Ryan’s Mortgage Blog:
Homeowners who have a HELOC need to be aware of some trends going on with lenders. For those who don’t what a HELOC is, it stands for Home Equity Line Of Credit. It is a loan set up similar to a credit card, where you have a maximum amount you can draw from, rather than for a fixed dollar amount in one lump some like other loans.
The “trend” I am talking about is lenders are reviewing most, if not all, HELOCs and freezing some. Many people are receiving letters in the mail that their home equity line has been cutt off. This includes people with who have never even touched their home equity account and still have the whole balance left to use. According to CNN.com, lenders are trying to stem losses from subprime mortgages and other high-risk loans, by cutting off these HELOCs. As of September, delinquencies on HELOCs were up 47% year over year, according to Economy.com; the numbers are expected to be worse in 2008. I have some friends from the Bay Area that have had their HELOC cut off and they didn’t see it coming at all. They have always paid on time and have plenty of equity in their house.
If your HELOC hasn’t been frozen you need to know your risk:
According to CNN.com these risks include:
- Area housing prices have fallen by 10% or more.
- People who bought their home within the last couple of years with little money down are seen as risks. Maybe even people who are in an Adjustable Rate Mortgage. Who knows who the lenders see as a “risk”.
- Banks have tightened their guidelines for new HELOCs. In years past you could get a HELOC for up to 100% of the value of your house. It has dropped to 60-90% depending on the lender and area. You should call your bank and ask what the loan-to-value cap is on new HELOCs. If your house debt is above that, your line could be at risk.
-A change in credit score or a missed payment could also flag your account. Reread your contract to see if such factors allow the lender to cut you off.
If you have been “frozen” from you HELOC, you can still fight it. The letter from the lender should explain why you were cut off, and if you think it’s untrue you should fight it. For instance, if they say your credit score has declined, but you know it hasn’t, run a report and send it to them. Maybe even have your home appraised if the value of the home is in questions.
Another scenario is you could get a loan from a different bank. If you have equity and decent credit, you probably would qualify with a different lender. I’d be happy to help assist you if you have any questions regarding the matter, or if you wanted to see if you would qualify for another loan. I can be reached at rbaker@PeregrineLending.com or 805-540-0866.
And just when you thought I couldn’t offer you any more good stuff through my website…I have yet something else for you!
My free home valuations have been enhanced to include a property report. When you receive the valuation report, you’ll see a “Get Cyberhomes Report” button at the top next to the Cyberhomes logo. Click on this and you’ll get lots more info, including comparable details and graphs of interesting data.
I’ve added a new informational report to assist you and I really like this one. When you request a report, it goes out and gets the current info from our local MLS system. So, if a home Sold today (and the agent updated the MLS), you’ll see it on your report.
There’s a lot of info on the report so take your time to click around and see all it provides. You can view the info on graphs, choose smaller reporting periods and immediate display them (3 month, last 30 days, this week), and see Community and School info.
I just set it up so if you have any problems with it, please let me know. I’m not going to put a link on my home page until I know it’s working ok.
You can access the new MLS Market Snapshot reports here.
Title companies and mortgage brokers aren’t supposed to do anything to incent real estate agents to send business their way. This is a big time violation under RESPA (Real Estate Settlement Procedures Act). For example, Title Companies used to give agents a gift when a escrow closed such as a free car wash or gift basket. This is a No No but no one was reporting them. The RESPA rules say that you can’t give anything that an agent would pay for themselves. If you go into a real estate office you’re going to find things like piles of notepads with a mortgage brokers name on it. This is ok since they are using this to promote their business but they can’t give an agent a notepad with the agent’s name on it as that is something that an agent would normally pay for.
It was in the news today that Remax in Colorado is suing First American Title because First American canceled a marketing agreement where Remax was getting paid over $600,000 a year by First American for exclusive advertising to Remax agents. This lawsuit caught the attention of investigators and now they are looking to see if a violation occured.
“The Colorado Division of Real Estate has subpoenaed RE/MAX franchisees and staff members, and is investigating whether RE/MAX agents were provided with incentives such as vacation time or company-generated leads to steer consumers into purchasing title insurance from First American.”
The Tribune reported today that the County is looking at requring homes in Los Osos to be retrofitted with low-water fixtures and toilets when the home is sold because of the water concerns in Los Osos.
There is also a Bill in the Assembly that the California Association of Realtors (CAR) is opposing.
AB 2678 will require a state agency to set up a process to require point-of-sale energy efficiency audits that will cost up to $400 and ultimately will require point-of-sale energy efficiency retrofits that may cost thousand of dollars.
Here are CAR’s reasons for the opposition:
- AB 2678 will hurt your business. Heaping costly requirements on all sales will slow every residential AND commercial transaction, further weakening the real estate market and the economy.
- Point-of-sale approaches take too long. Research shows that only 22% of the properties most in need of energy efficiency retrofits will actually be sold by 2020. AB 2678 will be grossly ineffective in achieving its goals.
- AB 2678 will hurt housing affordability. The mandatory audit and retrofit requirements ultimately created could add THOUSANDS of dollars to every transaction. And every $1,000 increase in the price of a home disqualifies 26,600 families from owning.
Wondering what SLO County cities are the most active right now?? I looked at the 188 Pending Sales thus far this month (single family homes) and here is how they break down:
21- Arroyo Grande
26 – Atascadero
2 – Avila Beach
1- Bradley
7 – Cambria
8 – Cayucos
7 – Grover Beach
2 – Los Osos
8 – Morro Bay
18 – Nipomo
2 – Oceano
55 – Paso Robles
8 – Pismo Beach
19 – San Luis Obispo
2 – San Miguel
3 – Templeton
There’s a couple of new restaurants to try out.
The waffle place in SLO has just opened. It’s right at Los Osos Valley Road and 101 where Denny’s used to be.
Chili’s in Arroyo Grande is scheduled to open next week too. It’s up in the Trader Joe’s parking lot, across from Walmart.
I usually give a new restaurant a week or two to work out the kinks before I visit them.
I calculated the Median Home Prices for homes sold the first Quarter of 2008 (January 1 – March 31). Below is a chart that compares the median home price between Q1 2008 and Q1 2007. I also updated the individual city sold info. To view these, go to the home page of http://www.slowatch.com/ and scroll down to “City Stats”. Then click on “Sold Info” under the city you want to see the Sold detail.
Not sure what happened in Los Osos other than the mixture of homes were more on the higher end of the price curve than in other Quarters. Check out the detail and you’ll see how many homes in each price range sold.
I’m also researching quarterly median home prices since 2004 and I’m about half way done. I plan to provide graphs for each city so you can see what the median home price has done over the past 4 years.
| Q1 2008 | Q1 2007 | ||
| Arroyo Grande | $585,000 | $635,000 | -7.9% |
| Atascadero | $437,500 | $510,000 | -14.2% |
| Cambria | $680,000 | $642,000 | 5.9% |
| Cayucos | $900,000 | $907,500 | -0.8% |
| Grover Beach | $452,500 | $520,250 | -13.0% |
| Los Osos | $634,500 | $497,500 | 27.5% |
| Morro Bay | $480,000 | $595,000 | -19.3% |
| Nipomo | $521,500 | $565,000 | -7.7% |
| Oceano | $353,450 | $369,900 | -4.4% |
| Paso Robles | $396,500 | $443,000 | -10.5% |
| Pismo Beach | $670,000 | $789,500 | -15.1% |
| San Luis Obispo | $625,000 | $699,000 | -10.6% |
| Santa Maria | $288,750 | $393,450 | -26.6% |
Ryan’s Mortgage Blog:
Your Credit Score is obviously a big part of obtaining a loan and getting a good rate. I have pointed out some tips before, but with tightening guidelines, it is even more important to take care of your credit score now more than ever before. I can’t stress enough to take care of any problems you have with your credit score now instead of waiting until you need a loan. Problems with your report cannot be fixed over night.
There are free services out there that will give you your credit score, but the ones I have used seem to be lacking information or not as accurate compared to the ones I order through our company’s partnering credit agency (CCI – www.ccireports.com). I pay around $15 to get a detailed credit report that even lists all of your lenders names and contact information if you want to dispute something with them. CCI allows us to offer our clients a credit analyzer, rapid rescore, and other services you can check out on their website. As a note, my personal credit card company offers me a free credit score rating every month and also a free report once a year. You may check with yours to take advantage of it, but like I said, it may not be as comprehensive as some others.
If you need help fixing your credit or getting rid of errors/problems, your mortgage broker, such as myself 
, can help you. Sometimes it’s as easy as running your credit, giving you advice, and maybe calling your credit company to alert them of an error. Sometimes legal action needs to take place, which your broker can also help you with. But if you want to do it on your own, I have a site that was referred to me by some co-workers and they were pleased with their services. I haven’t used them myself because I like to handle things on my own, but I thought I would share it with you guys because I know not all of you are going to come to me for help. The site is www.lexingtonlaw.com They offer a free 11 page guide to helping you understand your credit and how the score is calculated. The guide also tells you what affects your score (I’ll cheat and give you the list, but I recommend reading the full thing to understand it):
- Previous Credit Performance
- Current level of indebtedness
- Amount of time credit has been in use
- Pursuit of new credit
- Types of credit experience
I have a copy of this guide I can email to you if you didn’t want to go on their site, but I recommend visiting the site because they have some other helpful articles. Enjoy.
