Bush Signs Housing Bill

Today, Wednesday, July 30, 2008 President Bush signed the housing bill that is suppose to help 400,000 homeowners while aiding in stabilizing the financial markets that have been declining due to the housing market.

The bill that Bush had stated he would veto was signed in the Oval Office with only a few key officials present such as Henry Paulson, Treasury Secretary and Steve Preston, Housing Secretary.

White House Spokesman, Tony Fratto stated that, “We look forward to put in place new authorities to improve confidence and stability in markets,” and went on to say that the Federal Housing Administration would begin immediately to implement the new policies that will keep Americans in their homes.

The bill is been regarded as the most important housing legislation seen in decades that will allow homeowner you for whatever reason cannot afford their mortgage payments refinance their homes into affordable government backed loans which will allow them to keep their homes.

Along with this measure, the bill will also temporarily give a lifeline to Fannie Mae and Freddie Mac while reducing the controls of these businesses.

The bill was passed in the House last week, the Senate voted Saturday, and then it was sent directly to the president.

The one portion of the bill that caused President Bush to want to veto it was the provision for $3.9 billion in neighborhood grants. He believes this money will benefit the lenders, which refused to work with homeowners originally to save their homes instead of foreclosing. However, he decided he would sign the bill in order to aid the homeowners due to the fact that the Democratic congress would take forever in negotiating the grant provision and American homeowners need help now.

The bill goes as far as requiring lenders to show how high a mortgage can go under the terms of their mortgage, provides $180 million in pre-foreclosure counseling for homeowners, the Treasury Department has unlimited power until December 2009 for lending money to Fannie Mae and Freddie Mac or the power to buy their stock if needed, and also includes a nice $15 billion in tax cuts, for first-time home buyers for houses purchased between April 9, 2008, and July 1, 2009.

New Mortgage Plan

On July 28 2008, Henry Paulson the Treasury Secretary of the United States presented a mortgage plan for banks to issue covered bonds to finance home mortgages. Citi, Bank of America, JPMorgan Chase, and Wells Fargo are all behind the plan but have not stated whether they are ready at this time to issue bonds.

What this does for the American people and for banks across America are that the bank can borrow money from investors using such things as home mortgage loans as collateral. The investor will then have a claim on the items used as collateral, just in case the bank fails, instead of trying to find other creditors. This is a new concept in the US but has been used in Europe for years.

The problem here is that the International Monetary Fund stated, “”a bottom for the housing market is not visible”, while financial lending companies and policymakers are searching various ways to help make mortgages available and still fight the fight against falling house prices and the rise in foreclosures.

Paulson stated, “Covered bonds have the potential to increase mortgage financing, improve underwriting standards, and strengthen U.S. financial institutions by providing a new funding source that will diversify their overall portfolio.”

Throughout the US the way most lending companies sell their mortgages to investors was through what was called securitization or securities, however, when those with poor credit ratings began to clog the market, investors jumped ship.

Covered bonds are appealing to investors as the loans are backed by a several mortgages or other loans, which means that investors would not be standing around with other creditors, as they want for their money from a failed lending institution.

Of course, with all things it will take time for change to be seen. There is not quick fix for the US housing market, prices of homes are still above the normal price when they are compared to income and costs of rental property and banks are now tighter with their money. The real answer comes from the demand for housing must increase to see any changes.

Senate passed Homeowner Rescue Fund

Washington- The senate approved a $3.9 Billion housing bailout program today!

The number one question is this too little and too late? Especially with the caps that are in place with the higher foreclosure markets being CA and some of the more expensive areas in the country? Also, should our government be bailing these people out of their reckless decisions as homeowners and unscrupulous lenders?

President Bush will sign it quickly, the White House said, despite reservations over $3.9 billion in the bill that would aid neighborhoods devastated by the housing crisis buy and fix up foreclosed properties.

The bill, approved 72-13 in a rare weekend session in the Senate, would give the government power to throw a financial lifeline to the ailing mortgage companies Fannie Mae and Freddie Mac. They back or own $5 trillion in mortgages, or nearly half the nation’s total. The rescue plan is intended to prevent the two pillars of the home loan market from failing and causing broader market turmoil, while strengthening oversight of their operations.

An estimated 400,000 homeowners would escape foreclosure by getting the chance to refinance into more affordable loans backed by the Federal Housing Administration. There would be higher limits on loans that Fannie Mae and Freddie Mac can buy and the Federal Housing Administration can insure. The loans would be capped at $625,000.

The Senate on Friday removed the last hurdle to passage on a 80-13 test vote that showed broad support for the election-year help. The House passed the bill Wednesday.

Bush initially said the proposal was a burdensome bailout for irresponsible borrowers and lenders. But he dropped a threat to veto it this week after Treasury Secretary Henry M. Paulson argued that the support for Fannie Mae and Freddie Mac was vital to calming markets in the U.S. and abroad.

The administration also opposed the aid for neighborhoods, arguing that approach would hurt homeowners by giving lenders an incentive to foreclose rather than help people stay in their homes.

Supporters said the bill was a long-overdue response to the mortgage meltdown and would help boost the sagging economy.

Democrats bashed Republicans for delaying the measure and forcing the Saturday session.

Housing “is a matter of grave concern to many of us who see across America foreclosures that are taking away the homes of many American families and affecting the value of millions of other homes. But this could have been done yesterday,” said Sen. Richard Durbin, D-Ill.

Paulson’s request for the emergency power to rescue Fannie Mae and Freddie Mac led to a bipartisan deal on the bill, which also creates a regulator with tighter controls on the government-sponsored mortgage companies, as Republicans long sought.

Democrats won concessions as part of the compromise, including a permanent affordable housing program to be financed by the two companies’ profits and the $3.9 billion in grants.

“It’s been nearly six years since we called for a strong, independent regulator for Fannie Mae and Freddie Mac and nearly a year since the president called on Congress to quickly pass legislation to modernize the Federal Housing Administration to keep more deserving Americans in their homes, especially low-income Americans,” White House deputy press secretary Tony Fratto said.

“So it’s good that the Democratic Congress has finally acted.” He added, “Because of the Democratic Congress’ delays and the need for action now, President Bush will sign this bill when he receives it, despite our concerns with some provisions, including nearly $4 billion to help lenders, not the homeowners this legislation is intended to serve.” Many conservative Republicans are opposed to the foreclosure rescue, which they call a bailout of reckless homeowners and unscrupulous lenders. They are equally furious about the help for Fannie Mae and Freddie Mac, companies they say enjoy lavish profits in good times and wield their outsized political clout to resist regulation while depending on the government to bail them out should they falter.

Sen. Jim DeMint, R-S.C., slowed the measure’s final passage because Democrats refused to allow a vote on his proposal barring the two mortgage companies from lobbying and making political contributions. He said the legislation was a mammoth bill stuffed with extraneous items, powered by the desire of lawmakers in both parties to act on a pressing issue.

“No matter what’s wrong with it, most of the members of this Senate are going to come in and vote for it, and check the box and go home and say they did something about housing,” DeMint said.

Del Mar Real Estate update

The community of Del Mar reported 10 Del Mar homes sold at a median price of $1,777,500 and a 36.7% increase for the month of June 2008.

Del Mar has so much to offer and will always be a community that is in high demand. It is a very well known coastal community in San Diego County. Del Mar is known for its Hot Air Balloon rides as well as the San Diego Fair which is held every year at the Del Mar Fair grounds. Del Mar is also known for the Del Mar horse races that are held every year at the famous Del Mar Race Track. These and other events bring in tourists as well as the locals that want to be a part of the Del Mar excitement.

Del Mar is just north of La Jolla and very convenient to access the heart of San Diego for other cultural events or shopping. Not to mention how convenient it is to the ocean and to the beautiful mountains in San Diego. Del Mar has a lot to offer both the family as well as the person or persons looking for that ideal San Diego Condo or estate.

Where’s the Help?

Many people wishing to purchase a home often rely on seller assisted down payment assistance programs. Without this help, most middle class families cannot afford to purchase a new home. This does not mean they cannot afford their mortgage payments, but they cannot put money back in order to save for a down payment. The reason this is true is that they have x amount of dollars to live on each month, they pay rent, utilities, and all other bills on time. Many of these middle class citizens even have good credit, but cannot seem to save money for a down payment.

Now, comes, the huge slap in the face to many middle class Americans. HUD has reissued its rule to ban seller assisted down payment assistance programs and the charitable organizations that help individuals seek home ownership.

If HUD’s new rule is implemented many Americans will not be able to enjoy their dream of homeownership. The government will have to use the tax dollars of these Americans that rent and all other Americans to replace PDA’s. There will not be any recourse for those that wish to buy a home and can afford a new home, but cannot save enough money for a down payment. Of course, as long as Americans cannot buy homes, the housing market is going to be in trouble along with homeowners that wish to sell their homes.

May individuals believe turning to such loans as HUD, FHA, Freddie Mac, and Fannie Mae are the answers to our dreams, however, if they ban programs that help the Americans get into their dream homes, where is the help?

With this type of stuff going on behind the backs of Americans, whom can we turn to for help? The answer is your realtor. Contact your realtor; they can help you when it comes to buying a home or selling a home. They know exactly what is going on and can work on our behalf to fight these types of bans.

La Jolla Real Estate Update

The La Jolla Real Estate market reported 20 La Jolla Homes sold during the month of June 2008 at a median price of $1,222,000.

The La Jolla real estate market is a very unique market in many ways. If you look at the median priced properties in La Jolla you soon realize that it is a very, very high demand real estate market and there are several reasons that drive that. One main reason is the area and what is has to offer being surrounded by the Pacific Ocean and the proximity to San Diego Proper. You can literally be to the San Diego Airport in about 15-20 min you can be to downtown in about 15 minutes and you obviously can be setting on the beach in about 5 minutes. You are only minutes to Sea World and the San Diego Zoo as well as Balboa Park the the nation’s largest urban cultural park. If you are a sports fan you are only minutes to both Petco Park as well as Qualcomm Stadium. Not to mention the views from the La Jolla Homes or La Jolla Condominiums. It is truly the hidden Jewel and offers some of the most magnificent views in the world and especially in San Diego.

La Jolla will always be one of the most desired communities in Southern California and specifically San Diego County. There is a lot of tourism and vacationers that come to enjoy one of the best kept secrets in the world. Although I must say the word is getting out and once you visit you too will understand what a paradise that La Jolla truly is.

Coronado Real Estate update

The Coronado Real Estate market is by far one of the strongest in San Diego County. Last month June 2008 Coronado reported 12 Coronado homes sold at a median price of $1,480,000. That was a 23.3% increase for the month.

There are several reasons that continue to drive the Coronado Real Estate market even in these slower times. Location probably being by far one of the top reasons. It is setting literally only minutes from San Diego’s downtown and of course the ocean as it is surrounded by the ocean on all sides. You have the bay on the Downtown and Point Loma side and then ocean on the beautiful Coronado Islands side. Coronado has so much to offer it is truly a hidden jewel not to mention the Hotel Del Coronado. It is a world renown landmark that will remain one of the finest of its times. The Del brings in thousands every year and allows them to see San Diego at it’s finest. Not to mention the weather on Coronado. I once read that Coronado offers the most consistent weather in the world second only to the Canary Islands and I will say having lived there it is absolutely heaven.

Whoa! Hang On – Fannie & Freddie are Fine!

Much like everything else tied to the stock market, we have analysts, and stock trading investors that love to jump the gun. When they jump the gun, everything comes tumbling down so to speak.

When investors feel the market is not doing what they think it should and bring them record profits, they pull away from certain stocks, or sell what they own. When investors do not have confidence in any market sector, they are not going to buy stocks in that sector whether it is the housing market, oil, or even electronics. We see this trend all the time in every sector across the board.

Of course, you heard it on the news that Fannie Mae and Freddie Mac were in trouble, once again, you are listening to the Media that loves to blow everything out of proportion to get a rise out of investors, consumers, and everyone that listens.

When this occurred, the Fed’s had to do something just to ease the minds of the general public and of course those investors on Wall Street. What did they do? Well, all they really did was state that Fannie Mae and Freddy Mac cannot fail as they are both government sponsored enterprises and they will do what is necessary to stop the failure, which will never happen.

The Fed’s devised an emergency plan just to put everyone at ease, which includes:
Congress was asked to pass legislation to extend lines of credit for a temporary time period over the 2.25 billion limits at the present time.
This will give the Treasury has the option to buy equity in Fannie Mae and Freddie Mac.
In addition, grant the Federal Reserve Bank of New York the authority to lend funds to Fannie Mae and Freddie Mac if needed.

After the initial statement from the Fed’s we heard from both Fannie Mae and Freddie Mac.

Daniel H. Mudd, President, and CEO of Fannie Mae stated, “We continue to hold more than adequate capital reserves and maintain access to liquidity from the capital markets,…“Given the market turmoil, having options to access provisional sources of liquidity if needed will help to strengthen overall confidence in the market.”

Words of Richard F. Syron, Chairman and CEO of Freddie Mac were, “The company (Freddie Mac) is adequately capitalized, has a large liquidity portfolio and access to the world’s debt markets. The company’s capital and liquidity resources will enable it to continue to serve its public mission as it has always done.”

Rancho Santa Fe update

The community of Rancho Santa Fe reported 13 Rancho Santa Fe homes sold at a median price of $2,000,000 for the month of May 2008.

The community of Rancho Santa Fe is one that is always in high demand. Due to the uniqueness with its proximity to San Diego and having larger 2 Acres or more lot sizes being the norm Rancho Santa Fe offers a lot of character especially for the equestrian lovers. Not only is Rancho Santa Fe home to a lot of equestrian lovers it also has a lot to offer to the Golfer of the family as well with some of the best known Golf courses in the world like the Bridges and the Ranch.

Ranch Santa Fe has a very classy ranch family style setting and is only minutes to the Del Mar race track and fair grounds and also the beach. Offering the perfect venue for many families desiring a serene country executive style setting.

Is relief in sight?

For many homeowners on the brink of foreclosure Senate Bill 1137 in California is just in the nick of time. Recently, the State Legislature of California enacted the foreclosure reform law. Lenders will not be able to just file a default and take away homes as they did at one time. With this law in place, all lenders will have to contact the homeowner and work together with all options available at least 30 to 60 days before they can file a notice of default to begin foreclosure procedures. Homeowners upon foreclosure will have from 30 to 60 days to move from the foreclosed property unless there are other laws in place that overturn this law.

Along with this bill, any person that does purchase a home that is in foreclosure is required to do all upkeep on the exterior of the vacant property.

This bill offers a ray of hope for homeowners that have not fallen prey to the foreclosure epidemic in that if there is a way for the lending company to work with the homeowner, the homeowner will be able to keep their home.

Now, comes the alternatives to foreclosure. If a homeowner is in a home that is out of their limits to pay back the mortgage for any number of reasons such as illness that has landed the breadwinner out of work, then working out a solution will be a difficult one.

The best thing to do when contacted is to talk with the lending company. Many people feel as if they have no hope and do nothing to try to keep their. This is the number one mistake. Talk with the lending company, explain your situation, and learn what options you have available.