A common theme on this blog over the years, “shadow inventory” and the future of distressed sales (foreclosures and short sales), is coming up one more time. While conventional wisdom for years has been every bit of good news on the housing front has been a bunch of hype I have been sharing statistics with you that spells out what has actually been happening.
In reality the future foreclosure rate is determined by one thing, one thing most media source and people never mention, people missing their first mortgage payment today. It is as simple s that. If you read this website you know that I share these statistics every few months or so and the number of people missing their mortgage payments has been going down, down, down; and with it the number of foreclosures 6-12 months later.
The nationwide delinquency rate is lower than any time since Q1 2008, the time we began to see cracks in the market but well before the crash happened. This means the foreclosure rate over the next couple years will be lower and lower too. To boot the actual foreclosure start rate is lower than at any time since Q2 2006!
“Shadow inventory,” homes that banks are holding onto or short sales/foreclosures that just haven’t happened yet, the media (and some gloomy Gus’) favorite boogie man is non-existent. The banks have already unloaded their inventory for the most part and home prices have rebounded so much only a small fraction of people still owe more than their home is worth.
I’m sure if you have been in the market to buy or sell a home lately you see that short sales and foreclosures are a very small part of what is out there, when just two years ago they made up the bulk of the market in the greater Sacramento area; including Roseville and Rocklin.
This is all good news!
Senior Mortgage Consultant – 19 Years Experience
As many of you know (and some of you don’t) I felt I had found a career-long home at Innerwork Mortgage a few years ago. When Innerwork was bought out in late 2012 by another company we merged and, of course, we all thought that was going to be for the best but things didn’t work out as planned.
I’m ELATED to announce that I’ve made a move to what I expect to be my home for the next 20 years! At a familiar address, back at the old Innerwork digs, with some of the same players, but with a new banking partner (Roseville-based American Pacific Mortgage).
We’re building a new branch that will be everything the old branch was and SO MUCH MORE! I’m ready to serve the Roseville/Rocklin area like never before and we have some special surprises in store for our real estate partners as well.
Below is a question I received on my website, as well as the answer. For the most part most lenders do a pretty good job of this but sometimes they don’t and you have the power to question them if they think they are collecting too much from you…
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A $100. increase on my 30 year fixed mortgage!!
My loan was originally being serviced by Bank of America when we bought this property 5 1/2 years ago. We have never missed a payment or been late. Last January our loan was sold to Penny Mac for servicing, I have had nothing but problems with this company! The online payment center still won’t let me go all way through to pay, the automated phone payment frequently disconnects me, and usually after six tries when I do get an operator they have a $15.00 fee for helping me, Ugh!! Now my question: Can this company charge me an extra $100. a month because of their annual Account Analyst that has predicted that because of the rising costs of servicing my PITI 30 yr. fixed HUD loan my escrow acct. will be short by $1,300.00? If they can do that, it means that my terms HAVE changed and it is no longer a 30 yr. fixed loan! It’s not my fault that Southern California has an unstable economy, why should I have to pay for that! I tried to go back to B of A and they just sent me an automated form letter. Do I have any legal recource at all?? Please help, the payments are scheduled to start next month. L. B.
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Everything goes back to the original terms of your mortgage. Something you signed at closing (there are different variations of what this document is called) dictates what a lender/servicer can and cannot do when it comes to adjusting your impound account.
Generally speaking they do have the ability to adjust what is needed on the impound portion of your payment on an FHA loan and this does not change the terms of your loan so long as only the impounds are affected. You are however able to challenge this. HUD (the Department of Housing & Urban Development) created rules to make sure lenders are not collecting too much.
The money in your escrow account is YOUR MONEY and is always your money until it is paid out. But the onus is on you to ensure you are not paying too much. As I am not an attorney I can only say so much, but I can share with you a link to HUD’s guidelines in the subject…
Basically lenders/servicers are only allowed to keep up to a maximum of 1/6 of the total cost of taxes and impounds as a “cushion” over and above the amount they collect so they have enough to make the next payment for your taxes or insurance. The issue here is what figure they are basing that calculation on.
From your question it sounds like you believe that is an arbitrary number, or a number based on an estimate of future expenses that may or may not be accurate. If that is actually the case I would think you have a valid complaint.
Your next step would be to make a “qualified written request” to the lender about the amount they are collecting (send it separate from your payment). They then have 20 days to respond and 60 days to resolve the complaint, including providing documentation that shows their calculations and where it is coming from. If they don’t solve it to your satisfaction you can then file a complaint with HUD.
One thing to remember is, if they are right about needing the extra $1,300, homeowners insurance and taxes are YOUR responsibility even if there are impounds on your loan. If they are short $1,300 for taxes next year it is highly likely that you will have to come up with the money all at once to make sure your taxes are paid on time and with no penalty. Some lender/servicers will pay the extra amount on your behalf but they will bill you for the difference and may increase your impounds by double the amount you were short when that was due (say $200 a month instead of $100) to A.) pay them back, and B.) to make sure there is enough so the next payment can be made when that comes around. Hope that helps.
P.S. If values have gone up quite a bit where you live it might make sense to look at a Conventional loan via a refinance. As opposed to an FHA loan you may not have to have impounds on a Conventional loan. You may be able to lower your payment and have the ability to pay your taxes and insurance on your own and not have to worry about the impounds. Something to think about. I get calls every day for people wanting to get out of their FHA loan and into a Conventional.
Earlier this week PG&E began work on a long-awaited modernization project on four miles of natural gas transmission lines and over 100 yards of distribution lines in the city of Roseville. Completion of all parts of the project is expected to take up to six months.
“These pipe replacement projects will allow PG&E to meet the increasing demand for natural gas to support additional growth in the area and improve the safety and integrity of the natural gas system,” said Erik Kurtz, gas distribution superintendent for PG&E’s Sierra Division. “During these projects, we will work to minimize impacts to customers as best we can, and we very much appreciate the support and patience of area residents and businesses.”
The Northern and Central California energy giant will be contacting residents and business owners in the affected areas to provide information and answer questions. Per regular safety guidelines they will vent natural gas from the pipelines they’ll be working on while they work, but the PG&E is encouraging anyone who has concerns about natural gas odors in the area to call them at (800) 743-5000.
While not law just yet, the Stop Errors in Credit Use and Reporting (SECURE) Act of 2014 will be a huge help to many consumers. We have had conversations about how the archaic credit laws are in the country, both on this website and with some of you in person, and I don’t see it ever being perfect, but this is a good start.
Reading the text of the bill some of it sounds redundant with current protections (that have not quite worked as planned) but this should help in clarifying those protections and make sure both creditors and the credit reporting bureaus are transparent and put more effort into follow the rules, as well as adding some guidelines such as requiring the credit bureaus to provide a free credit score along with the already available free annual credit report
Political realities of today being the political realities of today this may not ever pass (seeing as its authors and sponsors are all from one party) but I can’t see any reason for this to be political at all. My assumption is we see one of the few bills that passes with bipartisan support.
We can only hope, it will be good for ALL of us. At any given time there are an estimated 10 million American adults with major errors on their credit report! It could be you… I’ve been in that group at one time. While I am well versed in credit monitoring and repair due to my profession and was able to quickly fix the issue, most of those 10 million people aren’t.
Read more about the Stop Errors in Credit Use and Reporting Act of 2014 at my preferred credit repair provider’s blog here: BLUE WATER CREDIT BLOG.
Till next time please give me a call if there is anything I can help you with…
It was just pointed out to me by a local Realtor (thank you for all the great info you provide on a regular basis, Jen) that Placer County has updated their tax bill website…
Placer County Tax Bill Search
For any of your property tax bill needs in Roseville, Rocklin, or anywhere in Placer County here is your starting point. Of course you can always call me or your favorite real estate professional and have us do the research for you.
This has been a popular subject on this site, I’ve often discussed it in a way that flies in the face of what the conventional media has been pushing for the last few years; the rate of mortgage delinquencies nationwide has decreased to its lowest level in the last six years (since “pre-crash”).
In the 4th quarter of 2013 the percentage of homeowners at least 60 days late on their mortgages had dropped to under 4.0%. Marking two straight years of quarterly improvements and the first time this metric has been sub-4% since 2008.
The level is still too high, with most economists preferring it be under 2% in a normal market, but improvement is improvement. And steady improvement is even better!
But real estate is always local, right? Indeed, for the most part that is true, and in California our rate is 3.06% for Q4 2013! Beating the national average by quite a bit and putting us nearly in the normal range and at one of the lowest mortgage delinquency rates of any of the 50 states. The rate in the Roseville/Rocklin/Lincoln area is even lower, well within the historically normal range.
Looking forward? As we’ve discussed many times here, less delinquent accounts = less foreclosures in the future. This is why I was telling everyone that was so scared of the media’s boogeyman of the last half decade, “shadow inventory,” that they have nothing to worry about. It didn’t exist and, while the foreclosure problem looked as scary as could be in 2010-2012, the fact late payments were on the decline told us that distressed sales in the future were also going to decline.
Couple that with the FACT that mortgages of the last 5 years have been of MUCH higher credit quality (no more people that couldn’t buy homes could anymore, and are therefore less likely to default), we see an ever-improving real estate market that should stand on its own after years of being propped up by Washington.
Put this one in the win column!
SOURCE: TransUnion Data
Senior Mortgage Consultant – 18 Year’s Experience
(especially in the ultra-hot Roseville and Rocklin real estate markets)
This is a GREAT tip for buyers out there right now…
If you are out there looking at homes and making offers in this market, especially in the Roseville, Rocklin, Lincoln, Granite Bay, or Folsom areas, you know we’re seeing home sellers having a large number of offers to choose from. Likewise they are choosing the best offer they have and the odds of getting a seller credit towards closing costs aren’t as high as they have been from 2008-early 2013. Especially on the hottest, multi-offer properties…
Unfortunately, the reality is many buyers simply can’t pay their own closing costs. Or can they?
With a little bit of creative financing you can have the winning offer AND also have your closing costs paid for!
On a $349,000 purchase you can simply bump up the rate a little and have us (or any lender really) give you a rebate towards closing costs. If today’s 30 year FHA rate is 4.0% (this is not a rate quote, rates change every day) it would be as easy as taking a 4.25% rate and getting as much as 1% of a lender rebate to pay for all your closing costs.
In this scenario the buyer’s payment only went up by $48 but they got a $3,490 lender credit to cover closing costs and their offer was accepted! In all reality who can argue with a 4.25% rate anyways, especially if it saved $3,500 up front which, if you didn’t have saved for closing, you may not have been able to have your offer accepted anyways.
The same idea can work with pretty much any loan. Putting down 10% and going conventional? It may be possible to make this work too, rather than asking for a seller credit on a property you know will have multiple offers.
This is how we do it… Get you financed but also get you the home you want instead of someone else having their offer accepted. If you have more than enough for down payment and closing costs this is not really necessary, or advisable, but for those that don’t this is another tool to get your offer noticed and increase the likelihood of being accepted.
Sincerely (your outside the box lender),
Yep, that is right. The city of Lincoln, Ca is still eligible for 100% USDA financing.
Over the last two years USDA was supposed to change their eligible areas based on the 2010 US Census but the date of the new map’s going into effect keeps getting pushed back. The most recent date for the change was Jan 16th, 2014 (it was also slated to change in October 2013, March 2013, and October 2012)…
What does this mean?
Well, it means if you want to buy in Lincoln, or any other city/area that will no longer be USDA-eligible once the new maps go into effect (Auburn being one of them), you now have until (at least) October 1st, 2014 to get into contract and have your lender get the application over to USDA.
For the map of eligible areas plug your subject address into this link on the USDA website and it will tell you if it is eligible or not (Lincoln, CA is 100% eligible as of the search I did today).
USDA Eligibility Map Lookup
If you would like to lookup what the future map looks like, whether it changes on October 1st, 2014 or if they push it back again, it is right here…
USDA Future Eligible Area Map Lookup
If you would like any assistance or would like to get prequalified for a USDA loan please give me a call. In my opinion it is one of the best loans out there, if you want to buy in a USDA-eligible area of course. 100% financing is allowed, it is government-backed so rates are on the lower-end (similar to FHA and VA in most cases), but it does not have the huge UFMIP and annual Mortgage Insurance premiums like FHA does (that makes FHA such an expensive loan in comparison to most other loans these days).
Lets say you are looking in the Northern part of Rocklin but can’t find anything in that your price-range or down payment availability will allow you to qualify for. 12 Bridges is right there and you may be able to (subject to minimum income/asset/credit requirements) buy with a lower down payment, or even none at all.
Senior Mortgage Consultant – 18 Years Experience
Yes, I decided to make a move. A few years ago I had found a home in Innerwork Mortgage right here in Roseville that was great for me and allowed me to service my clients and real estate partners as good as, if not better than, anyone else in the market. That was somewhat short-lived when Innerwork was bought out/merged with another company and we had to start all over.
I spent a year with the new, merged, company and for the most part it was good. At first anyways. After a while my ability to service my clients and partners was not up to my high standards and, try as I might to make the changes needed to make the system meet my standards, it just wasn’t happening. I gave it a full year and decided to should start talking to some other mortgage bankers to see if there was something that would suit me better and allow me to provide the kind of service I am known for and demand of myself.
After a long search, talking to and spending considerable time reviewing the operations and systems at more than 10 Roseville mortgage companies, I have found a new home! I am happy and proud to say I am the newest Mortgage Consultant at Paramount Equity as part of the “Paramount Partners” Roseville branch!
Yep, the company with the radio ads…
I know many of you think of Paramount Equity only as a refinance-focused lender, and I thought the same thing as well, however nothing can be further from the truth (otherwise you know I would not have come on board here). Yes, saving families money through refinancing their mortgage is a big part of what Paramount Equity does, but at my branch we are more focused on purchase transactions, working with the local real estate community to support getting buyers into homes.
I will continue to focus on helping people purchase homes and support my real estate partners as I always have done. With a focus on great service and education to my clients, speed and efficient transaction, and transparency with the Realtors that are involved with the escrow. And I am certain that Paramount Equity is the place that will allow me to do these things in a way that meets the highest of standards!
Give me a call with any questions or if I can help in any way. I’ve been over here for two weeks now and am ready to rock and roll!