Easing of mortgage lending standards: Housing Bubble or No Bubble

Fannie Mae's third quarter 2015 Mortgage Lender Sentiment Survey™ reveals that more lenders report easing of mortgage lending standards across all loan types. Great news for home buyers.

For example, recently Chase Bank eased the lending requirements for its jumbo mortgages, which tend to be loans in excess of $417,000 in many markets and $625,500 in more expensive areas. A potential buyer now only needs a credit score of 680 and a 15% down payment to qualify for a maximum loan amount of $3 million for a primary-residence home. Borrowers used to need a 740 score and put 20% down. By easing its standards, the bank is hoping to gain more customers.

California is by far the biggest lending state when it comes to jumbo mortgages—both in dollar amount and number of loans. More than half of Bank of America’s jumbo lending is originated and closed in California, and dollar volume from January through August 2015 was up 20% over a year ago.

Fannie Mae announced its new HomeReady mortgage that will replace MyCommunityMortgage, Fannie’s previous affordable lending product. The latest product is designed to help creditworthy borrowers with lower and moderate incomes access an affordable, sustainable mortgage.

Easier credit may sound like a recipe for an automatic rerun of the housing crisis. Some critics express concern over a new housing bubble. But it’s still a far cry from the heady pre-crisis days where lenders would often waive downpayments entirely and not bother checking borrowers’ claims regarding their credit-worthiness. Unlike the catastrophic housing bubble seen at the start of this century, home price frothiness today is not being fueled by free and easy mortgage credit.

Are you concerned over a new hosing bubble? Should Mortgage Lending Standards Ease?

(Real Story) Home Selling Tips: How to fight a low appraisal

We had one property in contract, and appraisal came $80,000 in lower than purchase price. Buyer who is a Real Estate agent insisted that our seller should reconsider the sale price based on the appraisal because all other buyers will run into the exact same situation.

Not so fast!

A low home appraisal can kill the sale of a home. Our story is a bit extreme but it may happen to you. So here are home selling tips to help you fight a low appraisal.

1. Check for mistakes
You and your real estate agent need to take time to read the appraisal report. Make sure the appraiser made no mistakes that might have led to a lower valuation. Make sure facts about the home are correct, including the number of rooms and bathrooms. Also look for omissions, such as a recent addition or significant improvement that should have increased the value of the home. And make sure the comparable-sales data is fair and accurate.

2. Look at homes in the same neighborhood
The homes used in the appraisal should be in the very same neighborhood as yours, especially if some of the surrounding neighborhoods are less desirable than yours.

3. Check into the school district
This can be a significant value changer for many neighborhoods. Homes in significantly better school districts are more desirable and generally priced higher than their counterparts in sub-par districts. Be sure all homes in the appraisal share the very same school district. This can make all the difference.

4. Ask the appraiser to reconsider
Once you have copies of all your comps and any other supporting documentation, you can present all that to the appraiser and ask them to reconsider their determination. This is usually done via the bank or mortgage company that originally ordered the appraisal.

5. Ask for a second appraiser
If the appraiser refuses to reconsider his determination, and you and your agent feel there is supporting evidence that would significantly alter the outcome of the appraisal value, you can send a demand letter to the bank or mortgage company to send out for a second appraisal.

6. Order a brand-new appraisal
Finally, if all else fails, you or your real estate agent can order your own appraisal. There is a cost for that and you would have to pay for it out-of-pocket. There is no guarantee that it will come in at a better value, but if you and your team feel confident that the value should be higher, than it may be worth the expense. You can also try to have the cost split between the seller and buyer — as it benefits both.

7. Meet in the middle
If buyer agrees that appraisal value is not reflecting property improvements etc., you can meet in the middle or somewhere in between. For example, if purchase price was $500,000 and appraisal came $480,000, you can lower the purchase sale to $490,000 then buyer needs to make up the difference in cash.

As for our case, buyer/agent was determined to purchase property closer to appraised value, which was $80,000 lower, and will not go along with a dispute of the appraisal. In fact we thought this could have been appraisal fraud because the buyer could flip this property without much of their money put into it.
So we discussed the situation to our seller, here is what we did…

8. Move on to new buyer
If you and your real estate agent are confident of your property value, and market value is not declining, cancel the contract and just move on.

Our team and sellers had confidence in the property valuation, especially after performing so many Broker Price Opinions (the estimated value of a property as determined by a real estate agent) for Bank owned properties and short sales for the lenders. So, we canceled the contract, withdrew the property from market for short time, re-listed property, sold for more than asking price. The appraisal came in at the purchase price. These two appraisal difference are whopping more than $90,000!!!

As always the seller should work with experienced realtor to handle these situations.

Home Buying tips: Request for repairs

My clients are purchasing a house in Mount Merritt, Rancho El Cajon, near the Mount Helix area. Even though the house was completely remodeled recently, we submitted a request for repairs (and got almost all of it accepted).

A very important part of a Real Estate transaction, but also a very misunderstood part of the transaction is the request for repairs also known as the RFR.
Buyers often think that by requesting repairs the seller is required to do these repairs. But this is not the case. The seller can decide to either do all the repairs, a part of the repairs, none of the repairs, or give some money or credit to the buyer to have repairs done.
Most of the request for repairs should only include things that involve Health and Safety issues, or differed maintenance that should have been kept up by the seller in the first place. Smoke alarms, GFCI outlets, problems that would cause an appraiser to have to come back and look at the property again should definitely be dealt with, hopefully prior to the appraisal.
Often times major things like foundation problems or something that couldn’t have been seen in the initial viewing of property could mean that you need to renegotiate the purchase price rather than actually do a request for repairs.
One thing I always do for a request for repairs is kind of make grocery list from the inspection report. Then have the buyer decide what is very important to them, and what’s not so important. Don’t get petty. Things that are natural wear and tear should probably not be considered. However, you may want to add a few things to the list that you may not care that much about but which give seller something to reject. This may make it easier to get a couple of the things you do want done.
As a listing agent I really do not want to see a request for repairs however, I believe a buyer’s agent should always submit one on behalf of their client.
If you have any questions, contact Mark Kunce at mark@sdmyhome.com or visit my website.

Video: Is Short Sale Relocation Assistance Money Taxable?

Short sale lenders are offering your relocation fees.
Is Short Sale relocation assistance Taxable?
San Diego Short Sale Specialist Mark Kunce will answer that question.
For more information, call 619-663-7139.

Video: 0 days on Market!?

San Diego Realtor Dan Becker and Mark Kunce talk about Real Estate Market in San Diego Metro Area.

Are you a savvy home buyer? Would you like to be?
Contact us, we can help! Give us a call 619-663-7139 or visit http://www.sdmyhome.com.

Video "Real Estate Investment: A Wide Gap"

http://www.sdmyhome.com/investor.html

San  Diego Realtor Mark Kunce talks about Real Estate Investment.

Discover Neighborhood: Solana Beach, favorite destination for Denver Broncos Fans in San Diego?

The charming, seaside community of Solana Beach is nestled along the northern coast of San Diego County, and is approximately a 30 minute drive from downtown San Diego. The median sales price for homes in Solana Beach CA for Oct 12 to Dec 12 was $726,000 based on 62 home sales.

If you are a Denver Broncos Fan in San Diego County, you need go to the Chiefs Burger and Brew. Despite the name, it is the headquarters of Southern California Bronco Fans. They even have seats from the old Mile High Stadium. I recommend you to come at least 1 hour earlier to get a table.

I was so disappointed after the devastating loss against Ravens and how the defence played conservatively (but I am not against Fox's decisions to take a knee).
Looking forward to 2013 season.


If you are a Denver Broncos Fan (or football fan) and looking to buy or sell Real Estate in San Diego County, please contact me at mark@sdmyhome.com . It is always fun to talk about football while we are taking care of your buying/selling Real Estate needs.