Obama outlines reforms in housing finance system

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President Obama called Fannie Mae and Freddie Mac a “failed business model” in a speech outlining new housing goals on Tuesday.

The president is backing three proposals in finance reform, including streamlining refinancing for borrowers, waiving closing costs for those who refinance on shorter terms, and creating special programs that will expand eligibility for refinancing for those without government-backed mortgages. Overall, the President’s position is to "preserve access to safe and simple mortgage products like the 30-year, fixed-rate mortgage."

In a chat on Zillow.com, Obama stated he intended to push a housing package through congress by the end of this year.

Foreclosure activity in California dropped dramatically

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Big news for California real estate numbers: Foreclosure activity in the state has hit an all-time low since the last housing boom.

During the first quarter of this year, only 18,567 mortgage default notices were filed – that’s 51.4% down from Q4 of 2012, and 67% down from the same time last year. The drop is being attributed to recent regulations placed on foreclosure activity – particular the Homeowner Bill of Rights that took effect on January 1.

DataQuick expects that foreclosure activity will pick up slightly once lenders adjust to these new policies.

Interested in Echo Park real estate or purchasing a home in other Northeast Los Angeles neighborhoods? Contact me today!!

The market is improving, but is it time to sell?

Is it safe to sell your house now?

It's been seven years since the start of the housing market collapse, but finally things are starting to look up. Mortgage rates remain at record lows, new home construction is starting to go up, and home values are improving.

So if you're looking to sell your home, is now the right time?

A new survey by Fannie Mae reveals nearly one in four homeowners are confident that now is a good time to sell, a number which is up 11% from a year ago. And even though home values are improving, they are still 27% below 2006 highs.

If you're thinking about selling, give me a call. I can help you determine if it's the right time and what is the right price.

FHA mortgage premiums about to go up

For those who qualify for low interest loans, things are about to get a little more pricey. Earlier this month, the government accounted the FHA Mortgage Insurance Premium will increase 10-15 points (0.10% on mortgages under $625,000, 0.15% for that amount or more), raising concerns that those affected will be lower income and first-time home buyers. Although one of many increases that have occurred over the past few years, this increase will become permanent and will require insurance for the life of the loan, but is mainly aimed at long-term housing market stability by making loans less risky. However, many rely on FHA loans for low down payments (15.41% of homes in 2012 were purchased using an FHA loan), and making home loans less affordable could put a damper on market recover.

The rate increases are set to go into effect on April 1. In the past, the insurance would fall off at 22% equity, but now monthly insurance payments will be required for 30 years on a 30 year FHA loan, unless a 10% down payment is made at the outset.

Looking to buy a home in Northeast Los Angeles? Contact Urban Hillsides today!

A look at the Northeast Los Angeles real estate market

Communities included: Echo Park, Silver Lake, Atwater, Highland Park, Glassell Park, Eagle Rock, Mt. Washington, Montecito Heights. Single Family: December/January

• Properties sold: 111 / 85
• Average days on market: 50 / 69
• Median price: $484,169 / $514,105
• Average cost per square foot: $344 / $359

Residential Income (2-4 units)

• Properties sold: 24 / 24
• Median price: $582,941 / $487,792

Condo:

• Properties sold: 7 / 4
• Median Price: $197,500 / $319,350

(Source: The MLS)

Also see our last market review for September/October 2012

Mortgage Debt Relief Act extended through the new year

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According to a survey by YouWalkAway.com, the extension of the Mortgage Debt Relief Act of 2007 will drive more short sales in 2013.

The act was set to expire at the end of 2012, but Congress voted to extend it another year, thus providing debt forgiveness for underwater homeowners who choose a short sale, loan modification, or foreclosure rather than defaulting on their loan.

While the report doesn't see a new wave of mortgage defaults this year, the extension of the act will provide tax relief for those homeowners who are currently in foreclosure. New foreclosure applicants, however, can only expect to have that tax relief for a year (which is how long the act has been extended) – a time period that may not be enough because of how long some foreclosures can take.

As an alternative to defaulting on your loan, a short sale or loan modification may be the best route.

Home values rose 5.9% in last quarter of 2012

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Zillow’s most recent Home Value Index report indicated home values in the country rose 5.9% in 2012 from the previous year, and the best annual gain since 2006.

In the fourth quarter, home values rose 2.5% from the third quarter, up to a $157,400 average. Of the largest metros surveyed, 69% saw annual home value gains last year. Foreclosure activity also declined, dropping 12% from 16% at the end of 2011.

Even with the positive gains in home values last year, the new year is anticipated to see a more sustainable 3.3% appreciation rate, which Zillow sees as being more tempered.

Based on these numbers, Zillow projects a 3.3% rise in home values for 2013, a rise that will bring us up to the norm.