365 Things to do in Simi Valley, CA & Ventura County - San Fernando Valley Real Estate Guide
Simi Valley's Insider's Guide to Real Estate Research & Home Owner Information
The Rancho Simi Recreation and Parks District has created a hunt for a medallion … [Read More...]
I wanted to give a nod to Dean Ouellette over at Thompson Realty. Dean has been very good at collecting great articles on Real Estate and created the Top 10 Real Estate Posts of the day on his blog www.deansellsaz.com. This is a great resource to bookmark or subscribe via RSS feed and of course a great guy to call if you are moving to Arizona.
Tuesday – I learned that both Lawyers and Chicago Title Insurance Companies had simplified their rates. I see this as a great move on the part of these two title companies. What they have done is made their short term rate now the standard rate. Previously, the short-term rate was a discounted rate homeowners would receive if they used the same company to rewrite a title policy typically within five years. For example, Mr. Smith, a Simi Valley homeowner refinances his house. At the time of the refinance ,new title insurance is ordered. Three years later Mr. Smith decides to sell his house, if he uses the same title company that was used at the time of his refinance, then a discounted or known as the short-term rate would apply.
Understanding title insurance really makes all of us wonder how expensive should it really be. We know that a property and casualty insurance company such as State Farm is very busy handling accident claims after the season’s first rain. These property and casualty insurance companies have a pretty predictable loss pattern. Title insurance on the other hand, is quite different. How often has someone you’ve known had to make a claim against their title policy? I’m not sure if I know anyone who’s ever had to make a claim and I’m around this stuff all the time. So thinking back on property and casualty insurance in comparing the loss ratios to a title company; title companies probably have the lowest loss claims in the insurance business. This high profit margin insurance business should offer very favorable rates, however until recently this was not the case.
One other thing you should consider is that is that the buyer and the seller have a choice in which title company is used. Make sure, you’re able to see the rate sheets of a few companies so you can compare rates. Your concern in a title policy is not only price, but if the company will be around in the rare case you would need to make a claim. Knowing this, it is important to understand that there are several very large title insurance companies (nationally) which underwrite the smaller companies. While the buyer and seller have choice, price and company stability should be weighed heavily. Also consider that some real estate companies have a financial relationship or interest or quasi-interest in certain title insurance companies. Your broker should provide you with the disclosure if this is the case. Because of the low loss ratio and the high profit margin on these title policies, brokers look for these arrangements as an additional profit center on transactions and title companies look to these relationships as a way to monopolize business. This should be a clear cut RESPA Violation under Regulation X, but it happens and certain brokerages have found a way around RESPA.
In the last year the California Department of Insurance has cracked down on title companies and their perks to real estate brokerages. This is definitely helps the consumer, but some brokerages are finding loopholes and continuing in their old ways.
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Thanks for reading Simi Valley’s Premiere Real Estate Blog!
Author – Ted Mackel Simi Valley Real Estate Agent – Keller Williams Realty
Ted Mackel is a top producer at Keller Williams Realty Simi Valley,
specializing in Simi Valley Real Estate
(805) 432-7705
RESPA changes enacted January 16, 2010 will benefit Simi Valley home buyers and help them understand the costs of their financing on the new good faith estimate (GFE) and HUD-1 settlement statements.
When shopping for a loan, the mortgage broker must give a good faith estimate to the client that outlines the costs of the loan. Prior to January 16, 2010 the GFE was a pretty general estimate and could fluctuate greatly between the time a home buyer identified a property to purchase and finally closed escrow. These lax regulations allowed unscrupulous mortgage brokers to easily bait and switch homebuyers into terms and fees they originally would have rejected. The “white hats” of the mortgage industry suffered under the old rules and this new regulation will allow the good guys to rise to the top.
Under the new regulation, the mortgage broker cannot give a GFE without there being a property. The new GFE is more detailed and has more specific rules. For example, mortgage brokers are allowed to average or estimate third-party costs such as inspections, appraisals or other testing. At the close of escrow this figure is compared to the actual costs on the HUD-1. There is a 10% difference allowance on these fees.
The new GFE and HUD-1 forms are designed to increase transparency to the Simi Valley home buyers by requiring mortgage brokers to show their yield spread premium as part of the origination fee. Most home buyers are not aware that in addition to the fees to the broker that were seen on the old forms, the broker earned additional money in the form of a yield spread premium. The yield spread premium was calculated on the interest rate spread between what the home buyer qualified at and what their final lock rate was at. The issue is not whether the broker is entitled to this fee, but rather that it must be disclosed.
There are some costs that cannot be altered on the form anymore which include the origination fee and the transfer taxes. Under the new regulation the original GFD and the final HUD-1 are compared at closing. If there are fluctuations in the fees outside of the limits above, the lender is held responsible for the difference.
If the discrepancy in these fees are over the 10%, then a change of circumstance affidavit needs to be signed at least three days before the loan can close. And a change in the interest rate would require new disclosures, GFE and truth in lending three days before closing.
I believe that the comparison of the GFE and the HUD-1 will help weed out the bad lenders in the industry, help the consumer understand and make more informed decisions about the costs of their loan and reduce unnecessary costs and fees.
As the mortgage industry and our escrow officers learn how to work through this process, we should expect some delays in closings over the course of the next few months. Once everyone gets the hang of the new system, the consumers will benefit and our hard-working “white hat” mortgage brokers will be able to better serve home buyers.
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Thanks for reading Simi Valley’s Premiere Real Estate Blog!
Author – Ted Mackel Simi Valley Real Estate Agent – Keller Williams Realty
Ted Mackel is a top producer at Keller Williams Realty Simi Valley,
specializing in Simi Valley Real Estate
(805) 432-7705
The lunatics have taken over the asylum. (CNBC video interview at end of this post)
Beside being the song title of a 1980s new wave band (Fun Boy Three), the title of this post may be more accurate than even I realize.
I follow the papers, several blogs including Calculated Risk, Square Feet Blog, industry blogs such as Inman and it is clear to me that the newspapers blow with the wind. One day everything is great and the next day everything is terrible. My industry sources, such as trade associations and even companies like Dataquick are too quick to create sensational headlines that are almost as obnoxious as the newspapers. I have been telling my clients for long time now that this is going to be a long recovery and bumpy along the way. There is opportunity in every market – even this market; it just takes determination and persistence.
For example, just two days ago, Dataquick’s headline from their own website is “Southern California Home Sales Increase“. While the over all article does a pretty good job explaining what’s been happening, I think it’s still tries to paint a rosy picture prematurely. While certain sections of Southern California are reacting better than others, the Simi Valley housing market is still below pace for any type of stable or normal market.
Looking at some of today’s headlines we see “Seriously Delinquent Mortgages Versus Unemployment Rate” and “Strong Dollar, Weak Data Pummels Stocks” and “Three-Month Treasury Bill Yields Turned Negative“. Yet the desire to cheer-lead back or will back the real estate market will appear in a conflicting article in the next few days.
What is extremely important for Simi Valley home buyers and home sellers is to understand at this time is, any claim of a recovery or stabilization, is just more premature thought or whistling in the dark. There’s still plenty of bad venom in the mortgage markets and housing markets that need to work through the system before we can see substantial relief.
Low inventories have favored sellers and low interest rates have enticed buyers, a long-term strategy in residential real estate is probably a safer play. The entry-level housing combined with the historically low interest rates has created affordability for a large segment of the market. The upper level housing has not mirrored the entry level housing.
We know there are still record numbers of bad loans, mortgages not being paid on time, adjustable mortgages getting ready to reset, modification programs, short sales, and foreclosures being held off the market; that the fragile environment created by government intervention ,the banking industry’s manipulation of inventories and interest rates can only be sustained for a limited amount of time.
The economy grew for a long time based on unsustainable consumer spending tied not to discretionary income, but rather to home-equity spending. Now that home equity spending has been cut off and credit lines are being closed and reduced, the consumer spending Wall Street is waiting for will not return. This all trickles down through the economy affecting jobs and housing.
While the headlines will continue to seesaw consider the information in this interview on CNBC with Meredith Whitney.
CAUTION, CAUTION, CAUTION is all I have to say. Do your research, a smart buy or move up purchase can be found in this market as long as you keep your ear to the ground.
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Thanks for reading Simi Valley’s Premiere Real Estate Blog!
Author – Ted Mackel Simi Valley Real Estate Agent – Keller Williams Realty
Ted Mackel is a top producer at Keller Williams Realty Simi Valley,
specializing in Simi Valley Real Estate
(805) 432-7705
That’s right Simi Valley home buyers, the tax credit is waiting for Obama’s signature. The tax credit legislation passed the House today in a 403 to 12 vote. The Senate vote was 98 to zero. This time around there a few additions, these are pointed out in my video blog below. One thing I did not cover was the income limitations which have been raised to $125,000 for single buyers and $225,000 for couples, from the prior limits of $75,000 and $150,000, respectively. To curb any abuse of those claiming the credit, the claimants must attach proof of purchase to their tax return.
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Thanks for reading Simi Valley’s Premiere Real Estate Blog!
Author – Ted Mackel Simi Valley Real Estate Agent – Keller Williams Realty
Ted Mackel is a top producer at Keller Williams Realty Simi Valley,
specializing in Simi Valley Real Estate
(805) 432-7705
Update on Extending the First Time Home Buyers Tax Credit
The First Time Home Buyers Tax Credit is set to expire on November 30th. The reality of this deadline means that the buyers out now need to get a home in escrow by the 20th of October. The Thanksgiving Holiday will add days to any escrow with financing, so a typical 30 day escrow may not be enough time to close before the deadline.
There has been much talk about extending the deadline for another year and more likely six months. All that has happened to this point is that the House has passed a bill to extend the credit for Service Men and Women who are overseas for the next year. This bill is expected to pass through the Senate. The question remains: will the Tax Credit will be extended for all first time home buyers?
(September 3rd, 2009 – Los Angeles) Ted Mackel has been named for the California Association of Realtors Expo Tech Opening Session: Text, Tweet, and Sell: A Dialogue on Tech’s Possibilities for Today’s Agents,” panelists: Drew Burke, Ted Mackel and , moderated by Joel Singer. Panel for Tech Tuesday is in San Jose on October 6th. 10:00 AM – 11:30 AM. Selected as one out of over 175,000 members of the California Association of Realtors and of the 600+ Realtors in Simi Valley, Mackel is excited to participate in the panel and Expo.
Mackel commented “Our industry’s tools are changing at light speed. The consumers are using options on the Internet for their next home purchase or sale that my industry is slow to acknowledge. The panel gives our industry a chance to exchange and share ideas from across the state so we can increase our knowledge and serve our clients better. I have been an early adopter in this area and look forward to the opportunity to give back to my industry.”
False Recovery? How Fragile is the Simi Valley Real Estate Market
This is a chart I whipped up last year trying to illustrate what a mortgage interest rate does to the real estate market when it goes over 6%. I might have posted it before, but it really needs another look at with our current market conditions. Why this chart becomes even more important now is that the current market conditions are a false positive on recovery for the following unsustainable reasons:
If you are in the market to buy a home in Simi Valley, the frustration factor is getting to everyone, you are not alone. Only a good increase in inventory can help cool this market down. I pray for inventory for my buyers.
If you are a seller and cannot wait a few years before selling, this is the time to make a move as the low inventory creates less competition and the likelihood that you can move you home quickly if priced aggressively and made ready to show with a home stager or staged yourself.
If you would like to talk real estate in an open relaxed environment; follow me on Twitter @RealtorTed and watch for my updates as I usually go to Panera Bakery in Simi Valley one night a week and hang out for a few hours having coffee with local people talking about Real Estate, things around the community, computers etc. I hope to see you there!
National Economic Woes will impact Simi Valley Real Estate
I am posting two clips from youtube. This first clip was from January 39th and the second is from May 6th; this should cause all great concern. The housing market is not going to recover anytime soon. Our national economy and our state economy are in serious trouble. Our banking system is at the heart of the matter and our banking system is what provides the cash to fuel the loans for people to buy homes. While I am bearish about our housing market, it is better to be realistic and not tabloidistic when talking about how to plan for the next home purchase or home sale. I see way too much false hype from my industry and the local news about Simi Valley homes for sale. Simi Valley Real Estate will recover, but this is going to be a long process and when we get to a balanced/stabilized market I hope that the system is changed to keep the nonsense of 5 years ago from ever happening again.
I posted an anonymous story sent to me via email on my Facebook public page (Ted Mackel Simi Valley Real Estate Guy on Facebook), I am not sure who wrote it, but it is a simple way to understand the mess we are in. If you know the author please pass it on to me so I can give proper credit.
Now 3 months later the same old story:
HVCC impacts Simi Valley Homes For Sale
HVCC – HOME VALUATION CODE OF CONDUCT
History:
New York Attorney General, Andrew Cuomo investigated Fannie Mae and Freddie Mac appraisal practices. Fannie and Freddie (with the Office of Federal Housing Enterprise Oversight (aka – OFHEO) agreed to adopt new changes to how appraisals are processed in the mortgage industry in exchange for an end to the investigation. The HVCC arose out of this agreement and contains many positive and needed guidelines to clean up the industry. Unfortunately as with most bureaucracy, the agreement contains changes to how brokers and agents are able to work with appraisers. These changes will significantly impact the value of your Simi Valley home, impact the process of selling your Simi Valley home, possibly raise the costs to the buyer of your Simi Valley home and create higher risk for a buyer to enter into an escrow on a Simi Valley home purchase.
What The HVCC means for Brokers:
This means that brokers are not allowed to choose appraisers. This is important in that appraisers have traditionally been chosen based on quality of work and knowledge of the area they are appraising. This loss of control of an integral part of the loan origination process, can possibly increase loan funding times and increase costs to the consumers in the form of longer rate locks and the need to order new appraisals if there is a need to change lenders.
What it means to Appraisers:
What this means to Sellers:
What this means for Buyers
While most agree that there needs to be better regulation and oversight on the appraisal business, the HVCC goes too far. Good reputable appraisers exist in every trade area, they should not be penalized for the those that have created the problem. Since the government has chosen to create rules that will negatively impact an already fragile Southern California Real Estate market; Buyers and Sellers need to better understand the process so they can work together through escrow in a proactive manner that will conclude in the original goal…. sale of a property.
Ted Answers Trulia Voices
The Rancho Simi Recreation and Parks District has created a hunt for a medallion in their Parks throughout Simi Valley. They have placed the Medallion in one of the parks and when found take it to their offices on Sycamore Drive. Clues as to where to look will be posted on the RSRPD Facebookpage. [...]
Looking for Things to do in Simi Valley for the Halloween Season? Mourning Rose Manor in East Simi Valley at 5250 Aurelia Street has been delighting Simi Valley Halloween fans for 6 years. Lydia and her husband have created a unique Halloween experience complete with Ghosts, Skeletons, Grave yard with Crypt, Spiders, Spooky Sounds and [...]
