Posted at 09:24 AM in Carmel Valley Realtors, Economy, FHA Loans, Green Real Estate, International Real Estate, Jumbo Mortgage Capital, La Jolla Real Estate , Mission Valley Condo Loans, Mortgage Financing, Mortgage Rates Report, Oceanside Townhouse For Sale, Radio Mortgage, Real Estate, Recession, San Diego Condo Loans, Solana Beach Real Estate, Triple Crown Condos, VA IRRL Home Loan Refinance, Value Investing, Veterans Admin Home Loans | Permalink | Comments (0)
Posted at 08:47 PM in Economy, FHA Loans, La Jolla Real Estate , Mission Valley Condo Loans, Mortgage Financing, Mortgage Rates Report, Real Estate, Recession, San Diego Condo Loans, Triple Crown Condos, Trust Deed Investing, VA IRRL Home Loan Refinance, Veterans Admin Home Loans | Permalink | Comments (0)
Posted at 11:33 AM in Economy, Financial Planning, Investment Strategies, Mortgage Financing, Real Estate, Renovation Financing | Permalink | Comments (0)
You have heard me talk about China and it's effect on California real estate a lot. Just two years ago, I was on TV, talking about the oversized influence Chinese nationals had on Southern California real estate. Since then, a trade war with China escalated and the Chinese government cracked down on capital leaving Mainland China. The result has been lower mortgage rates and lower real estate prices in areas where Chinese nationals were buying properties.
Chinese buyers aren't as active as they were two years ago:
A big reason Chinese investors are retreating from the American housing market is that Beijing has placed tight limits on how much capital can leave the country in the wake of a devaluation in the yuan a few years ago.
“In China, each family member has been restricted to $50,000 or less,” says Steven Ho, senior loan officer at Quontic, a New York City-based bank. That makes it tougher for Chinese investors to elbow out American buyers with all-cash offers.“A few years before, these restrictions were not so stringent.”
The government toughened capital controls last year as the Chinese economy weakened, Ho says.
Also, China's slowing economy itself has dampened the confidence and purchasing appetite of Chinese buyers, Yun says. The Trump administration's trade war with China, he says, has further chilled investment in U.S. housing.
Meanwhile, more Chinese homeowners have been selling their American houses and condos because they can’t pay the maintenance costs with their money trapped in China, says Jeff Lu, vice president of Fidelity National Title Insurance.
President Trump's tariff war, with China, is causing global unrest. Investors are flocking the US treasury bonds, driving US mortgage rates lower:
U.S. Treasury yields have plunged since the July meeting and the gap between 2-year and 10-year yields has inverted, a typically reliable indicator of an impending recession.
Thirty-year mortgage rates have dropped about 100 basis points since late last year and are expected to stay below 4% over the next several years, around 60 basis points lower than forecast just three months ago.
You may love or hate China. You may love or hate Trump. You can hold either or both opinions but to ignore Chinese buyers of real estate or US treasury securities is to let youor opinion cloud your judgement when making a real estate purchase
Posted at 04:53 PM in Da' Fed, Economy, Investment Strategies, La Jolla Real Estate , Mortgage Financing, Mortgage Rates Report, Real Estate, Recession | Permalink | Comments (0)
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Posted at 08:22 AM in Carmel Valley Realtors, Economy, FHA Loans, La Jolla Real Estate , Mission Valley Condo Loans, Mortgage Financing, Mortgage Rates Report, Real Estate, San Diego Condo Loans, Solana Beach Real Estate, Triple Crown Condos, VA IRRL Home Loan Refinance, Veterans Admin Home Loans | Permalink | Comments (0)
Posted at 12:46 PM in FHA Loans, Jumbo Mortgage Rates Report, La Jolla Real Estate , Mission Valley Condo Loans, Mortgage Financing, Mortgage Rates Report, Radio Mortgage, Real Estate, San Diego Condo Loans, Solana Beach Real Estate, VA IRRL Home Loan Refinance, Veterans Admin Home Loans | Permalink | Comments (0)
...and a worse time to be a San Diego buyers' agent.
San Diego is in a housing crisis and the simple explanation for it is that we have a tremendous backlog of new housing--the politicians aren't helping us either. NIMBY-ism, water restrictions, and traffic density are core issues which restrict housing and, while they are legitimate issues, the county has a 65,000 unit backlog of new housing.
Experts believe that San Diego County needs 170,000 housing units built from 2012-2025 to meet demand and population growth- some 15,000 housing units each year. Over the past five years, San Diego County has averaged 2000 new housing units.. We are already 65,000 units behind and, if we continue at this anemic pace, we will end up 120,000 housing units short in 8 years. That is pushing up prices of existing homes.
You might think that rising housing prices, and double digit rent increases, will halt population growth in the County. While it might, SANDAG believes the region will grow by another million people within 25 years. Increased demand for housing and restricted supply means one of two things to your clients: they have to move out of San Diego County or home ownership is now, more than ever, the only defense against this housing shortage. Your role, as a buyer's agent, is now more important than ever to your clients' futures.
We are here to help you--here are three ways we can do that.
1- TBD approvals: this isn't a pre-qualification, this isn't a pre-approval, this is a full underwriting approval for the buyers' credit and income. We take an application, gather up supporting documentation, submit the file to the underwriter, and have a clean approval within 5 business days. What this means is that we can close a transaction in 21 days, giving your buyers a competitive advantage when they make offers.
2- "Selling" the buyer to the listing agent: a lot of the buyer's agents we work with ask us to speak to the listing agent when they make the offer. We communicate to them that we have that underwriting approval and, more importantly, tell them exactly what that means. It means that the only issues for a full loan approval are property related: appraisal, homeowners insurance and title insurance. When we explain the process to the listing agent, and represent the strength of the buyer, more offers get accepted.
3- VA and FHA condo approvals. So many condominium buyers are shut out because the complex lacks an agency approval, The perception is that VA and FHA condominium complex approvals are burdensome and lengthy--nothing could be farther from the truth. Debra and I are experienced experts at VA condo approvals-- we have approved over 130 of them in the past 8 years and we get those purchase transactions closed in 45 days or less. FHA condo approvals are easier for us because we have a HUD-delegated underwriter who has the ability and discretion to approve the complex FHA-eligible
This is a great time to be a real estate agent in San Diego County, especially if you list a lot of properties. Representing buyers however, is difficult. We're here to make that job easier on you.
Posted at 09:26 AM in 92130Realtors.org, Blue Collar Beach Towns, Carmel Valley Realtors, FHA Loans, Jumbo Mortgage Capital, La Jolla Real Estate , Mission Valley Condo Loans, Mortgage Financing, Oceanside Townhouse For Sale, Real Estate, San Diego Condo Loans, Show me a Good Deal, Solana Beach Real Estate, Value Investing, Veterans Admin Home Loans | Permalink | Comments (0)
If you have an FHA loan in process this month. you were "given a gift" only to have it "taken away" nine days later. It was a political stunt by past HUD Chairman Julian Castro and it's a darned shame it happened to you. Let me break it down for you:
The FHA charges borrowers money to insure their loan against default. It adds 1.75% to your loan and charges a monthly mortgage insurance premium in addition to that added 1.75%. You can avoid this by having at least a 20% down payment and getting a conventional loan (although FHA rates are lower than conventional rates)
The FHA monthly mortgage insurance premium WAS based on an annual charge of .5% of the loan amount prior to the Obama Administration taking office. During the housing crash, the FHA insurance pool (the money collected from the premiums) was depleted because of all the foreclosures. The first term Obama HUD Secretary (Shaun Donovan ) started to increase the monthly mortgage insurance premium cost, from the annual charge of .5%, to an annual charge of 1.4%. This increased the monthly cost of a new $400,000 FHA loan from $166/month to $466/month.
This was a bummer for new FHA borrowers because they were essentially paying for the failures of the past borrowers. Still, if FHA was going to be sustainable, it had to do something so they opted this approach. It worked. The FHA insurance pool grew from being depleted to sustainable. As the size of the FHA reserve pool increased, the HUD Secretary during Obama's second term (Julian Castro) started reducing the monthly mortgage premium from an annual charge of 1.4% to its current annual charge of .8%. This reduced those monthly mortgage costs (on a $400,000 loan) from $466 to $266.
A few months ago, HUD Secretary Julian Castro floated another premium cut from its current .80% annual cost to .55% annual cost. This would reduce the monthly cost (on a $400,000 loan) from $266 to $183. This move was met with vocal opposition from career HUD bureaucrats and the Republicans in Congress. The prevailing thought was to leave the annual FHA mortgage premium be for now and let the reserve fund grow more.
HUD Secretary Castro ignored the advice of career HUD bureaucrats and issued the order to cut the FHA monthly mortgage cost anyway. He issued this order on January 11, 2017 to take effect for loans FUNDED after January 27, 2017. I thought this was suspicious when he issued it because all previous HUD orders were effective for loans STARTED after the effective date. This seemed "too good to be true".
If it looks too good to be true, it usually is untrue. HUD Secretary Castro's order, breaking with normal HUD policy on effective dates, was a legitimate HUD order anyway. We (like other lenders and REALTORS) delayed closings so that borrowers would benefit from the monthly cost reduction. Here's what you need to know:
Castro's FHA order to reduce costs was never gonna happen and Castro knew it when he issued it on January 11, 2017.
Castro was playing politics with borrowers' money. His intention was to put the new HUD Secretary (Dr. Ben Carson) and the new President into the tough spot of saying "Sorry. This was never a good idea". As such, Castro timed the repeal of the January 11, 2017 FHA order to come out just an hour before the new President was inaugurated. Castro was quick to release this repeal order to the media so that it could run with the story that "The New President RAISED FHA monthly mortgage costs".
Let me give you a simple analogy:
I am the principal of a school and you are taking my job next Friday. Last month. I asked all the teachers if we could cut the dismissal time from 3PM to 2PM, The teachers said "this is a bad idea" and you (the new principal) agreed with the teachers. Last week, I ignored the teachers advice and sent an email to all of the pupils saying that the new dismissal time would be 2PM, effective the Monday after you become the new principal. My last act as principal, before I hand you the keys to the school, will be to send an email to the pupils saying "Sorry, the new principal might be a meanie so I can't keep that 2PM promise to you". Guess who won't be popular with his new pupils next Monday? You.
It's political scheming and it's garbage. The Obama Administration took a parting shot at the incoming Trump Administration and, if you have an FHA loan in process, you are the loser in this political game. In my opinion, the incoming Administration should honor the reduction for 30 days and restore the (higher) premium for loans funded after February 28, 2017. They might not have time to do that and I don't make policy so, if you have an FHA loan in process, expect to pay the original (higher) amount.
Posted at 10:27 AM in Carmel Valley Realtors, Carmle Valley Realtors, FHA Loans, Jumbo Mortgage Capital, Jumbo Mortgage Rates Report, La Jolla Real Estate , Mission Valley Condo Loans, Mortgage Financing, Mortgage Rates Report, Real Estate, San Diego Condo Loans, Solana Beach Real Estate, Triple Crown Condos | Permalink | Comments (0)