory. These home owners are willing to lower prices after several months on the market.
With lower rates and higher inventory levels, someone is going to pick up a nice home for a good deal.

You can call me with any Real Estate Questions at 818-Myhouse (694-6873). With over 20 years experience in Real Estate I can assist you with property sales, purchases, investing and resolving distressed loans. 818MyHouse.com with Keller Williams Realty – My Experience Turns Your Real Estate Dreams Into Reality.

Filed Under: Real Estate

Porter Ranch Home Foreclosure Delays

June 28, 2011 By

Porter Ranch Home Foreclosure Delays Due to Bad Bank Paperwork

Lender processing delays reduced the number of U.S. homes taken back by banks in the first three months of the year and contributed to a sharp drop in properties entering the foreclosure pro­cess.

But March foreclosure data suggest foreclosure activity may be starting to creep higher, as lenders make progress tackling a backlog of pending foreclo­sure cases.

Banks repossessed 215,046 homes in the January to March quarter, down 6 per­cent from the fourth quarter and down 17 percent versus the same period last year, foreclosure listing firm Real­tyTrac Inc.

Banks Overwhelmed With Home Forclosure Paperwork

The number of properties receiving a notice of default for the first time also declined, falling 17 percent from the fourth quarter and 35 percent from the first three months of last year, the firm said.

The dropoff in foreclosure activity stems from foreclo­sure documentation prob­lems that came to light last fall. Many banks have since revisited thousands of fore­closure cases, delaying the processing of new foreclo­sures. The logjam has been compounded by court delays in states such as Florida, New York, and New Jersey, where foreclosures must be approved by a judge.

Still, between February and March, the number of properties repossessed by banks rose 13 percent, the highest increase in a year. And homes receiving their first notice of default climbed 16 percent.

“The bottleneck is opening up a little bit and we’re start­ing to see the first inklings that we might be getting back to more normal levels of foreclosures,” said Rick Sharga, a senior vice presi­dent at RealtyTrac.

By normal levels, Sharga means the elevated pace of foreclosure activity that led to more than 1 million homes being taken back by lenders last year.

Roughly 5 million borrow­ers are at least two months behind on their mortgages, by some estimates. And many of the factors that have contributed to the foreclo­sure crisis are likely to con­tinue driving foreclosures this year, including high unemployment, a weak hous­ing market, falling home val­ues and tighter lending stan­dards.

The foreclosure processing delays remain most pro­nounced in states where judges play a role in the fore­closure process. In Florida, for example, foreclosure activity has fallen 47 percent since the fourth quarter, and it’s taking nearly 17 months from the time a property receives its initial notice of default until it is put up for auction. That process normally takes about four months, Sharga said.

Filed Under: Foreclosure Information

Investment Real Estate

June 28, 2011 By

Investment Real Estate- Cash Flow King or Cash Drain?

 By Dave Friedman, Realtor

 

I will be writing a series about the “Real Scoop” on real estate investment choices among houses and duplexes along with the returns and risks. Wealthier neighborhood versus working class neighborhood investment cash flow and risk will be discussed. 

I have gained much experience in understanding property returns and risks over the years from personal and client investments.   

 

Investors with limited experience in real estate should start out with houses or small apartment complexes up to four units.  (Over four units require a commercial loan that is very expensive and harder to qualify)   Commercial property can have higher risks since they are more sensitive to economic downturns. Houses and apartment buildings tend to be more conservative since people need housing.  If you avoid buying during frothy market times or in an over built area, then some wonderful opportunities are available. 

 

Should you purchase in a great area like Pasadena or Porter Ranch rather than in a working class area such as North Hollywood or Van Nuys?  The following are vital to consider when deciding:

 

Investment Returns:                            Pasadena/Porter Ranch    Van Nuys

 

   Cash Flow                                       Low                                 Medium/High                                                                                                                         

    Annual average appreciation          Medium                           Medium/High

Investment Risks:                               Low                                 Medium

    Local unemployment rate               Low/medium                   Medium

     National economy                         Low/medium                   Medium

     Investment Value Change             Low/medium                   Medium/High

    (Volatility)

 

 As you can see in the above chart, nicer neighborhoods offer less volatility
or price gyrations along with lower cash flow returns and higher
capital investment requirements. There is also less wear and tear from tenants.

Working class neighborhoods such as Van Nuys offer the investor higher cash
flows relative to the investment dollar but are subject to higher valuation
volatility.  The reason for volatility in the less expensive areas is because
more investors can afford to move into those investments.

The correct option depends on your goal of appreciation only or a balanced combination of both property appreciation and cash flow. 

Feel free to call me with any  Real Estate Questions at 818-Myhouse (694-6873).  With over 20 years experience in Real Estate I assist with property sales, purchases, investing and resolving distressed loans.  818MyHouse.com with Keller Williams Realty – Experience Turns Real Estate Dreams Into Reality

Filed Under: Investment Real Estate

Can I afford this house- wes

June 2, 2011 By

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Filed Under: Real Estate

Can I Afford This House

June 2, 2011 By

By Dave Friedman, Realtor

Whether it is a beautiful Tuscan style home in Northridge or a wonderful Porter Ranch townhome with great canyon views,  how do you know if you can afford that house?  Loan programs have down payment requirements that vary depending on your FICO credit score, money in the bank and income level.   Home buyers should have at a minimum an idea of their maximum down payment and maximum allowed monthly housing expense before shopping for a home.  Ideally, home buyers should be preapproved by a lender so they know exactly how expensive of a home the bank will lend on.  Home sellers expect offers to be accompanied by a pre-approval letter.    The following information will give you a better understanding of lender guidelines.

The federal government has stepped in with low down payment FHA programs for most home buyers that require only 3.5% down.   The down payment minimums for the majority of loans range from 3.5% to 20%.    You want to take into consideration approximately 2%  of the purchase price for closing costs which may be put into the loan or paid at closing.  You should have a reserve of at least 3 months  of home payments in the bank for emergencies.  Once you figure out how much you feel comfortable for a down payment, closing costs and emergency fund,  then the mortgage and related payment affordability based on income can be calculated.

A fairly accurate way of figuring your maximum monthly payment affordability is to take into consideration all monthly debt reported to credit agencies such as car payments and other loan payments.  That total should not exceed 45-50% of your gross monthly income.

The last major piece in determining what loan programs you qualify for is your FICO score or credit rating.  Fico scores that still qualify for some loans can be as low as 500 but require at least 10% down.

The majority of loans require mortgage insurance if the borrower does not put down 20%.  The fee ranges from presently .5% to .9% of the loan amount annually until the loan value drops to a conforming amount relative to the property value.  The good news is the borrower with limited funds may be able to purchase a home when values are low and interest rates are around 5% fixed for 30 years and about 4.35% fixed for 15 years.

The other monthly costs besides mortgage payments and mortgage insurance for down payments under 20% are property taxes and property insurance.  Property Insurance can be figured approximately .34% or .0034 times the purchase price.    Property taxes in Los Angeles County is approximately 1.25% or .0125 times the purchase price.  The last two expenses should be broken down by month so you can see your total housing cost.

The factors of  borrowers’  FICO credit score, cash position and income are key in determining the maximum affordability.  The recession should have reminded us all that maximizing debt to the fullest is not always a great idea.   Can I afford this house should be followed up with do I feel comfortable with this amount of debt and how much can I save with a 15 year loan versus a 30 year loan.

Feel free to call me with any  Real Estate Questions at 818-Myhouse (694-6873).  With over 20 years experience in Real Estate I assist with property sales, purchases, investing and resolving distressed loans. 818MyHouse.com/Keller Williams Realty – Experience turns Real Estate Dreams Into Reality

Filed Under: Business, Investment Real Estate, Real Estate
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