homes

Simi Valley September 2011 Home Sales Volume at 2008 Levels

October 10, 2011 By Ted Mackel Leave a Comment

Do Simi Valley September Homes Sales show another false positive for the real estate market? In 2009 and 2010 September sales volume for single family detached homes tailed off after a 2008 rebound over a record low in 2007. Fast forward to today and low interest rates are enticing investors and home buyers to enter the market, however pricing is still flat. The market for homes below $400,00 is still leading the way with 53% of the sales for the month. 57% of those sales are dominated by Short Sales and Bank Owned homes. 25% of all the Simi Valley SFD homes sold were snapped up by all cash buyers and 40% with conventional financing. This high percentage of Cash and Conventional buyers shows that low interest rates combined with attractive pricing is bringing savvy real estate buyers to the table.

Pricing is in a low trough at this point and has remained in this trend for most of 2011. The mid to high $200k price point has solidified a low for Simi Valley Single Family Detached Housing and only dips below this range if the properties have significant damage. A recent article from CoreLogic^® (NYSE: CLGX) stated:

“Even with low interest rates, demand for houses remains muted. Home sales are down in September and the inventory of homes for sale remains elevated. Home prices are adjusting to correct for the supply-demand imbalance and we expect declines to continue through the winter. Distressed sales remain a significant share of homes that do sell and are driving home prices overall,” said Mark Fleming, chief economist for CoreLogic.“

What does this mean for housing above the $500k price point? Those homes have trended selling at 8%-10% below the original list price showing the the market absorption rate for these houses is still dictated by buyer mood. The homes between $400k to $500k experience on average only a 3%-4% drop in price from List to Sell.

We can take away the following five points

Low interest rates are bringing buyers out.
Buyers refuse to bid up pricing and remain patient.
Homes in well maintained condition are seeing short market times when price matches buyer sentiment.
Investors are out accumulating rental property.
Distressed property still make up over 50% of the inventory.

Filed Under: Market Updates Tagged With: Bank Owned, Buyers, homes, homes sales, investors, real estate, Sellers, Short Sale, Simi Valley

Custom Signage to sell your Simi Valley Home

August 23, 2011 By Ted Mackel 4 Comments

(Video Below) Whether your home is in Simi Valley, the west San Fernando Valley, Moorpark, Thousand Oaks, Newbury Park or in-between, I have been working with custom signage for 3 years now. I have been looking at ways to improve on the custom sign and the picture to the right is the new design I rolled out last week. The same printing technology used in vehicle wraps is what makes this possible for the real estate industry.

The purpose behind the custom sign follows three main ideas:

When potential buyers are driving neighborhoods, the pictures of the backyard and an interior shot give the buyers a teaser preview of the property to generate more interest in the property.
The website and QR code are directly linked to a mobile compliant website with tons of information (including community video) on the home that the potential buyers can view right in their car on a smart phone or iPad. My use of the mobile website and QR code gives me direct feedback on how many people are accessing the site for more information.
The typical real estate signs here in Southern California, are hung on large 4×4 wood posts. My sign is the same size (30×24), orientated vertically, but with a different installation method and custom design. This sign gets buyers to stop the car.

One thing I need to stress, is that much of the internet content out today can be viewed on smartphones, the difference in the mobile technology I am using is that it is specifically designed and formatted for display on mobile phones. If you have a mobile phone type in the following address and you will see:

http://iflymobiapp.com/callevista

If you are trying to view this on your laptop or home computer you can see the formatting is designed for mobile devices.

I have been working on this for a long time and continually monitor feedback from buyers and will continue to do so. You can see my video below from 2008, this listing was one of the reasons I started working on these signs.

One other interesting thing I came across in my discussion with potential home buyers who called off my signs is, I always ask, “how many properties did you print out at home before coming to drive Simi Valley neighborhoods?” The response has always been “No list, just driving neighborhoods”. I thought that this was odd with gas pricing over the last 3 years, but this even more shows how important the sign in my client’s front yard is. If the drive-bys have not previewed the house on the internet, then the custom sign and it’s teaser ability to get drive-bys to stop their car is very important.

Keller Williams Realty gives me that ability, to create this custom marketing where many real estate firms are more interested in promoting their firm and not your house. While some of my branding is on this sign, the focus is your house with the customization. The point is, when I put the sign in your front yard am I selling your house or my firm? Think about that as you drive through any neighborhood and see For Sale signs.

In July I wrote Why QR codes won’t sell your Simi Valley Home and was very critical of QR codes for real estate use. My 4 points of 1. Mobile Friendly, 2. Tracking, 3. Regurgitation, 4. Understanding have all been addressed in my design and implementation, will the QR code sell your house? No, #1 the Price, Condition and Location are the biggest factor in the ability to get your home sold. No amount of advertising can sell an overpriced home. Ultimately, the goal is to get as many eyes on the property as possible and be competitive with the surrounding homes. The custom yard sign is just another piece of that plan to reach the goal.

I would love to hear your comments below, thanks for reading.

Filed Under: Real Estate News, Sellers, Simi Valley Tagged With: Buyers, homes, mobile, QR codes, real estate, Simi Valley

Asking for Closing Costs Could Cause Home Buyers To Over Pay For Their Purchase

July 1, 2011 By Ted Mackel Leave a Comment

Home Buyers many times ask Home Sellers for concessions or assistance when they make an offer to purchase a home. The typical request from a home buyer is for closing costs, a home warranty, repairs or for the seller to include certain personal property items for sale. This article will focus on closing cost requests from home buyers.

The following information pertains to California real estate only. Real estate settlement and closing procedures vary from state to state, so if you are looking for information for real estate transactions in a state other than California, the information below may not apply to your situation.

As the Simi Valley housing market has lost value and sales have slowed, the requirements for buyers to get financing has become difficult at the same time. The Simi Valley real estate market has seen the most activity in homes selling under $450,000. The buyers in this price range typically have low down payment offers and do not have significant reserves or savings. The FHA loan program allows those buyers with limited resources to purchase homes with as little as 3 1/2% down. For Simi Valley this translates into approximately $8000-$15,000 minimum down payment needs; the FHA program helps these buyers get into homes.

Looking at Simi Valley homes selling for under $450,000, the typical closing costs associated with those home purchases can range in the $8000-$10,000 range. It has been a pretty common practice for buyers to write an offer asking the seller to concede up to 3% of the sale price to assist the buyer with these closing costs. While not all sellers have the ability to make this concession, the buyers will add this figure on top of their offer price so the seller will realize a net sales price closer to what is acceptable to the seller.

In 2010 the federal government changed the Good Faith Estimate (GFE) and tightened down regulations on this form to protect buyers from overpaying fees associated with obtaining financing. Once the buyer’s lender issues the GFE, the lender is bound by those numbers and has very few options to increase any of the figures on that statement. The 2010 GFE does allow for some minor adjustments, but overall the buyer can feel pretty good about the actual closing costs associated with their purchase and loan after receiving this document. These new regulations with the GFE have created an issue in how buyers should ask for a closing cost credits from the sellers. If these credits are asked for without consideration of the new GFE requirements, the buyer can end up paying more for the property than they intended.

For example,

The buyer asks for $10,000 credit toward closing costs in their offer to the seller.
The seller is clear that they would like to receive no less than $400,000 for their property.
The buyer’s offer is for $410,000 with the seller crediting back $10,000 toward the buyer’s closing costs.
The seller accepts the offer and escrow is opened.
The buyer now makes loan application with their lender.
A GFE statement is issued within three days of the loan application outlining all the buyers costs.
Those buyer costs total $8,000.
The seller’s obligation is only $8,000 and the $2,000 difference is now realized by the seller in a net sale price of $402,000.
The buyer just overpaid $2,000 more for the property than they originally intended to.

The example above outlines one of the problems Simi Valley home buyers may encounter when asking for closing costs to be credited by the sellers.

Some might say, ” when the buyer makes loan application, shouldn’t the lender set all the fees on the GFE statement to equal the $10,000?” The 2010 GFE was designed to outline and identify the costs to obtain financing, so buyers could go out and compare the costs between different lenders. How would it be to the lender’s advantage to inflate the costs and fees; just to try and burn up a concession/credit from the seller? Also, why would anyone want to pay more for property or pay more for costs than they need to?

If you are a buyer who is considering asking for a seller concession in closing cost assistance, understand the ramifications of such requests. If reserves/savings are one of the driving issues into asking for this type of seller concession that is one thing, but if you are asking for the seller concession while you have the money to pay for these closing costs, consider the following:

Your property will be assessed for property taxes in the amount of the sales price. Is increasing the sales price worth paying additional property taxes over the course of time you own the property?
By offering more than the original listing price to cover your closing costs, remember you will be paying interest on the higher purchase loan amount for next 30 years (if your loan is amortized on a 30 year schedule). I’ve always felt that home buyers should deeply reconsider (if possible) financing closing costs for 30 years. It’s does not make much since to pay interests on fees, since the first 20 years of the 30 year amortization schedule is weighted toward paying down the interest on the note.

Last, if you’re reading this article and you end up educating and instructing your real estate agent on these issues, ask yourself how well you’re being represented by an agent who’s not aware of these issues. If tour real estate agent is not aware of issues as important as the impact of closing costs on your pocketbook during negotiations of your home purchase; then what else are they unaware of that may leave your money on the table or put you at a disadvantage in negotiations?

My sellers will gladly accept the additional funds if your closing costs are overstated in your original offer. Wouldn’t you feel better if you had an agent representing you trying as hard as they can to make sure you’re not leaving money on the table? Call or text (805) 432-7705

Filed Under: Buyers Tagged With: closing costs, Home Buyers, Home Sellers, homes, Market, real estate, Simi Valley

Simi Valley Indian Hills Indian Meadows Tract Sales History 2003-May 2011

June 11, 2011 By Ted Mackel Leave a Comment

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Below are tables representing Simi Valley Indian Hills Meadows Tract Home Sales History. The Indian Hills Meadows Tract is located off Alamo Drive and East of Yosemite. This is a quick snapshot at how the Indian Hills Meadows Tract has reacted to the changing market. Sales data is from 2003 through May 31st 2011.

The Indian Hills area in Simi Valley consists of 5 tracts. The Ranch and Ridge Sections are the two largest tracts in the development with the Indian Meadows being the third largest. Before the tract was built this is where hang glider pilots would come to train. They would launch up by the water tank an fly out to the fields below that is now Placerita Drive. The following sales data represents just the Indian Meadows area.

The tract was built in two phases, the first phase was the lower half in 1986 down along Placerita. The homes up on Iroquois were built in 1989 and the floor plans were the same layout but made a little larger. There are three two story models and a one story model.

Indian Hills Ranch Simi Valley 2003 Sales History
Average Sale Price	$541,570
List to Sale Ratio	100%
Average Days on Market	60
Number of Homes Sold	5

Indian Hills Ranch Simi Valley 2004 Sales History
Average Sale Price	$649,421
List to Sale Ratio	98%
Average Days on Market	7
Number of Homes Sold	43

Indian Hills Ranch Simi Valley 2005 Sales History
Average Sale Price	$706,180
List to Sale Ratio	95%
Average Days on Market	31
Number of Homes Sold	9

Indian Hills Ranch Simi Valley 2006 Sales History
Average Sale Price	$747,000
List to Sale Ratio	93%
Average Days on Market	94
Number of Homes Sold	2

Indian Hills Ranch Simi Valley 2007 Sales History
Average Sale Price	$753,667
List to Sale Ratio	96%
Average Days on Market	100
Number of Homes Sold	3

Indian Hills Ranch Simi Valley 2008 Sales History
Average Sale Price	$591,344
List to Sale Ratio	90%
Average Days on Market	108
Number of Homes Sold	4

Indian Hills Ranch Simi Valley 2009 Sales History
Average Sale Price	$525,00
List to Sale Ratio	91%
Average Days on Market	45
Number of Homes Sold	1

Indian Hills Ranch Simi Valley 2010 Sales History
Average Sale Price	$625,000
List to Sale Ratio	95%
Average Days on Market	40
Number of Homes Sold	1

Indian Hills Ranch Simi Valley thru May 2011 Sales History
Average Sale Price	$527,875
List to Sale Ratio	97%
Average Days on Market	95
Number of Homes Sold	2

There are currently five homes for sale in the Indian Meadows tract as of June 10,2011. The average list price of the five homes is $575,550 with an average of 35 days on market, I have been most these homes and based on location amenities and pricing the final sales price will most likely average down close to the $560,000 3 of the homes have already reduced their orignal list price 3%-5%.

Filed Under: Simi Valley Tracts Tagged With: floorplans, homes, Indian Hills, Indian Meadows tract, Simi Valley

Simi Valley Indian Hills Ranch Tract Floor Plans

June 8, 2011 By Ted Mackel Leave a Comment

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There were four models built in the Indian hills Ranch Tract of Simi Valley. Below are each of the Floor Plans along with a graph of the sales that have occurred form 2003 to May 31st 2011 for each floor plan.

More Indian Hills Tract Information:

Filed Under: Simi Valley Tracts Tagged With: floorplans, homes, Indain hills tract, Indian Hills Ranch, Simi Valley

3 Signs your home is not Ready to Show- (Simi Valley Homes for sale)

July 29, 2010 By Ted Mackel 2 Comments

I was out this week showing Simi Valley homes to clients and the bank owned Simi Valley homes (REOs) have enough issues that can be understandable; however, the owner occupied properties could really use some help as well. I shot a few pictures while out and decided to bring up this topic again as Simi Valley home sellers really need to think about how they might approach the sale of their home. I think every home seller needs to ask the following question.

Am I (Home Seller) a willing participant ready to do what it’s going to take in this market to sell my home or am I an obstructionist whether aware or unaware of how I drive buyers away from my home?

Are you shooting yourself in the foot? You want to sell your home but when Realtors call to show your home do you suffer from the following maladies:

You need time to clean
Your animals have free run of your house and need to be put away
Realtors can only come at very specific times with an appointment

There are plenty of Simi Valley homes for prospective buyers to see; if your home is the most difficult and it is not ready, then you might as well take your home off the real estate market.

Simi Valley is not unique to people’s busy schedules, so access for buyers and Realtors is very important. Creating obstacles and barriers to letting your home be seen by perspective buyers will only cost you money and time in the long run, as buyers in this real estate market will have other opportunities.

First, if you have a hard time keeping your home clean it may be a good idea to hire a house cleaner while your home is on the market. The money you add to your home budget will pay off with a quicker sale and maybe even a better price for your home, if your home is in tip-top shape when prospective buyers come through.

Next, if you have not created obstacles and barriers for buyers and Realtors accessing your home; do you have family pets? While we all love our pets, prospective buyers may have fears. Large dogs with free run of homes is a very common occurance. It seems like the larger the dog the more liberty the owners give their pet(s) inside their homes.

I am helping three clients find a home in Simi Valley right now that have a fear of dogs and at least 30% of the homes we go to, have dog issues that distract my client’s full attention when looking at those homes. Other than your dog scaring my clients way from your home, the odor that an indoor pet creates is now noticeable to the pet owner, but can be another distraction to prospective buyers. Yes I know that your dog won’t hurt anyone and that your dog is the nicest dog on the planet, but prospective buyers with a fear of dogs really do not care about those claims. Those buyers will be so concerned about where you are keeping your dog, they never get to enjoy your home.

Last, appointments and limited access. The Lock box system we use in the Simi Valley Moorpark Association of Realtors is computerized and a secure system. The agent’s keys are electronically updated every 15 mins when on and will update when turned on so it is very easy to lock out problem agents. Their is a CBS code (Call Before Showing) that can

be given to the agents before they come over to see your home. The importance of using the computerized boxes we use in the Simi Valley Moorpark Association of Realtors is that a report of who has been in your home is available daily. Also the key automatically calls the system after it is used to open a lockbox and the Listing agent receives an email notification of the showing. Most agents now carry Android, iPhone or Blackberry and can access email at any time.

While I understand the different reasons why sellers would like appointments and a restriction, please remember there are many other homes out there that are easier to see.

Putting all together….Keep your house clean, manage your family pets and make it easy for buyers to access your home. If you remove these obstacles, that will be the first step towards getting more people to show your home and be interested after they have visited.

See Related Articles:

Filed Under: Sellers Tagged With: Buyers, home, homes, lcok box, prospective buyers, real estate, Simi Valley

Inexpensive ways to increase the value of your Simi Valley Home (Part I – Video Below)

November 23, 2009 By Ted Mackel 2 Comments

Looking for inexpensive ways to make your Simi Valley home more attractive for buyers?

But wait a minute, aren’t homes selling with multiple offers, bidding wars and buyers being left out? Certainly in the lower price ranges homes are selling quickly and with multiple offers; however, homes in all price ranges with serious deferred maintenance and other issues are being scrutinized by buyers and sometimes left on the market.

A factor that has become glaringly obvious is that homes in the lower price ranges that do not sell in the first 30 to 60 days end up with a scarlet letter that causes buyers to be very cautious before proceeding.

So what can you do to get your Simi Valley house ready and not have it cost you a fortune?

Curb appeal – First Impressions are important in any market. What does your house say when buyers drive by?

There are two categories under curb appeal in which to view your home.

First is the landscaping

Trees are the most overlooked and poorly planned landscaping item at most homes. Many times the tree species was too large for the yard to begin with or was misplaced in the yard. There are what I call the “volunteers”, these are the trees that are grown from seeds that are deposited in your yard from bird droppings. Most of these volunteer type trees are fast growing deep rooted and destructive, as the birds sit on rain gutters, utility lines, roof edges fences and deposit the seeds where they grow and breakup sidewalks, perimeter walls and fences, impact foundations, grow up against the roof, and rub up against the house. I’ve seen were large trees over the course of years have rubbed the stucco color coat off the side of homes.

Most home owners do not understand that when they plant a tree in their yard, that will need to be pruned and maintained every few years. If not, they will overgrow and create far more costlier problems than the cost to prune and maintain the trees. See this example of how a poorly placed and improper species planting in my yard by the previous owner created a big time maintenance issue. Trees and Overhead Power Lines

Overgrown shrubs and trees negatively impact the growth of your lawn as fallen leaves and lack of sun kill off portions of the lawn. Trimming the trees and shrubs will make a huge difference in the appearance of your home.

Make sure that all dead branches are removed from the trees and that the trees are pruned and thinned. Check the shrubs and planters removing old worn-out plants and weeds. Any shrubs that are growing up and blocking Windows and pathways need to be cut back. If you enjoy potted plants, make sure that you are not overcrowding the front of your house and even the front doorway with too many potted plants.

Depending on the season, after you get your yard cleaned up, perennial flowers such as lavender, gold strum, daisies, asters, chrysanthemums or hibiscus can be picked up at places like the Simi Valley Home Depot, Lowe’s or the Do It Center in flats very inexpensively.

If the time of year is right to bring in some new plants and color, make sure your sprinkler system is working.

Second is the exterior appearance of your Simi Valley house.

The condition of your roof - If your roof is visible and made of composition shingles, consider a tuneup for these types of roof systems 10 or more years old. A roofer can install new Ridge caps, check and seal roof Jack flashings, chimney flashings, and drip edge flashings. If your roof has turbine venting these can be checked adjusted and or replaced if necessary. On my house I had all the equipment, pipes and the flashing painted a matching brown. The new Ridge caps and freshly painted vents made my 15 year old roof look almost new. Fascia boards and the eaves with peeling and worn-out paint provide perfect attack points for wood destroying organisms such as dry rot and termites. Unprotected wood in the Southern California sun can be damaged quickly. Along with the fascia boards and eaves, the trim around the Windows and doors may need attention too.
The front door - If your door is dirty and the paint is still intact, dust, shoe marks, and handprints should be cleaned off the door. If the paint or finish is peeling and/or worn off, the door should be repainted. Make sure any screen doors, door bells and most importantly the doorknob and deadbolt are all in working order and not in disrepair. Also any keys you have made for the realt0r lockboxes should work without any problems. After a number of years, continual copies of keys can create difficult to open locks. A locksmith can come adjust the locks or you if you are handy, take the locks and deadbolts to a locksmith to have them keyed alike with a new key combo; which will generally charge approximately $10 per cylinder to have re-key.

After sprucing up the trim and front door you may want to wash the stucco and/or siding and any cobwebs in the eaves. If the stucco or siding is in poor condition repair and paint may be needed.

In the order of things to do here is how I would tackle my own Simi Valley home.

The front door-paint and/or clean and adjusts the locks.
Shrubs and planters-cleanup, spruce up and add color.
Trees-remove volunteers that have grown up too close to the house or fences.
Trees-prune overgrown trees that are blocking the view of the house.
Roof tuneup-replace Ridge caps.
Roof tuneup-paint flashings.
Cleanup, repair and paint exterior of home,

Depending on the interior condition of the home, maybe only several of the above items need to be taken care. An overall budget and plan for the interior and exterior preparation of your home needs to be compared to any kind of improvement of sale price you can anticipate for your home.

While the above outline has many items, you may have a home that only needs a few of the minor items dealt with before your home is placed on the market.

Put yourself in the shoes of a buyer and try to look at your house as a buyer would, critical, concerned and looking for issues that might aid their negotiations. Tackle those issues now and take those items off the negotiating table.

If you’d like a free evaluation of your home’s condition I’d be happy to come over and go through your home and give you some tips and ideas on how to improve that first impression.

For more tips and ideas see:

Search for Homes in Simi Valley California

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

Filed Under: Home Improvement, Sellers Tagged With: homes, house, landscaping, Simi Valley

A Fistful of Dollars – Part II (attn: Simi Valley – Loan Modification)

March 15, 2009 By Ted Mackel Leave a Comment

As you know, the Federal Government announced a wide variety of very important changes for homeowners last Wednesday, March 4. Simi Valley home owners can start working on your own loan modification right now but you will have to wait a little longer for the 105% refinances. In the interest of keeping this email as brief as possible I am only going to concentrate on the loan modification piece after I say a few words on the amazing refinance opportunities many of you will have very soon. 105% Loan-to-Value (LTV) refis are just around the corner but the lenders are not set up to take these loans yet. The general guidelines have been announced (and are VERY AGGRESSIVE!!) but the programs and pricing are not coming out for another few weeks. If any of that changes before then I will let you know. These 105% refis are available for every conforming loan, whether it be investor, second home or owner occupied. In some cases there are income waivers available and in some cases there will be appraisal waivers. The cost of these refis will be less than normal and the rates should be very competitive. This will be a life saver for many homeowners.

Important Notes for 105% Refis:

If you don’t have mortgage insurance on your current loan (AKA PMI or MI) then you don’t have to get new policy. This is HUGE as mortgage insurance is almost impossible to get these days and it will save you a lot of money every month if you don’t need it!

If you currently have mortgage insurance you will have to convince them to transfer the old policy to the new loan, much easier said than done. You will probably need our help to accomplish this without pulling your hair out.

If you have a second mortgage it will help and hurt you. While your LTV on your first is likely lower than 105% (the good news), you will have to convince the second mortgage to go back to second position (the bad news). This can be EXTREMELY difficult and you will need our help to get this done in many cases.

The Feds are encouraging 2nds to take a “buyout” (i.e. We owe you $50K on our 2nd mortgage but how about $5K and we call it even?). Participation is voluntary by the lenders and is hard to come by right now. You will need our help (did I say that already?) if you are going to get lucky enough to get a buyout. Save those pennies…

We are supposed to have these programs 4/4/09 or sooner. Most of these programs require a good payment history, you being current on your mortgage payment and your credit scores are still very important. While there is no minimum credit score, the guy with the 610 FICO will pay 3 points more than the guy with the 720 FICO (on a $400,000 loan that is $12,000!). Squeeze every last point out of your credit while you still have time and make those mortgage payments if you can. If you can’t then you are a better candidate for a loan modification.

Please call me if you have questions on the 105% refis right now. They will be available to everyone with a conforming loan very soon and are designed to lower your monthly expenses so that you can keep your home(s) without a lot of hassle. In many ways our government got this right except for the potential issues noted above.

On to loan modifications (AKA “Loan Mods”). These are really designed for “preventable foreclosures” and I have already had seemingly qualified people declined for these loan mods so be careful how you approach this. You have to demonstrate things have changed since you got your loan and you have to show financial hardship. If you aren’t having financial trouble (which is a good thing) then you are probably not a good candidate for a loan mod. In addition, these loan mods only last for 5 years in most cases so if your plan is longer term it’s best to consider a refi if you can get one. Be aware that you may have to prove everything you say on these loan mods in writing according to the guidelines so make sure you keep excellent notes on your conversations with the lender(s). I recommend you make a call log for every call, every person you talk to and make sure get their call center location in case you need to track them down again.

Loan Modification Guidelines:

The borrower must have had a change in circumstances that causes financial hardship, or is facing a recent or imminent increase in the payment that is likely to create a financial hardship (this means anyone with an ARM that will adjust is eligible). The lender must ask about current income and assets and current expenses as well as the specific circumstances relating to the claimed financial hardship. Each of these elements shall be verified through documentation.
The home must be an owner occupied.
The home must be a primary residence (verified with tax return, credit report, and other documentation such as a utility bill).
Borrowers in bankruptcy are not automatically eliminated from consideration for a modification.
First lien loans must have an unpaid principal balance (prior to capitalization of arrearages) equal to or less than $729,750.
Loans can only be modified under the ”Home Affordable Modification” program once.
Subordinate liens are not included in the Front-End DTI calculation, but they are included in the Back-End DTI calculation (see below).
Servicers are required to”escrow” for modified borrowers’ real estate taxes and mortgage-related insurance payments immediately. This means every modified loan will have “impounds” and you will have to pay your taxes & insurance monthly moving forward.
Redefaulting Loans will be terminated from the program, and no further payments of any kind will be made to the lender/investor, servicer, or borrower. Redefaulting Loans should be considered for other loss mitigation programs prior to being referred to foreclosure.
The investor may not require the borrower to contributeany cash to close the loan mod.
Unpaid late fees will be waived for the borrower. These include late fees prior to the start of the Trial Period and accrued during the period.
The borrower’s income will be verified by requiring a signed Form 4506-T (Request for Transcript of Tax Return) and obtaining the most recent tax return on file for each borrower on the note. For wage earners, the two most recent pay stubs for each wage earner on the note will also be required. For self-employed borrowers or for non-wage income, the borrower’s income will be verified by obtaining other third party documents that provide reasonably reliable evidence of income. Borrowers must also represent and warrant that they do not have sufficient liquid assets to make their monthly mortgage payments. Better hide those millions!
You do not have to trash your credit to be eligible, if you meet the hardship requirements you can still keep up your credit.
There are no modification fees or charges borne by the borrower.

Front-End Debt-To-Income (DTI) Target:

These loan modifications are designed to get your payment to 38% of your gross income. Here is the easy way to figure that out: Take your current gross income and divide by 12 then multiply that number by .38. That is your new target payment including your principal, interest, taxes, insurance and HOA fees (PITIA). For example: You make $60K per year which is $5000/mo x .38 = $1900/mo target payment.

Mortgage insurance premiums are excluded from the PITIA calculation.
The Front-End DTI Target is 31%. The government and your lender will contribute additional monies after you make your first 3 payments on time to get your payment to 31% DTI (In our example new payment reduced to $1550 if you make your first 3 payments on time).
The minimum interest rate “floor” on these loan mods is 2% with no exceptions, your rate might be higher but not any lower. This means that if our payment of $1900 requires a 1% interest rate instead of 2% or more then you will not get the loan modification unless they forgive you enough principal to qualify or if the lender defers a portion of your principal. This might add another layer of complicating factors but at the end of the day, if you are successful with this you will be very happy.
Some borrowers will be required to work with a HUD approved counselor if their other debts are too high and the loan modification will not take effect until they provide a signed statement indicating that they will obtain counseling.
In many cases you will get $1000 each year for the next 3 years if you remain current on your loan mod.

Interest Rate Cap:

The modified interest rate must remain in place for five years, after which time the interest rate will be gradually increased 1% per year or such lesser amount as may be needed until it reaches the Interest Rate Cap.
The Interest Rate Cap for the modified loan is the lesser of ( A ) the fully indexed and fully amortizing original contractual rate or ( B ) the Freddie Mac Primary Mortgage Market Survey rate for 30-year fixed rate conforming mortgage loans, rounded to the nearest 0.125%, as of the date that the modification document is prepared.

What if you don’t qualify:

The lender/investor must seek other foreclosure prevention alternatives, including alternative modification programs, deed-in-lieu and short sale programs.

To Wrap This Up:

I know there is a lot to digest here, please feel free to email me or call me with any questions. We, here at Sherwood, want to help you as much as possible but we don’t do these loan mods for any sort of fee, we actually help you for free. People ask me why I don’t charge for any of this and I respond that we do a ton of things for our clients for free and helping them is one of those things. I spend at least 20% of my time doing free things for people and that is not about to change.

We will certainly help you through the loan mod process but we absolutely can’t do it for you nor do we believe you should pay someone to do thisfor you, you are more than capable! Many of these so called loan mod companies are just fee generating machines that do very little for their clients and keep most of their “money back guarantee” money (read the fine print). If you do find you need professional help I have a local law firm I can refer you to that I trust. Otherwise, this whole thing is much cheaper and safer to do on your own. I have heard stories of these things only taking a few hours in many cases. I think we all have a few hours to improve the course of our lives in these uncertain financial times.

I will be in touch soon with more news on the 105% refis as well as a few stories to share on loan mods. Until then, please feel free to contact me with anything I might do for you, your friends, your family and your co-workers. Rates are still phenomenal and you can always count on us to give you the right advice.

Talk to you soon!

Michael Chabot
Mortgage Professional
100 E. Thousand Oaks Blvd., Suite 210
Thousand Oaks, CA 91360
(805) 496-5415 ext. 19
www.sherwoodmtg.com

See Related Stories from Michael Chabot: A Fist Full of Dollars – Part I Foreclosure Pevention Act 2008

Filed Under: Money matters Tagged With: homes, Loan modification, real estate, reifinance, Simi Valley

Simi Valley Moorpark Real Estate YTD Sales Report through February 2009

March 4, 2009 By Ted Mackel Leave a Comment

Simi Valley Moorpark Real Estate YTD Sales Report through February 2009

The Headline for Simi Valley Moorpark Real Estate is…..”NOT MUCH HAS CHANGED”. That is except for inventory continues to shrink. Typically shrinking inventories favor sellers with modest increases in pricing, but the combination of tight lending criteria, our recession/depression, unemployment now over 10% in the State of California and a glut of Foreclosed – Short Sale properties for sale; Buyers remain cautious and bearish. Sure you will hear some hype about multiple offers and Buyers having a hard time getting an offer to go through, but if you look at the over all picture, the numbers for Simi Valley Real Estate show that we are about where we started off last year (2008). The following Simi Valley Moorpark Real Estate YTD Sales Report is created by myself and posted monthly on this blog. Make sure to look though the Market Updates Category for past reports and trending.

If you are in the market to buy a house and you have missed out on one or more properties, be patient and don’t just settle for a house because of the pressure from other buyers. Many times there are much better homes in tip top shape that are getting overlooked because of the action on the Foreclosed and Short Sale homes. The lure in a lower price will be offset by numerous repairs and home improvements you will have to deal with, as deferred maintenance is typical of Short Sale and Foreclosed homes.

Be sure to subscribe to this blog on the upper right hand side of the page either by email or RSS feed as I will be posting pictures of some of the serious issues I am seeing in foreclosed homes, that will cost thousands of dollars to repair.

Activity – Single Family Detached Homes

Active Listings	Simi Valley	Moorpark
Active
# Units	401	135
Average List Price	557,286	858,660
Average Days Listed	125	103

Pending Sales in Escrow
# Units	92	25
Average List Price	443,676	589,418
Average Days on Market	73	85

Total Closed Sales for 2008
# Units	127	32
Average List Price	447,420	524,767
Average Sold Price	437,360	509,175
Average Days Listed	81	75

Average Closed Sales per month	63.5	16
Unsold Inventory Index (in months)	6.31	8.44

Activity – Single Family Attached Homes

Active Listings	Simi Valley	Moorpark
Active
# Units	125	28
Average List Price	317,530	281,517
Average Days Listed	148	112

Pending Sales in Escrow
# Units	17	14
Average List Price	255,782	241,999
Average Days on Market	120	77

Total Closed Sales for 2008
# Units	20	15
Average List Price	255,935	268,223
Average Sold Price	251,228	263,540
Average Days Listed	75	118

Average Closed Sales per month	10	7.5
Unsold Inventory Index (in months)	10.6412.5	3.73

Filed Under: Market Updates Tagged With: homes, housing, Market Updates, Moorpark Market update, real estate, Simi Valley

Simi Valley Housing Sales Volumes 2006-2009 (Easy Charts)

February 10, 2009 By Ted Mackel Leave a Comment

Simi Valley Housing Sales Volumes 2006-2009 (Easy Charts)

Each month I prepare my market updates which can be found in the Market Update section of my blog under Catagories. I also track on a spread sheet the volumes so I can compare yearly volumes by month and try to spot any trends. Below are the updated charts (done in Apple iWork 08).

simi valley housing volumes sales for 2006-2009