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Paso Robles home loan expert cautions on new rules for 2014

by pasoroblesdailynews.com

Connect Home Loans Mortgage Originator Steve Allen Cautions on Lending Confusion for Early 2014

Effective January 2014, changes in lending requirements issued by the Consumer Financial Protection Bureau will require the mortgage industry to comply with new servicing rules intended to protect the consumer. But will it be a law of unintended consequences?

With new regulations and guidelines for the mortgage industry taking effect in January 2014, Steve Allen, Loan Officer with Connect Home Loans, a Paso Robles mortgage broker, is focused on several issues: What the requirements will be, how they can be implemented in time and how they’ll affect his clients. As part of the Dodd-Frank Act of 2010, the changes issued by the Consumer Financial Protection Bureau (CFPB) will bring about a slew of new mortgage servicing rules that address a borrower’s ability to repay, what constitutes as a ‘qualified mortgage,’ and protections for high-cost mortgages. As a 25-year veteran of the lending industry in Paso Robles, Allen believes that implementation of these new requirements will become one of the most difficult challenges his industry has ever undertaken.“When you have a massive amount of regulation coming out at one time, in any industry, there’s usually a lull where everybody tries to figure out how to make it work,” explained Allen. He cautions that compliance may produce a slow-down in lending for at least the first half of 2014.

In the years leading up to the market crash of 2008, Allen says the mortgage lending industry was really just a free-for-all. “There weren’t that many professionals in the business and, for a multitude of reasons, a lot of things had snowballed; interest rates had dropped and guidelines had become so flexible because property values were skyrocketing,” he said. “Nobody felt the need to police things well and it basically got out of hand to a point where collapse was inevitable.” However, in an effort from the government to swing the pendulum the other way, Allen feels the new, wide-sweeping regulations may end up squeezing out the smaller consumer.

For example, beginning in January 2014 a very narrow set of guidelines will be instituted for so-called ‘qualified mortgages,’ or QMs. Lenders of these loans will enjoy certain legal protections from future litigation. “Pretty much most of the industry including Fannie Mae and Freddie Mac have all said that come January they’re only buying QM loans,” explained Allen. Qualifying for a QM loan requires a lower debt to income ratio. Currently, conventional loans require a maximum debt to income ratio of 45%, with FHA a little higher. When the new requirements take effect the ratio will likely be capped at 43%, across the board. “Today, if you were to put that rule in place, fully half of the people who are out there in the pipeline buying houses and getting loans would be removed,” Allen said. Additionally, costs associated with a mortgage will go up including appraisal fees.

On the up side, Allen believes that people will have to take a step back and perhaps buy less house to qualify for a QM, leading to lower housing prices in the future. “We should not see prices increasing the way they are,” Allen said. “They should be increasing about 2-5% a year, at most. Last year they increased 20% simply because of a lack of inventory.” Homeowner hopefuls who don’t qualify for a QM could be pushed into a non-qualified mortgage loan, creating a whole new market much like sub-prime loans. As Allen explains, “If you’re going to provide someone with a non-qualified mortgage, their interest rates are probably going to be a little higher, and the costs and fees are certainly going to be a higher in order to make it work.”

In dealing with these new regulations, Allen predicts that there will be a period of disruption as everyone tries to adjust and understand the rules, implement them and gauge the impact on the consumer and the lending industry.
His advice? Although it’s a competitive market, now is the time to buy. See your lender and get the process started to purchase a new home before the end of 2013. Waiting for 2014 could greatly
diminish your ability to qualify and buy, in the short term.

http://pasoroblesdailynews.com/paso-robles-home-loan-expert-cautions-on-new-rules-for-2014/6917/

 

Home Prices, Number of Houses Sold in SLO County Rise in August

by sanluisobispo.com

The total number of homes sold in San Luis Obispo County — including new homes, resale single-family homes and condos — reached its highest point in August since before the recession. The overall median home sale price rose, too, to $425,000.Three hundred and eighty-seven homes were sold in the county in August, compared with 330 a year earlier, according to DataQuick of San Diego. That’s the most sold in the month of August since 2005, when 617 homes were sold. The next year, the number of total sales fell by 59.3 percent and stayed low throughout the recession, before beginning a rebound in 2011.

The overall median home sale price in San Luis Obispo County increased 18.1 percent in August from the year-earlier period to $425,000, marking the 16th consecutive month in which it rose year over year. That’s 24.8 percent lower than the peak August median of $565,000 in 2006.The median is the midpoint where half of the residences sold for more and half for less; figures are compared year-over-year because of the highly seasonal nature of home sales. About 79 percent of the homes sold were resale single-family homes. Those sales grew 6.6 percent year-over-year to 305, and their median price grew 18.3 percent to $431,750.

DataQuick also tracks sales of condos and new homes, though data for those categories are subject to large swings because the sales numbers are so small. Condo sales rose 51.4 percent year over year to 53 units in August, and the median price rose 19.4 percent to $345,000. Sales of new homes in August more than tripled year over year, with 29 being sold compared with nine in the same month in 2012. The median price of a new home decreased by less than 1 percent from the same month last year to $442,750.

http://www.sanluisobispo.com/2013/09/17/2688492/slo-county-housing-median-price.html


Read more here: http://www.sanluisobispo.com/2013/09/17/2688492/slo-county-housing-median-price.html#storylink=cpy

National Housing Report: August 2013

by Remax.com

http://files.a2.remax.com/content/National_Housing_Report_Sept_2013.pdf?rmxaid=20320645

Location Matters: 5 Factors to Consider in Your Home Search

by Remax.com: RE/MAX Housing Blog

September 6, 2013


You’ve probably heard the real estate mantra: “Location, location, location.” It’s the key deciding factor in your new home search – and for good reason.

The location of your home dictates a lot of things: quality of life, school choices, commute times and social interactions. Even if you find the home of your dreams, never sacrifice on location. If you can’t seem to find the right home in the right location, you might need to adjust your price range or wish list as a compromise to get into the neighborhood you love.

If you’re thinking of buying a house, consider these five location factors:

Schools
If you have children, this is probably at the top of your consideration list. Make sure you thoroughly research schools that serve the neighborhoods you’re most interested in to ensure you get the exact quality of education you want for your kids. GreatSchools.org is a fantastic website to help you do your homework; it provides school reviews, test scores, demographic snapshots and much more.

Commute times
Pick your neighborhood wisely so you don’t wind up spending more time in traffic than actually enjoying your new home. When you embark on your home search, pay attention to how far your desired neighborhoods are from public transit (buses, commuter rails, subways, etc.), as well as major highways. Decide how much traffic you’re willing to deal with going to and from work every day and whether the tradeoff of living in your dream neighborhood is worth the extra commute time.

Lifestyle
Do you want to live in a historic urban neighborhood? Looking for a quiet, family-friendly suburb? The quality of life you desire is dependent upon your lifestyle needs, and you want to live in a place that will, above all else, make you and your family happy. Drive through the neighborhoods you’re interested in, walk around, and visit small businesses to get a better sense of what living in those places might be like. In other words, don’t just rely on online searches and reviews to make your decision; you have to see it all for yourself.

Local amenities
Do you want to live near amenities like restaurants, shopping and family attractions? Or are you seeking an escape from the hustle and bustle? Keep these items in mind as you embark on your home search.

Resale value
It seems odd to think about selling down the road when you’re thinking about buying, but property values are an important consideration for buyers who might want to move again in five or 10 years. Your RE/MAX agent can help you determine average prices for your target neighborhoods. Also, look at property taxes over the years to get a sense of how much (or how little) those payments could fluctuate in the future.

http://www.remax.com/c/housing-blog/blog-post/location-matters-5-factors-to-consider-in-your-home-search

C.A.R. One Cool Thing

by California Association of Realtors

SLO County's Median Home Price Rises to $415,000 in July

by sanluisobispo.com

— kleslie@thetribunenews.com
Published: August 29, 2013

The overall median home sale price in San Luis Obispo County — including new homes, resale single-family homes and condos — increased to $415,000 in July, marking the 15th consecutive month in which it rose year over year. It increased 13.7 percent from the July 2012 median price of $365,000, though it was still 24.4 percent lower than the peak July median of $548,750 in 2006, according to DataQuick of San Diego. The median is the midpoint where half of the residences sold for more and half for less; figures are compared year over year because of the highly seasonal nature of home sales. The California median price for homes sold in July increased 29.2 percent year over year to $363,000. With 48,118 homes sold statewide, July also marked the highest sales count for any month since August 2006 when 51,054 homes were sold. In San Luis Obispo County, 431 homes were sold in July, compared with 369 a year earlier. About 78 percent of the homes sold were resale single-family homes. Those sales grew 13.2 percent year-over-year to 335, and their median price grew 11.4 percent to $445,500.

DataQuick also tracks sales of condos and new homes, though data for those categories are subject to large swings because the sales numbers are so small. Condo sales rose 10 percent year-over-year to 55 units in July, though the median price fell 10.1 percent to $271,000. Sales of new homes in July rose 78.3 percent year-over-year, compared with 23 new homes sold in the same month in 2012. The median price of a new home nearly quadrupled from the same month last year: Of 41 new homes sold in July, the median price was $449,500, which is about 274.6 percent more than the July 2012 average of $120,000.

http://www.sanluisobispo.com/2013/08/29/2657235/median-home-price-slo-july.html


Read more here: http://www.sanluisobispo.com/2013/08/29/2657235/median-home-price-slo-july.html#storylink=cpy

Displaying blog entries 1-6 of 6

Contact Information

Real Team 360
RE/MAX Parkside Real Estate - BRE #01421338
1213 Vine Street
Paso Robles CA 93446
Office: (805) 238-1555