It's no secret that lenders are hurting or going out of business all across the country. Big names such as American Home Mortgage, Aegis, H & R Mortgage, and New Century have gone out of business. Not even the biggest name in the business, Countrywide, is immune to this meltdown. They recently borrowed about $11.5 Billion from banks in order to fund their own loans. Investors are taking their money out of the lending business, so there is less money to lend. Investors are not buying these loans, which is the reason Countrywide had to borrow money to lend out. Soon after borrowing the huge amount, they let go about 500 employees. This number is sure to grow in the near future.
The problem is that sub prime loans that Countrywide had sold previously are defaulting in large amounts. The borrowers can't refinance because the homes do not appraise at what they bought them for. Foreclosures are sure to keep rising and the bulk of it is still out there. Summer of 2008 to Winter of 2008 may see the most foreclosures because most loans sold were fixed for three years and they will become adjustable in 2008.
What does this mean for buyers? It's good and bad. The good news is that prices are coming down and they may be able to afford more. The bad news is that you have to put down at least 5-10% down to get a loan for most loan programs. Loan programs have been disappearing and days of 100% financing are gone. Banks don't want to take more risk than they are comfortable with, which is why loan programs have been yanked out of the market left and right. The good news is that if you are a first time home buyer, there are programs out there that can help. FHA loans are one of them. They typically require only 3% in down payment and is a competitive loan. If you have more questions regarding FHA or any other loan programs, I would be more than happy to refer you to my loan agent once you contact me.
What does this mean to sellers? Prices keep dropping, so if you have an adjustable loan and if you are able to, refinance your home with a fixed rate mortgage before you are not able to afford the payments and lose your home.
Please email me with any questions at arsalonbadri@yahoo.com.
Thank you.
Sincerely,
Arsalon Badri
Keller Williams Realty
916-821-9807 Cell
www.ElkGroveTrends.com
Friday, August 24, 2007
Monday, August 6, 2007
June, 2007 Sacramento Housing Statistics
Please click on the following link to see the Sacramento area housing market statistics:
http://www.sacramentohomesandcondos.com/Nav.aspx/Page=http://www.sacramentohomesandcondos.com/Nav.aspx/Page=%2fPageManager%2fDefault.aspx%2fPageID%3d2040839
http://www.sacramentohomesandcondos.com/Nav.aspx/Page=http://www.sacramentohomesandcondos.com/Nav.aspx/Page=%2fPageManager%2fDefault.aspx%2fPageID%3d2040839
Friday, July 6, 2007
Sacramento Real Estate Market Data and Statictics
I am posting statistics for home sales in the Sacramento area so you can see how the market is. Words only go so far, while numbers tell you the hard facts. I have for you the market sales data by zip code in Sacramento County. Please click on the following link for the market data:
http://www.sacramentohomesandcondos.com/Nav.aspx/Page=%2fPageManager%2fDefault.aspx%2fPageID%3d2040839
The number of homes on the market is definitely going up. This is due mostly in part to the foreclosures that resulted from the sub prime loans that are becoming adjustable. Once the loans become adjustable, the payments shoot up so much that the owners can't afford the payments. One solution would be to refinance, but most people obtained 100% loans and the homes are not worth what they paid for, so they can't refinance. This gives them two choices. Sell it as a short sale, getting the bank to accept less than what the owners owe. The other choice is to do nothing, stop paying the bank, and let the home go to foreclosure.
http://www.sacramentohomesandcondos.com/Nav.aspx/Page=%2fPageManager%2fDefault.aspx%2fPageID%3d2040839
The number of homes on the market is definitely going up. This is due mostly in part to the foreclosures that resulted from the sub prime loans that are becoming adjustable. Once the loans become adjustable, the payments shoot up so much that the owners can't afford the payments. One solution would be to refinance, but most people obtained 100% loans and the homes are not worth what they paid for, so they can't refinance. This gives them two choices. Sell it as a short sale, getting the bank to accept less than what the owners owe. The other choice is to do nothing, stop paying the bank, and let the home go to foreclosure.
Wednesday, May 30, 2007
What are REO's and why are they affecting your property's value?
The Elk Grove, California market has seen a period of great appreciation, and now depreciation. What is driving down the prices? One main reason is that there are many foreclosures and banks are taking them back, just to sell them below market. These are called REO's.
So what are REO's? REO stands for Real Estate Owned. It's a term used by banks and the real estate industry to signify that a property is owned by the bank. REO's are post foreclosure properties, meaning that the property was foreclosed upon and went to a true foreclosure at the courthouse, at which point the bank that financed the loan bought it back. The bank buys it back because there is no one willing to bid on the property.
There are pre-foreclosures, foreclosures, and post foreclosures. The pre-foreclosure is a property that is on it's way to being foreclosed on and the seller may put it on the market to sell it for less than what the total loan amount is. This is called a "short sale." The Realtor representing the seller can negotiate with the bank to lower the amount that bank will accept for the property. There is an automatic loss on the bank's part. The question is how much? Some banks are willing to negotiate more than others, so it depends on the bank. If the property does not sell, then it goes to a true foreclosure at the steps of the courthouse, where only cash is accepted. You must have the total bid amount at the time you win the auction in form of a cashier's check.
If the property doesn't sell at the auction, the bank buys it back and puts it on the market with its own Realtor, usually pricing it below market. They are usually not in top condition, which is why the price is lower than market. REO's are becoming better and better buys because they are flooding the market and banks are becoming more and more negotiable. They don't want to hold on to the property. They are "must sell" properties and the banks only want the cash. As time passes, banks will be even more negotiable and buyers will be able to get great deals.
This is all bad news for sellers, but great news for buyers. The market appreciated way faster than it should have and now it's correcting itself. There is no telling where the bottom is, but this trend should go on for a while. If you have to buy a home, there are great deals out there. If you don't have to buy, then wait until you feel comfortable about the prices. One other factor in pruchasing is the mortgage rates. They are creeping up slowly, so hopefully they will remain about the same for a while.
So what are REO's? REO stands for Real Estate Owned. It's a term used by banks and the real estate industry to signify that a property is owned by the bank. REO's are post foreclosure properties, meaning that the property was foreclosed upon and went to a true foreclosure at the courthouse, at which point the bank that financed the loan bought it back. The bank buys it back because there is no one willing to bid on the property.
There are pre-foreclosures, foreclosures, and post foreclosures. The pre-foreclosure is a property that is on it's way to being foreclosed on and the seller may put it on the market to sell it for less than what the total loan amount is. This is called a "short sale." The Realtor representing the seller can negotiate with the bank to lower the amount that bank will accept for the property. There is an automatic loss on the bank's part. The question is how much? Some banks are willing to negotiate more than others, so it depends on the bank. If the property does not sell, then it goes to a true foreclosure at the steps of the courthouse, where only cash is accepted. You must have the total bid amount at the time you win the auction in form of a cashier's check.
If the property doesn't sell at the auction, the bank buys it back and puts it on the market with its own Realtor, usually pricing it below market. They are usually not in top condition, which is why the price is lower than market. REO's are becoming better and better buys because they are flooding the market and banks are becoming more and more negotiable. They don't want to hold on to the property. They are "must sell" properties and the banks only want the cash. As time passes, banks will be even more negotiable and buyers will be able to get great deals.
This is all bad news for sellers, but great news for buyers. The market appreciated way faster than it should have and now it's correcting itself. There is no telling where the bottom is, but this trend should go on for a while. If you have to buy a home, there are great deals out there. If you don't have to buy, then wait until you feel comfortable about the prices. One other factor in pruchasing is the mortgage rates. They are creeping up slowly, so hopefully they will remain about the same for a while.
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