Loan limits restored to their higher amounts!

The Senate voted yesterday and overwhelmingly passed the appropriations bill effectively reinstalling higher conforming loan limits for the FHA through the end of 2013.  In Orange and LA counties, it’s confirmed that $729,750 will be our new loan limit.

Despite uncertain economic times, most Americans still value home ownership.

By Gino Blefari

How’s the real estate market? It’s a question every one of us in this business is faced with every day. Homeowners, buyers and sellers seem to have honed a hyper-awareness for the state of the economy, how it impacts home values – or real estate prices in general – and how it impacts their personal finances. This is no surprise given the times we’re living in.

Just when things seem like they are looking up (sales of existing homes increased 7.7% to a rate of 5 million in August, up from 4.67 million in July), we get a reality check of how Americans are feeling about the state of housing. A survey released by Fannie Mae this week showed that for the most part, people are still very pessimistic about the current economy, home prices and household finances. How people view the economy is actually pretty important to our recovery – meaning, if they view things as really bad, they’re not going to buy or sell until they change their minds or circumstances force them to change.

The most interesting thing about Fannie Mae’s September survey is that the majority of respondents said they’d buy their next home rather than rent: 63% said they would buy their next home if they were going to move, up 1 percentage point since August. Only 32% said they’d rent their next home, which is down 2 percentage points since the previous month.

If Americans are so pessimistic, why would they commit to such a large financial obligation? The answer is simple: They view buying conditions as really good:

lowest mortgage interest rates anyone can remember
a firm belief that home prices will fall over the next year
a firm belief that rents will continue to rise.
We can also deduce from this that Americans still value homeownership – despite uncertain economic times. Owning still makes sense to most people over the long term. And perhaps Americans are even feeling like homeownership is the one certainty they can count on in the long term to provide some form of financial security if the rest of the economy gets its act together.

If all these people say they’d rather buy than rent their next home, then why aren’t we seeing soaring sales? As noted above, many are expecting more problems with the economy and financial situations to get worse. 19% of respondents in Fannie Mae’s survey said they expect their own financial situations to worsen over the next year. While that’s actually down a bit from August when it was 22%, it’s still a significant figure to think about. One-fifth of people on average are bracing for more bad news.

What can we do? We can stop and think about the true state of the real estate market and how heavily impacted it can be by something as intangible as the way people are feeling about the economy, cost of living, job security and personal finances. Just because home sales start trending up doesn’t mean we’re in the clear, and when we see them stumble doesn’t mean homeownership is any less valuable to Americans.

Rates are amazing now! 30 year fixed rates in the high 3% range and possibly dropping lower.

The Fed, ending a two-day policy meeting later Wednesday, is expected to announce a rebalancing of its bond portfolio weighted more heavily to longer-term securities, pushing already-low long-term interest rates even lower in a move dubbed Operation Twist.  On Wednesday, the Federal Reserve will conclude its latest policy meeting and may announce further measures aimed at lowering long-term borrowing costs. One option is called “Operation Twist:” the Fed would sell some of its short-term holdings and buy longer-term U.S. debt to push yields—which are already at historic lows—even lower.  Why? One clear aim of Fed policy, as Chairman Ben Bernanke wrote in an op-ed last year, is to bring about “lower mortgage rates [that] will make housing more affordable and allow more homeowners to refinance.”  The trouble is, the relationship between Treasury yields and mortgage rates isn’t perfect. And in recent weeks, the difference, or spread, between the 10-year Treasury yield and Freddie Mac’s average 30-year fixed-rate mortgage has widened considerably.

Carole Geronsin Main Panelist at The International Real Estate Summit

September 1, 2011 Anaheim, California – Over 2,200 real estate agents and mortgage professionals gathered for a three day sales training and marketing Summit, where Carole Geronsin was selected as an elite panelist member.

Carole’s expertise on the local market, negotiations, online marketing, customer service and fiscal knowledge were the reasons why she was asked  to contribute to the to the assembled group. Out of more than 65,000 real estate professionals, Carole was chosen to speak on this platform.

In these trying times, Carole is able to not only list and sell residential real estate at a very high volume, she is also able to effectively teach and mentor agents from across North America and Europe.

Carole shares her success and passion for real estate with her two partners, Genelle and George Geronsin. Together, this dynamic family team has dominated the North Orange County area in sales volume, consistently ranking as the #1 producers along with #1 ranked Prudential.

If you would like more information, please contact The Geronsins at 714-283-6649.

The Geronsins nominated to Inman News 100 Most Influential Real Estate Leaders in the USA

Inman News, the leading source of independent real estate news, information, advice, research, opinion and commentary for industry professionals and consumers has nominated The Geronsins as one of the top 100 most influential real estate leaders in the nation. Inman News states that the top 100 list recognizes those whose voices and actions have the power to change the industry.  Among them are individuals who embody strength, common sense, innovation, ingenuity, perseverance and progress.  They include the industry’s brain trust and dealmakers, and those outside the industry who impact the business of buying and selling homes. “Being nominated to this list is one of our career highlights,” states Carole.  “It shows that our dedication to the industry, our client care and our service to others matter.” With a combined 50 years in the real estate industry, The Geronsins have built their business practices around the best ways to assist their clients.  “We are always looking for new innovative ways to bring marketing assistance and exposure to our clients homes,” says Genelle.  “In a constant changing marketplace we need to adjust our thought process and practices to what is most effective for each clients home.” The Geronsins, who have been Prudential California Realty’s top selling agents in all of North Orange County for 19 out of the past 20 years have an unparalleled tract record of sales.  In 2010 alone they sold in excess of $80,000,000 and assisted over 90 families with their home selling and/or purchasing needs.  In an ever changing economy and real estate market consumers need experienced agents that provide the value of longevity, sales tract record and knowledge to best assist them to make good financial choices. “Currently homeowners are facing financial dilemmas,” states George.  “Each dilemma is different.  Do I take advantage of the interest rates and buy up?  Do I sell now or wait?  What is likely to happen in the next couple of years and how will that affect my home affordability?  I can’t afford my house payment anymore, what are my options?  We look at every client’s concerns individually and best assess their situation.  We spend as much time as needed to adequately council them with information on their options.”  Carole adds “we do not make decisions for our clients.  We simply provide them with resources, and the facts so that they can make the best decision for themselves.” The uniqueness that The Geronsins bring to the Inman List is the fact that they are a family team.  They bring two generations of thought processes and practices into the real estate market every day.  “We feel blessed to be able to work together”, says Genelle.  “We all have different strengths and we are able to combine them to help our clients in the best way possible.”

Longtime homeowners only regret? That they had not bought more homes.

Longtime homeowners provide valuable insight when asked if they regret buying their home.  Their only regret? That they had not bought more houses.  According to Gino Blefari, President & CEO of Intero Real Estate Services Inc., this response is the true measure of consumer confidence.

I often speak with homeowners who’ve lived in their homes for 20, 30, 40 or even over 50 years and I always like to ask, “If you had the chance to go back in time and buy more houses, would you?”

Their answer – always immediate and with ironclad certainty – YES!

This to me speaks volumes about the enduring value of homeownership. It’s much more meaningful than the consumer sentiment surveys you see each month gauging consumer confidence in housing. If the nation’s veteran homeowners can still stand in their front lawns and unequivocally say they made the right decision and whose only remorse is not buying more property, then I’d say that’s the kind of consumer confidence other assets may only dream about.

Don’t be fooled by the sad stories of foreclosures or the owners who decided to walk away because they were underwater. These stories have nothing to do with the value we put on homeownership. These stories are often about people who were unlucky or got caught up in mortgages they couldn’t really afford, who lost their jobs or who were unprepared for a financial emergency.

Even through all of this, homeownership is still valued in this country. Do you think that homeowners who walk from their mortgages will never buy a house again? You’re dead wrong.

Do you think that marriages and babies and promotions will no longer lead to home purchases? You’re dead wrong. How do I know this? Because our veteran homeowners can look back through boom-and-bust cycles and still say with certainty that they made the right decision. Because even as the nightly news blasts stories about “plummeting” home values, our agents’ phones are ringing from customers eager to buy.

Housing is certainly an important market to our economy. But homes time and again prove that they are not simply commodities to be traded on Wall Street like stocks and bonds. They are not items on financial spreadsheets. They are homes – places where we create memories, live our lives, build our futures.

When we finally emerge from this lull and look back on the recovery years for answers, I have a feeling that more of us will say, “I wish I would’ve bought more houses before that market took off.” We won’t regret all the years spent building wealth in our homes.

Fannie Mae HomePath Financing for REOs

The nation’s largest mortgage lender, Fannie Mae, has announced a new financing program called the HomePath program. This program is intended to help reduce Fannie Mae’s inventory of real estate owned property (REO) by attracting investors, owner occupants, and second home owners.

The HomePath financing program offers various down payment options depending on the type of buyer

• 3% for owner occupant
• 10% for second home buyer
• 15% for investors

To even further attract buyers, this financing program eliminates the appraisal requirement and mortgage insurance. Often times in real estate, delays of closing escrow come from third party elements such as getting an appraisal, termite inspection, and home inspection. It is not uncommon for there to be several appraisals on a property because of difference of opinions from one or more parties involved with the sale of the home.

Another interesting aspect of the HomePath financing program is the no-declining market restriction. The mortgage is only restricted by the amount of the down payment.

There is also the Home Path Renovation Mortgage which is similar to the FHA 203K which allows the buyer to borrow money to make repairs on the property for them to live in.

Fannie Mae has made these financing options available for potential buyers in an effort to reduce their REO inventory, but only time will tell if buyers will use this type of financing. To view a list of mortgage lenders honoring Homepath Financing, visit http://www.fanniemae.com/homepath/financing/lenders-list-2010-eng.html;jsessionid=LJIMML2UOTHDTJ2FECISFGI.

Prudential Real Estate Awarded Highest Seller Satisfaction by J.D. Power & Associates

Prudential Real Estate has done it again! J.D. Power and Associates has honored Prudential Real Estate with the 2010 Highest Seller Satisfaction Award.

Prudential Real Estate received the highest number of points with 760 out of 1000, and received particularly high marks in the marketing and agent categories. Prudential Real Estate came in second for the Home Buying survey, receiving 811.4/1000 points.

The 2010 Home Buyer/Seller study was conducted from March 2009 to April 2010 and was judged on four primary factors: agent, marketing, office, and services. Over 3,000 surveys were submitted from 2,817 respondents who bought or sold a home during the time period.

We couldn’t be more proud or honored to be affiliated with Prudential Real Estate, and congratulate our colleagues in sharing this achievement with them.

Irvine & Yorba Linda Named Best Places to Live

CNN’s Money Magazine just recently published their annual “100 Best Places to Live” in American small cities naming Irvine, CA #22 and Yorba Linda, home of President Richard Nixon, #38.

These two cities can attribute their placement due to excellent school districts, extensive dining and shopping, low crime rates, and plenty of community events.

Irvine is a growing business center and home to several Fortune 500 companies. In addition, the city is within minutes to the beach and major highways leading to Los Angeles and San Diego.

Yorba Linda is an equestrian’s dream with over 100 miles of trails, plenty of local parks and several golf courses. Plus there is the added benefit of being close to Disneyland, MLB Anaheim Angels, and the NHL Anaheim Ducks.

Yorba Linda is definitely one of the top choices for people of any lifestyle, especially those looking to raise a family. The homes in this area offer a variety of incredible panoramic views such as city lights, mountains, Catalina, and ocean. In addition, many of the homes are on large size lots great for children to run around and play. One of the premiere neighborhoods of Yorba Linda is the prestigious area of Kerrigan Ranch where there are custom built fine homes. Just take a look at our listing at 4021 Paso Fino Way or any of our listings in Yorba Linda and you can see why this is such a desired place to live.

We have been selling real estate in Yorba Linda for over 30 years, and time and time again we encounter buyers who only look at real estate in Yorba Linda and sellers who don’t want to leave this area.

To view the complete list, visit http://money.cnn.com/magazines/moneymag/bplive/2010/index.html

Q & A on Short Sales | Part 2

Continuing our mini series on Short Sales, I will now explain how a short sale will affect one’s credit among other topics.

How will a Short Sale affect my credit? 

• A short sale will drastically affect your credit score similar to that of a foreclosure.
• Expect a 200 to 300 point hit in your FICO. However, in most cases there is much less of a point reduction in your FICO in a short sale. A lot of this has to do with the amount of negative reporting history recorded by the lender.
• There is usually a lot less negative history reported in a short sale because the property is sold before the foreclosure.
• The key to retaining the most points in your score is to settle all bad debts and negative reporting activity as soon as possible.

What is the advantage of a short sale as opposed to foreclosure?

• The advantage to a short sale is that it usually does not cost you any money and the lender pays for all the real estate fees and closing costs.
• Your FICO score might not be affected as badly in a short sale.
• You will also be eligible by Fannie Mae guidelines to qualify for a loan at a reasonable rate after 24 months where it could take 5 to 7 years with a foreclosure.

How does a short sale work?

• A real estate agent will list your property subject to the lender’s acceptance of the deficiency or loss.
• They will obtain the highest possible price for the property and submit everything with the short sale package to the lender. You will be able to live in the property during the short sale process.
• It is extremely important to hire an agent that has short sale experience and who is very knowledgeable on short sales and negotiations with the lenders.
  • Because property owners cannot by law receive any compensation in a short sale, they tend to use anyone to facilitate this process.
  • The short sale is only an advantage if it is done successfully and as quickly as possible. Only use someone who is going to have the best possible chance of getting the short sale approved.

Short sales on investment and income properties?

• Since the 2007 Debt Forgiveness Act does not apply here, it is extremely important to hire a professional to represent the short sale.
• It is in the property owner’s best interest to obtain the highest possible amount for the property. If you are going to be 1099 on the loss, you want to make sure the loss is as little as possible.
• It is also important for the agent that represents you to try and negotiate the release of a deficiency judgment, where the lender sues you for the deficiency or loss.

*** It is best and highly advised, to contact your CPA to get all the information for your particular case and tax liability and filing information.

If you have any further questions on short sales, contact our office at 714.283.6649.