It seems that over the past few months, everywhere I drive there is road work going on. Some of these are short term local projects while others are going to be major projects that will yield big results once they are completed.
Re-alignment of the Ortega Highway Interchange is one such project that in underway and is expected to be completed by the Spring of 2015. This is a Caltrans project and as a part of this project, the Ortega Highway west of the freeway is being realigned to connect directly to Del Obispo instead of going straight to Camino Capistrano. The Ortega Interchange bridge is being rebuilt, and the north and south on- and off-ramps are being widened. Traffic can be a bear getting through this area - especially on Friday afternoons. For construction updates, log onto www.ortega.dot.ca.gov.
Closing the Avenida La Pata Gap Gap between San Clemente and San Juan Capistrano is another project that is just about ready to go out to bid. I have heard that there is still about a 15 million funding short-fall, but that the project will commence even with the funding issue. More information is available on this project by going to http://pcpw.ocpublicworks.com/projects/la-pata/
Extending the 241 Toll Road is a project of the TCA (Transportation Corridor Agencies) which intend to extend the 241 Toll Road 5 1/2 miles south from where it currently ends at Oso Parkway to an area near the Ortega Highway - also being called Cow Camp Road. This project is known as the Tesoro Extension and has been going through the permitting process over the summer with construction scheduled to begin as early as December 2013. For more information on this project go to www.relievetraffic.org.
The Orange County Transportation Authority (OCTA) has two projects they are undertaking to improve Interstate 5. During the first project, one carpool lane will be added in each direction on Interstate 5 from San Juan Creek Road in San Juan Capistrano to Avenida Pico in San Clemente. Avenida Pico in San Clemente will also have the freeway interchange widened. As everyone knows that lives in San Clemente, this project is desperately needed, but living with the construction will be tough since it is not expected to be completed until mid-2017. More information is available at www.octa.net/i5pico.
The second project from OCTA which is scheduled between 2018 and 2022, will address Interstate 5 from El Toro Road to the 73 Toll Road Interchange - which will be improved and the second carpool lane will be extended from its current terminus near El Toro Road to Alicia Parkway. In addition, either one or two new general purpose lanes may be added to Interstate 5 between El Toro Road and the 73 Toll Road. In June 2018, OCTA will begin rebuilding the interchanges at both La Paz Road and Avery Parkway. More information on this project can be found at www.octa.net/i5eltoro.
Thursday, October 10, 2013
Thursday, September 5, 2013
Orange County Real Estate Updates
Our market is continuing to improve with some of the following news bite updates...Orange County ranks in the Number 2 spot among the top ten locations leading the national housing recovery as per Realtor.com The city in the number 1 spot is Oakland!
The median price of an existing single family home in Orange County is now $657,080 which requires an annual income of $126,300 to qualify for this mortgage. There are 23% of Orange County households with this minimum annual income.
The median price of an existing single family home in California in June was up to $428,510 and there are 44% of California households able to qualify for a home in this price range.
Another statistics that came my way is San Clemente real estate is expected to appreciate 11.5% this coming year. So if you are still just barely breaking even on the equity in your home, there is hope that this next year will bring you back to a positive position and able to make some real estate changes.
The median price of an existing single family home in Orange County is now $657,080 which requires an annual income of $126,300 to qualify for this mortgage. There are 23% of Orange County households with this minimum annual income.
The median price of an existing single family home in California in June was up to $428,510 and there are 44% of California households able to qualify for a home in this price range.
Another statistics that came my way is San Clemente real estate is expected to appreciate 11.5% this coming year. So if you are still just barely breaking even on the equity in your home, there is hope that this next year will bring you back to a positive position and able to make some real estate changes.
Wednesday, August 28, 2013
Home Statistics for the County
As of May 2013 the median price for a resale home in Orange County is up to $540,000. That is a jump of $105,000 since the same time last year
During the first quarter of 2012 105,251 homes had mortgages that were underwater which was about 19% of homes (SOURCE: CoreLogic).
Let's fast forward to 2013 and 44,000 Orange County homes have been pushed above the water in the past year by rising home prices. This still leaves 60,989 homes with a mortgage still underwater. This equates to 11.1% of homes in the first quarter of 2013 (SOURCE: CoreLogic).
During the first quarter of 2012 105,251 homes had mortgages that were underwater which was about 19% of homes (SOURCE: CoreLogic).
Let's fast forward to 2013 and 44,000 Orange County homes have been pushed above the water in the past year by rising home prices. This still leaves 60,989 homes with a mortgage still underwater. This equates to 11.1% of homes in the first quarter of 2013 (SOURCE: CoreLogic).
Property Tax Assessment Review Period About to Expire
Just because property values have improved this past year, still does not necessarily mean that your assessed value is where it should be. Between July 2 and September 16, Orange County property owners who believe that their homes have been valued too high for property tax purposes can request a formal review of their property tax assessment value for the upcoming 2013 tax bill.
To do this you need to complete, print out, and sign the Clerk of the Board's Online Application for Changed Assessment, which is available at https://assessmentappeals.ocgov.com/aa/ you must mail the signed form to the Clerk before the deadline.
This is only for your base property tax rate and has nothing to do with special assessments. While on the topic of special assessments - remember this year when you file your tax return, you can no longer write off the special assessments as a part of your property tax bill on your California State Income Tax Form. Although legitimately we were never to write off the special assessments, it went without any enforcement until 2012 when the State has decided to enforce that component and you can be liable for fines and back unpaid taxes if you continue to use things such as your Mello Roos assessment as a property tax deduction.
To do this you need to complete, print out, and sign the Clerk of the Board's Online Application for Changed Assessment, which is available at https://assessmentappeals.ocgov.com/aa/ you must mail the signed form to the Clerk before the deadline.
This is only for your base property tax rate and has nothing to do with special assessments. While on the topic of special assessments - remember this year when you file your tax return, you can no longer write off the special assessments as a part of your property tax bill on your California State Income Tax Form. Although legitimately we were never to write off the special assessments, it went without any enforcement until 2012 when the State has decided to enforce that component and you can be liable for fines and back unpaid taxes if you continue to use things such as your Mello Roos assessment as a property tax deduction.
Sunday, August 4, 2013
Interest Rates and Inventory...What To Do???
Well, as interest rates slowly creep back up so is our inventory. While by most recent standards rates are higher (A/O 6/27/13 4.46%) we want to remember those lows of 11/2012 when they hit 3.31%. But back in November we had very little inventory and very little activity outside of the "all-cash buyer". But, many of you remember the days back in 1981 when rates skyrocketed to 18.63%. Although that was an unusual high - hovering in the 6-8% range has occured for the first decade of this century. Yes, as rates creep up your buying power shrinks...so now is the time to go looking. Inventory in Orange County, CA as of 7/3/2013 was up to 4,727 units. The low end of the market is shrinking while the upper ends continue to show growth. The largest sector of the market locally that has grown is the properties in the $500K to $750K price range which has increased 74% since March of this year. With the increase in inventory we will see a less crazy, more normal housing market which is really what we want and need.
What I hear many people saying is that we are in a new "housing bubble". While housing prices are not going to go crashing down anytime soon, as more sellers add to the inventory, the housing market is becoming more balanced and appreciation will slow down. Higher interest rates will also encourage that balance.
What I hear many people saying is that we are in a new "housing bubble". While housing prices are not going to go crashing down anytime soon, as more sellers add to the inventory, the housing market is becoming more balanced and appreciation will slow down. Higher interest rates will also encourage that balance.
Wednesday, July 31, 2013
More Information About Purchasing Again After A Short Sale - It's All About How It Is Reported
Current Fannie Mae guidelines require a 2 year waiting period after a borrower has had a short sale to be eligible for new financing with a 20% down payment. The loan must be submitted through Fannie Mae’s automated underwriting system, Desktop Underwriter (DU), to insure the short sale on their credit report will be approved.
There are three different results DU will report a loan file as:
A) Approved/Eligible-this means the buyer is approved
B) Refer/Eligible-this means the buyer’s file must be manually approved by an underwriter
C) Refer with Caution- this is a loan denial
There are 3 main credit bureaus that collect and report the information-Experian, Equifax and TransUnion. Each of the bureaus makes their own decision on what internal codes are to be used in reporting a short sale. The code most commonly used is an I-5, “Installment with Severe Delinquency”. Unfortunately the code I-9 is sometimes reported which represents a “Foreclosure”.
If two of the bureaus report an I-5 and one of the bureaus report the short sale as an I-9, Desktop Underwriter reads the report as a foreclosure and will issue a Refer with Caution because the waiting period after a foreclosure with FNMA is 7 years.
Experian refuses to change the code from I-9 to I-5 if they are the bureau reporting the short sale as a foreclosure. Their reasoning is the definition of a short sale is a pre-foreclosure which is deemed a type of foreclosure.
The remedy would be a manual underwrite because the buyer’s documentation would prove the home sold and the bank settled for less than full. However, most investors require a DU Approve/Eligible in order for them to purchase the loan so most lenders do not offer a manual underwrite on Fannie Mae loans.
One solution has been waiting for the 3 year time period to elapse and finance with FHA. The waiting period after a foreclosure is 3 years with FHA. The down side is the mortgage insurance requirement even if the borrower has 20% down payment. That can be a very expensive option for the buyer.
The takeaway from this is to know it is more than just meeting the timeframe after a short sale for the buyer to be eligible for new financing. The buyer needs to be fully approved by having their loan file entered in Fannie Mae’s automated underwriting system and have the final decision be Approved/Eligible before entering escrow.
There are three different results DU will report a loan file as:
A) Approved/Eligible-this means the buyer is approved
B) Refer/Eligible-this means the buyer’s file must be manually approved by an underwriter
C) Refer with Caution- this is a loan denial
There are 3 main credit bureaus that collect and report the information-Experian, Equifax and TransUnion. Each of the bureaus makes their own decision on what internal codes are to be used in reporting a short sale. The code most commonly used is an I-5, “Installment with Severe Delinquency”. Unfortunately the code I-9 is sometimes reported which represents a “Foreclosure”.
If two of the bureaus report an I-5 and one of the bureaus report the short sale as an I-9, Desktop Underwriter reads the report as a foreclosure and will issue a Refer with Caution because the waiting period after a foreclosure with FNMA is 7 years.
Experian refuses to change the code from I-9 to I-5 if they are the bureau reporting the short sale as a foreclosure. Their reasoning is the definition of a short sale is a pre-foreclosure which is deemed a type of foreclosure.
The remedy would be a manual underwrite because the buyer’s documentation would prove the home sold and the bank settled for less than full. However, most investors require a DU Approve/Eligible in order for them to purchase the loan so most lenders do not offer a manual underwrite on Fannie Mae loans.
One solution has been waiting for the 3 year time period to elapse and finance with FHA. The waiting period after a foreclosure is 3 years with FHA. The down side is the mortgage insurance requirement even if the borrower has 20% down payment. That can be a very expensive option for the buyer.
The takeaway from this is to know it is more than just meeting the timeframe after a short sale for the buyer to be eligible for new financing. The buyer needs to be fully approved by having their loan file entered in Fannie Mae’s automated underwriting system and have the final decision be Approved/Eligible before entering escrow.
Wednesday, July 3, 2013
Mello-Roos Explained
In 1978 California voters passed Proposition 13 which limited property taxes to about 1% of assessed value. This was great for homeowners but didn't resolve the issue of local communities needing access to tax revenues to support schools and infrastructure in newer communities. In 1982 as an end-run around Proposition 13, state legislators came up with the Community Facilities Act or more commonly referred to as Mello-Roos (named after the bill's sponsors). Mello-Roos is a special assessment on real property and is commonly found in the newer developments of Orange County, CA. Mello-Roos tax assessments help fund schools, new roads, and infrastructure such as water bonds, bridge bonds, etc. It is an assessment based upon either square footage of the lot or the building and runs usually from 15 to 30 years. Since the assessment is based upon bonds that are floated, the re-financing of these bonds can extend the initial time period of the assessment.
As a Realtor, many people specifically state that they do not want to pay Mello-Roos taxes, so you need to steer clear of areas such as Talega, Coto de Caza, Ladera Ranch, Newport Coast, and most of Aliso Viejo. Although there are newer developments such as the Reserve in San Clemente that do not have Mello-Roos taxes specifically because the developer paid off the bonds and wrapped those fees into the actual price of the homes. In Talega, the initial development had two Mello-Roos bonds while the "newer" part has an additional bond to cover the cost of the bridges. While in the age-restricted senior community, they only pay one bond (water), since to pay for a school bond would not be fair to retired homeowners.
Everyone plugged along using the Mello-Roos tax assessment as a write-off on their income tax returns along with all the other "special" assessments that show up on property tax bills. That is until NOW! Effective in the 2013 tax year, ALL special assessments can no longer be written off as a tax deduction on income tax returns. This is causing many homeowners additional grief since there are so few tax write-offs to begin with. Many homeowners in Mello-Roos tax districts are re-evaluating the cost of these assessments.
One idea that I am attempting to apply is paying off the Mello-Roos assessment at the close of escrow in selling a home. Once the assessment is paid off, the home remains free and clear of Mello-Roos for the remainder of it's life. Many homeowners are not even aware that this is an option, and it really needs to be used more frequently as a market differentiation strategy. So in essence you can buy in Talega without the burden of Mello-Roos taxes (if you happen to negotiate with a seller that is open to this strategy).
With tighter lending, eliminating the Mello-Roos cost could allow you to afford more house and who wouldn't rather have more house than more taxes?
As a Realtor, many people specifically state that they do not want to pay Mello-Roos taxes, so you need to steer clear of areas such as Talega, Coto de Caza, Ladera Ranch, Newport Coast, and most of Aliso Viejo. Although there are newer developments such as the Reserve in San Clemente that do not have Mello-Roos taxes specifically because the developer paid off the bonds and wrapped those fees into the actual price of the homes. In Talega, the initial development had two Mello-Roos bonds while the "newer" part has an additional bond to cover the cost of the bridges. While in the age-restricted senior community, they only pay one bond (water), since to pay for a school bond would not be fair to retired homeowners.
Everyone plugged along using the Mello-Roos tax assessment as a write-off on their income tax returns along with all the other "special" assessments that show up on property tax bills. That is until NOW! Effective in the 2013 tax year, ALL special assessments can no longer be written off as a tax deduction on income tax returns. This is causing many homeowners additional grief since there are so few tax write-offs to begin with. Many homeowners in Mello-Roos tax districts are re-evaluating the cost of these assessments.
One idea that I am attempting to apply is paying off the Mello-Roos assessment at the close of escrow in selling a home. Once the assessment is paid off, the home remains free and clear of Mello-Roos for the remainder of it's life. Many homeowners are not even aware that this is an option, and it really needs to be used more frequently as a market differentiation strategy. So in essence you can buy in Talega without the burden of Mello-Roos taxes (if you happen to negotiate with a seller that is open to this strategy).
With tighter lending, eliminating the Mello-Roos cost could allow you to afford more house and who wouldn't rather have more house than more taxes?
Wednesday, June 12, 2013
PHOTOS FROM NEW LISTING
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| Street view of house from street |
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| Dining room into living room with peek of entry in rear |
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| Family room toward eat in kitchen |
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| Master bedroom |
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| Master bathroom |
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| Rear patio area |
THE BEST OF TALEGA WITHOUT THE BURDEN OF MELLO ROOS
Enjoy the best of Talega without the burden of Mello Roos taxes. Picture yourself in this recently updated light and private 6 bedroom, 5.5 bath home that has two downstairs bedrooms both with in-situ baths. From this ideal end of cul-de-sac location, the property boasts a large wrap around rear and side yard including a black pebble-tec saltwater rock pool, spa, waterfalls and a large entertaining area with built-in Jenn-Air gas grill.
Updated kitchen (May 2012) with stainless steel Kitchen Aide appliances including a built-in French door refrigerator, slab Colonial Cream granite, large center island, and a walk-in pantry. Master bath was updated last summer with slab Carrara White Italian Marble. Large porcelain oval handmade vessel sinks by Whitehaus with Kraus fixtures. Tub surround with slab marble and Calcutta gold marble tile backsplash. Tub and shower were designed with access panels to plumbing valves.
Handpainted crown molding in the master bedroom with a bult-in bookshelf unit. The powder room was updated with granite, a glass vessel sink with waterfall faucet and a "statement" mirror. Two additional bathrooms were updated this year with Venetian Marble. The upstairs Jack 'n Jill bath in Blanco Perlato, Kohler under-mount sinks with glass tile backspash and decorative accents in the tub/shower with frameless European shower door. The downstairs bath was done in Tibetan Beige with a Kohler under-mount sink with glass and metal tile backsplash and decorative accents in the stall shower with a frameless shower door.
The side yard was designed with copper pipe custom-made arbors which is a haven for the local hummingbirds and finches while a small producing veetable garden is in the side rear. There is room for children's play equipment or a trampoline. Pacifica is easy walking distance to the Talega Swim and Athletic Club and the private Calle Altea Park. This property has a three-across direct access garage with 7'9" garage doors for higher profile vehicles with a large driveway that can easily accommodate 4 additional cars.
This is NOT your typical Talega home, but so much more...call for a private viewing
Updated kitchen (May 2012) with stainless steel Kitchen Aide appliances including a built-in French door refrigerator, slab Colonial Cream granite, large center island, and a walk-in pantry. Master bath was updated last summer with slab Carrara White Italian Marble. Large porcelain oval handmade vessel sinks by Whitehaus with Kraus fixtures. Tub surround with slab marble and Calcutta gold marble tile backsplash. Tub and shower were designed with access panels to plumbing valves.
Handpainted crown molding in the master bedroom with a bult-in bookshelf unit. The powder room was updated with granite, a glass vessel sink with waterfall faucet and a "statement" mirror. Two additional bathrooms were updated this year with Venetian Marble. The upstairs Jack 'n Jill bath in Blanco Perlato, Kohler under-mount sinks with glass tile backspash and decorative accents in the tub/shower with frameless European shower door. The downstairs bath was done in Tibetan Beige with a Kohler under-mount sink with glass and metal tile backsplash and decorative accents in the stall shower with a frameless shower door.
The side yard was designed with copper pipe custom-made arbors which is a haven for the local hummingbirds and finches while a small producing veetable garden is in the side rear. There is room for children's play equipment or a trampoline. Pacifica is easy walking distance to the Talega Swim and Athletic Club and the private Calle Altea Park. This property has a three-across direct access garage with 7'9" garage doors for higher profile vehicles with a large driveway that can easily accommodate 4 additional cars.
This is NOT your typical Talega home, but so much more...call for a private viewing
Monday, January 28, 2013
Update on Getting A Mortgage After Bankruptcy or Foreclosure
As with most things these days, the rules seem to change as our real estate market struggles to improve. It used to be that if you suffered a bankruptcy or foreclosure you could kiss home ownership goodbye for at least 7 years, now for the most part, the rules say that you must wait at least 3 years, depending upon the reason you lost your house.
If you lost your house do to "extenuating circumstances" over which you had no control; this includes "life-changing" events such as a job loss, serious illness, or the death of a wage earner. A divorce, a business failure or being overwhelmed by too much credit does not count. You won't just automatically qualify, but you must provide documentation that you can handle credit and afford the payments. You need a squeaky clean credit history after your life changing event.
Unfortunately, after the loss of a home, many people cut up the credit cards and live on cash. That won't cut it, you must show a good payment history to obtain a mortgage. Although you can develop an alternative credit report using your rent payments, utility bills, and cellphone payments, most lenders still want to see trade lines and a credit score.
The other factor that comes into play is if you seek a mortgage with a government-backed financing, the wait time is usually less. For instance, mortgages insured by the Department of Veterans Affairs, after a Chapter 13 bankruptcy, the minimum wait time for VA financing is just 12 months; a Chapter 7 bankruptcy the wait is usually about 24 months.
FHA has essentially the same rules as the VA regarding bankruptcies - one year for Chapter 13 and two years for Chapter 7. If you went through a short sale or foreclosure it is usually three years...again if there are documentable extenuating circumstances the waits can be shorter.
For conventional loans, the wait times are tiered, 2 years after a short sale if there are extenuating circumstances, 4 years without. Freddie Mac guidelines say that when a borrower's financial issues were due to his mismanagment: An acceptable credit reputation must be reestablished for at least 84 months if he or she was foreclosed upon, 60 months if the borrower filed more than one bankruptcy petition in the last seven years, 48 months after the discharge or dismissal of a Chapter 7 bankruptcy, and 48 months after conveyance of a deed in lieu of foreclosure or a short payoff.
The wait is 48 months for all other significant adverse or derogatory credit information, but only 24 months from the discharge date of a Chapter 13 bankruptcy. If extenuating circumstances can be shown, and if there is evidence on the credit report that the borrower has reestablished an acceptable credit reputation, the wait is 36 months if you went through a foreclosure of filed more than one bankruptcy petition in the last seven years. If the bankruptcy was discharged or dismissed, the wait is only 24 months. As well as for a short sale, deed-in-lieu, or if the borrower suffered another significant adverse or derogatory credit event.
So don't despair, there is light on the horizon.
If you lost your house do to "extenuating circumstances" over which you had no control; this includes "life-changing" events such as a job loss, serious illness, or the death of a wage earner. A divorce, a business failure or being overwhelmed by too much credit does not count. You won't just automatically qualify, but you must provide documentation that you can handle credit and afford the payments. You need a squeaky clean credit history after your life changing event.
Unfortunately, after the loss of a home, many people cut up the credit cards and live on cash. That won't cut it, you must show a good payment history to obtain a mortgage. Although you can develop an alternative credit report using your rent payments, utility bills, and cellphone payments, most lenders still want to see trade lines and a credit score.
The other factor that comes into play is if you seek a mortgage with a government-backed financing, the wait time is usually less. For instance, mortgages insured by the Department of Veterans Affairs, after a Chapter 13 bankruptcy, the minimum wait time for VA financing is just 12 months; a Chapter 7 bankruptcy the wait is usually about 24 months.
FHA has essentially the same rules as the VA regarding bankruptcies - one year for Chapter 13 and two years for Chapter 7. If you went through a short sale or foreclosure it is usually three years...again if there are documentable extenuating circumstances the waits can be shorter.
For conventional loans, the wait times are tiered, 2 years after a short sale if there are extenuating circumstances, 4 years without. Freddie Mac guidelines say that when a borrower's financial issues were due to his mismanagment: An acceptable credit reputation must be reestablished for at least 84 months if he or she was foreclosed upon, 60 months if the borrower filed more than one bankruptcy petition in the last seven years, 48 months after the discharge or dismissal of a Chapter 7 bankruptcy, and 48 months after conveyance of a deed in lieu of foreclosure or a short payoff.
The wait is 48 months for all other significant adverse or derogatory credit information, but only 24 months from the discharge date of a Chapter 13 bankruptcy. If extenuating circumstances can be shown, and if there is evidence on the credit report that the borrower has reestablished an acceptable credit reputation, the wait is 36 months if you went through a foreclosure of filed more than one bankruptcy petition in the last seven years. If the bankruptcy was discharged or dismissed, the wait is only 24 months. As well as for a short sale, deed-in-lieu, or if the borrower suffered another significant adverse or derogatory credit event.
So don't despair, there is light on the horizon.
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