Monthly Foreclosure Count Drops For 16th Straight Month

Foreclosure rates are falling.
According to foreclosure-tracking firm RealtyTrac, monthly foreclosure filings fell 2 percent in May to just under 215,000 filings nationwide. A foreclosure filing is defined as any one of the following: a default notice, a scheduled auction, or a bank repossession.
On an annual basis, foreclosure counts have dropped over 16 consecutive months, dating back to January 2010.
Like all things in real estate, though, foreclosures are local. 6 states accounted for more than half of the country’s foreclosure filings in May. Those six states — California, Michigan, Arizona, Florida, Georgia and Texas — represent just 34% of the U.S. population.
But even on a per household basis, the figures remain disproportionate.

• Top 10 Foreclosure States : 1 foreclosure per 357 households, on average
• Bottom 10 Foreclosure States : 1 foreclosure per 8,764 households, on average

The nationwide foreclosure rate was 1 foreclosure per 605 households.
As a home buyer in San Jose , foreclosures matter. Distressed homes account for close to 40% of home resales and that’s because distressed properties often sell at steep discounts; in some markets, up to 20 percent less than a comparable, non-distressed home. Foreclosed homes can be a great “deal”, therefore, but only if you’ve done your homework. 
Buying a bank-repossessed home is different from buying from “people”. The contracts and negotiation process are different, and homes are sometimes sold with defects.
If you plan to purchase a California foreclosure, therefore, speak with a real estate professional first. With foreclosures, there’s a lot you can learn online, but when it comes time to submit an actual bid, you’ll want an experienced agent on your side.

What’s Ahead For Mortgage Rates This Week : May 16, 2011

Mortgage markets worsened overall last week for the first time in 5 weeks.

Better-than-anticipated economic data plus dwindling concerns for Greece’s sovereign debt combined to a spark a bond sell-off. Conforming mortgage rates moved higher in California as a result.

Rate shoppers were hit especially hard last Tuesday.

At Monday’s close, conventional fixed- and adjustable-rate mortgages were posting their lowest levels of 2011, but by Tuesday’s market close, rates had climbed as much as 0.250 percent across the board. In some cases, more.

The spike highlights how quickly mortgage rates can change in a recovering economy, and why “floating” a rate can be costly.

This week, mortgage rates figure to be equally volatile. There’s a large set of market-changing data planned for release, and several Fed members have planned public appearances, including a 9:00 AM ET, Monday morning kickoff from Fed Chairman Bernanke.

• Monday : Bernanke speech; Homebuilder Confidence Survey
• Tuesday : Housing Starts; Building Permits
• Wednesday : FOMC Minutes
• Thursday : Existing Home Sales

In addition, Thursday brings a second rate shopper-risk.

The Initial Jobless Claims will be released at 8:30 AM ET and it will be closely watched by Wall Street. Initial claims are sharply higher since the end of April and investors believe the jobs market is key in a sustained economic recovery. If the data shows that initial claims receded, mortgage rates are expected to rise in response.

Get Your Applications In : FHA Mortgage Insurance Premiums Rising 0.25 Percent April 18, 2011

After this week ends, the FHA is raising mortgage insurance premiums on its new San Jose borrowers. It’s the FHA’s third such increase in the last 12 months.

Beginning with FHA Case Numbers assigned April 18, 2011, mortgage insurance premiums will be higher by 25 basis points per year, or 0.25%.

Against a $200,000 loan size, the MIP increase adds $500 to an FHA-insured borrower’s annual cost of homeownership. All new FHA loans are subject to the increase — purchases and refinances.

Existing FHA-insured homeowners across California are unaffected. Premiums do not rise for loans already made.

The FHA is increasing its mortgage insurance rates because, as a group, the FHA is insuring a much larger percentage of the U.S. housing market. 

In 2006, the FHA held a 4 percent market share. By 2010, that share ballooned to 19 percent and, today, it’s estimated to be even higher.

In its official statement, the FHA says that the quarter-point MIP bump will “significantly strengthen” its reserves which are depleted because of delinquencies and defaults. By law, the FHA’s capital reserves must meet certain levels. 

Therefore, to meet these requirements, the FHA is rolling out its new mortgage insurance premium schedule:

• 15-year loan term, loan-to-value > 90% : 0.50% MIP per year
• 15-year loan term, loan-to-value <= 90% : 0.25% MIP per year
• 30-year loan term, loan-to-value > 95% : 1.15% MIP per year
• 30-year loan term, loan-to-value <= 95% : 1.10% MIP per year

In order to calculate what your FHA monthly mortgage insurance premium would be, multiply your beginning loan size by your insurance premium in the chart above, then divide by 12. 

The FHA also charges a 1 percent, up-front mortgage insurance premium at closing. That figure remains unchanged.

Military Personnel Can Still Claim The $8,000 Homebuyer Tax Credit

For certain members of the military, and for certain federal employees, there’s just 2 months remaining to get use the federal home buyer tax credit.

Eligible persons include members of the uniformed services, members of the Foreign Service, and intelligence community employees who served at least 90 days of qualified, extended duty service outside of the United States between January 1, 2009 and April 30, 2010.

Spouses of persons meeting the above criteria are eligible as well.

The federal home buyer tax credit ranges up to $8,000 for first-time home buyers, and up to $6,500 for existing homeowners. Existing homeowners must have lived in their “main home” through 5 of the last 8 years to be eligible.

Claiming the federal tax credit is a two-step process. First, eligible persons must be under contract for a new home on or before April 30, 2011.  The home’s closing must then occur on or before June 30, 2011. 

The IRS does not make date exceptions.

Furthermore, both the buyer(s) and the subject property must meet certain minimum eligibility requirements:

• The home may not be purchased from a parent, spouse, or child
• The home may not be purchased from an entity in which the seller is a majority owner
• The home may not be acquired by gift or inheritance
• Each buyer must meet tax credit eligibility standards
• The home sale price may not exceed $800,000
• Buyers may not earn more than $125,000 as single-filers; $225,000 as joint-filers

The complete program description is published on the IRS website.

Another important note is that the IRS is giving eligible buyers a tax credit as opposed to a deduction.  This means that a taxpayer qualifying for the full $8,000, and for whom the “normal” 2011 federal tax liability is $8,000, will have zero federal tax liability in 2011.

For additional information regarding your tax credit eligibility, call an accountant. Speaking with a tax professional is often worth the cost.

Foreclosure Activity Drops Throughout The Most Foreclosure-Heavy States

Foreclosure activity is slowing. According to foreclosure-tracker RealtyTrac, the number of foreclosure filings dropped 17 percent on an annual basis last month. Monthly filings ticked higher 1 percent after a combined 23 percent decrease through November and December 2010.

The phrase “foreclosure filing” is a catch-all term, comprising default notices, scheduled auctions, and bank repossessions. 

January marked the third straight month of sub-300,000 filings after 20 straight months above it.

As compared to January 2010, six of the nation’s 10 most foreclosure-heavy states posted an annual foreclosure filing reduction. The remaining four showed modest worsening.

It’s noteworthy that states like California and Florida posted declines of 7 percent and 54 percent, respectively, and that Nevada posted a relatively-low 3 percent gain. These three states have been at the leading edge of foreclosure activity since 2007. Their subsequent recoveries, therefore, may foreshadow a better housing market ahead.

Or, this may be lasting effects from the “robo-signer” controversy.

Regardless, home buyers in California continue to clamor for distressed homes.

According to the National Association of REALTORS®, properties in various stages of the foreclosure and short sale process are selling at discounts in the range of 10-15 percent so it’s no wonder they now account for 36 percent of all home resales. Buying a foreclosure can be a great “deal”.  They can be more trouble and cost than they’re worth.

Therefore, If you’re in the market for a foreclosed home in the Cambrian area , be sure to speak with a licensed real estate agent. The process of buying a distressed home is different from buying a non-distressed home. An experienced professional can help make sure you negotiate your best possible price.

How To Renegotiate Your Credit Card Interest Rates To Something Lower

Credit card debt, left unchecked, can pile up quickly. Especially for debtors making minimum payments.  

According to the Federal Reserve, a credit card balance of $5,000 at 23.99 percent APR won’t pay off for 16,127 years. That’s one reason why it’s important to manage your credit card rates, and renegotiate them whenever possible.

In this 4-minute piece from NBC’s The Today Show, you’ll learn the tested tactics that can cut a credit card rate, and get monthly payments to a more manageable range. And it’s do-it-yourself — no debt management firms required.

Some of the tips in the video include:

• Compare your current rate to the rate offered to new customers. Ask the lender for “new customer rate” if it’s lower.
• If your credit score has improved since application, ask for an interest rate more reflective of your current credit score.
• Be nice to the customer service representative. Kindness helps.

Managing debt is an important part of household budgeting so if you’re finding your credit card payments and/or rates too high for your liking, try following the instructions as described in the video. And, above all else, be persistent. The credit card companies won’t likely approve your first request.