Archive for February, 2011
Californians Have Best Credit Scores In Nation
HOME LOANS, INDUSTRY NEWS, SHASTA COUNTY
A recent article in a mortgage trade journal pointed out the fact California mortgage applicants have the highest credit scores in the nation. According to the article authored by Heather Cernoch, prospective borrowers in California have average credit scores of 755, 20 points higher than the national average.
Hawaii came in second in the credit score ratings at 751. States in the northeast did well while the lowest credit scores were found in the Southeast region. Mississippi had the lowest average credit score at 695.
I suspect Redding/Shasta County avearge may be lower than California as a whole. The collapse in real estate prices locally in conjunction with double-digit unemployment and conversations with local lenders lead me to believe the average here is significantly lower.
Today, many homeowners with good jobs and credit are wrestling with the idea of strategic defaults on loans for their primary homes, second homes and investment properties. A strategic default is defined as a borrower who elects to walk away from their property because the mortgage is underwater, not because of any financial hardship.
As one mortgage industry expert points out in the article, Californians have managed to weather the wave of foreclosures and precipitous price drops without serious damage to their credit ratings. Let’s hope this trend continues!
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL LIVING REAL ESTATE PROFESSIONALS
CORNER OF COURT AND PLACER IN REDDING
NEARLY 30 YEARS LOCAL REAL ESTATE SALES EXPERIENCE
Wells Fargo Lowers Credit Score Bar for FHA Loans
FHA LOANS, HOME LOANS, TIPS FOR BUYERS
Wells Fargo implemented new underwriting rules in mid-January that will help buyers with credit scores below 600. 
Borrowers with credit scores as low as 500 can now qualify for a loan if they meet certain requirements. Here’s an outline of their new loan policies:
- Borrowers with credit scores of 500-579 must make a 10% downpayment and the downpayment cannot be a gift or provided by a downpayment assistance program such as those offered by Redding and Shasta County.
- Borrowers with credit scores between 580 and 599 must tender a 5% downpayment under the same conditions as above.
- Borrowers with credit scores of 600 or better can make a downpayment as low as 3.5% and gift funds are acceptable.
In all cases, Wells Fargo is limiting closing cost credits to the borrower from the property seller to 3%. In the past, seller contributions up to 6% were allowed.
An FHA loan is a government insured loan. The loans are processed and funded by FHA approved lenders. If the borrower defaults on the loan, the government steps in, makes the lender whole, then resells the property after foreclosure.
Historically, this program has not cost taxpayers a dime. However, the decline in home prices, the struggling economy and the marked increase usage of the FHA loan program has resulted in red ink. HUD, which oversees this loan program, recently modified the mortgage insurance requirements to increase revenues to cover losses. Today, borrowers can expect to pay more in upfront fees and monthly payments of mortgage insurance premiums to keep FHA solvent.
For additional details, contact Mike Whitman at Wells Fargo in Redding at 226-2646.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL LIVING REAL ESTATE PROFESIONALS
CORNER OF COURT AND PLACER IN REDDING
NEARLY 30 YEARS LOCAL REAL ESTATE SALES EXPERIENCE
Redding/Shasta County Pending Home Sales Soar
HOME LOANS, TIPS FOR BUYERS, TIPS FOR SELLERS
2011 started with 255 pending home sales according to the Shasta Multiple Listing Service as of January 3rd. Today, 405 homes are in escrow. That is a nearly 60% increase in just one month. How can this be?
Some of this can be attributed to dozens of last year’s pending listing inventory expiring on the last day of 2010. Many real estate agents schedule listings to expire the last day of the year. Once these agents realize their listings had expired, they reinstated the listings causing a spike in the pending listing count. This explains about half the spike. The other half is likely due to the upward bump of interest rates that occurred in December. Rates increased about 1/2 % from their historic low point reached in November. Buyers waiting on the fence jumped in when rates started inching upward.
The number of active listings has not changed significantly since the beginning of the year. Today there are 1251 active listings comapred to 1242 on January 3,2011. Likewise, the number of bank owned properties listed for sale is about the same as January 3- 255 vs. 253 today. Short sale listings are also static- 211 then vs. 205 today. The pace of home closings is steady at about 35 homes/week or 159 year-to-date.
Personally, I have noticed an upsurge in activity. The calls I receive on ads, signs, Internet postings and from past clients plus agent referrals are all up from a year ago. 2011 is starting off much brighter than 2010! I have to believe it is not just the beautiful spring-like weather but renewed optimism amongst those wishing to buy and sell. This may be the pent up demand beginning to unleash itself-just in time to absorb the much-talked-about surge of bank owned “shadow inventory” expected in the months ahead.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL LIVING REAL ESTATE PROFESSIONALS
CORNER OF COURT AND PLACER IN REDDING
NEARLY 30 YEARS LOCAL SALES EXPERIENCE
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