Spanish Soap Opera

Halloween in May!

Home Resales Decline
By Shobhana Chandra

May 23 (Bloomberg) -- Sales of previously owned homes in the U.S. fell in April and the supply of unsold properties reached a record, signaling no let-up in the 27-month housing slump.
Purchases declined 1 percent to an annual rate of 4.89 million, higher than forecast, the National Association of Realtors said today in Washington. The median price fell 8 percent from April last year, the second-biggest drop.
`There is no indication that things are improving,'' said Christopher Low, chief economist at FTN Financial in New York, who forecast sales would drop to a 4.9 million pace. ``Inventories will stay out of balance at least until the end of 2009 and prices will keep falling.''
Defaults on subprime mortgages have prompted lenders to restrict credit, while falling property values have given buyers who are still able to get financing reason to delay purchases. The slide in home values may hurt consumer spending, which accounts for more than two-thirds of the economy.


Laarni's take: The first and foremost reason why we cannot get out of the doldrum is the scarcity of loan programs and the slow pace in underwriting. Everybody is AFRAID to do Anything Substantial. The ones who are suffering the consequences are the ONES who are really qualified to buy. I got a sale through ChFA that has been in underwriting for almost 90 days!!! Totally ridiculous. I feel like everyone is even fearful of his own shadow!!! This is almost like a LOOONGGG Halloween where everyone is spooked!

WE WILL NEVER FAIL!

Housing starts post surprising rebound!

"I have learned this at least by my experiment: that if one advances confidently in the direction of his dreams, and endeavors to live the life which he has imagined, he will meet with a success unexpected in common hours."

Henry David Thoreau

AMIDST ADVERSITIES

I AM TAKING A PAUSE AND A BREATHER .............






G O L A K E R S ! ! ! ! ! ! !

THE RISK FACTOR

FHA premiums to be based on risk

Pricing plan coincides with FHA expansion

The Bush administration proposes to implement "risk-based" pricing of premiums paid by borrowers with government-backed loans beginning July 14 -- the same day guidelines for FHA loan guarantee programs are to be expanded to serve more delinquent borrowers.

The more flexible pricing structure, which would also allow FHA to reduce mortgage insurance premiums for some borrowers with good credit, is intended to enable the government to serve more troubled borrowers while protecting taxpayers from losses, HUD officials said. The proposed change in pricing will be published in the Federal Register for public comment on May 13.

Under the current pricing structure, all borrowers regardless of their credit standing pay 1.5 percent of loan balance up front and 0.5 percent a year. Under risk-based pricing, the upfront premium will range from 1.25 percent to 2.25 percent.

On a $150,000 mortgage, the difference between the existing 1.5 percent upfront premium and the 2.25 percent premium is about $7 per month, HUD says.

Risk-based pricing has been a controversial aspect of so-called "FHA modernization" legislation, with some opponents worried that borrowers who can least afford the fees will be overcharged. A sweeping housing bill approved by the House on Thursday would require FHA to refund extra premiums charged to higher-risk borrowers if they do not default on their loans.

The Bush administration says it needs to implement risk-based pricing to ensure that claims filed by lenders when FHA loans go bad are covered by premiums collected from borrowers, and not paid by taxpayers.

"By charging different premiums, FHA will operate like most other insurance companies," HUD said in a statement. "This premium structure will preserve lower premium costs for FHA's traditional borrowers, including low-income and minority families who have a strong credit history and save for a down payment."

Claims against FHA's insurance fund are expected to rise, in part because FHA loan limits have been increased to as much as $729,500 in high-cost markets, and also because of a new program aimed at helping troubled borrowers refinance into more affordable loans.

The new FHASecure program, rolled out by the Bush administration in August, was originally designed to help borrowers who had fallen behind on payments on adjustable-rate mortgage (ARM) loans after an interest-rate reset.

On April 9, the administration expand the FHASecure program by creating two new categories of eligible borrowers:

• Borrowers with adjustable-rate mortgage (ARM) loans who were late on two consecutive monthly mortgage payments or at two different times over the previous 12 months. FHA will require a 97 percent loan-to-value (LTV) ratio for these borrowers to refinance into a government-backed loan -- which in many cases would require lenders to write down some principal.
• Borrowers with ARM loans who were late on three consecutive monthly mortgage payments or at three different times over the past 12 months. FHA will require a 90 percent LTV ratio for these borrowers to refinance.

HUD said the expanded FHASecure guidelines are set to be implemented on July 14 in conjunction with risk-based premium pricing.

HUD estimates that FHASecure has helped 150,000 borrowers refinance since the program was launched and that the expanded guidelines will help as many as 500,000 homeowners take advantage of the program by the end of the year. FHASecure accounted for $28.5 billion of the $68 billion in loans FHA has helped facilitate since September, HUD says.

Democrats are pushing for an even bigger, $300 billion expansion of FHA loan guarantee programs to enable up to 2 million FHA-backed refinance loans in cases where lenders agree to accept no more than 85 percent of a property's current appraised value. That plan, which is opposed by the Bush administration, is part of the housing bill HR 3121 approved by the House Thursday.

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What's your opinion?

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My opinion-- it is taking FOREVER for these policy makers to sort this out. Buyers and Sellers alike are all WAITING FOR THE FINAL WORD. I have Sellers telling me that they will wait to sell because they have heard the by next year, the market will go up.. on the ohter hand- Buyers are waiting because they have heard that the market has not reached its bottom. I am one confused Agent!

HARLEY DAVIDSON and the GOOD SAMARITAN

I had been stirred and shaken lately( like a good martini). Last Thursday, after dropping off my son to school , my mind was already thinking of how the 91, 5, 101 and the 170 freeways would look like. It was a VERY ordinary day but I was running late and I still needed to get gas. That was another 15 minutes addition to my hectic schedule notwithstanding the price to fill up my tank. Darn!!! On my way to take the 91 Freeway, on a light street traffic- this guy in his motorcycle passed me by. He was on his Harley Davidson, got his shades, his plaid shirt and his shiny chrome-like helmet and I can see he was enjoying the mild spring weather. I was asking myself how would it feel to ride that hog. I will be the first one to tell you that I am a total coward. I cannot take big risks nor do something just for the cheap thrill. NO, NO- no rollercoaster rides for me. The biggest thrill of my life is CLOSING MY ESCROWS! What a life!!! But once in a while my mind wanders, these motorcycle guys look TOO COOL especially when they are weaving in and out of the lanes. But this guy was just going straight and following all the rules in the Harley Davidson book of traffic. Then suddenly....BAAAMMMMM! He was hit by the tail of the 12-wheeler who was making a left turn in front of us. The driver of the big trailer did not notice him but he flung probably a good 12 feet. OMG, he was rolling along but I just cannot stop or else I will cause an accident myself. So I parked my car on the right side of the road and called 911 PRONTO! I explained to the dispatcher where I was and what happened. I knew I was shaking and trembling. S he even took my number. This is the first time I've seen this type of accident thisclose and it once again affirmed how fragile life is. My 911 call helped. I saw the police cars and saw the firetrucks rushing by within 2 minutes of that call. I prayed for the man. I hope he is alright now.

I drove on my way to my appointment- I was not late, I got the listing. I probably did something GOOD that day...

A HOUSE CANNOT BE A HOME

Myth of the Walk Aways

by Zubin Jelveh Apr 29 2008 lifted from portfolio.com

Abandoned homes are a questionable symbol of the housing crisis ...So who exactly are the mortgage walkers?

Homeowners that analysts believe are most likely to cut their losses are those who took out subprime loans on investment properties. That group accounted for 5.3 percent of subprime loans originated in 2006 and 2007, according to Inside Mortgage Finance. This translates into roughly a little under 250,000 homes. The speculators most likely to dump houses are also ones who saw the biggest price drops, bringing this at-risk number down even more.

As for the rapidly growing websites, they also have the advantage of starting from a low base. The actual number of clients they've reported is still tiny: HomeFreeMe has had about 80 clients since launching in February, and Carlsbad, California-based YouWalkAway.com has served about 200.

For his part, Treasury Secretary Henry Paulson reportedly held a meeting with top lenders and servicers last week and urged them to come up with a plan to help underwater borrowers. (Paulson was also said to express his frustration over the lack of granular data on these borrowers.)

The lesson here is that as banks and federal officials work to reduce incentives for walking away, and as lenders become more willing to negotiate with delinquent borrowers, there is a good chance that we've already seen the worst of the walk aways.



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