Burbank, CA

Description: Mortgage brokers play an important role when it comes to refinancing. They can offer you a cheaper rate than what the banks or credit unions can offer.

When you are thinking about refinancing your existing mortgage for any particular purpose, there are a number of factors that you must understand for the intention of preventing overpayment for your next home mortgage loan.

Mortgage broker markup of your mortgage interest rate and useless fees charged by the lender can rapidly turn a beneficial deal into an expensive new home mortgage loan.

Refinancing your mortgage through a credit union or bank would not protect you from mortgage broker markup as you might believe. Following are some valuable tips that would assist you in getting some idea about the role of mortgage brokers in refinancing. These tips would help you stay away from paying an excessive amount and becoming ruined by your next mortgage loan.

Mortgage Brokers vs Banks

Mortgage brokers function as mediators between the borrowers and countrywide lenders. These lenders which also include banks pay them for dealing with the applications on their behalf. For being competitive, they work with a lower profit margin than other lenders or banks.

A large number of people believe that they can steer clear of payment of mortgage broker fees by refinancing their existing mortgage loan through a bank. In spite of everything, your bank works as a direct lender. Unluckily, the banks are similarly guilty as mortgage brokers, perhaps more than the mortgage brokers in making the most of their customers by charging too much from them. In reality, the banking lobby of the United States has paid out millions of dollars for successfully amending the disclosure regulations to banks. This is true; the Real Estate Settlement Procedures Act is not applicable for your bank and your bank is not bound to reveal their markup or margin of profit on your home loan.

In contrast, mortgage brokers have the accessibility to wholesale rates and if you can locate a good broker who is ready to function for a flat activation fee, this would help you save a lot of money every year. Similar to your bank, the mortgage broker can markup your mortgage rate for getting a commission from the lender. This name of this commission is Yield Spread Premium and if you wish to get the best deal while refinancing your existing loan, it is necessary that you keep away from this needless markup.

written by Betty Parker

Burbank, CA February 2009

Market Index

A market index of above 1.20 is a seller's market, between 0.80 to 1.20 is a balanced market, and below 0.80 is a buyer's market.

The market index continues to decline from 0.28 to 0.24 points. In six months we are almost back to February 2008's level.

New Listings - 54 new listings, compared to 64 last month and 87 in 2008.

Pending Listings - 42 listings opened escrow, compared to 48 last month and 48 last year.

Pending Ratio -0.78, even with last month's 0.75, and compared to last year's 0.55.

Listing Inventory - 290 homes on the market at the end of the month, compared to 300 last month, versus 346 in 2008.

Sold Listings - 29 listings sold during the month, compared to 35 last month and 29 in 2008.

Days On Market 63, versus 104 in 2008.

Average Sales Price - $437,638, which is 18.2% lower than last year.

Price per square foot $323.94, the second-lowest in the last 12 months, exceeded only by last month's $301.38.

Everyone wants their own piece of pork from the Stimulus Bill. You are in luck. Buy a home (not having owned one in the last three years) and you can get an $8,000 tax credit. Buy a NEW HOME and get another $10,000 from the state of California. My advice - interest rates are low, buy now.

For sellers, if you need to sell for top dollar, then call me for a Highest Value Property Audit to see how we can help you get the most out your home when you sell.

Data is from SRAR and has not been verified, is not guaranteed, and subject to change

The Obama administration has given us some new details on its $275 billion plan to help stem the tide of foreclosures nationwide.

It’s offering many incentives to investors, lenders etc. to entice them into modifying distressed mortgages to keep Americans in their homes. The steep fall in home prices is the main reason we’ve had a global financial meltdown, so the administration’s housing plan is vital to ending the deepening economic recession.

The plan is called the “Making Home Affordable Program”, which the administration thinks can help up to 9 million homeowners. There are two primary goals of this plan:

· First, it offers $200 billion to provide refinancing for homeowners who owe more than their homes are worth-also referred to as being “underwater” on their mortgages. To qualify, these homeowners-5 million of them by administration estimates-must have their mortgages in the hands of Fannie Mae or Freddie Mac, the mortgage finance giants that the government seized last September.

This plan will help, but it won’t reach lots of homeowners in places like California and Florida where homes are now worth substantially less than their mortgages.

Because most mortgages are bundled into securities and sold into a secondary market, it’s not easy for homeowners to find out whether Fannie or Freddie owns their loans or whether they’ve been pooled with other loans and sold by an investment bank to other investors.

· The other part of Obama’s plan attacks the problem of affordability. The administration provides another $75 billion in incentives to help prevent foreclosures in cases in which the homeowners, up to 4 million of them, are about to lose their homes. The money comes from the $700 billion bailout fund approved last October.

This part of the plan is extremely complex as it offers many financial incentives to mortgage servicers, who are essentially bill collectors for private investors who own pools of U.S. mortgages. Some incentives stay with the servicers while others flow through to investors.

In exchange for the incentives, a servicer would modify a mortgage so that no more than 38% of a homeowner’s monthly after-tax income was taken by the monthly mortgage payment. The government then would step in and share the cost of reworking that mortgage so that no more than 31% of the borrower’s monthly income was tied up in the payment.

· Any lender that takes new taxpayer bailout money under the administration’s Financial Stability Plan will be required to participate.

· The Obama plan got a strong endorsement Wednesday from the Financial Services Roundtable, which represents many of the largest mortgage lenders. This first step will go far in adopting consistent guidelines for everyone. But, officials confirmed that there’s no standard procedure for lenders under the Fannie and Freddie portion of the plan. It will be up to each lender to determine whether the refinances go through them or whether mortgage brokers and other intermediaries can help homeowners seek refinanced loans under the program.

· Officials were also careful to note that mortgage servicers won’t be able to modify mortgages if the terms of their contracts with the investors who own the pools of mortgages don’t allow it. There is no reliable data on how many of these investors are on the other ends of contracts that prohibit mortgage modifications.

That question is important, since many of the weakest loans underwritten during the height of the housing boom, from 2004 to 2006, were sold by now-defunct investment banks to investors abroad, many in Europe.

So who qualifies?

· Your mortgage must predate the start of 2009, you must live in the home and you’ll have to provide proof of income.

· First, are you already behind on payments or even in the foreclosure process? If the answer is no, then ask yourself whether your current mortgage rate is high enough to make it worth your while to refinance to take advantage of today’s low rates for 15-year and 30-year fixed-rate mortgages.

· You must find out who owns your loan. Most mortgages are bundled together and sold into a secondary market, where investors technically own them. If Fannie Mae or Freddie Mac placed your loan into the secondary market, you can contact the company that sends your monthly mortgage statement to discuss the new program. If your mortgage is in the portion of the secondary market where the private sector issued the mortgage-backed securities, you don’t qualify.

· To qualify under the refinance portion of the Obama plan, you can owe up to 5% more than your home is now worth. Thus, many homeowners in California, Florida, Arizona and Nevada, where home prices have plunged, won’t qualify.

There are many more details to this plan, this was just a bare bones explanation!

Related articles by Zemanta

* Find Out If You Qualify For Mortgage Assistance [Foreclosure Prevention] (consumerist.com)

* Clark Howard Simplifies "Making Home Affordable" Plan (hsh.com) * Obama housing rescue could help millions (dailyfinance.com)

* Looking for a Mortgage? Check Out the F.H.A.'s Rules (nytimes.com)

I love it when a client calls to let me know that I single handedly sold a house for them. While I was photographing his own home that he was listing, Lior Kane told me that I had sold this house for him. I laughed when he said this. However, he said he wasn't kidding. The virtual tour that I had taken of the house had caught the eye of a couple in Los Angeles. Pasadena wasn't even an area that they had considered looking. Then they saw my virtual tour and immediately called. They were at the house for a viewing the next day and made an offer. I have to admit I'm pretty happy. I know virtual tours are a really great tool, but that is such a great example of how they can work for you. Now the real question...where's my commission Lior?

I get alot of questions from home buyers asking me if we are at the real estate bottom here in Burbank and the San Fernando Valley and the honest answer is, I don't know. But I will tell you that looking at the unemployment numbers that came out today, I would guess the answer is probably, no. But keep in mind that we won't know where the bottom actually was until things start to improve.

Unemployment hit at 25 year high for February coming in at 8.1% and to make matters worse the numbers from December were revised.....for a total loss of 681,000. The December revision makes that the worse figure in 59 years. If you look at the numbers more closely you'll find that the average wage has been trending up slightly indicating that more lower paying jobs were cut. But the cuts have been widespread canvasing a wide range of industries.

The other statistic that we should all be looking at is the number of delinquent mortgages.

More homeowners are struggling to pay their mortgages, according to the latest study. More than a tenth of households were behind on payments, 7.9% of the loans are overdue and 3.3% are in the foreclosure process.

We'll have to see how effective the new stimulus package is as far as helping homeowners avoid foreclosure, but even with that help be prepared to see short sales and foreclosures for some time to come. On the glass is half full front I will say that there are some great deals out there!

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