Residents who bought their home in Orange County in the past 3 years may find themselves with the somewhat good news of a temporary reduction in their property taxes. The county is allowing homeowners who believe their actual value is less than the assessed value to go through an informal review in order to possibly lower their taxes.
The form is available from the county, or clicking on our link for the Request for Informal Assessment Review.
The deadline is quickly approaching - March 30, 2008!
A few things to remember:
1. Your assessed value may already be below the market value depending on when you purchased your property or had it significantly reassessed due to remodelling, etc. Find your assessed value at the county’s Tax Collector page.
2. Any victory will be short lived. Your property will jump back to the earlier (higher) assessed value when property begins to climb again. You will not be able to enjoy the cost of living maximum allowance of 2% per year dictated by Prop. 13.
Here is Dataquick’s chart showing the property taxes for a Prop. 13 home versus the median sales price home in Orange County in just seven years.
orange county property taxes prop 13
Saturday, March 29, 2008
Initial FannieMae Guidelines for “Jumbo” Conforming Loans
More and more information is coming out on the higher conforming loans instigated by Congress as part of the Economic Stimulus Package. FannieMae has a detailed outline available as a .pdf. Listed below is a summary of the Eligible Products, Purpose and Occupancy Requirements:
Products
* 15-, 20-, 30- and 40-year fixed-rate, fully amortizing mortgages (no balloons)
* 30-year fixed-rate mortgages with 10-year interest-only periods
* Fully amortizing 5/1 adjustable-rate mortgages (ARMs)
* 5/1 ARMs with 10-year interest-only periods
Purpose
* Purchase
* No cash-out refinance
* Cash-out refinances for primary residence only
Occupancy
* 1-unit primary residences, including condos and PUDs
* 1-unit second homes
* 1-unit investment properties
30 year fixed rate mortgages economic stimulus package eligible products fanniemae fixed rate mortgages
Products
* 15-, 20-, 30- and 40-year fixed-rate, fully amortizing mortgages (no balloons)
* 30-year fixed-rate mortgages with 10-year interest-only periods
* Fully amortizing 5/1 adjustable-rate mortgages (ARMs)
* 5/1 ARMs with 10-year interest-only periods
Purpose
* Purchase
* No cash-out refinance
* Cash-out refinances for primary residence only
Occupancy
* 1-unit primary residences, including condos and PUDs
* 1-unit second homes
* 1-unit investment properties
30 year fixed rate mortgages economic stimulus package eligible products fanniemae fixed rate mortgages
What are the Acutual Numbers...Latest Jan. 2008 Results!
The total number of sales for January (the latest month available) is 1,286 and that is a 46% decline over January 2007. There were 806 resale houses, 327 condos sold and 153 new homes. Orange County had 4,276 Notices of Default (not foreclosures) for the fourth quarter of 2007, compared with 1,983 for the same time period 2006. That is a 115.6% upswing. Actual foreclosures have been running about 1 in 4 of total defaults. Inland Empire and Los Angeles fared far worse with Defaults over 17,000 for each county respectively.
Finally Some Realisting (And Yes Positive) Headlines About Socal Real Estate
The news varied from a positive “negative headline” such as “O.C. homebuilder’s woes may reach bottom in ‘08” (OC Register, Lansner), to a downright positive headline such as “Ignore the Headlines! Except this one. Sure housing’s in a hole. But there’s a potent case for buying now, whether it’s real estate or stocks.” (Time Magazine, Keadlec). What is the reason for the sudden optimism within the broader pessimism? The answer to that question is a multitude of factors that this newsletter has been drumming into you for the past few months; factors such as low interest rates, selection, seller concessions, lack of competition and ultimately, more bang for your buck.
Both of the articles mentioned above really hinge on mortgage rates as key. Jeff Meyers, the founder of the Meyers Builder Advisors consultancy in Corona Del Mar notes the loan limit changes as bringing liquidity to the market. He states, “…2008 will be the bottom year for builders in Orange County.” The time magazine article says if you are, “emotionally ready to be a homeowner, you have good credit, plan to stay put for five years and have been waiting for the perfect entry point… It’s time to get serious— before an inevitable rise in interest rates wipes out your advantage.” There may be some plausible arguments to waiting for prices to finish falling in other parts of the country where appreciation isn’t the foregone conclusion to this story. But it’s tough to sit out in California. Housing prices have not fallen as fast as the doomsayers predicted. It has been a correction, just as this newsletter stated over a year ago. Will prices continue to come down? Yes, there is probably some air left in the balloon. But if you’re not careful rising interest rates will be buoying up that balloon that you want to see fall. Prices aren’t everything. Leverage is.
Both of the articles mentioned above really hinge on mortgage rates as key. Jeff Meyers, the founder of the Meyers Builder Advisors consultancy in Corona Del Mar notes the loan limit changes as bringing liquidity to the market. He states, “…2008 will be the bottom year for builders in Orange County.” The time magazine article says if you are, “emotionally ready to be a homeowner, you have good credit, plan to stay put for five years and have been waiting for the perfect entry point… It’s time to get serious— before an inevitable rise in interest rates wipes out your advantage.” There may be some plausible arguments to waiting for prices to finish falling in other parts of the country where appreciation isn’t the foregone conclusion to this story. But it’s tough to sit out in California. Housing prices have not fallen as fast as the doomsayers predicted. It has been a correction, just as this newsletter stated over a year ago. Will prices continue to come down? Yes, there is probably some air left in the balloon. But if you’re not careful rising interest rates will be buoying up that balloon that you want to see fall. Prices aren’t everything. Leverage is.
Wireless Telephones & Driving Rules from the CHP
We’ve all heard or read about the new laws that will take effect this summer regarding the use of cell phones while driving. As Realtors and title reps, we spend many hours in the car and many of those hours on the phone.
Getting a ticket can be costly, as can the outcome of the distractions while negotiating the streets with one hand on the wheel and the other on our ear.
The CHP produced a 3 page FAQ regarding both VC 23123 and VC 23124 that take effect July 1, 2008.
Below are some of the Q/A to know:
- Effective July 1, 2008 without a grace period;
- Bluetooth or wired earpieces or speaker phones comply with the handsfree rule;
- Both ears cannot be covered by a device;
- Exempted are emergency calls to: police, medical provider, fire department or other emergency service;
- Texting - ironically - is not excluded but you can be pulled over if the police feel you’re distracted;
- No one under the age of 18 can use a cell phone in any manner while operating a vehicle
- The fines start small but graduate with each offense; and
- Violations will show on your driving record, but no point will be added against your record.Have a safe trip.
Getting a ticket can be costly, as can the outcome of the distractions while negotiating the streets with one hand on the wheel and the other on our ear.
The CHP produced a 3 page FAQ regarding both VC 23123 and VC 23124 that take effect July 1, 2008.
Below are some of the Q/A to know:
- Effective July 1, 2008 without a grace period;
- Bluetooth or wired earpieces or speaker phones comply with the handsfree rule;
- Both ears cannot be covered by a device;
- Exempted are emergency calls to: police, medical provider, fire department or other emergency service;
- Texting - ironically - is not excluded but you can be pulled over if the police feel you’re distracted;
- No one under the age of 18 can use a cell phone in any manner while operating a vehicle
- The fines start small but graduate with each offense; and
- Violations will show on your driving record, but no point will be added against your record.Have a safe trip.
Price, Price, Price...The Keys to Successful Selling!
Some sellers desire to test the market. Perhaps their motivation for selling is not the greatest or they simply have some time before their drop dead move date. At any rate, price is generating a lot of buzz. The Wall Street Journal had a great article, “PRICE FIXING: IN THIS MARKET, SELLING A HOME REQUIRES SAVVY.” The article points out three distinct philosophies of price. “Round numbers signal prestige, while precise numbers suggest a bargain. Buyers anchor off the first digit, so $3,999 seems cheaper than $4,000.” Finally, “if you cut your asking price, make it easy to calculate the discount.”
Sunday, March 2, 2008
Simplology Blog Course - FREE
I'm evaluating a multi-media course on blogging from the folks at Simpleology. For a while, they're letting you snag it for free if you post about it on your blog.
It covers:
- The best blogging techniques.
- How to get traffic to your blog.
- How to turn your blog into money.
I'll let you know what I think once I've had a chance to check it out. Meanwhile, go grab yours while it's still free.
Wednesday, February 20, 2008
New Home Page Video and Learning Series
Well, It's about time! I now have a video up on my home page and am launching my 7-day Real Estate Tips Video Series with some of the best ideas/tips/tricks that I've learned in my career. Here is the home page video, Enjoy!
Raising conforming loan limit not a simple task
Monday, February 11, 2008
By Matt Carter Inman News
While Fannie Mae, Freddie Mac and the Federal Housing Administration will soon be allowed to dive into what until now has been the jumbo loan market, it remains to be seen how many borrowers will benefit.
Congress and the Bush administration have agreed to raise the $417,000 conforming loan limit until the end of the year, under a provision of the $150 billion economic stimulus package approved by Congress last week (see Inman News story).
But the devil, as they say, will be in the details. The new formula for determining the conforming loan limit will allow Fannie, Freddie and FHA to guarantee loans of up to 125 percent of the median home price of an area.
While housing markets where the median home price exceeds $216,840 will benefit from higher limits for FHA loan guarantee programs, one analysis suggests Fannie and Freddie will be able to tiptoe into the jumbo loan business in only 19 metropolitan statistical areas (MSAs).
The first step to be taken to implement the changes will be determining median home prices. The Department of Housing and Urban Development has been given 30 days to publish median-home-price data once President Bush signs the stimulus package into law.
But where will HUD get the data? And with prices falling rapidly in many markets, will the data be updated monthly, quarterly or annually?
HUD spokesman Lemar Wooley said FHA will use a combination of existing government data sets and available commercial information to determine the median sales price. He said FHA loan limits are based on the county a property is located in, except when the county is part of a larger MSA, in which case the county with the highest loan limit determines the limit for the entire MSA.
Not only does HUD have to come up with median-home-price numbers for every housing market in America, but Fannie Mae and Freddie Mac will have to come up with credit guidelines for a class of loans that, until now, has mostly been off-limits. The government-chartered mortgage financiers will have to decide what their standards will be for the loans they will purchase, or securitize and guarantee.
As they venture into the jumbo loan market, Fannie and Freddie will have to decide if they need to be more cautious about the minimum down payments they will accept, borrower's credit histories, and the fees they charge for taking on more risk. The task will be complicated by the fact that the maximum loan size will vary from market to market, instead of the uniform $417,000 limit in place today in 48 states other than Alaska and Hawaii.
In high-cost markets, the $417,000 conforming loan limit for loans eligible for purchase or guarantee by Fannie and Freddie will be raised to 125 percent of the median home price, with an upper cap of $729,750. That formula means that the $417,000 conforming loan limit will remain in place in markets where the median home price is $333,600 or less.
While there's no time limit for Fannie and Freddie to publish guidelines for the new class of loans, the companies have promised to work with regulators to expedite the process. James Lockhart, director of the Office of Federal Housing Enterprise Oversight, told members of the Senate Banking Committee Thursday that the process could take months.
The temporary increase in the conforming loan limit is likely to have a bigger impact on FHA loan guarantee programs, because the current limits for FHA are lower. In high-cost markets, the current ceiling for FHA loan programs is $372,790, and $200,160 in other markets.
The new ceiling for FHA loan programs in normal markets will be $271,050 -- meaning that even borrowers in housing markets where the median home price is below $216,840 may be eligible for FHA-backed purchase or refinance loans up to that amount. In areas where the median home price is above $216,840, the limit for FHA loan programs will be 125 percent of the median home price, all the way up to $729,750.
Fannie and Freddie will be allowed to buy and securitize jumbo loans originated any time between July 1, 2007 and Dec. 31, 2008. That means jumbo lenders may be able to sell some of the loans they've made in the last seven months to Fannie and Freddie, freeing them up to make more loans.
One reason Congress and the Bush administration agreed to raise the conforming limit, at least for now, is that Wall Street investors will no longer buy most mortgage-backed securities that don't carry the backing of Fannie, Freddie or FHA. That means borrowers are paying about 1 percent more for jumbo loans that exceed the $417,000 conforming loan limit.
But there's no guarantee investors will accept the jumbo loans backed by Fannie and Freddie -- which are private, publicly traded companies that face potentially billions of losses in the current mortgage morass -- as safe investments. They may also need some time to familiarize themselves with how FHA is handling the larger loans, said Jaret Seiberg, an analyst with Stanford Group Co. who follows the secondary mortgage market.
"Investors understand the risk characteristics of conforming mortgages that are securitized by Fannie and Freddie, and they understand FHA-backed loans securitized through Ginnie Mae," Seiberg said. "But they don't have experience with jumbo loans coming out of those channels. In a market with so much uncertainty, it's a real question whether investors are going to have an appetite for a new product."
If Wall Street investors don't snatch up the larger loans backed by Fannie, Freddie and FHA after they are securitized, that would limit the benefits to the secondary mortgage market and do less to ease the credit crunch than backers of the move have hoped.
As Fannie's and Freddie's losses mount and they bump up against minimum capital requirements, their capacity to purchase and guarantee loans is not unlimited. And as Lockhart noted, it takes three times as much capital to guarantee one $600,000 loan as it does one $200,000 loan.
While Seiberg is confident that HUD can implement higher loan limits for FHA programs, he said Fannie and Freddie have technological and capital issues to overcome before they become "meaningful players" in the "jumbo light" market.
As to which housing markets might benefit from higher conforming loan limits, Seiberg said Stanford Group used median-home-price data from the National Association of Realtors to analyze where Fannie and Freddie might be able to purchase or guarantee loans above the current $417,000 limit.
Stanford Group identified 19 markets -- more than a third of them in California -- where Fannie and Freddie could enter the jumbo light market.
Estimated conforming loan limit increases
Metropolitan area
Median price Q3 '07
Estimated new limit
Anaheim-Santa Ana, Calif.
$700,700
$729,750
L.A.-Long Beach-Santa Ana, Calif.
$588,400
$729,750
San Diego-Carlsbad-San Marcos, Calif.
$589,300
$729,750
San Francisco-Oakland-Fremont, Calif.
$825,400
$729,750
San Jose-Sunnyvale-Santa Clara, Calif.
$852,500
$729,750
Riverside-San Bernardino-Ontario, Calif.
$377,000
$471,250
Sacramento-Arden-Arcade-Roseville, Calif.
$335,700
$419,625
Barnstable Town, Mass.
$400,600
$500,750
Boston-Cambridge-Quincy, Mass.
$414,700
$518,375
Boulder, Colo.
$367,500
$459,375
Bridgeport-Stamford-Norwalk, Conn.
$491,100
$613,875
Miami-Fort Lauderdale-Miami Beach, Fla.
$346,800
$433,500
New York-Northern N.J.-Long Island, N.Y./N.J.
$476,100
$595,125
New York-Wayne-White Plains, N.Y.
$550,900
$688,625
Edison, N.J.
$391,800
$489,750
Nassau-Suffolk, N.Y.
$470,000
$587,500
Newark-Union, N.J./Penn.
$459,700
$574,625
Seattle-Tacoma-Bellevue, Wash.
$394,700
$493,375
Wash. D.C.-Arlington-Alexandria, Va./Md./W.V.
$438,000
$547,500
Source: National Association of Realtors, Stanford Group
By Matt Carter Inman News
While Fannie Mae, Freddie Mac and the Federal Housing Administration will soon be allowed to dive into what until now has been the jumbo loan market, it remains to be seen how many borrowers will benefit.
Congress and the Bush administration have agreed to raise the $417,000 conforming loan limit until the end of the year, under a provision of the $150 billion economic stimulus package approved by Congress last week (see Inman News story).
But the devil, as they say, will be in the details. The new formula for determining the conforming loan limit will allow Fannie, Freddie and FHA to guarantee loans of up to 125 percent of the median home price of an area.
While housing markets where the median home price exceeds $216,840 will benefit from higher limits for FHA loan guarantee programs, one analysis suggests Fannie and Freddie will be able to tiptoe into the jumbo loan business in only 19 metropolitan statistical areas (MSAs).
The first step to be taken to implement the changes will be determining median home prices. The Department of Housing and Urban Development has been given 30 days to publish median-home-price data once President Bush signs the stimulus package into law.
But where will HUD get the data? And with prices falling rapidly in many markets, will the data be updated monthly, quarterly or annually?
HUD spokesman Lemar Wooley said FHA will use a combination of existing government data sets and available commercial information to determine the median sales price. He said FHA loan limits are based on the county a property is located in, except when the county is part of a larger MSA, in which case the county with the highest loan limit determines the limit for the entire MSA.
Not only does HUD have to come up with median-home-price numbers for every housing market in America, but Fannie Mae and Freddie Mac will have to come up with credit guidelines for a class of loans that, until now, has mostly been off-limits. The government-chartered mortgage financiers will have to decide what their standards will be for the loans they will purchase, or securitize and guarantee.
As they venture into the jumbo loan market, Fannie and Freddie will have to decide if they need to be more cautious about the minimum down payments they will accept, borrower's credit histories, and the fees they charge for taking on more risk. The task will be complicated by the fact that the maximum loan size will vary from market to market, instead of the uniform $417,000 limit in place today in 48 states other than Alaska and Hawaii.
In high-cost markets, the $417,000 conforming loan limit for loans eligible for purchase or guarantee by Fannie and Freddie will be raised to 125 percent of the median home price, with an upper cap of $729,750. That formula means that the $417,000 conforming loan limit will remain in place in markets where the median home price is $333,600 or less.
While there's no time limit for Fannie and Freddie to publish guidelines for the new class of loans, the companies have promised to work with regulators to expedite the process. James Lockhart, director of the Office of Federal Housing Enterprise Oversight, told members of the Senate Banking Committee Thursday that the process could take months.
The temporary increase in the conforming loan limit is likely to have a bigger impact on FHA loan guarantee programs, because the current limits for FHA are lower. In high-cost markets, the current ceiling for FHA loan programs is $372,790, and $200,160 in other markets.
The new ceiling for FHA loan programs in normal markets will be $271,050 -- meaning that even borrowers in housing markets where the median home price is below $216,840 may be eligible for FHA-backed purchase or refinance loans up to that amount. In areas where the median home price is above $216,840, the limit for FHA loan programs will be 125 percent of the median home price, all the way up to $729,750.
Fannie and Freddie will be allowed to buy and securitize jumbo loans originated any time between July 1, 2007 and Dec. 31, 2008. That means jumbo lenders may be able to sell some of the loans they've made in the last seven months to Fannie and Freddie, freeing them up to make more loans.
One reason Congress and the Bush administration agreed to raise the conforming limit, at least for now, is that Wall Street investors will no longer buy most mortgage-backed securities that don't carry the backing of Fannie, Freddie or FHA. That means borrowers are paying about 1 percent more for jumbo loans that exceed the $417,000 conforming loan limit.
But there's no guarantee investors will accept the jumbo loans backed by Fannie and Freddie -- which are private, publicly traded companies that face potentially billions of losses in the current mortgage morass -- as safe investments. They may also need some time to familiarize themselves with how FHA is handling the larger loans, said Jaret Seiberg, an analyst with Stanford Group Co. who follows the secondary mortgage market.
"Investors understand the risk characteristics of conforming mortgages that are securitized by Fannie and Freddie, and they understand FHA-backed loans securitized through Ginnie Mae," Seiberg said. "But they don't have experience with jumbo loans coming out of those channels. In a market with so much uncertainty, it's a real question whether investors are going to have an appetite for a new product."
If Wall Street investors don't snatch up the larger loans backed by Fannie, Freddie and FHA after they are securitized, that would limit the benefits to the secondary mortgage market and do less to ease the credit crunch than backers of the move have hoped.
As Fannie's and Freddie's losses mount and they bump up against minimum capital requirements, their capacity to purchase and guarantee loans is not unlimited. And as Lockhart noted, it takes three times as much capital to guarantee one $600,000 loan as it does one $200,000 loan.
While Seiberg is confident that HUD can implement higher loan limits for FHA programs, he said Fannie and Freddie have technological and capital issues to overcome before they become "meaningful players" in the "jumbo light" market.
As to which housing markets might benefit from higher conforming loan limits, Seiberg said Stanford Group used median-home-price data from the National Association of Realtors to analyze where Fannie and Freddie might be able to purchase or guarantee loans above the current $417,000 limit.
Stanford Group identified 19 markets -- more than a third of them in California -- where Fannie and Freddie could enter the jumbo light market.
Estimated conforming loan limit increases
Metropolitan area
Median price Q3 '07
Estimated new limit
Anaheim-Santa Ana, Calif.
$700,700
$729,750
L.A.-Long Beach-Santa Ana, Calif.
$588,400
$729,750
San Diego-Carlsbad-San Marcos, Calif.
$589,300
$729,750
San Francisco-Oakland-Fremont, Calif.
$825,400
$729,750
San Jose-Sunnyvale-Santa Clara, Calif.
$852,500
$729,750
Riverside-San Bernardino-Ontario, Calif.
$377,000
$471,250
Sacramento-Arden-Arcade-Roseville, Calif.
$335,700
$419,625
Barnstable Town, Mass.
$400,600
$500,750
Boston-Cambridge-Quincy, Mass.
$414,700
$518,375
Boulder, Colo.
$367,500
$459,375
Bridgeport-Stamford-Norwalk, Conn.
$491,100
$613,875
Miami-Fort Lauderdale-Miami Beach, Fla.
$346,800
$433,500
New York-Northern N.J.-Long Island, N.Y./N.J.
$476,100
$595,125
New York-Wayne-White Plains, N.Y.
$550,900
$688,625
Edison, N.J.
$391,800
$489,750
Nassau-Suffolk, N.Y.
$470,000
$587,500
Newark-Union, N.J./Penn.
$459,700
$574,625
Seattle-Tacoma-Bellevue, Wash.
$394,700
$493,375
Wash. D.C.-Arlington-Alexandria, Va./Md./W.V.
$438,000
$547,500
Source: National Association of Realtors, Stanford Group
Tuesday, February 19, 2008
Welcome to the Guide to Orange County Real Estate
Hello All! Welcome to this blog. I will be posting many relevant articles, information, and specific hot properties available throughout Orange County. Stay Tuned.
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