Real Estate blog in the San Francisco Bay Area - Michael Koenig author

Safety Advice for Space Heater Use

November 22, 2011 By Michael

Space heater safety tips Space heaters are popular among homeowners in Fremont because, as portable appliances, they can heat a small space quickly and inexpensively. It requires less energy to run a space heater than to raise the temperature of an entire home by a few degrees.

However, space heaters can be dangerous, too.

In its November 2011 report, the National Fire Protection Association reveals that heating equipment was involved in an estimated 58,900 home structure fires, 480 civilian deaths, 1,520 civilian injuries and more than $1.1 billion in damage.

Space heaters caused a disproportionate percentage of the accidents :

79% of all home heating-related civilian deaths
66% of all home heating-related civilian injuries
52% of all home heating-related property damage

If you use space heaters, therefore, please remember to read (and follow) the manufacturer’s instructions for proper usage, and to obey basic safety standards.

First, never place anything flammable within three feet of a space heater. Space heaters get very hot, very quickly and can ignite rugs, paper and curtains.

Next, make sure your space heater is placed on the floor, on level ground. Do not rest it on books, or on furniture.

Also, make sure to turn space heaters off when leaving a room, or when going to bed. Space heaters are not meant to replace whole-home heating and should not be left unattended under any circumstance.

The Underwriters Laboratory makes a list of general safety tips available on its website. Considering how much damage space heaters can cause, the list is worth committing to memory.

Filed Under: Around The Home Tagged With: Home Safety, NFPA, Space Heater

Additional HARP Guidance For Underwater Homeowners

November 16, 2011 By Michael

Tuesday, Fannie Mae and Freddie Mac unveiled lender instructions for the government’s revamped HARP program, kick-starting a potential refinance frenzy across California and nationwide.

HARP stands for Home Affordable Refinance Program. The updated program is meant to give “underwater homeowners” an opportunity to refinance at today’s low mortgage rates.

In the two-plus years since its launch, HARP’s first iteration helped fewer than 900,000 homeowners. HARP II, by contrast, is expected to reach millions.

Lenders begin taking HARP II loan applications December 1, 2011.

To apply for HARP, applicants must first meet 4 basic criteria :

The existing mortgage must be guaranteed by Fannie Mae or by Freddie Mac
The existing mortgage must have been securitized by Fannie Mae or Freddie Mac prior to June 1, 2009
The mortgage payment history must be perfect going back 6 months
The mortgage payment history may not include more than one 30-day late payment going back 12 months

If the above criteria are met, HARP applicants will like what they see.

For HARP applicants, loan-level pricing adjustments are waived in full for loans with terms of 20 years or fewer; and maxed at 0.75 for loans with terms in excess of 20 years.

This will result in dramatically lower mortgages rates for HARP applicants — especially those with credit scores below 740. Some applicants will find HARP mortgage rates lower than for a “traditional” conventional mortgage.

In addition, HARP applicants are exempted from the standard waiting period following a bankruptcy or foreclosure, which is 4 years and 7 years, respectively.

These two items are inclusionary and should help HARP reach a broader U.S. audience.

HARP contains exclusionary policies, too.

The “unlimited LTV” feature only applies to fixed rate loans or 30 years or fewer. ARMs are capped at 105% loan-to-value.
Applicants must be “requalified” if the proposed mortgage payment exceeds the current payment by 20%.
Applicants must benefit from either a lower payment, or a “more stable” product to qualify

And, of course, HARP can only be used once.

Fannie Mae and Freddie Mac will adopt slight variations of the same HARP guidelines so make sure to check with your loan officer for the complete list of HARP eligibility requirements.

Filed Under: Mortgage Guidelines Tagged With: FHFA, HARP, Home Affordable Refinance Program

Foreclosures Filings Up in California…And Growing.

November 15, 2011 By Michael

Foreclosures per capita October 2011

Four States Account For Half Of Nationwide Activity
Foreclosed homes are a hot market throughout California — and supplies are ramping up.

According to foreclosure-tracking firm RealtyTrac, October’s foreclosure filings rose 7 percent to 231,000 filings nationwide.

A “foreclosure filing” is any one of the following foreclosure-related events : A default notice on a home; a scheduled auction for a home; or, a bank repossession of a home. Because of this definition, a single home can account for up to 3 foreclosure filings — one from each category.

Because of this, we may glean more relevant insight into the foreclosure market by separating RealtyTrac’s foreclosure report into “event types”.

Default Notices : Up 10% from September 2011; Down 31% from October 2010.
Scheduled Auctions : Up 8% from September 2011; Down 38% from October 2010.
Bank Repossessions : Up 4% from September 2011; Down 27% from October 2010.

These breakdowns suggest that, although improved as compared to last year, the foreclosure market is growing. At least, it’s growing in some parts of the country. We can’t forget that — like everything real estate — foreclosures are a local phenomenon.

In October, just 4 states accounted for more than half of the country’s foreclosure filings. Those four states — California, Florida, Michigan and Illinois — represent just 26% of the U.S. population.

Even on a per household basis, the figures remain disproportionate :

Top 10 Foreclosure States : 1 foreclosure per 341 households, on average
Bottom 10 Foreclosure States : 1 foreclosure per 7,434 households, on average

The nationwide foreclosure rate was 1 foreclosure per 563 households.

As a Bay Area home buyer, foreclosures are worth watching. They account for 18% of home resales nationwide and, in some markets, can be bought at steep discounts versus a comparable “non-distressed” home. That is part of their appeal, in fact.

But just because foreclosed properties can be a “deal”, it doesn’t mean you should rush to buy one. Buying a foreclosed home from a bank is different from buying a non-foreclosed home from a “person”. The contracts and negotiation process are different, and foreclosed homes are sometimes sold as-is.

“As-is” means “this home may have defects”.

Therefore, if you plan to buy a foreclosed home, talk with a real estate professional first. You can learn a lot about the housing market online, but with respect to writing an offer on a property, you’ll want an experienced agent on your side.

Filed Under: Housing Analysis Tagged With: foreclosures, RealtyTrac, REO

Want to Buy a Home? Good Luck Getting a Loan.

November 10, 2011 By Michael

Mortgage guidelines get tougher

As part of its quarterly survey to member banks nationwide, the Federal Reserve asked senior loan officers whether last quarter’s “prime” residential mortgage guidelines have tightened, loosened, or remained as-is.

A “prime” borrower is defined as one with a well-documented, high-performance credit history; with low debt-to-income ratios; and who chooses to finance a home via a traditional fixed-rate or adjustable-rate mortgage product.

After a 2-year easing cycle, the nation’s biggest bank banks report that they’ve reversed course, and are raising the bar on mortgage approvals.

For the period July-September 2010, 88% of responding loan officers admitted to tightening their prime guidelines, or leaving them “basically unchanged”.

If you’ve applied for a home loan of late, you’ve experienced this first-hand.

High delinquency rates and defaults since 2007 have caused the banks to rethink what they will lend, and to whom. As a result, today’s mortgage lenders scrutinize assets, incomes, and credit scores to make sure that nothing “slips by”.

For today’s home buyers and would-be refinancers, the mortgage approval process can be challenging as compared to how it looked just 18 months ago.

Minimum credit scores requirements are higher today
Downpayment/equity requirements are larger today
Debt-to-Income ratio requirements are more strict today

In other words, although mortgage rates are the lowest that they’ve been in history, fewer applicants can qualify. And, with more the housing market still in recovery, it’s likely that guidelines will tighten again in 2012.

Therefore, if you’re among the many people in East Bay wondering if it’s the right time to buy a home or refinance, consider that, although mortgage rates may fall, approval standards may not.

The best rate in the world won’t matter if you’re not eligible to lock it.

Filed Under: Mortgage Guidelines Tagged With: Federal Reserve, Prime Mortgages, Senior Loan Officer Survey