Archive for October, 2008
Brookside Neighborhood Update October 2008
October 24th, 2008 Categories: Brookside Escondido, Escondido, Market Trends, Real Estate News
Brookside Escondido continues to be one of the best values in North County. Located in North Escondido and adjacent to Reidy Creek golf course, Brookside is a gated community of 262 homes. Want a large yard, a great place for kids to grow up, or looking specifically for a home close to lots of golf? Check out Brookside Escondido!
Here is the latest look at what’s on the market, what’s under contract and what is now under contract.
Just click on the chart to enlarge it.
This neighborhood is a fabulous value for anyone looking for large homes (from 2550 square feet up to over 3600 square feet), both single story and two story, large lots (minimum lot size in Brookside is 10,000 square feet) and lots of other amenities. It’s also a gated community, with walking trails, low homeowner fees, and no mello roos!
There are a still a few “Bank Owned” homes available, and a couple of short sales as well. If you would like more information on Brookside, please call or email us. We not only list and sell Brookside, but we live here too!
If you’re looking for Bank Owned or Forecloseure Properties, just click on this link to search all of San Diego County!
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FHA Loans – Credit Requirements
October 19th, 2008 Categories: Mortgage News, Real Estate News
This is the second in a series of six posts that deal with important aspects of FHA financing. The first post provided an overview of the program. This post will detail the credit requirements necessary to obtain an FHA home loan.
Traditional Credit History
This describes the typical credit history that most people tend to establish over time. As consumers utilize credit in its many forms (credit cards, car loans, student loans, mortgages etc.) detailed histories of how they have managed their credit responsibilities are collected by at least three credit bureaus. In addition, each bureau also computes a composite credit score commonly known as your FICO score (stands for Fair Isaac Corporation, the company that created the current credit-scoring models). The FHA lender will review the FICO scores as well as the details of the individual’s credit history to determine how well a Borrower has managed credit in the past. NOTE: You may obtain a free credit report once each year, from each of the three major bureaus (Equifax, Experian and Transunion) by going to www.annualcreditreport.com. There are many websites where you can obtain your FICO scores, usually for a fee. One popular site is www.myfico.com.
Derogatory Credit
You knew we would get there eventually. Derogatory, or negative, credit are the dents and dings that people can incur in their financial lives. Here is a breakdown of how FHA lenders consider such items:
- all derogatory items within the last 24 months require a written and signed letter of explanation
- “minor” derogatory remarks older that 24 months do not require explanation
- all “major” derogs require written explanation, regardless of age (the FHA lender determines what is minor vs. major)
- collections are considered major derogs and must be explained; most FHA lenders will require them to be paid off
- judgments must likewise be paid off unless a verifiable repayment plan is in force and all payments have been made to-date
- a foreclosure must be at least 3 years old, but may be less than that for certain documented extenuating circumstances beyond the Borrower’s control (I.e. serious illness, death of a wage-earner). Divorce will not normally be considered.
- Chapter 7 bankruptcy discharge must be at least 2 years old with no new derogatory credit issues after the discharge; may be less than 2 years with acceptable extenuating circumstances. Less than 12 months not allowed
- Chapter 13 and/or Consumer Credit Counseling allowed with at least a 12-month history of on-time payments; permission of the bankruptcy court or counseling agency is required
Non-Traditional or Alternative Credit
The FHA allows for Borrowers without traditional credit histories to document their bill-paying behavior by showing on-time payment of other types of consumer bills such as rents, utility bills and car insurance. Such documentation cannot be used to enhance an existing traditional credit report or offset other derogatory credit
A Final Word On Credit
As you can see, the FHA has certain minimum standards and requirements, yet also allows FHA-approved lenders a certain degree of discretion in some areas. It is up to the lender’s underwriter to render a final decision on the creditworthiness of a particular Borrower. Some lenders may add additional requirements as well, but can never ignore or toss out FHA guidelines. Click here to go to the FHA’s consumer website.
The next post in this series will discuss income and employment requirements for obtaining FHA financing.
Contact Paul Gonzales at (800) 775-7334 or paul@pictureperfectsandiego.com
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Foreclosures In My Neighborhood – How Do They Affect My Value?
October 10th, 2008 Categories: Brookside Escondido, Escondido, Foreclosures & Short Sales, Real Estate News
Foreclosed properties and “short sales” are certainly in the news today. We are all aware that they exist in every community right now including our own neighborhoods.
Properties that have been taken back by a bank or lender and held on their books are known as “real estate owned” or REOs.For both regulatory and business reasons they must work to sell them as soon as they can and get the REOs off their ledgers. 
So-called short sales are where the private owner and the lender agree to sell the property for less than what is owed.
In our current markets, this need to liquidate properties often forces the lender to sell at a loss. As seen in recent sales figures for many areas, this practice has at least the potential to drive market prices lower in some areas.
OK – So how can the sale of a nearby foreclosure or short-sale affect me? Any individual home sale in the area is only one statistic, not the entire local market.
In fact, a common misperception is that the lowest recent home sale “sets the price” for similar properties around it.
Not so. Understanding just a couple of basics about how a professional appraiser determines value can illustrate the impact that recent nearby sales have on your home’s value.
Appraisers are required to identify recent sales of properties that are similar and near in proximity to the home being appraised; these other sales are called comparable sales, or “comps”. There are extensive rules and formulas that they use to accomplish all that but those are the general criteria that they seek.
After adjusting the sales prices for considerations such as age, size, amenities, quality and condition (among many other issues) the appraiser then has a finely-tuned range of prices that he or she will use to determine the value of the subject property being appraised.
While not impossible, it is rare that the final value ascertained will be equal to the lowest comparable sales price (REO, short-sale or otherwise). Most commonly, the final value will be somewhere within the range of prices analyzed.Which brings us back to the topic of the sale of a nearby REO or “short”.
If the lowest sales price in the pool of comps used by the appraiser is an REO and is also significantly lower than the rest of the comps in the pool, the appraiser has the latitude to comment on that aspect.
Depending upon how solid the remaining sales comps are, the REO or short-sale could have only a minimal impact on the value of the subject property.
It may thus represent only the low end of the value range for that particular market.On the other hand, if the majority of recent comps happen to consist of REOs and/or short sales, then they may well define that local market and collectively have a significant impact on the value of the subject property.
In the final analysis, the value of your property is determined by your local market and is usually defined by recent multiple sales. Regardless of whether comparable sales are private sales, short sales or REOs, the market “is what it is” at that point in time. What’s most important to remember is that for the vast majority of markets, value is not defined by any one single sales transaction!
Contact Paul at (800) 775-7334 or at paul@mycwmtg.com
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