Scores of Local schools

I realized that I needed to update my school scores! Here they are! I put my favorite schools on the list. All of the FUHSD and a few others in the area. Please let me know if you want any other schools!

New appraisals law.

According to a recent new Law by the Federal Reserve Board, the appraisal market has been hit with lower fees and new appraisal rulings.

1.Appraisal Fees that the Banks are charged have been reduced from $400.00 to $200.00. Which means that the Quality Appraisers are leaving the market since they will not reduce their income by 50%.
2. If an appraisal comes in low by an appraiser the bank can only have 2 appraisals and they have to take the lower one.

The result is that thee banks do not have enough appraisers to process the current loans so we are being advised to lengthen our contingency times to 25 days since no closing are happening prior to 45 days and if you have a low appraisal from an inexperienced appraiser you must go and apply with a new bank to get a new appraisal.
Which since there are only 4 banks to choose from is really tying our hands.

I was around in the 1990's when the banks lost 100K's of dollars due to a refusal to take 5K less and sat until the market dropped 100K more. I asked the Banks don't your stock holders see these losses and they replied "no" we right all of this off in the red and they just declare it. They never see that the process of foreclosures is the cause of it.

Well, here we go again in 2009. Banks take 2-3 months to get back to our buyers who have the 1st offer. By then the buyer sees prices dropping or a better buy and walks from the short sale or foreclosure and here we go again.

I had such high hopes that the short sales were going to be the cure of the foreclosure problems of the 1990's but the banks are self destructing again. This is not out of ignorance but out of fear. They get so scared about the market that they over compensate to the point where they choke the life out of the real estate flow and stop the process almost to a halt.

Hopefully, someone in the banking industry will use the expertise of a experienced Realtor and get this market flowing again before they cause another major price drop.

Median Prices up from last month

With more expensive homes selling better than they have in months, the median price of houses sold in the Bay Area rose last month compared to April

In the nine-county region, the median price of previously owned single-family houses that sold in May rose to $337,000 from $307,400 in April, according to MDA DataQuick, which gathers the data from public records. May's median price, however, was a drop of 37 percent compared to May 2008.

n recent months, sales of previously foreclosed homes in the Bay Area's less expensive communities have formed a large portion of sales, which has helped tug the median price down.

But in May, sales of more costly homes bounced back a bit, nudging the median price up. According to DataQuick, sales of homes in the $800,000-and-up price range rose to 13 percent of sales of previously owned houses, up from 10 percent in April and the highest level since October. Sales of houses for less than $400,000 fell to 58 percent in May, down from 62 percent in April and the lowest level since November.
In San Mateo County, the median price of previously owned houses was $601,000 last month, up from $550,000 in April, but down 23 percent from a year ago. Alameda County's median price was $330,000, up from $303,800 in April, but down 35 percent from May 2008. In Contra Costa County, the median price of $227,000 was up from $220,500 in April, but down 40 percent from May 2008.

Sales volume of all types of homes was higher in May this year than last in all Bay Area counties except Marin and San Francisco.

Change in Rules for Home-Buyer tax Credit!

In a policy change that could benefit thousands of people, the federal government announced Friday that its tax credit for first-time homebuyers can now be used to help pay closing costs on mortgages insured by the Federal Housing Administration.

The economic stimulus bill passed in February allows first-time homebuyers a tax credit equal to 10 percent of the home's purchase price or $8,000, whichever is less, when they file their federal income taxes. But under the plan announced Friday, buyers using FHA-insured loans will be allowed to treat the tax credit as additional down payment funds, or use it to pay for the closing costs that are typically incurred when a mortgage is funded.

"Families will now be able to apply their anticipated tax credit toward their home purchase right away," said Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, which oversees FHA.

Donovan announced the new use for the home-buying tax credit at a meeting of the National Association of Home Builders' board of directors, in Washington, D.C.

He also said the government is putting "safeguards in place" to ensure that lenders who are offering the tax-credit advances are not charging "excessive" fees for the service. In a letter to FHA-approved lenders, the agency said fees of more than 2.5 percent of the tax credit are excessive.

FHA loans are insured by the Federal Housing Administration and made through its approved lenders. The loans, whose upper limit is $729,750 in Santa Clara County, typically have lower interest rates than traditional mortgages.

Only qualified buyers using FHA loans can use the tax credit toward down payment or closing costs. Other buyers can take the tax credit when they file their income tax returns.

A few weeks ago, the housing industry was abuzz with news that FHA might allow borrowers to use the tax credit to replace the 3.5 percent minimum down payment required for FHA-insured loans. But the government quickly backpedaled on that idea, which would have resulted in more no-money-down, foreclosure-prone mortgages.

Friday, Donovan specified that FHA borrowers will still need to make down payments of at least 3.5 percent of a home's purchase price. But the tax credit can be used as an additional down payment amount, which may help borrowers secure a lower interest rate on their loans. It may also be used to pay for closing costs — such as the fees charged for title searches or mortgage applications — which sometimes total thousands of dollars.

Local real estate agents said the change to the tax credit program will help the local housing market somewhat.

"Overall, it is a good thing," said Karl Lee, a Milpitas broker who is president-elect of the Santa Clara County Association of Realtors.

But the change won't affect the current market for bank-owned properties, he said. Recently in Santa Clara County, banked-owned, post-foreclosure properties have been garnering multiple purchase offers. And the banks prefer to accept offers on their "REO" (real-estate-owned) properties from non-FHA borrowers when possible, he said, because FHA loans usually take longer to close than traditional loans.

"It may not help with the REO piece of the market," he said of the new use for the tax credit, "but for the rest of the market it will be a positive impact."

The tax credit applies to home purchases that close before Dec. 1.

What the heck is an Escrow?

Many of my posts that answer questions are derived from clients asking me questions. Just today I had a first time buyer ask me what Escrow is. I realized that people not in the profession might not fully understand the nature of escrow.

Help from lending tree gave me this!

If you've ever made an informal bet with a friend, you may have asked a third person to hold the money until the wager was resolved. When you take out a mortgage to buy a home, you're doing something similar by opening an escrow account.

How it works

When you put money in escrow it is held by a neutral third party (called an escrow agent) who works for both the lender and the borrower. The agent's role is to carry out the instructions agreed upon by both parties. The money is released when all the terms of the agreement are met. Escrow can be involved in anything from multimillion-dollar building projects to purchases made on online auction sites.

When it's used

When your mortgage closes, your lender will usually require you to open an escrow account to cover property taxes and homeowner's insurance. You'll make an initial deposit, followed by payments to the account every month. (Usually these are added to your regular mortgage payment.) The escrow agent will then release these funds as your taxes and insurance premiums come due.

Its purpose

The idea is to protect the lender by ensuring that you pay your taxes and insurance on time. If you default on your property tax, for example, your municipality can put a lien on the house, which would make it difficult to sell. Or if your house burns down and you've neglected to pay the insurance, the lender would be left with no collateral.

How you benefit

Escrow can benefit borrowers by helping them spread insurance and tax expenses evenly over 12 payments. For example, assume your yearly property taxes are two payments of $1,000 each, and your insurance is $400 annually. If you paid these directly, it would mean three large payments a year; your escrow costs, however, would be a manageable $200 a month.

Escrow payments

Your escrow account will have a built-in cushion -- if you miss a payment, the lender must still be able to pay your accounts on time. However, federal law prohibits lenders from requiring more than two months. expenses in escrow. And because your tax and insurance costs will change slightly from year to year, the lender will review and adjust your escrow payments annually.

When escrow may be waived

In most states, the money you place in an escrow account earns no interest for you. For that reason, many borrowers prefer to pay their taxes and insurance directly. Lenders may agree to this if your down payment is more than 20 percent, although some will raise your interest rate slightly to compensate. Once you agree to putting funds into an escrow account, however, it is difficult to cancel it, so make sure you fully understand the arrangement before your mortgage closes.

Prices are flattening.... bottom coming?

By Sue McAllister

After falling steeply for most of last year, median home prices in Silicon Valley have been flat for the past four months, according to a home sales report released Thursday. While that is a positive sign for homeowners, experts say a housing market recovery is distant, not around the corner.

The median price of single-family, previously owned homes that changed hands in Santa Clara County last month was $435,000, up 2 percent from March, but down 38 percent from April 2008, according to a report released Thursday by real estate information firm MDA DataQuick.

Since January, the median house price in the county has hovered in a narrow range between $420,000 and $435,000, while sales volume has increased from last year for several months. Economist Matthew Anderson of Foresight Analytics called that "a typical pattern in the early stages of a recovery."

A total of 1,171 previously owned single-family houses changed hands in the county last month, 27 percent more than in April 2008, the DataQuick report said. That marks the fifth consecutive month that sales volume has been up more than 20 percent on a year-over-year basis.

Condo sales in the county rose too, but only by 1.3 percent, to 318 units.
Across the nine-county Bay Area, sales volume of houses increased 28 percent in April from a year earlier, while condo sales rose 1.4 percent.

"Still, the sales volume is rather anemic, so we think it is too early to really call this a recovery," said Anderson, whose real estate research firm is based in Oakland. "The economy itself — that is, jobs — will need to recover in order to fuel a sustained recovery in the housing market."

The price trend for Santa Clara County condos and townhouses was similar to that for houses. The median price of condos sold last month was $255,000, up from $230,000 in March, but down 45 percent from a year earlier.

DataQuick reported that one reason median prices are flattening is that post-foreclosure properties — which are usually cheaper — make up a smaller proportion of home sales.

In April, 41 percent of previously owned homes sold in Santa Clara County had been foreclosed upon sometime in the previous 12 months. That was down from a high of 45 percent in January. For the Bay Area as a whole, foreclosures accounted for 47 percent of resales, down from a peak of 52 percent in February.

Rick Turley, president of Coldwell Banker for Northern California, said the number of foreclosure resales could go back up again later this year.

"We know there is a backlog of foreclosure properties that have not been released," he said. And though the introduction of those properties would nudge the median price downward, a recent spate of luxury-home sales will keep it stable, he said.
The median price represents the midpoint, meaning half the homes sold in a given period cost less than the median figure, and half cost more.
Meanwhile, sales of cheaper Silicon Valley homes are brisk, said Kurt Aichele of Thurro Realty in San Jose.

For homes priced at about $550,000 and below, he said, "it's a very competitive market. If you think, 'I can throw a bunch of lowball offers out there,' that day is gone; this market has bottomed out." Unless, of course, a lot more foreclosures flood the market or the economy sends a lot more people to the unemployment rolls, he added.

Multiple offers for under-$500,000 listings are common, and many of those properties sell for more than their asking prices.

The combination of lower prices, average mortgage rates of 5 percent or less for smaller loans, and a new $8,000 federal tax credit for first-time buyers is motivating people, Aichele said.

"If you're buying a $1.5 million property, an $8,000 tax credit doesn't get you all excited," he said. "But if you're buying a $300,000 property, $8,000 coming back to 'em is a big deal."

San Jose resident Pono Aiona and his wife have been looking for a Berryessa house priced at $400,000 or less since last month.

"We're four offers in," Aiona said, having made two unsuccessful bids for bank-owned homes that had multiple offers and two offers for short-sale properties, one of which was accepted about three weeks ago.

"Short sales" occur when an owner sells property for less than is owed on the mortgage; the sale must be approved by the lender, which is often a long and bumpy process.

If Aiona and his family do finally get the keys to the home they've signed a contract to buy for $350,000, Aiona says his monthly loan payments will be only $200 more than the rent he's paying now — "perfect," he said.

"I'm only willing to spend so much. I own my own business, and I need to make sure with the relatively soft economy, things don't go upside-down with it," said Aiona, a chiropractor in Fremont.

"We're just being really careful. I don't want to be in the position that many people find themselves in" — that is, unable to pay the mortgage if the family's income drops.

Mortgage rates dip to 4.82 percent, remain above record lows

By Alan Zibel
WASHINGTON — Rates on 30-year mortgages inched downward this week, remaining below 5 percent for the tenth-consecutive week and just above record lows.
Mortgage finance giant Freddie Mac said today that average rates on 30-year fixed-rate mortgages dipped slighly to 4.82 percent this week, down from an average of 4.86 percent last week.
The all-time low of 4.78 percent was recorded on the weeks of April 2 and April 30. Freddie Mac's survey dates back to 1971.
Low rates have sparked a surge in refinancing activity. The Mortgage Bankers Association said Wednesday its index of application volume climbed 2.3 percent last week from a week earlier. Applications to refinance existing loans made up nearly 75 percent of all applications.
To revive the economy, mired in the worst slump in decades, the Federal Reserve has cut its key interest rate to a record low near zero and is expected to hold it there well into next year. The Fed also has turned to unconventional tools to lower interest long-term rates and spur spending, which would help bolster economic activity.
The Fed at its meeting in March launched a bold $1.2 trillion economic-revival effort. It agreed to starting buying up to $300 billion worth of government debt over the next six months and to boost purchases of mortgage securities and debt from Fannie Mae and Freddie Mac.
At the April meeting, some Fed policymakers said additional purchases "might well
be warranted at some point to spur a more rapid pace of recovery," according to documents released Wednesday.
Qualifying for a loan, however, is still tough. Lenders have tightened their standards dramatically over the past year, so the best rates are available to those with solid credit.
Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day.
The average rate on a 15-year fixed-rate mortgage fell to 4.5 percent this week from 4.52 percent last week, according to Freddie Mac.
Rates on five-year, adjustable-rate mortgages dropped to 4.79 percent from 4.82 percent last week. Rates on one-year, adjustable-rate mortgages rose to 4.82 percent up from 4.71 percent.
The rates do not include add-on fees known as points. The nationwide fee averaged 0.7 point last week for 30-year and 15-year mortgages and averaged 0.6 point for five year and one-year adjustable rate loans.

Summerizing projects and Ecoonomic Indicators!

"Summerize" Your Home with These Spring Projects


It's hard to believe, but the official start of summer is just a few weeks away! Here are some spring cleaning projects you should definitely consider tackling before the hottest days of summer descend upon us.

Air Conditioning
It's important to have your air conditioner in perfect working order before summer starts. Taking care of any issues after the summer heat hits can potentially result in an increase in price, as well as an increase in the time it takes for a technician to visit your home. You should also replace any filters now. Simply remove the old one and take it to your local home improvement center. Sales representatives should have no problem finding its replacement.

Clean out your garage
Organizing a garage can be an excruciating experience during the hot summer months, so if that's something you need to do, don't put it off any longer. Once you clean out your garage, either donate any unwanted items or sell them.

Paint
Late spring is the perfect time to paint the interior of your home since the weather best lends itself to keeping your windows open, allowing the fresh air in and the paint fumes out. If you decide to paint the inside of your home, think about lightening the existing color as opposed to darkening it. Lighter colors are not only inviting, they create the illusion of a bigger, more open space.

Buy fans
Installing ceiling fans and using portable fans are great methods for cutting the heat inside your home. They are also far less expensive to use than an air conditioner. Using fans of any kind also enables you to keep windows open at night, allowing fresh air to circulate throughout the house.

Install dimmer switches
Dimmer switches not only add ambience, they also cut down on energy and the unwanted heat given off by brighter bulbs. Another tip is to use low-wattage light bulbs whenever possible.

Good luck and happy "summerizing!"



The Week's Economic Indicator Calendar

Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.


Economic Calendar for the Week of May 18 - May 22

POST-CONTRACT PITFALLS

Selling a home is like climbing Mount Everest – getting a signed contract is a great accomplishment, but that's only half the journey. The typical home sale today involves more than 20 steps after the initial contract is accepted to complete the transaction.



Much of what needs to be done before the closing is the responsibility of appraisers, loan processors, attorneys, and inspectors — the REALTOR®'s role is to coordinate those responsibilities, helping to ensure that others do their jobs promptly and correctly and that the closing isn't jeopardized.



Many steps between contract ratification and closing involve the cooperation of both buyer and seller, and attentive REALTORS® on both sides of the transaction will troubleshoot and keep everyone on track.

Home Selling from A to C (Acceptance to Closing)

Home Sellers	Home Buyers
1. Select an escrow agent. One of the parties selects an escrow agent. The escrow agent will collect the necessary documentation from each side and will conduct the closing.	1. Deposit earnest money funds. Earnest money funds are deposited according to instructions, which include who will hold the deposit, whether interest is to be accrued, and conditions of release. These funds are applied to the down payment at closing.
2. Assemble condo or home owners association (HOA) documents. Sellers who live in condos or in a neighborhood subject to an HOA must provide financial statements and recent reports to the buyer for review.	2. Make the final loan application. If interest rates are falling and more home owners are refinancing, additional time may be needed to obtain a mortgage commitment. If the property is being financed with a VA, FHA, or other government-backed loan, it will be necessary to obtain copies of correctly filed building permits for all remodeling or additions done since the original construction. Decisions about locking in interest rates can be made at any time after a contract is ratified.
3. Order a preliminary title report. A title search examines all public records to determine any defects in the chain of title; in other words, to confirm that the seller actually owns the property and has the right to transfer ownership.	3. Order the home appraisal. Lenders require an appraisal before committing to a loan. Appraisers compare the features and condition of a home to similar properties to arrive at a dollar figure for its value.
4. Request a satisfaction letter from present lender. Total amount due on any existing mortgages must be provided in advance of settlement.	4. Arrange the property survey. A survey determines the boundaries of the property, its location, and the size and shape of any buildings on the lot. The survey also identifies any existing easements or encroachments.
5. Coordinate home appraisal and inspections. Arrangements for access to the property must be made for the lender's appraisal and any inspections as specified in the contract.	5. Order inspections. Inspections may include those for home condition, radon, lead, earthquake, and termite infestations. Inspections should be ordered as soon as the contract is ratified so there is time to remedy any problems or renegotiate terms. REALTORS® have established relationships with inspectors and contractors to help ensure that their transactions get priority in busy times.
6. Arrange final utility readings and payments. When bills are prepaid, payments will be prorated at settlement between buyer and seller.	6. Verify employment and financial information. Lenders will require buyers to verify employment and financials before committing to the loan to ensure that there have not been significant changes since the process began.
7. Obtain home warranty policy (if applicable). If a seller has offered a home warranty policy, he or she must obtain this policy before closing.	7. Purchase homeowners' and hazard insurance. Homeowners' and hazard insurance is required by lenders; in some areas, flood insurance is also required.
8. Complete repairs. If the sellers have agreed to make repairs as a result of a home inspection, these must be completed. If repairs require a building permit, sellers must apply for one as soon as possible, because this could delay closing.	8. Obtain title insurance. Title insurance can help ensure that title defects will not make a property unsaleable in the future because of: Forged documents Undisclosed heirs to the property Mistaken legal interpretations of wills or trusts Misfiled documents — deeds, liens, mortgage satisfaction documents Confusion caused by similarities in names Incorrect marital status Mental incompetence
9. Have an attorney prepare the deed. The deed is the document by which the owner transfers title to the property.	9. Secure a loan commitment. Lender notifies escrow agent of commitment and confirms settlement date.
10. Arrange for payment of transfer taxes. Most states require a tax on transfer of property. This expense is most often the responsibility of the seller. Cities and local municipalities may also charge transfer taxes.	10. Transfer utility accounts. Utilities should be transferred into the buyers' names as of the date of settlement.
	11. Complete the final walkthrough. Buyers walk through the property with their REALTOR® shortly before closing to ensure that the property is being delivered in the condition agreed to in the contract.

Time Estimates for Delays

When things go wrong, closing can easily fall behind. Here's how much time to expect on particular delays:





One-Week Delays

• Buyer submits incorrect information to lender.
  
• Source of downpayment changes.
  
• Escrow fails to notify parties about missing documents.
  
• Principals leave town without signing all necessary papers.
  
• Unknown defects are discovered in the property.
  
• Last-minute liens discovered.
  
• Cloud on title.
  
• Move-out date changes.

Two-Week Delays

• Lender decides at the last minute it doesn't approve of the borrower or the property.
  
• Lender raises interest rates.
  
• Lender requires last minute reappraisal or repairs.
  
• Appraisal too low.

Mortgage applications falling?

Update!

Mortgage applications volume fell 11 percent last week to 1,113.2 from 1,250.6 the previous week on a seasonally adjusted basis, according to the Mortgage Bankers Association weekly survey.

On an unadjusted basis, the index decreased 10.9 percent compared with the previous week. It increased 45.6 percent compared with the same week a year ago.

The refinance share of activity decreased 1/10th of a percent while the purchase index declined 11.3 percent.

This was the first drop in mortgage applications in five weeks. While there was no adjustment in the calculations for the Easter and Passover holidays, it may have contributed to the decline in volume, the mortgage bankers suggested.

Mortgage rates continued to fall:

* 30-year fixed-rate mortgages decreased to 4.70 percent from 4.73 percent
* 15-year fixed-rate mortgages decreased to 4.46 percent from 4.49 percent
* 1-year ARMs decreased to 6.21 percent from 6.23 percent

These rates are great!

Also I mentioned last week that I was going to put a list for buyers to checklist. That is my previous post