There is something ironic that the federal government is requiring “credit class”. This has happened before when FHA lowered the conforming loan limits in Orange County from $729,000 to $625,000. The lawmakers then push the conforming limits back up to $729,000. In fact, IR did a post on this over a year ago and loan originations fell 80% when the conforming limit was lowered This could easily pass. This article is in front of the crowd.
FHA Mortgage Insurance To Fall For First-Time Buyers?
Author Dan Green Filed Under Mortgage Market Headlines
Earlier this year, the FHA raised upfront mortgage insurance premiums to 1.75% of the amount borrowed, due at closing; and raised annual mortgage insurance premiums to as high as 1.25% per year.
For homeowners in high-cost areas such as Orange County, California with mortgages in excess of $625,500, the FHA tacks on another 0.25% in MIP per year.
What was once considered an “affordability product” has suddenly become quite expensive — especially for first-time home buyers.
This is one reason why Representative Karen Bass, D-California has introduced a bill (H.R. 5884), which is sponsored by Representative Robert J. Dold, R-Illinois and Luis V. Gutierrez, D-Illinois, and which is meant to help make FHA mortgages more affordable for first-time home buyers.
The bill is listed in Open Congress as :
H.R.5884 – To establish a 1-year pilot program to reduce up-front premiums on FHA mortgage insurance for first-time homebuyers who complete a homeownership counseling program and thereby help to reduce default rates on residential mortgages.To qualify, first-time buyers would only have to complete a home ownership counseling program. The reward would be lower FHA mortgage insurance rates.
Remember the FHA program will need a bailout.
North Tustin Overview
| Median home price is $702,000. Based on a rental parity value of $673,000, this market is fairly valued. |
| Monthly payment affordability has been worsening over the last 3 month(s). Momentum suggests worsening affordability. |
| Resale prices on a $/SF basis declined from $274/SF to $274/SF. |
| Resale prices have been falling for 12 month(s). Price momentum suggests falling prices over the next three months. |
| Median rental rates increased $33 last month from $2,757 to $2,791. |
| Rents have been falling for 3 month(s). Price momentum suggests unchanging rents over the next three months. |
| Market rating = 1 |
Proprietary OC Housing News home purchase analysis 
13001 BARRETT Ln North Tustin, CA 92705
$833,000 …….. Asking Price
$833,000 ………. Purchase Price
12/22/2010 ………. Purchase Date
$0 ………. Gross Gain (Loss)
($66,640) ………… Commissions and Costs at 8%
============================================
($66,640) ………. Net Gain (Loss)
============================================
0.0% ………. Gross Percent Change
-8.0% ………. Net Percent Change
0.0% ………… Annual Appreciation
Cost of Home Ownership
——————————————————————————
$833,000 …….. Asking Price
$166,600 ………… 20% Down Conventional
3.80% …………. Mortgage Interest Rate
30 ……………… Number of Years
$666,400 …….. Mortgage
$156,206 ………. Income Requirement
$3,105 ………… Monthly Mortgage Payment
$722 ………… Property Tax at 1.04%
………… Mello Roos & Special Taxes
$208 ………… Homeowners Insurance at 0.3%
$0 ………… Private Mortgage Insurance
………… Homeowners Association Fees
============================================
$4,035 ………. Monthly Cash Outlays
($708) ………. Tax Savings
($995) ………. Equity Hidden in Payment
$213 ………….. Lost Income to Down Payment
$228 ………….. Maintenance and Replacement Reserves
============================================
$2,774 ………. Monthly Cost of Ownership
Cash Acquisition Demands
——————————————————————————
$9,830 ………… Furnishing and Move In at 1% + $1,500
$9,830 ………… Closing Costs at 1% + $1,500
$6,664 ………… Interest Points
$166,600 ………… Down Payment
============================================
$192,924 ………. Total Cash Costs
$42,500 ………. Emergency Cash Reserves
============================================
$235,424 ………. Total Savings Needed
——————————————————————————————————————————————-
This property is available for sale via the MLS.
Please contact Shevy Akason, #01836707
949.769.1599……
sales@ochousingnews.com…..
We're sorry, but it seems that we're having some problems loading MLS # P827789 from our database. Please check back soon.
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$865,000 12731 BONITA HEIGHTS Dr |
0.28 miles 4 bd / 2.75 ba 2,744 Sq. Ft. |
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$774,000 12812 VIA AVENTURA |
0.43 miles 4 bd / 2.75 ba 2,684 Sq. Ft. |
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$629,900 19301 FAIRHAVEN Ext |
0.47 miles 3 bd / 2 ba 1,875 Sq. Ft. |
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$669,800 12732 CHARMAINE Ln |
0.55 miles 4 bd / 2.25 ba 2,331 Sq. Ft. |
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$549,000 19402 CLOVER Ct |
0.56 miles 3 bd / 2 ba 2,181 Sq. Ft. |
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$949,000 13131 HEWES Ave |
0.75 miles 4 bd / 2 ba 1,869 Sq. Ft. |
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$539,900 13062 NEWHAVEN Dr |
0.77 miles 3 bd / 2 ba 2,035 Sq. Ft. |
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$699,900 6444 East NORMANDIE Cir |
0.86 miles 3 bd / 2.5 ba 2,249 Sq. Ft. |
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$565,000 13592 HEWES Ave |
0.93 miles 3 bd / 2 ba 1,752 Sq. Ft. |
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$850,000 10706 EQUESTRIAN Dr |
0.95 miles 4 bd / 2.5 ba 2,550 Sq. Ft. |
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Since lenders control short sales due to their required approval, lenders can restrict that supply as well to make prices go up and make future buyers pay more.
How Negative Equity Improves Home Values: Reports
Home prices are increasing, but one of the main drivers behind the boost in home values is also weighing on supply and demand.
According to a report from CoreLogic, negative equity is helping to drive up home prices because it also keeps homeowners from listing their property, which keeps inventory low.
Of the largest 100 markets, the five markets where prices are accelerating the fastest also have the highest share of negative equity and high demand for distressed properties.
Examples CoreLogic provided were Phoenix and Miami, where prices in May over a 12-month period appreciated by 14.7 percent and 9.7 percent, respectively.
In a recent report, Capital Economics also addressed the impact of negative equity on home values, and said that in a handful of hard-hit states, homeowner vacancy rates are well below the average, an indication of low supply.
“Presumably that’s because investment demand for cheaper homes – which are more likely to be afflicted by negative equity, and therefore in relatively short supply – is particularly
strong in States where housing valuations are especially low,” wrote Paul Diggle, property economist for Capital Economics.
CoreLogic also noted that homes in the lower-price segment are appreciating more rapidly. Over a one-year period, homes priced 125 percent or more above the national median improved by 1.8 percent compared to a 5.7 percent increase for homes priced below 75 percent of the national median.
This improvement in lower-priced homes, CoreLogic explained, is also helping to reduce the share of negative equity since underwater homes tend to be concentrated in lower-priced segments. Thus, as lower-priced underwater homes start to show price gains, they move out of negative equity. CoreLogic’s most recent report on negative equity revealed that 700,000 homes found their way out of being underwater in the first quarter of this year due to price improvements.
While negative equity does harm the housing market, Diggle said the net effect of negative equity on the homes prices is “fairly muted.”
“The bottom line is that negative equity will continue to weigh heavily on housing market activity, both on the supply side and the demand side. Nevertheless, it isn’t preventing a modest housing market recovery from taking shape,” Capital Economics concluded.