Buying a home - what size will your down payment be?

Mortgages - A Down Payment Anomaly - NYTimes.com

HOME buyers are often advised to come up with at least a 20 percent down payment, or face the likely additional expense of private mortgage insurance. But this year, at least, that counsel would not have saved them as much money as in the past.
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Rules put in place in late 2008 by Fannie Mae and similar rules adopted by Freddie Mac are less favorable to borrowers who put down 20 percent to 25 percent, considered to be the industry minimum. (Fannie and Freddie are the government-controlled companies that establish the underwriting standards for most of the nation’s loans.)

For most people, it turns out, smaller down payments result in lower interest rates. Whether that benefits borrowers in the long term, though, is open to debate.

What happens to the recovery if the FHA runs out of money?

FHA loans have driven this market recovery. 

REALTOR® Magazine-Daily News-Will Taxpayers Have to Bail Out FHA?

Will Taxpayers Have to Bail Out FHA?
The Federal Housing Administration stepped up to guarantee low-downpayment mortgages for riskier buyers after the mortgage market crashed. Now with many of them in default, the FHA’s losses have mounted, and it’s possible that its reserves will fall below the 2 percent level required by law. If that happens, taxpayers may have to bail out FHA.

Some housing analysts say that this will lead to tighter restrictions on FHA mortgages.

"It absolutely changes the political dynamic once you have to ask taxpayers" for money, says Lisa Marquis Jackson, vice president for John Burns Real Estate Consulting.

The 10 states with the most FHA-insured mortgages are:

1. Texas
2. California
3. Florida
4. Georgia
5. Ohio
6. Illinois
7. Pennsylvania
8. Michigan
9. Virginia
10. North Carolina


Source: The Wall Street Journal, Nick Timiraos (09/05/2009)

REALTOR® Magazine-Daily News-Option ARMs Put Recovery at Risk

REALTOR® Magazine-Daily News-Option ARMs Put Recovery at Risk: "“Everyone’s been focused on subprime, but we’re more concerned about this,” says Todd Jadlos, managing director of LPS Applied Analytics, which analyzes data for the financial industry. “By the time subprime defaults had increased 200 percent, in June and July of 2007, option ARMs had gone up 400 percent. People just didn’t notice because the overall numbers weren’t as high.”"

REALTOR® Magazine-Daily News-Foreclosure Bargains Are Disappearing

REALTOR® Magazine-Daily News-Foreclosure Bargains Are Disappearing: "Foreclosure Bargains Are Disappearing
Buyers of foreclosure have to be quick these days. Some houses go under contract fewer than 90 minutes after they are put on the market, says Brad Geisen, founder of Foreclosure.com.

'For every listing that comes out, we have 10 buyers,' says Cesar Dias, an associate with Approved Real Estate Group in Stockton, Calif.

Dias had 15 minutes of fame after introducing foreclosure sales tours last year. Now the tours are defunct because there are not enough homes to show.

'We had a lot of inventory last summer. Now we're down to 1,500 listings — from more than 5,000,' Dias says.

In Florida, real-estate investment companies, buying in bulk and paying cash, face competition"

foreclosure info

REALTOR® Magazine-Daily News-Pending Home Sales Continue to Climb

REALTOR® Magazine-Daily News-Pending Home Sales Continue to Climb: "Daily Real Estate News | August 4, 2009 | Share
Pending Home Sales Continue to Climb
Pending home sales are up for the fifth consecutive month, the first time in six years for such a streak, according to NAR.

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in June, rose 3.6 percent to 94.6 from an upwardly revised reading of 91.3 in May. The index is 6.7 percent above June 2008 when it was 88.7. The last time there were five consecutive monthly gains was in July 2003.

Lawrence Yun, NAR chief economist, says a combination of positive market factors is fueling the gains.

“Historically low mortgage interest rates, affordable home prices, and large selection are encouraging buyers who’ve been on the sidelines,' he says. 'Activity has been consistently much stronger for lower priced homes. Because it may take as long as two months to close on a home after signing a contract, first-time buyers must act fairly soon to take advantage of the $8,000 tax credit because they must close on the sale by November 30.”"

REALTOR® Magazine-Daily News-6 Reasons Why Some Homes Sell

REALTOR® Magazine-Daily News-6 Reasons Why Some Homes Sell: "* Lousy pictures on the Web.
* Priced too high for the neighborhood.
* Blah interior; ho-hum landscaping.
* Little online marketing and hard-to-find MLS listings.
* Low commissions. Practitioners make sure their customers see properties that offer a payoff.
* Miserable maintenance, including ceiling stains, leaky faucets, and ancient furnaces."

orange county short sale info

Selling short can be scary - Sacramento Business, Housing Market News | Sacramento Bee

Home Front: Selling short can be scary - Sacramento Business, Housing Market News | Sacramento Bee: "A second concern

People trying to do short sales also are worrying about reports that some lenders are selling second mortgages – typically the down payment loan – to collection agencies. They fear that in three or four years those agencies will be on the phone seeking payment.

Hainsworth confirmed it's happening. Elk Grove bankruptcy attorney Jonathan Stein said the owner of a 'second' has up to four years after the default date to collect. He said it's critical that your real estate agent negotiates a solution to the second.

Stein fears some people will rebuild credit scores after the hit of a short sale only to file bankruptcy when confronted later by a collection agency."

For more info about proper short sale negotiation