Burlingame, CA

This weekend, August 9th and 10th, the Burlingame Chamber of Commerce will be hosting its annual Art & Jazz Festival. There will be food, drink, activities, and events for people of all ages.

Come visit us in the Fox Mall right by Baskin Robbins. We'll be giving out information about our new program for seniors; a no-cost, debt-free alternative to a reverse mortgage.

I hope to see you there!

There has not been much change from last week in either the mortgage market or the stats in the local home sale market.

Rates have not moved much this week. That could change tomorrow when the Fed announces their decision regarding the Federal Funds Rate at 11:15 Pacific Time. I am going to go out on a limb and predict that they will not change rates - the consensus is that they will cut .25%.

Burlingame has 54 single familyhomes for sale with 10 listed as pending - not much change from last week. The lowest priced listing is for $659,000. The highest priced listing is for $2,995,000, which is a $100,000 increase of the highest priced home for sale from last week.

Hillsborough has 55 homes for sale with 3 listed as pending sales, according to mlslistings.com. The price range is between $1,995,000 to $18,000,000. Once again, the highest priced home for sale is in the $2,000,000 price range. We'll wait another week to see if we can draw any conclusions about what is happening in the Hillsborough home sale market.

My client recently received a letter from Washington Mutual stating that they were reducing his equity line from $939,700 to $282,000. We hear about lenders reducing the amount of available credit on equity lines every day. This case, I believe, is an example of a lender taking advantage of a customer because of their own problems.

WAMU approved my clients for a 90% CLTV equity line based on an appraised value of $2,600,000. It was a fully documented loan, and it closed in January 2007.

After receiving this letter, my client and I had a conference call with a supervisor from the WAMU consumer loan division. He stated that the decision to reduce the equity line amount was based on the results of an automated valuation model (AVM) of the home that determined that the home had declined in value from $2,600,000 to $2,398,252. My rough math tells me that the value, based on their AVM, dropped 8 to 9%.

Because of a 8% to 9% drop in value, WAMU arbitrarily decided to cut the amount available by approximately 70%! Over one year later they decide to change the CLTV from 90% to roughly 70% based on a computer model of an expensive home, not even a full appraisal!

Both myself and my client understand that WAMU has the right to cut the available balance of the equity line based on their determination of value. What we do not understand is why they cut the CLTV from 90% of the perceived value to 70% of the perceived value.

My client is paying a rate based on a 90% CLTV. Did they offer to reduce his rate based on a 70% CLTV? No.

We asked the supervisor if he could change the amount available back to the 90% CLTV that the original loan was based on. This would reduce the available line amount from $939,700 to $760,000. He said no. He said my client could provide an appraisal from an appraisal firm of WAMU's choice, or a property tax assessment. Then they would consider increasing the line.

The actions of WAMU in this case stink! I truly believe that they are cutting my client's available credit because of their problems. What do you think?

Jumbo rates have moved up in the past week. However, some of our lending sources are still offering attractive 5 year fixed rates in the 5% to low 6% range.

One loan program I find particularly attractive in the current marketplace is a 6 month adjustable rate mortage. It offers interest-only payments with no possibility of negative amortization. The index it is ties to is the very stable COFI index. Start rates begin as low as 3.49% (6.45% APR), with a 1% cap rate per adjustment. This loan can really help someone who wants to reduce their monthly expenses and increase their cash flow.

Burlingame home sales are happening throughout many different price ranges. Currently there are 55 single family residences on the market. Out of these 55 homes, eleven are pending sale, according to MLS Listings. The high asking price is $2,895,000, and the low asking price is $659,000.

Hillsborough, on the other hand, is mainly seeing sales in their lower price range. There are also 55 homes for sale, with four homes that have pending offers, according to MLS Listings. The high asking price on a pending sale is $2,580,000.

Next week we will check this data again to see what trends are developing in the local real estate market.

The credit crunch we are currently experiencing has made it more important than ever to have the best possible credit score. Lenders generally have raised the minimum credit score required. In addition, they are differentiating the rates offered by the customer's score in more increments than they have in the past.

I came across a great article with tips on how to improve your score. I hope you find some insight in the article to help you improve yours!