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With all of the houses on the market these days that are either "bank owned" (REO's - Real Estate Owned) listings or "Short Sales", no wonder there is so much confusion! Below is a little bit of information on Short Sales. Next I will post information on Bank Owned properties... stay tuned!

A short sale is when a mortgage lender agrees to allow a home owner’s property to be sold for less than it’s actual market value. The lender will discount a mortgage balance to give the home owner an opportunity sell the property and turn over the proceeds to fully satisfy an outstanding loan balance. In this instance, the lender has complete control whether to approve or disapprove the sale.

Most often, the lender will approve a short sale if the home owner owes more than the current market value, also called being “upside down.” Another reason for a short sale is to avoid foreclosure. Avoiding foreclosure can be a wise decision for the lender if the home owner has encountered a serious financial hardship or more importantly, if a short sale will result in a smaller financial loss than through the foreclosure process. Also, a short sale is a better option for the home owner for a number of reasons. First, even though a short sale does show up on a consumer credit report, it is far better than a foreclosure. A foreclosure creates a long-lasting back mark on your credit report and will drop a home owner’s credit score approximately 300 points. Also, the process is somewhat faster and less expensive than a foreclosure creating a superior choice if the market has softened.

While a home owner may think a short sale is an easy way out of an “upside down” property investment, lenders will not even consider a short sale until a notice of default has been issued and a valid reason has been presented to the lender. Typically, the lender will go over the home owner’s situation very thoroughly before approving a short sale. A loss mitigation department wills asses the situation and do data analysis before approving the sale. Most often there is a hefty amount of negotiating before a sale is final to ensure the lender is fully satisfied.

News That You Can Use

4/15/08:

Economic News:

• Unemployment claims decreased by 53,000 to 357,000 for the week ending 04/5/08.

o The 4-week moving average was 378,250, an increase of 2,500 from the previous week's revised average of 375,750.

· Crude oil for May delivery gained $1.62, or 1.5%, to settle at $111.76 a barrel on the New York Mercantile Exchange.

o The U.S. consumes about one-quarter of the world's oil production.

o Worries about the U.S. economy have been weighing on energy prices.

• The U.S. Federal Bureau of Investigation includes rescue scams in overall fraud data.

o This year, the FBI says it expects 60,000 Suspicious Activity Reports related to mortgage fraud, up from 47,000 in 2007 and just 7,000 in 2003.

• The U.S. Department of Housing and Urban Development (HUD) has a list of certified counseling groups on its Web site (http://www.hud.gov) and experts say homeowners should accept help only from certified groups.

News That You Can Use

4/8/08:

Economic News:

• Unemployment claims increased by 38,000 to 407,000 for the week ending 03/29/08.
• Gas prices slipped slightly to a national average of $3.331 a gallon from Monday's record of $3.339.

Prices are 55 cents higher than a year ago.

• Affordability index has been at its highest since spring of 2004.

Lower mortgage rates and weakening home prices fuel affordability.

Higher loan limitations will help stimulate the market and try to bring in more buyers in high-cost costal markets.

Congress and the Bush administration have approved temporary increases in the conforming loan and FHA loan limits to $729,750 in high-cost markets, the limits will expire at the end of the year.

3/25/08:

Economic News:

• Unemployment claims increased by 22,000 to 378,000 for week ending 03/15/08.
• Light, sweet crude for May delivery fell 19 cents to $101.65 a barrel on the New York Mercantile Exchange.

• Average mortgage rates. – Freddie Mac

· Highlights of C.A.R.’s resale housing figures for February 2008:

o C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in February 2008 was 14.3 months, compared with 8.2 months for the same period a year ago. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.

o The median number of days it took to sell a single-family home was 68.6 days in February 2008, compared with 66.1 for the same period a year ago.

3/18/08:

Economic News:

• Unemployment claims didn’t change from the previous week’s revised figure of 353,000 for week ending 3/08/08.

o The 4-week moving average was 358,500.

• National average price of a gallon of gas dipped slightly to $3.283 a gallon, but remains 73 cents higher than a year ago.

o Diesel prices rose to a new record above $4 a gallon.

• Exports increased to $148.2 billion in January from $145.9 billion in December. Goods were $104.5 billion in January, up from $102.9 billion in December, and services were $43.7 billion in January, up from $42.9 billion in December.
• Imports increased to $206.4 billion in January from $203.7 billion in December. Goods were $173.3 billion in January, up from $170.9 billion in December, and services were $33.1 billion in January, up from $32.8 billion in December.

News That You Can Use

3/11/08:

Economic News:

• Unemployment claims decreased by 24,000 to 351,000 for week ending 3/01/08.
• The national average price of a gallon of gas rose 0.7 cents overnight to $3.222 a gallon, 69 cents higher than one year ago.
• Highlights from the Mortgage Bankers Assoc. Conference:

o Many subprime loans have stopped resetting to higher rates due to lower interest rates in global lending markets.

o Nationally, prime fixed-rate loans are still 65 % of all mortgages. Also, about 35 % of homeowners have completely paid off their mortgages.

o First-quarter 2008 numbers, due in June, could show improvement, reflecting moves by lenders to work out alternatives to foreclosures.

News That You Can Use

3/04/08:

Economic News:

• Unemployment claims increased by 19,000 to 373,000 for week ending 2/23/08.
• Stanislaus County Unemployment Stats (December):

o Rose to 10% in December, compared to the estimate of 7.7% a year ago.

o Farm jobs to the biggest loss during the month, falling from 13,100 total jobs to 12,400, a loss of 700.

o Manufacturing industry saw an increase of 1,100 jobs over the year, including a 700-job jump from November to December alone.

o Educational and health services gained 800 more jobs over a year’s time from December 2006 to last December.

• The weaker dollar that has propelled oil and other commodities prices higher sent light, sweet crude for April delivery past $103.76 a barrel on the New York Mercantile Exchange.

o The dollar has been weighed down by concerns about the U.S. economy and the Federal Reserve's interest rate-cutting campaign.

o Lower interest rates tend to weaken the dollar, which fell Monday to a new low of $1.5275 against the euro.

News That You Can Use

2/26/08:

Economic News:

• Unemployment claims decreased by 9,000 to 349,000 for week ending 2/16/08.
• Retail gas prices rose 2.2 cents to a national average of $3.137 a gallon from $3.115 Friday, the highest since June 8.
• The percentage of households that could afford to buy an entry-level home in California stood at 33 % in the fourth quarter of 2007, compared with 25 % for the same period a year ago.

o At 54 %, the High Desert region was the most affordable in the state,

o followed by the Sacramento region at 53 %.

o Monterey was the least affordable region in the state at 20 %,

o  followed by the Santa Barbara region at 21 %.

News That You Can Use

2/12/08:

Economic News:

• Unemployment claims decreased by 22,000 to 356,000 for week ending 2/2/08.
• Light, sweet crude for March delivery fell 90 cents to $92.69 a barrel on the New York Mercantile Exchange.

New Tax Laws

• If you're forced to sell a home you can no longer afford, and your lender agrees to forgive any unpaid mortgage balance, you no longer have to worry about a hefty tax bill as well. (This tax break is retroactive to Jan. 1, 2007.) With the new legislation, the tax has been eliminated until Jan. 1, 2010.
• A small bit of good news for homeowners with private mortgage insurance (PMI): Congress voted to extend the deductibility of PMI premiums until Jan. 1, 2010.

o Only homeowners with adjusted gross incomes below $100,000 are eligible for a full deduction (it phases out between $100,000 and $110,000), and only mortgages for primary residences originated after 2006 are eligible. A PMI trade association estimates this tax break will result in an average $350 annual savings for homeowners eligible for the deduction.

• Tax relief for surviving spouses. If a surviving spouse opts to sell a primary residence within two years of the death of the other spouse, the surviving spouse is eligible for a $500,000 capital gains exclusion, rather than the old $250,000 exclusion that applies to individuals.

News That You Can Use

2/05/08:

Economic News:

• Unemployment claims increased by 69,000 to 375,000 for week ending 1/26/07.

o The 4-week moving average was 325,750, an increase of 10,250 from the previous week's revised average of 315,500.

• Light, sweet crude for March delivery rose $1.06 to settle at $90.02 a barrel on the New York Mercantile Exchange.

o At the pump, gas prices fell 0.2 cent overnight to a national average of $2.977 a gallon.

News That You Can Use

1/29/08:

Economic News:

• Unemployment claims decreased by 1,000 to 301,000 for week ending 1/19/07.
• Light, sweet crude for March delivery rose 28 cents to $90.99 a barrel.
• The October to November change in exports of services reflected increases in transfers under U.S. military sales contracts ($0.2 billion);
• The October to November change in imports of services reflected an increase in other private services ($0.1 billion
• The goods deficit with Canada decreased from $5.4 billion in October to $4.7 billion in November.
• The goods deficit with China decreased from $25.9 billion in October to $24.0 billion in November. The goods deficit with the European Union decreased from $11.9 billion in October to $10.4 billion in November.

This Week In Turlock Real Estate
	1/29	1/22	1/15	1/8
Active Listings (Turlock)	448	444	436	424
Pending Listings (Turlock)	68	59	63	60
Total	516	503	499	484
Mortgage Rates
30 Year	5.63%	5.28%		5.75%
15 Year		5.43%