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WASHINGTON — The Federal Reserve signaled Wednesday that a full economic recovery could take nearly three more years, and it went further than ever to assure consumers and businesses that they will be able to borrow cheaply well into the future.
The central bank said it would probably not increase its benchmark interest rate until late 2014 at the earliest — a year and a half later than it had previously said.
The new timetable showed the Fed is concerned that the recovery remains stubbornly slow. But it also thinks inflation will stay tame enough for rates to remain at record lows without igniting price increases.
Chairman Ben Bernanke cautioned that late 2014 is merely its “best guess.” The Fed can shift that plan if the economic picture changes. But he cast doubt on whether that would be necessary.
“Unless there is a substantial strengthening of the economy in the near term, it’s a pretty good guess we will be keeping rates low for some time,” he said.
The Fed has kept its key rate at a record low near zero for about three years. Its new time frame suggests the rate will stay there for roughly an additional three years.
The bank’s tepid outlook also suggests it’s prepared to do more to help the economy. One possibility is a third bond-buying program that would seek to further drive down rates on mortgages and other loans to embolden consumers and businesses to borrow and spend more.
Information obtained from the Calif. Asso. of Realtors with permission.
Article printed in the Mercury News and A.P. Jan. 25, 2012.
Federal authorities have charged seven men with infecting millions of computers with a virus-like program that tricked users’ Web browsers into navigating to phony pages stocked with ads, earning the defendants as much as $14 million. This type of online fraud is known as click-jacking, which waits for users to click on links to popular websites and then quietly redirected their browsers to similar-looking sites larded with online ads — ads that allegedly earned the defendants cash each time they were displayed.
So remember, be aware of what you are clicking. And don’t be fooled into fraudulent “free” offers.
Last year, more than two million people were turned down for home loans, according to federal data, often because the applicants didn’t meet certain lender requirements or because their applications were incomplete or otherwise problematic. With lenders’ underwriting criteria becoming more strict in recent years, it’s important buyers know the most common triggers for mortgage-loan rejection.
- Insufficient income: Lenders want to be sure borrowers can afford to make the mortgage payments. Lenders typically look for at least a two-year track record of income, which could hurt those who have changed jobs recently.
- Cloudy financial picture: Generally, total debt payments, including the mortgage, cannot exceed 45 to 50 percent of a borrower’s adjusted gross monthly income. Overtime and bonuses are included only if the borrower has worked for the same employer at least two years, and has a history of receiving them.
- Poor credit: Lenders typically reject applicants with FICO scores below 620.
- Low appraisal: One of the predominant reasons buyers are turned down for home loans is because the appraisal on the property is too low.
- Property problems: Sometimes issues turn up within a house, like a major repair or safety issue that needs to be addressed, before an application can be approved.
- Information mix-ups: Approximately 12 percent of new mortgage applications were denied because of unverifiable information or incomplete credit applications, according to the Federal Financial Institutions Examination Council.
Housing affordability increased in California in the second quarter as prices dropped from the same period a year earlier, according to the Calif. Assoc of Realtors.
Fifty-one percent of California households could afford a single-family home priced at the median, according to the CAR. That was an increase from 46% during the same period last year, when buyer tax credits fueled the market and pushed up prices. Affordability decreased from the prior quarter, but that was due to seasonal variations that pushed up prices.
Potential buyers needed to earn a minimum annual income of $63,080 to qualify for the purchase of a home priced at the state’s median, $293,580, which is the price at which half the homes sold for more and half for less. The house payment on that purchase, including taxes and insurance, would be $1,580, the group reported, assuming a down payment of 20% and an effective composite interest rate of 4.85%.
During the second quarter, affordability fell in the priciest parts of the state. San Bernardino County was the most affordable in the state, with a rate of 77%, while San Mateo County was the least affordable, with only 21% of households in the state able to afford that county’s median-priced home, the group reported.
That’s great news, so it’s now time we all buy instead of rent. Call me if you need help.
This information was obtained by permission from the Calif Assoc of Realtors.
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New law gives added protection to
short-sale hopefuls.
On Friday, Gov. Jerry Brown signed Senate Bill 458 (Corbett) into law. The new law, which contained an urgency clause and became effective upon signing, protects homeowners pursuing short sales by barring first and secondary lien holders from going after sellers for money owed after the short sales close.
More info on the story….
A short sale – a transaction in which the homeowner sells the property for less than is owed on the mortgage – must be approved by the lien holder or lien holders, if there is more than one.
Under previous law (SB 931 of 2010), a first mortgage holder could accept an agreedupon short sale payment as full payment for the outstanding balance of the loan, but the rule did not apply to junior lien holders. SB 458 extends the protections of SB 931 to junior liens.
The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) sponsored the bill and urged lawmakers to pass this much-needed legislation.
“The signing of this bill is a victory for California homeowners who have been forced to short sell their home, only to find that the lender will pursue them after the short sale closes and demand an additional payment to subsidize the difference,” said C.A.R. President Beth L. Peerce. “SB 458 brings closure and certainty to the short-sale process and ensures that once a lender has agreed to accept a short-sale payment on a property, all lienholders – those in first position and in junior positions – will consider the outstanding balance as paid in full, and the homeowner will not be held responsible for any additional payments on the property.”
Reprinted with permission from the Calif. Assco. of Realtors.
Our Realty World cameras video taped almost every major city in Northern California. This should help you learn more about the city that you may want to move to. Just click the city you are interested in. Please enjoy the show.
I look forward to helping you in anyway I can.
Alameda, California – http://www.youtube.com/watch?v=umg9CUVhcm0
Albany, California – http://www.youtube.com/watch?v=UHtBnoRUEe8
Berkeley, California – http://www.youtube.com/watch?v=99hulMyHn50
Blossom Valley, California – http://www.youtube.com/watch?v=-NnhW9Aa8qo
Campbell, California – http://www.youtube.com/watch?v=0vW1XRohxnA
Carmel, California – http://www.youtube.com/watch?v=d_fv8raJvJs
Cupertino, California – http://www.youtube.com/watch?v=-t5-VBa-xDI
Dublin, California – http://www.youtube.com/watch?v=TrCa7J8vseY
Emeryville, California – http://www.youtube.com/watch?v=nIVFzcKDqJM
Fremont, California – http://www.youtube.com/watch?v=GxBg9z_aZX0
Gilroy, California – http://www.youtube.com/watch?v=zpIcevWc1T0
Hayward, San Lorenzo, California – http://www.youtube.com/watch?v=hj-9Q44DxoE
Livermore, California – http://www.youtube.com/watch?v=wIceLQhYBeo
Los Altos, California – http://www.youtube.com/watch?v=NGbdSewOpzs
Los Gatos, Monte Sereno, California – http://www.youtube.com/watch?v=xjz7pIcPVnI
Milpitas, California – http://www.youtube.com/watch?v=L70mGkUN-Ug
Monterey, California – http://www.youtube.com/watch?v=L5tAE6JFD9I
Morgan Hill, California – http://www.youtube.com/watch?v=zMtQmrp20-8
Mountain View, California – http://www.youtube.com/watch?v=UMRVDVYCNZE
Newark, California – http://www.youtube.com/watch?v=2G5FT6SGeio
Oakland, California – http://www.youtube.com/watch?v=3okcJIUIlwI
Palo Alto, California – http://www.youtube.com/watch?v=FkJBK3-R_Aw
Piedmont, California – http://www.youtube.com/watch?v=ErZ_obcGb54
Pleasanton, Sunol, California – http://www.youtube.com/watch?v=voAFmyM3NGw
Salinas, California – http://www.youtube.com/watch?v=R-EYkmN7WR8
San Jose, California – http://www.youtube.com/watch?v=dcK3X9J-awU
San Leandro, California – http://www.youtube.com/watch?v=OAu1Up1PNnw
Santa Clara, California – http://www.youtube.com/watch?v=AnmCscnxXKs
Santa Cruz, California – http://www.youtube.com/watch?v=o1_mh1uLlF8
Saratoga, California – http://www.youtube.com/watch?v=kESZB-7tyeg
Sunnyvale, California – http://www.youtube.com/watch?v=_LcGBiK7e1Y
Union City, California – http://www.youtube.com/watch?v=zFXiAOe1Yck
Due to recent struggle in the real estate market, it’s now more difficult to get approved for a loan. Underwriting standards have tightened, meaning that borrowers need higher credit scores, more income and larger down payments in order to qualify. But that doesn’t mean you can’t buy a new home. Here are the biggest hurdles to home financing and what you can do to overcome them:
Higher credit score requirements – although you may get approved with a 620 credit score, you likely won’t get the most favorable interest rate and fee. The solution?? Contact all three credit reporting agencies—Equifax, Experian & TransUnion, by calling 1-877-3222-8228 or going to www.AnnualCreditReport.com . Once you get your credit reports, check all information for accuracy. If you find any discrepancies, report it to the credit company immediately.
Greater scrutiny of income & assests – mortgage lenders have to verify your information, so be prepared when you apply for your loan by having documentation that supports your income & assets. Have copies of tax returns, paystubs, bank statements and any investment accounts.
With a little preparation, you’ll be able to take advantage of today’s low interest rates and reasonable home prices…and buy the home of your dreams.
The Calif. Assoc. of Realtors (C.A.R.) released the results of a statewide survey on short sales and the challenges REALTORS® face in working with lenders and servicers.
The most frequent problems REALTORS® cited in working with lenders and servicers during the short sale process include unresponsiveness, onerous procedures, and long processing delays. The survey also found that fewer than three of five short sales close in California, illustrating the complexity and difficulty of navigating lenders’ and servicers’ short sale procedures.
“The lack of standardization, long approval process, and lack of lender approvals are hampering what should be a 45-day short sale process,” said C.A.R. President Beth L. Peerce. “Instead we’re hearing the typical response time for lenders is at least 60 days, and in many instances, their response time exceeds 6 months.”
It’s important to work with experienced real estate agents. So call me with your real estate questions. I’ve been helping clients since 1985.
Here are 5 more ways you can reduce the risk of having your identity stolen.
- Click with Caution. When shopping online, check out the website before entering your credit card number or other personal information.
- Check your bills and bank statements. Open your credit card bills & banks statements right away. Check them carefully for any unauthorized charges and report them immediately. Call if your bills don’t arrive on time…it may mean that someone stole your mail or changed your contact info to hide fraudulent activity.
- Stop pre-approved credit card offers. Those make a tempting target for identity thieves who may steal your mail. Go to: www.optoutprescreen.com .
- Ask Questions. Ask questions whenever your asked for personal information that seems inappropriate for the transaction. Ask how that info will be used or if it’s shared with others.
- Check your Credit Report. One of the best ways to protect yourself is to monitor or credit history. You can get a free report every year for free from each of the three credit bureaus. One source is: www.annualcreditreport.com .
I hope this information is helpful for you.
You can find more information about cyber security and safeguarding your personal information at the California Office of Information Security: http://www.cio.ca.gov/OIS/
There’s triple trouble for the Golden State’s struggling real estate market: the usual seasonal slowdown, a weak economy and “unrealistic asking prices” by some sellers, according to a report today from the California Association of Realtors.
Statewide, the seasonally adjusted home sales rate dropped 3.5 percent in October from the month before, the group reported. Year over year, though, sales were down 19.6 percent, although the market last fall was bolstered by federal tax credits for many homebuyers. The median price of a resale single-family house was up 2.3 percent from a year earlier to $304,220.
”We’re really seeing two different housing markets — one at the lower-end driven by first-time buyers and investors, which is keeping prices stable, and one with nostalgic sellers who set unrealistic asking prices,” Leslie Appleton-Young, the group’s vice president and chief economist, said in a news release today.
”Sellers need to consider current market conditions when pricing their home in order to facilitate a shorter time on the market,” she said.
“The housing market is experiencing an uneven recovery, and a temporary foreclosure stoppage in some states is likely to have held back a number of completed sales,” Lawrence Yun, the group’s chief economist, said in a statement. “Still, sales activity is clearly off the bottom and is attempting to settle into normal sustainable levels.”
~ Barry Ripp
information provided by Calif Assoc of Realtors with permission: www.car.org
