Congress Restores FHA Loan Limits to NAR-Backed Levels

The U.S. House and Senate yesterday restored FHA loan limits to the level they were at before they were allowed to expire at the end of September. As a result, the limits will rise to 125 percent of the area median home price from 115 Percent, up to a maximum $729,750, from $625,500. NAR estimates that several hundred counties where FHA loan limits fell at the end of September will now rise back up to the previous level.

“The reinstated loan limits will help provide much needed liquidity and stability to communities nationwide as tight credit restrictions continue to prevent some qualified buyers from becoming home owners and the housing market recovery remains fragile,” said NAR President Moe Veissi in a statement released last night.

President Obama is expected to sign the legislation shortly. The restored loan limits are in a broad-based bill that includes funding for a wide variety of federal operations and programs.

The maximum conforming loan limits for secondary mortgage market companies Fannie Mae and Freddie Mac also expired at the end of September, but lawmakers did not include a restoration of those limits in the bill. As a result, conforming loan limits will remain at 115 percent of the area median home price, up to $625,500.

Once President Obama signs the bill, the limits will go into effect. FHA will release a mortgagee letter to its approved lenders shortly. The mortgagee letter will contain a list that’s been updated to reflect the new limits. NAR analysts say it will take the agency a short period to update its database and release the mortgagee letter, maybe a couple of weeks.

The funding bill also extends the National Flood Insurance Program (NFIP) until December 16 to allow lawmakers time to consider long-term authorization of that program, which is an NAR priority.

If you have questions about loan limits, lending guidelines or anything real estate please visit or call us directly.

Five Great Things about Homeownership

by Carla Hill of


If you’ve been on the fence about homeownership, now is the time to take a leap! Don’t let the negative press deter you from one of life’s greatest joys.Take a look at five short and sweet reasons that homeownership is great!1. Equity. When you pay rent, you never see that money again. It is lining the landlord’s pocket. Yes, buying a home may come with some hefty initial costs (downpayment, closing costs, inspections), but you will make that money back over time in equity built in the home. Historically, homes appreciate by about 4 to 6 percent a year. Some areas are still experiencing normal appreciation rates. For the areas that have seen harder times since the recession, experts feel that the housing market will recover. Homeownership is about building long-term wealth. A home bought for $10,000 in 1960 is most likely worth 10 times that in today’s market.

2. Relationships: Renters tend to see their neighbors come and go quickly. Some people sign year leases while others are in the community for much shorter terms. Apartment complexes also tend to have less common shared space for people to meet, greet, and socialize. Homeowners, however, have yards, walking trails, or community pools and clubhouses where they can get to know each other. Neighbors stay put much longer (at least three to five years if they hope to recoup their closing costs). This means more time to develop relationships. Research has shown that people with healthy relationships have more happiness and less stress.

3. Predictability: Well, as long as you have a fixed-rate term on your mortgage it’s predictable. Most people buying homes today know that a fixed-rate is the way to go. This means your payment amount is fixed for the life of the term. If your mortgage payment is $500 today, then it will still be $500 a month in 10 years. This allows for people to budget and make solid financial plans. The sub-prime crisis meant many homeowners with adjustable rate mortgages saw their monthly payments rise and then rise some more. Homeownership, though, generally comes with a predictable table of expenditures. Even the big purchases are predictable. You know most roofs last just 15 years (or so). You know that each year you’ll need to pay for the gutters to be cleaned, and so on.

4. Ownership: Okay, this is a given. Homeownership means you “own” your home. That comes with some incredible perks, though! You can renovate, update, paint, and decorate to your heart’s desire. You can plant trees, install a pool, expand the patio, or do holiday decorating that would rival the Kranks (if the HOA allows!). The bottom line is this is your home and you can personalize it to your taste. Most renters are stuck with the same beige walls and beige carpet that has been standard apartment decor for 20 years. Now is your chance to let your home speak!

5. Great Deals: It’s a great time to buy. Interest rates are at historic lows. We’re talking 4.0 percent instead of 6.0 or higher. This means big savings for today’s buyers. Home prices have also taken a dip since the recession, which means homes are more affordable than ever. If you have steady income and cash for a downpayment, then be sure to talk to your local real estate agent about what homes in your area could be a fit for you.

Homeownership can be a real joy. It’s time to get off the fence and into a home that is right for you!

Short Sales Offer Significant Discounts in Several Major Cities

10/31/2011 By Krista Franks

Short sales are growing throughout the nation as distressed homeowners and servicers continue to seek alternatives to foreclosure and home buyers increasingly opt for the significant discounts that come with short sales.

With 9,145 completed short sales, the Los Angeles area had more short sale transactions than any other metropolitan statistical area (MSA) in the second quarter of this year, according to a recent blog post from RealtyTrac.

These short sales came with an average discount of 32 percent and at an average price of $350,237. Phoenix ranked second in number of short sales for the second quarter with 8,434 short sales, which came with an average discount of 27 percent and an average price of $133,793.

According to the RealtyTrac blog post, the metros with the highest numbers of short sales in the second quarter were:

1. Los Angeles
2. Phoenix
3. Cape Coral – Fort Myers, Florida
4. Oxnard – Thousand Oaks – Ventura, California
5. Reno – Sparks, Nevada
6. San Francisco
7. San Jose
8. Portland
9. Atlanta
10. Milwaukee

Short sale savings averaged more than 30 percent in Cape Coral – Fort Myers, Florida; San Francisco; San Jose; and Milwaukee.

Reno – Sparks, Nevada, experienced a 50 percent rise in short sales from the first quarter to the second quarter of the year, while San Francisco saw a 47 percent rise in short sales.

Atlanta and Milwaukee also saw significant increases in short sales over the quarter – 21 percent and 20 percent respectively.

To search all distressed homes in Orange County please visit

Submitting an Offer on A Short Sale Home

Just like a regular real estate transaction, if you want to purchase a home that is being sold as a short sale, your first step is to write an offer and submit it to the seller.

Questions to ask your agent before submitting a short sale offer:

  • How experienced is the selling agent with short sales?

Getting a short sale to close takes a lot of time and hard work. Experienced agents know the process, usually have good communication with the asset managers, and can give you an idea on the amount of time it will take to close.

In-experienced short sale agents may be in over their heads and getting the short sale to close becomes more difficult. In this situation, you may want to talk to your agent and to see if they are familiar with the listing agent. If they feel they can get it done, you may want to move forward anyways.

  • What liens are there on the property?

If the property has multiple liens against it, getting the short sale approved can be difficult at best. More then likely, a property with multiple liens will take an extended amount of time to get to close, if it even closes at all.

To find a lien on a property, you can check with your local courthouse or ask a title company to do a preliminary title report.  Ask your agent to help you with this task or call a title company in your area.

  • Are there any other offers?

Ask the agent if there are any other offers you will be competing with. Most agents won’t tell you what the offer amount is, but knowing how many offers are on the property will give you a better understanding of where you need to write yours at.

  • Has a price already been approved by the loan servicer?

If you get lucky, the short sale may already have a price the bank has approved. This scenario happens when a buyer has already submitted an offer, has gone through the approval process, but walked away before closing for one reason or another.

If the bank already has an approved price point, it can shorten the process depending on how long ago the price was approved. If it’s been awhile the bank may require you to go through the approval process again.

If all these scenarios check out in your favor, it may be a good idea to submit your offer. First, your offer has to be approved by the seller. If the seller agrees to the terms of your offer, they will then submit it to the bank for approval. Next is the approval process from the bank.

Short Sale Process: Approval Time Frame

Since getting an offer approved for a short sale is a process that requires a third party approval. It’s going to take longer then a normal real estate transaction. Here are some common questions many short sale buyers have:

  • How long will the lender take to approve my short sale?

This really depends on a lot of factors. Number one is who is the servicer? For example, Bank of America is one of the worst, and it can take sometimes upto 4 months to get an approval. Wells Fargo on the other hand is a lot more organized and usually can get an approval within 30-45 days after submitting the offer.

The time frame also depends on if the bank has already approved a price. If the bank has already approved a price point, then you know where to write your offer and you can skip the counter offer process.  If they haven’t approved a price they will usually order an appraisal or a BPO (broker price opinion) to be done on the property which takes more time.

  • What is the average time frame from start to finish buying a short sale?

Average is usually 3-4 months depending on your qualifications as a buyer. If you have cash, once the approval from the bank is completed, you can close in a couple of weeks. If you have to get financing, depending on the type of financing you’re getting, the time frame from bank approval will be an extra 30-60 days.  The longest amount of time I have seen it take to get a short sale done was 8 months while the shortest was 35 days on a cash offer.

  • Do I still have time for my  due-diligence timelines and financing?

Yes. Once you have approval from the bank, they usually give you a certain amount of time to do your due-diligence. You get plenty of time to do your inspections to determine if you still want to buy the home.

If your inspection shows there are problems with the home you might just have to walk away. Most short sales are sold as-is.  If the problems are bad enough sometimes you can re-negotiate with the bank. They may reduce the price in order to compensate for repairs.

The bank will give you time to get your financing completed, but if you go over your deadline, you can still ask the bank for an extension. Most the time financing deadlines can be extended if you run into any problems, just talk to the listing agent and ask for an extension.

During the short sale approval process, many buyers get anxious and decide to pull out. Sometimes you just find a better home and decide you want to write an offer on that home. Other times a buyer will have no other reason then cold feet. You can withdraw a short sale offer for a number of reasons:

Short Sale Process: Withdrawing An Offer

You can walk away at anytime up until the bank accepts your offer.  Once they accept your offer you can still walk away based on your financing deadline and your due-diligence period.

  • How do you withdraw an offer on a short sale?

To withdraw, just contact your agent, and tell them you want to withdraw. It’s that simple. They will notify the selling agent that your offer is no longer on the table and that’s it.

  • What are the possible consequences of withdrawing a short sale offer?

Really, the only consequence you will face is lost time. When you submit an offer on a short sale, you can ask your agent to put in the contract you will submit earnest money at the time the bank approves your offer. Once you submit your earnest money, you still have your financing and due-diligence deadlines to withdraw before you lose your earnest money deposit.

Once your due-diligence and financing deadlines are over, that’s when you can lose your earnest money deposit. If you withdraw after those time periods, you automatically forfeit your earnest money. It’s up to you to decide if it’s worth it to lose your earnest money. If you really don’t want to buy the home, losing a $1000 in earnest money might be better then living in a home you hate

To search all distressed homes in Orange County please visit

Yorba Linda takes big step by beating Tustin

  October 07, 2011 11:05 PM


TUSTIN – The storylines pulsated as Yorba Linda and Tustin took their tight, Empire League game deep into the fourth quarter Friday.

Yorba Linda, with its first senior class, would collect a breakthrough victory or traditional Orange County power Tustin would rally from a two-touchdown deficit.

The Mustangs emerged with the triumph, stopping the Tillers’ final two possessions to seal a 14-12 victory at Tustin.

The Mustangs (6-0, 2-0) forced Tustin (3-3, 1-1) to turn the ball over on downs with 3:19 left in the fourth and then ran out the clock before celebrating the victory over the defending league champion and the No. 3-ranked team in the CIF-Southwest Division.

Last season, Tustin defeated Yorba Linda, 42-7.

“We’re on the (football) map somewhere — (the school) is on Bastanchury and Fairmont,” Yorba Linda coach Jeff Bailey said. “Hopefully (people) know where we’re at now.”Yorba Linda took a 14-0 lead in the first quarter and then turned to its defense to secure the victory. On the strength on a five-man defensive front, the Mustangs held Tustin to 133 yards of offense (123 on the ground).

Tustin started its final drive at its 24 with 7:28 left in the fourth. Trailing 14-12, the Tillers faced a fourth-and-6 from their 38, but Lorenzo Ruiz broke up a lofty pass by up-ending a leaping Malik Shakur with 3:19 left.

Yorba Linda used a 3-yard run by Dallis Ellis to convert a fourth-and-inches play from the Tustin 30 for the knockout blow with about two minutes left.

“We worked really hard to prepare for this game,” said Ruiz, who also made a key fumble recovery in the first quarter. “We’re just really happy that we pulled through and won this.”

Yorba Linda took advantage of three Tustin miscues in the first quarter to open its 14-0 lead.

Tustin forced a punt on Yorba Linda’s opening possession but Ruiz recovered a fumble on the play at the Tillers’ 15. Three plays later, quarterback Alex Bernstein threw a 10-yard touchdown to Shad Pace on a short slant with 8:56 left in the opening quarter.

Tustin’s defense also appeared to force a punt on Yorba Linda’s second possession. After fumbling the previous punt, the Tillers didn’t send a return man back to field the kick but they had another challenge. Tustin was flagged for a personal foul on the punt from the Yorba Linda 44.

The penalty extended the Mustangs’ drive and Yorba Linda moved to the Tustin 13 where it faced fourth-and-1. Yorba Linda drew the Tillers’ offside for the first down. Two plays later, Pace caught a 6-yard touchdown pass from Bernstein. On this route, Pace first broke in before darting to the side of the end zone for the score.

The extra point by Matt Barr gave Yorba Linda a 14-0 lead with 1:06 left in the first quarter.

Tustin responded with one of its signature scoring drives. The Tillers marched 84 yards on 18 plays to trim the Mustangs’ lead to 14-6. Christopher Quintero capped a drive that lasted almost 10 minutes with a 2-yard run. The extra point failed with 3:21 left in the half.

Tustin drew closer in the third quarter after Edward Tandy made a leaping interception near his 38 and returned the ball to the Yorba Linda 32. Tandy later scored on a 2-yard run with 5:11 left in the third and then narrowly missed the end zone on the 2-point conversion run.

Tustin kept the pressure on by recovering the ensuing, low kickoff at the 50. But the Mustangs stopped Tustin on a fourth-and-1 with 1:56 left in the third. Tustin fumbled on the play but didn’t lose the ball.

Yorba Linda received strong defensive line play from ends Austin Thomas and Daniel Deedrick and interior linemen Ellis, Brandon Stewart and nose guard Sean Kanne.

Tustin’s longest run from scrimmage was nine yards. All-County running back Tyler Siudzinski finished with 32 yards on 15 carries.

The Mustangs were especially tough against Tustin’s inside runs.

“We didn’t give up the big play – that’s the key,” Bailey said.

Yorba Linda plays host to an improved Western next Friday.

“I know that this team is going to do great things,” Bernstein said. “Our leadership is there. We have the potential .. and it showed tonight.”

Tustin coach Myron Miller had high praise for Yorba Linda before the game.

“They’re good now but they’re going to be a great program,” Miller said.

Tustin’s defense also played well. The Tillers held the Mustangs to 150 yards of offense.

Tustin played without four starters because of injuries.

First-Time Buyers Losing Interest in Short Sales

Processing delays have taken their toll on first-time home buyer interest in short sales, which now account for more than one of every six house sales, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey.

First-time home buyer purchases of short sales dropped to 39.7 percent of short sale transactions in August. That represented a three-month slide and was the lowest level for first-time home buyers ever recorded by the HousingPulse survey.

The first-time home buyer share of short sales hit a peak of 54.1 percent of all short sale transactions in November 2009, just before the originally-scheduled expiration of the federal homebuyer tax credit.

Short sale transactions have long been problematic for buyers and sellers alike, with typical approval times of several months after a homebuyer first submits an offer. Factors slowing down short sale approvals include lost paperwork, coordination with multiple investors, slow appraisals, and mortgage servicer understaffing.

Still, for many first-time home buyers, average short sale prices of 27 percent lower than non-distressed properties compensated for the wait time. But with average time-on-market for short sales stalled at 16.6 weeks—with the majority of that time spent waiting for short sale approval—short sale transactions are becoming less popular with first-time home buyers.

Short sales are just one type of distressed property, with damaged REO and move-in ready REO also being significant components of today’s housing market. In August 2011, short sales accounted for 17.1 percent of the home purchase market, with damaged REO and move-in ready REO accounting for 13.2 percent and 15.6 percent, respectively.

The total proportion of distressed property, as represented by the HousingPulse Distressed Property Index (DPI), fell to 45.9 percent in August from 46.2 percent in June.

Real estate agents responding to the August survey indicated that home buyers frustrated with short sale delays are resorting to placing offers on multiple properties, with the intention on closing on only one. This practice can bog down the short sale approval process at mortgage servicers.

The Campbell/Inside Mortgage Finance HousingPulse Tracking Survey involves approximately 2,500 real estate agents nationwide each month and provides up-to-date intelligence on home sales and mortgage usage patterns.

To search for all short sales & foreclosures please visit


FHA Mortgage Rates Drop for 5th Straight Month

The average interest rate on mortgages sold to the government-sponsored enterprises in August averaged 4.56%, a drop of 1 basis point from the previous month, according to the Federal Housing Finance Agency.

It’s the fifth straight month of declines since the rate to reached 4.84% in March. On Oct. 3, the Federal Reservewill begin purchasing up to $400 billion in longer-term Treasurys and new agency mortgage-backed securities as part of an effort to keep borrowing costs low.

According to Frank Nothaft, chief economist at Freddie Mac, the Fed’s previous policies have already pushedinterest rates to the lowest level since the early 1950s.

Any additional drop would accelerate already declining rates, according to FHFA data.

In August, the 30-year fixed-rate mortgage averaged 4.63%, down 6 bps from the prior month. On all fixed- and adjustable-rate mortgages sold to the GSEs, the average rate was 4.52%, down 3 bps from July.

Roughly 30% of the purchase mortgages were “no-point” loans, the same share as the prior three months. The average term on these loans also declined more than six months to 27.6 years in August.

The average loan-to-value ratio was 77.2%, up more than one percentage point, and the average loan amount increased slightly to $214,300 in August.


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The Federal Open Market Committee seems to be taking direct aim at mortgage rates

September 22nd, 2011, 9:32 am

The Federal Reserve‘s plan to reinvest principal payments on some bonds into mortgage-backed securities is already contributing to the nation’s record low mortgage interest rates, Bankrate said Thursday.

Bankrate said the Federal Open Market Committee seems to be taking direct aim at mortgage rates by shifting $400 billion from short-term holdings into long-term government bonds. The program, which begins Oct. 3 and runs through June, will involve longer-term Treasury securities with remaining maturities of six years to 30 years, and will be financed through the sale of shorter-term Treasurys with maturities of three years or less.

“This program should put downward pressure on longer-term interest rates and help make broader financial conditions more accommodative,” the FOMC said in a statement following its two-day meeting.

Analysts also said anemic economic growth and European debt fears are keeping investors on the sidelines.

Rates are unlikely to increase until mortgage refinancing and purchasing activity picks up, Bankrate said.

“In order to get the most economic impact out of low mortgage rates, the pool of prospective refinancers needs to be expanded. Deeply upside-down homeowners, those with second liens or mortgage insurance, and lender concerns about buyback liability are all formidable impediments to refinancing,” according to the firm, which aggregates rate data from across the country.

The Freddie Mac primary mortgage market survey showed the average rate for a 30-year, fixed-rate mortgage remained unchanged this week at 4.09%, while the 15-year, fixed rate dropped one basis point to a new record low of 3.29%.

Meanwhile, the five-year, Treasury-indexed hybrid adjustable-rate mortgage averaged 3.02%, up from 2.99% last week and down from 3.54% a year ago.

The one-year, Treasury-indexed ARM averaged 2.82% this week, up from 2.81% a week earlier and down from 3.46% last year.

“A sluggish economy and investor concerns over the European debt markets left mortgage rates largely unchanged this week,” said Frank Nothaft, vice president and chief economist for Freddie Mac.

“Manufacturing activity in both the New York and Philadelphia regions contracted in September,” he said. “Moreover, the Federal Reserve board reported that households lost nearly $150 billion in net worth in the second quarter, representing the first quarterly decline in a year.”

Bankrate data show the 30-year FRM at record lows for the fifth consecutive week. The average rate for a traditional mortgage fell to 4.29%, from 4.32% last week, while the 15-year FRM declined to 3.42% from 3.44%.

In addition, the 5/1 ARM decreased to 3.05% from 3.07% last week.


Mortgage Rates Fall = Second Chance for Procrastinators

Falling mortgage rates are opening a new window for some borrowers, including those who missed their opportunity to refinance last year when rates hit similar lows.

Thirty-year fixed-rate mortgages averaged 4.39% for the week ending Aug. 4, the lowest level for the mortgage in 2011, according to the latest survey from Freddie Mac, released Thursday.

Looking for a 15-year fixed-rate mortgage? Those averaged 3.54% in the latest survey – the lowest they’ve been in the history of Freddie Mac’s survey. Five-year Treasury-indexed hybrid adjustable-rate mortgages also hit a record low, averaging 3.18%.

The rate drops came courtesy of glum economic reports as well as continued concerns about economies abroad. A sharp drop in the stock market also may have sent more investors toward bonds and mortgage-backed securities – which brings mortgage rates down.

History suggests that rates won’t go much lower, and it’s also anyone’s guess as to when rates will begin an upward trend once more. While the economy looks grim right now, a dose of optimism from some report or another could turn things around. Expectations are so low now that even slight surprises could cause rates to rise. Should the Federal Reserve adopt additional “quantitative easing” to stimulate the economy, that also could affect mortgage rates for the worse.

All of which is to say that if you’re in the market to refinance, get moving now. Below are some points to keep in mind before you start shopping.

What’s your home worth?

One of the biggest hurdles to refinancing today is a drop in house prices: If your home’s value has dropped since the origination of your last mortgage, refinancing might not be quite as appealing as you thought.

If your home value has fallen, you might need to pay down your principal in addition to whatever closing costs you’ve agreed to pay, in order to get the best rates. According to Freddie Mac, 26% of people who refinanced in the second quarter of 2011 brought cash to the closing table.  The whole concept of cash-in refi isn’t unheard of, but you’re taking money out of savings and plunking it into an equity situation. And with falling home prices, there’s the fear of “I’m going to put 10 grand in and it could be gone tomorrow.”

Others simply aren’t able to pay down principal for a refi. We’ve got a generation of borrowers out there who have been paying on their mortgages and carrying an above-market rate, but can’t refinance because the appraisal won’t allow them to do so.  At least have a ballpark idea of what your home is worth before calling a lender – and before wasting $400 or so for an appraisal that tells you your home value has drastically fallen.  To protect our clients, we regularly pull property profiles to make sure the expected and/or needed value is likely.

Make sure it makes sense.

An old rule of thumb is that refinancing makes sense if you’re able to get a rate that shaves a percentage point off your mortgage. For instance, on a $200,000, 30-year fixed-rate mortgage, the monthly payment is $1,136 per month if you have a 5.5% rate and $1,013 if you have a 4.5% rate.  That kind of savings probably makes a refinance worthwhile.

Another way to look at it is the client’s “break-even point.”  At TNG Mortgage, we typically like to see our clients be able to break even on the cost of the refinance in 36 months. Every situation is unique, and clients have wide-ranging goals.  In some cases, for instance, longer break-even periods could make more sense, if the homeowner plans on living in the home for a long amount of time to come.

For all real estate in Orange County please visit