by CRESTICO | Jun 9, 2009 | CRESTICO
The National Association of Realtors has a message it would like to get across and that message is that "America needs Fannie and Freddie." Who are these people that we have been hearing a lot about in the news lately? They are Fannie Mae and Freddie Mac.
According to Realtor Frances Martinez who was the speaker representative at a House Financial Services Subcommittee hearing on June 3, 2009, "Fannie Mae and Freddie Mac serve an important role in expanding homeownership and providing a solid foundation for our nation's housing financial system…Unlike private secondary market investors, Fannie and Freddie remain active in housing markets during downturns, using their federal ties to facilitate mortgage finance and support homeownership opportunities for all qualified borrowers."
Fannie and Freddie are government sponsored organizations that basically insure the success of our nation's housing system, the cornerstone of our economy. Fannie and Freddie work to make sure that all Americans have and will continue to have access to the fair and affordable mortgages. Just think, without Fannie and Freddie, when the market crashed, there would have been no alternative and all housing sales would have essentially come to a dead stop and this would have thrown our country into a deeper economic crisis.
All in all, Fannie and Freddie basically guarantee that there will be a secondary mortgage markets where people can safely and securely buy their homes and achieve the American dream. Getting a mortgage can be a scary thing. Thankfully, we have a country, a government and a system in place to make sure that the days of predatory lending and fraudulent behaviors in the lending industry are behind us.
by CRESTICO | May 13, 2009 | CRESTICO
Starting the Home Buying process
Choose a professional who specializes in residential Real Estate. She or he should have specific knowledge of the local real estate and mortgage markets.
Consider references carefully. An experienced, confident Agent can provide you with names of recent buyers in your market with whom he or she has worked.
Select a professional who will listen to you. Your Agent should be interested enough in you to find out about you and your housing needs and preferences.
Select a professional who puts service first. Strong customer service is key in today's real estate business. For Crestico Real Estate Agents, this service goes above and beyond giving buyers only what they expect and need. Your Crestico Real Estate Agent can show you any house that's for sale in your market – not just the homes listed by our company. If you see a house for sale that you like, arrange a viewing through us.
by CRESTICO | Apr 3, 2009 | CRESTICO
Is It A Good Time To Buy A Home?
The simple answer is YES! It is still a good time to buy a home. With the help of the right agent, you can make this "good time" into a "great time" for you and your family. The news is full of stories about the housing crisis, homeowners losing their homes, and the overall bad state of the economy. Not all of this news, however, has to translate into dissuading you from buying a home. In fact, right now is a very good time, especially for some, to jump in and achieve the American dream of home ownership. As of late, the housing market is starting to look better. Read on for more information about why it is still a good time to buy a home.
First, the government is looking to help you. If you are a first time buyer (which, to the government, is defined as anyone who has not owned a home in the last three years), you are entitled to a maximum $8,000 tax credit. Additionally, Interest Rates are at all-time lows and the Federal government is taking steps to insure and make these loans available to more and more people.
Leverage. Leverage is defined basically as borrowing money to supplement existing funds for investment. Imagine if you invested ten thousand dollars in stocks and those stocks earned ten percent, you would have earned one thousand dollars. But investing ten thousand dollars on a home, and having that home’s value increase ten percent; effectively, you would have earned ten thousand dollars. Which sounds like a better investment to you?
Next, you have to live somewhere. And so does everyone else. According to nationwide statistics, approximately 800,000 new households are created each year in the United States alone. Each of these households will need housing, regardless of the state of the economy. This fact alone ENSURES the recovery of the housing market.
Cycles. The economy is a cycle, and like a cycle, what goes down must come back up. Once this happens, it will create INSTANT equity for you. That means you will have earned FREE money just by living in your home, which you are going to do regardless of where you live. Why not buy a home and earn free money in the process?
Mortgages. Many people think a mortgage is just like paying rent, right? WRONG! With the right fixed-rate mortgage, you are basically ensuring the same payment for thirty years. If you try to rent an apartment for thirty years, odds are that every year or so, your rent will be increased. That does not happen with mortgages.
Ownership. Owning a home is a GREAT accomplishment and it allows you to express yourself in the best way possible. You can decorate it any way you want, furnish it, paint it, and improve it and all the while you will be increasing its value and the value of your investment. Ownership also gives you and your family a sense of stability and a place to lay your roots.
These are only a FEW of the reasons why right now is a good time to buy a home. A qualified agent will be able to answer any questions you may have and also give you more reasons to consider investing in your next home!
by CRESTICO | Feb 28, 2009 | CRESTICO
What is a Loan Modification?
Loan Modifications are something you have been hearing much about lately. Often, the people advertising these modifications do not explain the process clearly before they gather your information. Here is an easy to understand explanation of what a Loan Modification is.
Basically, a Loan Modification (called Loan Mod, for short) is a process that an attorney or other Real Estate professional will use to “modify” the terms and conditions of an existing loan. Currently, most of these modifications are being applied to mortgages, but could potentially be applied to any type of loan. This modification in terms generally only takes place AFTER the issuer of the loan (the lender) has granted approval to do so. Approvals are generally based on comprehensive review and consideration of all material factors.
A common reason for the request and subsequent approval of a modification arises from some sort of financial hardship that affects the borrower’s ability to repay the loan. In the current economy, where layoffs are becoming more prevalent and more and more borrowers are entering the many stages of foreclosure, many borrowers are facing very real and legitimate hardships that severely impact their ability to repay their loan obligations.
When lenders are considering granting modification approvals, they will often consider the borrower’s payment history and standing with respect to the subject loan. Most borrowers are diligent and make the appropriate payments in an appropriate manner. This will often help the lender to choose to allow a modification rather than institute a foreclosure. The foreclosure process is a timely and expensive method for recovering the property. Also, it should be considered that in the current market, lenders have many properties that are non-performing, which is to say that they have been foreclosed or abandoned, and modification may be the lender’s only option to keep a borrower paying.
Another factor lenders consider in granting approvals is, should such approval be granted, will the borrower be able to begin and continue making payments in a timely fashion under the new terms. Generally, to secure a modification, a borrower must be able to demonstrate some ability to overcome the current financial hardship and ensure that he/she will be able to pay back the loan in an acceptable manner.
Modifications may take shape in different forms. Once a lender has decided to grant approval, this approval may be either to lower the monthly payment amount, thereby making it easier for the borrower to stay current. In this case, the difference in the amount of the payments will be added to the “back end” of the loan, thereby extending the term of the loan. Also, a lender may decide to lower the interest rate on the loan, thereby reducing the payment with no addition to the total loan amount, lowering only the amount of interest paid.
Mitra Karimi-Paydar
Crestico Realty
(310) 362 – 0828 (TEL)
(877) 881-2929 (FAX)
mitra.karimi@crestico.com
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by CRESTICO | Feb 12, 2009 | CRESTICO
Foreclosure Moratorium: Good Thing or Bad Thing?
Today, the news reported that foreclosure figures were down for the month of January. The Riverside and San Bernardino areas of California have been some of the hardest hit areas when it comes to struggling homeowners and foreclosures. Record numbers of defaults and foreclosures have been reported. Press Enterprise reported that there were 17,629 foreclosure-related actions in Riverside and San Bernardino counties in January, according to a report released by RealtyTrac, an Irvine-based firm that markets properties online. That is 8 percent less than December in the two Inland counties but about 40 percent more than January 2008. Recently, mortgage giants, Freddie Mac and Fannie Mae imposed a moratorium on foreclosures, effectively barring lenders from foreclosing on any properties.
Although this may sound like a good thing, it may not be. Stopping foreclosures with a moratorium, may not be the answer to our mortgage crisis. Even though the numbers of foreclosures have been reduced, this reduction may not necessarily lead to the solution of the crisis because moratoriums often add costs to the foreclosure process and leave servicers and borrowers with effectively "bigger" bills to pay. Additionally, moratoriums result in impediments on statutorily required actions like sending breach letters, notices of default, and debt accelerations.
Not allowing foreclosures to take place does not save homes where the property has been abandoned, converted and is not profitable, damaged, subject to code violations, and where borrowers may have sufficient income to pay their loans but choose not to because of the moratorium. Delaying foreclosure in these aforementioned cases will not only result in higher costs for servicers and borrowers but will also lead to the deterioration of the properties.
Furthermore, one definite side effect of moratoriums is an increase in the number of delinquencies and defaults. A moratorium essentially motivates the faltering borrower to stop making payments. Borrowers who were once stretching, working more hours, adjusting their lifestyles and even liquidating assets to make their mortgage payments to avoid foreclosure now have no motivation to pay their mortgages. Also, these borrowers will then face an increased risk of never being able to recover from their situations. As more penalties and fees are incurred and increased motivation is provided to stay delinquent, the chances for recovery become increasingly reduced.
Another unintended side effect is the undue pressure that will be put on the servicing companies of these loans. The cost to continue to advance principal, interest, tax and insurances payments during the time that borrowers are not paying will cause severe financial hardships for these companies, especially since they do not own the loans, but merely service them.
Ultimately, while the words sound like they hold the answer to the current crisis we are facing, one must look deeper into the proposed "solution" and truly reveal the impact that this "solution" will have on our society and economy. To further distress already distressed parties, in my opinion, would not present a solution to our crisis. While a moratorium is a good first step, it is only beneficial if we use the time to seek and find other answers to our problems that would result in actual positive results.
