Banks are getting a bad repudiation maybe that’s why Credit Unions are making a come back.
Credit union mortgage lending doubles in California
By Jon Prior September 4, 2012 • 1:38pm
California credit unions took advantage of the Home Affordable Refinance Program and originated twice as many home loans in second quarter than the previous three months.
These smaller lenders wrote a collective $9.6 billion in mortgages, up from $4.6 billion at the beginning of the year. Like larger banks, credit unions were able to pick up some business from an expanded HARP, which allowed more underwater borrowers to refinance their Fannie Mae and Freddie Mac loans.
Many of the largest banks tied off new HARP to just the loans they service, and some borrowers exhausted with poorly managed government programs in the past even bypassed the largest banks for their more approachable credit unions.
“Credit unions are the good guys in all of the problems in housing. That was a big part of the inflow. The larger banks are just too big and bureaucratic,” said Diana Dykstra, CEO of the California and Nevada Credit Union Leagues.
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Proprietary OC Housing News home purchase analysis
1024 West 3RD St Santa Ana, CA 92703
$275,000 …….. Asking Price
$250,000 ………. Purchase Price
10/1/2009 ………. Purchase Date
$25,000 ………. Gross Gain (Loss)
($20,000) ………… Commissions and Costs at 8%
============================================
$5,000 ………. Net Gain (Loss)
============================================
10.0% ………. Gross Percent Change
2.0% ………. Net Percent Change
3.3% ………… Annual Appreciation
Cost of Home Ownership
——————————————————————————
$275,000 …….. Asking Price
$9,625 ………… 3.5% Down FHA Financing
3.60% …………. Mortgage Interest Rate
30 ……………… Number of Years
$265,375 …….. Mortgage
$69,292 ………. Income Requirement
$1,207 ………… Monthly Mortgage Payment
$238 ………… Property Tax at 1.04%
$0 ………… Mello Roos & Special Taxes
$69 ………… Homeowners Insurance at 0.3%
$276 ………… Private Mortgage Insurance
$0 ………… Homeowners Association Fees
============================================
$1,790 ………. Monthly Cash Outlays
($181) ………. Tax Savings
($410) ………. Equity Hidden in Payment
$11 ………….. Lost Income to Down Payment
$89 ………….. Maintenance and Replacement Reserves
============================================
$1,299 ………. Monthly Cost of Ownership
Cash Acquisition Demands
——————————————————————————
$4,250 ………… Furnishing and Move In at 1% + $1,500
$4,250 ………… Closing Costs at 1% + $1,500
$2,654 ………… Interest Points
$9,625 ………… Down Payment
============================================
$20,779 ………. Total Cash Costs
$19,900 ………. Emergency Cash Reserves
============================================
$40,679 ………. Total Savings Needed
The property above is available for sale on the MLS.
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Cost of Ownership Analysis
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$340,000 1045 West CHESTNUT Ave |
0.29 miles 3 bd / 1.75 ba 1,222 Sq. Ft. |
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0.39 miles 2 bd / 1 ba 950 Sq. Ft. |
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$264,900 720 South PARTON St |
0.67 miles 2 bd / 2 ba 998 Sq. Ft. |
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0.7 miles 2 bd / 1 ba 1,097 Sq. Ft. |
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$280,000 1029 West CUBBON St |
0.79 miles 3 bd / 1 ba 921 Sq. Ft. |
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$294,900 901 South PARTON St |
0.81 miles 3 bd / 2 ba 1,005 Sq. Ft. |
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$325,900 1434 TOLLIVER St |
0.83 miles 3 bd / 2.5 ba 1,131 Sq. Ft. |
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$285,000 1517 LOUISE St |
0.87 miles 3 bd / 1.5 ba 1,134 Sq. Ft. |
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$319,000 1731 West WILLITS St |
0.93 miles 3 bd / 1.25 ba 998 Sq. Ft. |
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$295,000 1405 West MCFADDEN Ave |
0.97 miles 3 bd / 2.5 ba 1,134 Sq. Ft. |
Fewer home buyers are first-timers
The vast majority of home buyers already own a home.
Despite low interest rates, low prices and slowly rising sales, first-time homeowners accounted for just 34% of all buyers in July, according to data released Wednesday by the National Association of Realtors. While that figure has inched up slightly from the month and year prior, the association says first-time home buyers account for 40% of purchasers under normal conditions.
The reluctance of newcomers to enter the market may be further adding to housing’s woes. After all, first-time buyers are vital to boosting sales, especially during downturns, since when they buy a home, they aren’t also selling a previous home to finance the purchase.
Their recent absence is largely due to the current challenges of saving up enough for a down payment: In a survey released in June by Trulia, an online real estate marketplace, 47% of all adults who aren’t homeowners and who wish to buy a home said that the down payment is the biggest obstacle to entering the housing market. Most mortgages require at least a 10% down payment, and in some pricey markets, like New York and San Francisco, coming up with that cash can take years, says Jed Kolko, chief economist at Trulia. A poor credit history, which makes it difficult to qualify for a mortgage, was the second most common issue holding back would-be first timers, according to Trulia’s survey.
Many potential buyers are also facing higher unemployment rates than other groups. The unemployment rate among 25- to 34-year-olds stood at 8.2% in July, compared with 6.9% for 35- to 44-year-olds and 6.5% for 45- to 54-year-olds, according to the Bureau of Labor Statistics.
Separately, first-time buyers are competing against investors—who tend to have all-cash offers and who go after the same, lower-price homes, says Leonard Baron, real estate lecturer at San Diego State University. Sellers who are eager to unload their homes are more willing to work with investors, since the sale doesn’t hinge on a bank’s decision to approve them for a mortgage. More recently, experts say, tight inventory has made it even harder for first timers to compete.
In the past, government intervention encouraged more first timers to buy a home. They accounted for nearly half of all purchases during the first half of 2009 through spring 2010, according to the NAR. That spike was partly attributable to the federal government’s $8,000 tax credit for first-time home buyers.
But there was also a larger supply of homes to choose from at that point, says Walter Molony, a spokesman for the NAR. Going forward, experts say, a larger economic recovery will have to occur in order for more lifelong renters to become home buyers. And more lower-price-range homes—in particular, foreclosures and other distressed properties now being held off the market—need to go on sale, says Molony.