Escena model homes reopen, crews working to make golf course playable.
The stalled Escena development in Palm Springs is springing back to life.
Palm trees and desert-tolerant plants are being planted along the outer perimeter of the eventual 1,450-home community project that includes the fallow golf course on 460 acres along Vista Chino Road and Gene Autry Trail.
Landscaping teams are working their way around the corners.
The guard-house entrance is being spruced up.
And Greg McGuff, division president of Lennar Corp., said the Escena model homes have reopened to spur the sale of a standing-stock of 38 homes.
It comes at a time the California Desert Association of Realtors reported a 47 percent increase in Multiple Service Listed sales in April compared to the year before. It noted an 11.7 percent gain over the previous month, and a decline in inventory for the third month in a row.
Lennar is not only working on perimeter landscaping.
McGuff said the company is working to make the Jack Nicklaus-designed golf course that closed in November 2007 playable again. “By September, we expect to have the clubhouse completed,” he said.
For months, the sprawling master- planned community that includes models built by Standard Pacific Homes has seemed frozen in time.
The biggest step to spur the Escena restart came in March and April.
New Valley PS, a subsidiary of New Valley LLC, a limited liability company engaged in the real estate business, acquired all the land but that on which the homes of Lennar and Standard Pacific already sit.
New Valley Palm Springs LLC became the new owners of roughly 450 acres in the community when it bought a loan out of foreclosure.
The loan was acquired at its $20million face value, plus accrued interest and other costs, for about $1.5million, according to the parent company New Valley LLC of New York.
It was the collateral property for the debt accrued by Lennar Homes of California Inc. and Empire Land LLC, which were equal partners of Escena. Standard Pacific bought home sites from the Escena venture, and were not involved in the foreclosure action, McGuff said.
“That's history, and I'd rather not relive it,” McGuff said. “I'd rather talk about the future.
L.J. Edgcomb, a builder in Southern California for 20 years who is working as an agent of New Valley Palm Springs LLC, said the new buyer has laid claim to 252 detached home sites, the golf course and land that has been entitled for 615 attached products: townhouses, condos and possibly a hotel.
Asked if New Valley is mulling construction starts at this time, Edgcomb said it's too early to tell.
“We're focusing on the community improvements now,” he said.
“We have owned the property now for just over one month, so as any new owner would do, we are just now still sorting out the details.”
The real estate market is changing so rapidly that it would be premature to say what's in the cards right now, he said.
At the same time, he added: “This is positive. Any movement forward is positive.”
Wednesday, June 3, 2009
Tuesday, June 2, 2009
HOMEBUYER TAX CREDIT
DONOVAN ANNOUNCES RECOVERY ACT'S HOMEBUYER TAX CREDIT CAN IMMEDIATELY HELP THOUSANDS OF FIRST-TIME HOMEBUYERS TO BUY A HOME.
FHA plan will stimulate new home sales and help stabilize housing market.
WASHINGTON - Speaking to the National Association of Home Builders Spring Board of Directors Meeting, U.S. Housing and Urban Development Secretary Shaun Donovan today announced that the Federal Housing Administration (FHA) will allow homebuyers to apply the Obama Administration's new $8,000 first-time homebuyer tax credit toward the purchase costs of a FHA-insured home. Donovan said that today's action will help stabilize the nation's housing market by stimulating home sales across the country.
The American Recovery and Reinvestment Act of 2009 offers homebuyers a tax credit of up to $8,000 for purchasing their first home. Families can only access this credit after filing their tax returns with the IRS. Today's announcement details FHA's rules allowing state Housing Finance Agencies and certain non-profits to "monetize" up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate. To read the FHA's new mortgagee letter, visit HUD's website.
"We believe this is a real win for everyone," said Donovan. "Today, the Obama Administration is taking another important step toward accelerating the recovery of the nation's housing market. Families will now be able to apply their anticipated tax credit toward their home purchase right away. At the same time we are putting safeguards in place to ensure that consumers will be protected from unscrupulous lenders. What we're doing today will not only help these families to purchase their first home but will present an enormous benefit for communities struggling to deal with an oversupply of housing."
Currently, borrowers applying for an FHA-insured mortgage are required to make a minimum 3.5 percent downpayment on the purchase of their home. Current law does not permit approved lenders to monetize the tax credit to meet the required 3.5 percent minimum down payment, but, under the terms of today's announcement, lenders can now monetize the tax credit for use as additional down payment, or for other closing costs, which can help achieve a lower interest rate. Buyers financing through state Housing Finance Agencies and certain non-profits will be able to use the tax credit for their downpayments via secondary financing provided by the HFA or non-profit. In addition to the borrower's own cash investment, FHA allows parents, employers and other governmental entities to contribute towards the downpayment. Today's action permits the first-time homebuyer's anticipated tax credit under the Recovery Act to be applied toward the family's home purchase right away. Unlike seller-funded down-payment assistance, which was a vehicle for abuse, this program will allow homebuyers to shop for the best home price and services using their anticipated tax credit.
According to estimates by the National Association of Home Builders, the Administration's homebuyer tax credit will stimulate 160,000 home sales across the nation - 101,000 of which will be first-time buyers who will receive the credit. Another 59,000 existing homeowners will be able to buy another home because a first-time buyer purchased their home. Given FHA's current market share, it's estimated that thousands of families will be able to purchase a home by allowing the anticipated tax credit to be applied toward their purchase together with an FHA-insured mortgage.
Homebuyers should beware of mortgage scams and carefully compare benefits and costs when seeking out tax credit monetization services. Programs will vary from organization to organization and borrowers should consider whether the services make sense for them, as well as what company offers the most suitable and affordable option.
For every FHA borrower who is assisted through the tax credit program, FHA will collect the name and employer identification number of the organization providing the service as well as associated fees and charges. FHA will use this information to track the business closely and will refer any questionable practices to the appropriate regulatory agencies, as necessary.
FHA plan will stimulate new home sales and help stabilize housing market.
WASHINGTON - Speaking to the National Association of Home Builders Spring Board of Directors Meeting, U.S. Housing and Urban Development Secretary Shaun Donovan today announced that the Federal Housing Administration (FHA) will allow homebuyers to apply the Obama Administration's new $8,000 first-time homebuyer tax credit toward the purchase costs of a FHA-insured home. Donovan said that today's action will help stabilize the nation's housing market by stimulating home sales across the country.
The American Recovery and Reinvestment Act of 2009 offers homebuyers a tax credit of up to $8,000 for purchasing their first home. Families can only access this credit after filing their tax returns with the IRS. Today's announcement details FHA's rules allowing state Housing Finance Agencies and certain non-profits to "monetize" up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate. To read the FHA's new mortgagee letter, visit HUD's website.
"We believe this is a real win for everyone," said Donovan. "Today, the Obama Administration is taking another important step toward accelerating the recovery of the nation's housing market. Families will now be able to apply their anticipated tax credit toward their home purchase right away. At the same time we are putting safeguards in place to ensure that consumers will be protected from unscrupulous lenders. What we're doing today will not only help these families to purchase their first home but will present an enormous benefit for communities struggling to deal with an oversupply of housing."
Currently, borrowers applying for an FHA-insured mortgage are required to make a minimum 3.5 percent downpayment on the purchase of their home. Current law does not permit approved lenders to monetize the tax credit to meet the required 3.5 percent minimum down payment, but, under the terms of today's announcement, lenders can now monetize the tax credit for use as additional down payment, or for other closing costs, which can help achieve a lower interest rate. Buyers financing through state Housing Finance Agencies and certain non-profits will be able to use the tax credit for their downpayments via secondary financing provided by the HFA or non-profit. In addition to the borrower's own cash investment, FHA allows parents, employers and other governmental entities to contribute towards the downpayment. Today's action permits the first-time homebuyer's anticipated tax credit under the Recovery Act to be applied toward the family's home purchase right away. Unlike seller-funded down-payment assistance, which was a vehicle for abuse, this program will allow homebuyers to shop for the best home price and services using their anticipated tax credit.
According to estimates by the National Association of Home Builders, the Administration's homebuyer tax credit will stimulate 160,000 home sales across the nation - 101,000 of which will be first-time buyers who will receive the credit. Another 59,000 existing homeowners will be able to buy another home because a first-time buyer purchased their home. Given FHA's current market share, it's estimated that thousands of families will be able to purchase a home by allowing the anticipated tax credit to be applied toward their purchase together with an FHA-insured mortgage.
Homebuyers should beware of mortgage scams and carefully compare benefits and costs when seeking out tax credit monetization services. Programs will vary from organization to organization and borrowers should consider whether the services make sense for them, as well as what company offers the most suitable and affordable option.
For every FHA borrower who is assisted through the tax credit program, FHA will collect the name and employer identification number of the organization providing the service as well as associated fees and charges. FHA will use this information to track the business closely and will refer any questionable practices to the appropriate regulatory agencies, as necessary.
Wednesday, May 20, 2009
Buyer Tax Credit Loan "Guidance" Coming Soon
Detailed guidance on the federal government's plan to provide short-term loans to borrowers using the First-Time Homebuyer Tax Credit is expected to be out shortly, but a spokesperson from the U.S. Department of Housing and Urban Development, which is writing the guidance, couldn't give a firm release date. HUD policy staff are "still working out the details on it," HUD spokesperson Lamar Wooley told REALTOR® Magazine today. "So we expect it to be published shortly."
The short-term loan program, which would effectively monetize the first-time homebuyer tax credit by permitting eligible lenders to make bridge loans collateralized by the borrower's expected tax credit, was announced by HUD Secretary Shaun Donovan at the Real Estate Summit NAR hosted on the opening day of its 2009 Midyear Legislative Meetings in Washington last week. At the summit, Donovan said the loans would enable FHA consumers to access the tax credit funds when they close on their home loans so that the cash could be used as a downpayment.
"FHA will permit trusted FHA-approved lenders and HUD-approved nonprofits, as well as state and local governmental entities to 'monetize' the tax credit through short-term bridge loans," Donovan said. "We think the policy is a real win for everyone, ensuring that borrowers can tap into the numerous organizations that are already part of the FHA network to receive this additional benefit. FHA will be publishing the details shortly."
It's unclear at this point what shape the guidance will take and whether authorization for the loans will be available across the board or only in states in which the state housing finance agency already has a tax credit bridge-loan program in place. There are 10 states today that have such a loan program, according to the National Council of State Housing Agencies: Colorado, Delaware, Idaho, Kentucky, Missouri, New Jersey, New Mexico, Ohio, Pennsylvania, and Tennessee. (Of course, California isn't there yet.)
When it's released, the guidance is expected to be issued as a HUD Mortgagee Letter and will likely discuss which federal, state, and local governmental agencies and nonprofit organizations will be permitted to make the loans, and whether lenders such as FHA-approved mortgagees will be permitted to make the loans. The guidance could also cover how loan amounts will be limited, what happens if repayment problems occur, and what repayment terms would look like.
The short-term loan program, which would effectively monetize the first-time homebuyer tax credit by permitting eligible lenders to make bridge loans collateralized by the borrower's expected tax credit, was announced by HUD Secretary Shaun Donovan at the Real Estate Summit NAR hosted on the opening day of its 2009 Midyear Legislative Meetings in Washington last week. At the summit, Donovan said the loans would enable FHA consumers to access the tax credit funds when they close on their home loans so that the cash could be used as a downpayment.
"FHA will permit trusted FHA-approved lenders and HUD-approved nonprofits, as well as state and local governmental entities to 'monetize' the tax credit through short-term bridge loans," Donovan said. "We think the policy is a real win for everyone, ensuring that borrowers can tap into the numerous organizations that are already part of the FHA network to receive this additional benefit. FHA will be publishing the details shortly."
It's unclear at this point what shape the guidance will take and whether authorization for the loans will be available across the board or only in states in which the state housing finance agency already has a tax credit bridge-loan program in place. There are 10 states today that have such a loan program, according to the National Council of State Housing Agencies: Colorado, Delaware, Idaho, Kentucky, Missouri, New Jersey, New Mexico, Ohio, Pennsylvania, and Tennessee. (Of course, California isn't there yet.)
When it's released, the guidance is expected to be issued as a HUD Mortgagee Letter and will likely discuss which federal, state, and local governmental agencies and nonprofit organizations will be permitted to make the loans, and whether lenders such as FHA-approved mortgagees will be permitted to make the loans. The guidance could also cover how loan amounts will be limited, what happens if repayment problems occur, and what repayment terms would look like.
Thursday, May 14, 2009
Tax credit can be used as down payment on FHA Loans !!
The government today gave the green light to the financing of bridge loans of up to $8,000 to first time home buyers who qualify for tax credits under the Obama Administration’s economic stimulus plan. The new mortgagee letter stipulates that government agencies, non-profits and FHA-approved lenders can give advances on the tax credits. Housing secretary Shaun Donovan told a national Realtor group Tuesday that, “We want to enable FHA consumers to access the tax credit funds when they close on their home loans so that cash can be used as a down payment.
WASHINGTON, May 12, 2009
Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, said that the Federal Housing Administration is going to permit its lenders to allow homeowners to use the $8,000 tax credit as a down payment. Secretary Donovan said that important changes, which the National Association of Realtors® has been calling for, will help consumers purchase a home. “We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a down payment,” Donovan said. According to Donovan, the FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.
Donovan said the Obama administration plans to further stabilize the housing market. “I do think we have some early signs hat the market overall is stabilizing,” said Donovan. “Since January we’ve seen both home sales moving up and down around a relatively stable number and we are seeing the first signs that the rapid decline in home prices is starting to abate.”
WASHINGTON, May 12, 2009
Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, said that the Federal Housing Administration is going to permit its lenders to allow homeowners to use the $8,000 tax credit as a down payment. Secretary Donovan said that important changes, which the National Association of Realtors® has been calling for, will help consumers purchase a home. “We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a down payment,” Donovan said. According to Donovan, the FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.
Donovan said the Obama administration plans to further stabilize the housing market. “I do think we have some early signs hat the market overall is stabilizing,” said Donovan. “Since January we’ve seen both home sales moving up and down around a relatively stable number and we are seeing the first signs that the rapid decline in home prices is starting to abate.”
Tuesday, May 12, 2009
Big U.S. banks selling stock to repay government
NEW YORK (Reuters) - Four big U.S. banks on Monday said they would sell $6.55 billion of common stock and repay funds from the government's bank bailout program, after federal stress tests showed they can weather a deep recession without new capital.
U.S. Bancorp plans to sell $2.5 billion of stock, and sold $1 billion of five-year notes. Capital One Financial Corp sold $1.55 billion of stock, BB&T Corp said it will sell $1.5 billion, and Bank of New York Mellon Corp said it will sell $1 billion.
BB&T also cut its quarterly dividend 68 percent to 15 cents per share to save $725 million a year, after 37 straight years of higher payouts. Chief Executive Kelly King in an interview said the decision marks "the worst day in my 37-year career."
Separately, KeyCorp said it would sell $750 million of stock to help plug what regulators called a $1.8 billion capital shortfall. KeyCorp said it may take other actions, including converting other securities to common stock.
The offerings were announced three days after Wells Fargo & Co and Morgan Stanley sold a combined $12.6 billion of stock. Morgan Stanley also sold $4 billion of debt.
These banks were among 19 lenders to undergo government tests of their ability to weather a deep economic downturn. Regulators last week ordered 10 lenders, including Wells Fargo and Morgan Stanley, to raise a combined $74.6 billion.
Banks are raising capital after improved investor sentiment caused shares in the sector to more than double from their lows in early March, despite worsening credit conditions in housing, commercial loans and credit cards.
"They're trying to get while the getting is good," said Walter Todd, who helps invest $650 million at Greenwood Capital Associates LLC in Greenwood, South Carolina. "Fundamentals of banks appear not as bad they were, but they are still not good given the underlying conditions in the economy."
U.S. Bancorp is based in Minneapolis; Capital One in McLean, Virginia; BB&T in Winston-Salem, North Carolina; Bank of New York Mellon in New York, and KeyCorp in Cleveland.
In Monday trading, shares of U.S. Bancorp fell 9.9 percent to $18.50; Capital One fell 13.5 percent to $27.10; BB&T fell 7.6 percent to $24.34; Bank of New York Mellon fell 8.1 percent to $29.55, and KeyCorp fell 9.9 percent to $6.28.
Bank of New York Mellon announced its offering after markets closed. The 24-member KBW Bank Index, which includes all five banks, fell 7.1 percent. Capital One's close was below the $27.75 per share price of its stock offering.
BB&T CEO CRITICIZES TARP
U.S. Bancorp took $6.6 billion from the government's Troubled Asset Relief Program, while Capital One took $3.55 billion, BB&T $3.1 billion and KeyCorp $2.5 billion.
Hundreds of lenders took money from TARP, which was designed to spur lending and improve the economy.
Yet many now view TARP as an albatross that imposes too many restrictions, including on executive pay, and suggests that recipients are desperate for capital.
"Rational, objective lending is one of the most important purposes of the banking system, and when you inject Congress and the administration into it, it effectively politicizes the process, which is not healthy," BB&T's King said.
King also said the stress tests unnecessarily created "huge levels of anxiety and concern" among investors. "Regulators have always had the ability to assess the capital of institutions, and require more if they chose," he said.
At least one dozen lenders have repaid or gotten permission to repay TARP, and Goldman Sachs Group Inc and JPMorgan Chase & Co have said they want to do so as well.
Goldman Sachs & Co and Morgan Stanley are arranging the offerings for U.S. Bancorp and Bank of New York Mellon. Barclays Capital arranged the Capital One offering. Goldman Sachs, JPMorgan and Morgan Stanley are arranging the BB&T offering. Morgan Stanley is arranging the KeyCorp offering.
U.S. Bancorp plans to sell $2.5 billion of stock, and sold $1 billion of five-year notes. Capital One Financial Corp sold $1.55 billion of stock, BB&T Corp said it will sell $1.5 billion, and Bank of New York Mellon Corp said it will sell $1 billion.
BB&T also cut its quarterly dividend 68 percent to 15 cents per share to save $725 million a year, after 37 straight years of higher payouts. Chief Executive Kelly King in an interview said the decision marks "the worst day in my 37-year career."
Separately, KeyCorp said it would sell $750 million of stock to help plug what regulators called a $1.8 billion capital shortfall. KeyCorp said it may take other actions, including converting other securities to common stock.
The offerings were announced three days after Wells Fargo & Co and Morgan Stanley sold a combined $12.6 billion of stock. Morgan Stanley also sold $4 billion of debt.
These banks were among 19 lenders to undergo government tests of their ability to weather a deep economic downturn. Regulators last week ordered 10 lenders, including Wells Fargo and Morgan Stanley, to raise a combined $74.6 billion.
Banks are raising capital after improved investor sentiment caused shares in the sector to more than double from their lows in early March, despite worsening credit conditions in housing, commercial loans and credit cards.
"They're trying to get while the getting is good," said Walter Todd, who helps invest $650 million at Greenwood Capital Associates LLC in Greenwood, South Carolina. "Fundamentals of banks appear not as bad they were, but they are still not good given the underlying conditions in the economy."
U.S. Bancorp is based in Minneapolis; Capital One in McLean, Virginia; BB&T in Winston-Salem, North Carolina; Bank of New York Mellon in New York, and KeyCorp in Cleveland.
In Monday trading, shares of U.S. Bancorp fell 9.9 percent to $18.50; Capital One fell 13.5 percent to $27.10; BB&T fell 7.6 percent to $24.34; Bank of New York Mellon fell 8.1 percent to $29.55, and KeyCorp fell 9.9 percent to $6.28.
Bank of New York Mellon announced its offering after markets closed. The 24-member KBW Bank Index, which includes all five banks, fell 7.1 percent. Capital One's close was below the $27.75 per share price of its stock offering.
BB&T CEO CRITICIZES TARP
U.S. Bancorp took $6.6 billion from the government's Troubled Asset Relief Program, while Capital One took $3.55 billion, BB&T $3.1 billion and KeyCorp $2.5 billion.
Hundreds of lenders took money from TARP, which was designed to spur lending and improve the economy.
Yet many now view TARP as an albatross that imposes too many restrictions, including on executive pay, and suggests that recipients are desperate for capital.
"Rational, objective lending is one of the most important purposes of the banking system, and when you inject Congress and the administration into it, it effectively politicizes the process, which is not healthy," BB&T's King said.
King also said the stress tests unnecessarily created "huge levels of anxiety and concern" among investors. "Regulators have always had the ability to assess the capital of institutions, and require more if they chose," he said.
At least one dozen lenders have repaid or gotten permission to repay TARP, and Goldman Sachs Group Inc and JPMorgan Chase & Co have said they want to do so as well.
Goldman Sachs & Co and Morgan Stanley are arranging the offerings for U.S. Bancorp and Bank of New York Mellon. Barclays Capital arranged the Capital One offering. Goldman Sachs, JPMorgan and Morgan Stanley are arranging the BB&T offering. Morgan Stanley is arranging the KeyCorp offering.
Monday, May 11, 2009
U.S. threatens to rescind stimulus money over wage cuts
The Obama administration threatens to rescind billions in stimulus money if Gov. Schwarzenegger and lawmakers do not restore wage cuts to unionized home healthcare workers.
Reporting from Sacramento -- The Obama administration is threatening to rescind billions of dollars in federal stimulus money if Gov. Arnold Schwarzenegger and state lawmakers do not restore wage cuts to unionized home healthcare workers approved in February as part of the budget.
Schwarzenegger's office was advised this week by federal health officials that the wage reduction, which will save California $74 million, violates provisions of the American Recovery and Reinvestment Act. Failure to revoke the scheduled wage cut before it takes effect July 1 could cost California $6.8 billion in stimulus money, according to state officials.
The news comes as state lawmakers are already facing a severe cash crisis, with the state at risk of running out of money in July.
The wages at issue involve workers who care for some 440,000 low-income disabled and elderly Californians. The workers, who collectively contribute millions of dollars in dues each month to the influential Service Employees International Union and the United Domestic Workers, will see the state's contribution to their wages cut from a maximum of $12.10 per hour to a maximum of $10.10.
The SEIU said in a statement that it had asked the Obama administration for the ruling.
The cut was highly contentious during last winter's budget talks. Republican lawmakers insisted that the rapidly growing, multibillion-dollar state program, In Home Supportive Services, be scaled back significantly.
Democrats fought major reductions in the program, which they say is a cost-effective alternative to nursing-home care, but ultimately compromised.
Reversing the wage cut would require a two-thirds vote of the Legislature, meaning Republican support would be needed.
Schwarzenegger on Wednesday sent U.S. Secretary of Health and Human Services Kathleen Sebelius a letter urging the federal government to reconsider.
"Neither the Legislature nor I make decisions to reduce wages or benefits lightly, but only as a last resort in response to an unprecedented fiscal crisis," Schwarzenegger wrote.
Reporting from Sacramento -- The Obama administration is threatening to rescind billions of dollars in federal stimulus money if Gov. Arnold Schwarzenegger and state lawmakers do not restore wage cuts to unionized home healthcare workers approved in February as part of the budget.
Schwarzenegger's office was advised this week by federal health officials that the wage reduction, which will save California $74 million, violates provisions of the American Recovery and Reinvestment Act. Failure to revoke the scheduled wage cut before it takes effect July 1 could cost California $6.8 billion in stimulus money, according to state officials.
The news comes as state lawmakers are already facing a severe cash crisis, with the state at risk of running out of money in July.
The wages at issue involve workers who care for some 440,000 low-income disabled and elderly Californians. The workers, who collectively contribute millions of dollars in dues each month to the influential Service Employees International Union and the United Domestic Workers, will see the state's contribution to their wages cut from a maximum of $12.10 per hour to a maximum of $10.10.
The SEIU said in a statement that it had asked the Obama administration for the ruling.
The cut was highly contentious during last winter's budget talks. Republican lawmakers insisted that the rapidly growing, multibillion-dollar state program, In Home Supportive Services, be scaled back significantly.
Democrats fought major reductions in the program, which they say is a cost-effective alternative to nursing-home care, but ultimately compromised.
Reversing the wage cut would require a two-thirds vote of the Legislature, meaning Republican support would be needed.
Schwarzenegger on Wednesday sent U.S. Secretary of Health and Human Services Kathleen Sebelius a letter urging the federal government to reconsider.
"Neither the Legislature nor I make decisions to reduce wages or benefits lightly, but only as a last resort in response to an unprecedented fiscal crisis," Schwarzenegger wrote.
Tuesday, April 28, 2009
U.S. to pay off mortgage investors
Treasury Department announces new mortgage incentives for lenders, which will reduce monthly payments for millions of borrowers.
WASHINGTON (Reuters) — The U.S. Treasury Department will Tuesday tap a $50 billion housing rescue fund to pay off mortgage investors and reduce monthly payments for millions of borrowers, said a senior administration official.
Mortgage servicers that own a small stake in costly loans will receive a cash payment to either erase the debt or agree to accept a reduced return on their investment.
“It will be a shared effort with lenders, investors, borrowers and the government to ease or extinguish second-lien mortgage payments,” a senior administration official told Reuters.
During the height of the housing boom, some borrowers were able to buy a home with no downpayment by adding a second lien, and many of those loans are now failing as the economy and housing market struggle.
Second liens typically carry a higher interest rate than primary mortgages but those second liens will have a lower rate under the modification plan, the officials said.
“The second lien holder, as is appropriate in the junior position, is taking more of a reduction in interest rate,” one official said. “The interest rate will go at least as low as the interest rate on the first and it will (fall) much further to get there.”
Tuesday’s announcement will build on President Barack Obama’s housing rescue plan announced in February that aims to reduce the cost of homeownership for up to 9 million borrowers straining to make their monthly payments.
Rescue gets a revamp
Officials will also announce new incentives for the Hope for Homeowners program conceived last summer to refinance hundreds of thousands of struggling borrowers.
In fact, the program has only aided a handful of homeowners and the Department of Housing and Urban Development will offer mortgage servicers thousands of dollars for each home loan that they successfully modify under that troubled program, the officials said.
The officials said that they will continue to remove other bureaucratic encumbrances and expand incentives where needed to steer more homeowners away from default.
Some analysts have faulted officials and lawmakers for leaving Hope for Homeowners hamstrung by the question of second liens as those investors have had a near veto power on modifications.
“It has taken policymakers a long time to realize that second liens are a showstopper,” said Dwight Jaffe, a professor of housing finance at Berkeley University in California
WASHINGTON (Reuters) — The U.S. Treasury Department will Tuesday tap a $50 billion housing rescue fund to pay off mortgage investors and reduce monthly payments for millions of borrowers, said a senior administration official.
Mortgage servicers that own a small stake in costly loans will receive a cash payment to either erase the debt or agree to accept a reduced return on their investment.
“It will be a shared effort with lenders, investors, borrowers and the government to ease or extinguish second-lien mortgage payments,” a senior administration official told Reuters.
During the height of the housing boom, some borrowers were able to buy a home with no downpayment by adding a second lien, and many of those loans are now failing as the economy and housing market struggle.
Second liens typically carry a higher interest rate than primary mortgages but those second liens will have a lower rate under the modification plan, the officials said.
“The second lien holder, as is appropriate in the junior position, is taking more of a reduction in interest rate,” one official said. “The interest rate will go at least as low as the interest rate on the first and it will (fall) much further to get there.”
Tuesday’s announcement will build on President Barack Obama’s housing rescue plan announced in February that aims to reduce the cost of homeownership for up to 9 million borrowers straining to make their monthly payments.
Rescue gets a revamp
Officials will also announce new incentives for the Hope for Homeowners program conceived last summer to refinance hundreds of thousands of struggling borrowers.
In fact, the program has only aided a handful of homeowners and the Department of Housing and Urban Development will offer mortgage servicers thousands of dollars for each home loan that they successfully modify under that troubled program, the officials said.
The officials said that they will continue to remove other bureaucratic encumbrances and expand incentives where needed to steer more homeowners away from default.
Some analysts have faulted officials and lawmakers for leaving Hope for Homeowners hamstrung by the question of second liens as those investors have had a near veto power on modifications.
“It has taken policymakers a long time to realize that second liens are a showstopper,” said Dwight Jaffe, a professor of housing finance at Berkeley University in California
Friday, February 27, 2009
Friday, December 19, 2008
Mortgage rates down, applications up
30-year fixed-rate hits at least 37-year low
December 19, 2008 11:40 AM
By Inman News Inman News
Rates on 30-year fixed-rate mortgages are at their lowest since Freddie Mac began tracking them in 1971, the mortgage financier said in releasing the results of its weekly primary mortgage market survey.
Frank Nothaft, Freddie Mac vice president and chief economist, attributed the decline in part to the Federal Reserve's statement this week that it stood ready to expand purchases of mortgage-related assets as it cut the federal funds overnight rate to a record low of zero to 0.25 percent (see story).
The 30-year fixed-rate mortgage (FRM) averaged 5.19 percent with an average 0.7 point for the week ending Dec. 18, down from 5.47 percent last week and 6.14 percent a year ago.
The 15-year FRM averaged 4.92 percent with an average 0.7 point, down from 5.2 percent last week and 5.79 percent a year ago. The 15-year FRM has not been lower since April 1, 2004, when it averaged 4.84 percent.
Rates on adjustable-rate mortgages (ARMs) were also down, with the five-year Treasury-indexed hybrid ARM averaging 5.6 percent with an average 0.6 point, down from 5.82 percent last week and 5.9 percent a year ago.
One-year Treasury-indexed ARMs averaged 4.94 percent with an average 0.5 point, down from 5.09 percent last week and 5.51 percent a year ago.
Meanwhile, the Mortgage Bankers Association said applications for the week ending Dec. 12 were up a seasonally adjusted 2.9 percent, driven by a 6.5 percent jump in refinance applications. Applications for purchase loans fell 4.5 percent, while the government purchase index (largely FHA) was unchanged.
December 19, 2008 11:40 AM
By Inman News Inman News
Rates on 30-year fixed-rate mortgages are at their lowest since Freddie Mac began tracking them in 1971, the mortgage financier said in releasing the results of its weekly primary mortgage market survey.
Frank Nothaft, Freddie Mac vice president and chief economist, attributed the decline in part to the Federal Reserve's statement this week that it stood ready to expand purchases of mortgage-related assets as it cut the federal funds overnight rate to a record low of zero to 0.25 percent (see story).
The 30-year fixed-rate mortgage (FRM) averaged 5.19 percent with an average 0.7 point for the week ending Dec. 18, down from 5.47 percent last week and 6.14 percent a year ago.
The 15-year FRM averaged 4.92 percent with an average 0.7 point, down from 5.2 percent last week and 5.79 percent a year ago. The 15-year FRM has not been lower since April 1, 2004, when it averaged 4.84 percent.
Rates on adjustable-rate mortgages (ARMs) were also down, with the five-year Treasury-indexed hybrid ARM averaging 5.6 percent with an average 0.6 point, down from 5.82 percent last week and 5.9 percent a year ago.
One-year Treasury-indexed ARMs averaged 4.94 percent with an average 0.5 point, down from 5.09 percent last week and 5.51 percent a year ago.
Meanwhile, the Mortgage Bankers Association said applications for the week ending Dec. 12 were up a seasonally adjusted 2.9 percent, driven by a 6.5 percent jump in refinance applications. Applications for purchase loans fell 4.5 percent, while the government purchase index (largely FHA) was unchanged.
Thursday, November 20, 2008
Low prices boost valley home sales
Foreclosure sales drive valley's third quarter.
Coachella Valley home sales during the third quarter of 2008 jumped 51.5 percent compared to 2007, driven predominately by buyers nabbing foreclosures and other distressed properties that have been sharply discounted.
The rise in sales is a dramatic turnaround from 2007, when third-quarter housing sales were down 23.3 percent from the same period in 2006.
The new housing analysis comes from Real Data Strategies, which provided statistics to The Desert Sun for a comprehensive look at sales from July through September 2008.
While sales are up, average prices are down as banks try to clear out the rising number of foreclosures and other sellers try to compete with the deals offered on distressed properties.
“It's creating new market-level prices and competition,” said Patrick Veling, president and founder of Brea-based Real Data Strategies.
“Traditional sellers can agree to meet or beat (bank prices) or simply wait it out.”
The quarterly analysis of homes sold through the Desert Area Multiple Listing Service reveals:
A total of 1,935 Coachella Valley homes were sold during the third quarter of 2008.
That's up from the 1,277 sold during the same three months of 2007 and up from 2006, when 1,665 homes were sold.
The bulk of homes sold are going for less than $500,000, a price point that traditionally has been described as the entry-level market
In 2007, homes priced under $500,000 made up 68 percent of all local sales. In the third quarter of 2008, they accounted for nearly 85 percent.
Traditional entry-level communities such as Coachella, Cathedral City and Desert Hot Springs saw a boom in sales of homes priced under $500,000.
Experts say not all those are traditional entry-level homes. Some are move-up or upscale homes that have seen dramatic price reductions in order to draw buyers.
“You're seeing condos with a ‘1' in front of it instead of a ‘2,'” Palm Springs Regional Association of Realtors executive officer Sam Schenkl said. “You're getting a second chance at a home that may have been priced out of your reach.”
The sales of foreclosures and the resulting predominance of falling prices across the board are having a notable influence on the valley's market.
In many cities where sales are up, the total volume of sales — the value of all the sold homes' prices — is on par or even less than years where they saw fewer sales.
Take the 92240 ZIP code of Desert Hot Springs.
In third quarter 2006, 176 entry-level homes were sold equating to nearly $50.1 million in sales.
Compare that to third quarter 2008, when 220 homes were sold — a 25 percent increase — but average prices have dropped about $150,000.
Total sales equated to $29.5 million.
Cathedral City, where entry-level home sales jumped 144.4 percent in third quarter 2008.Significant number of his buyers are people looking for second homes who are now able snag properties that used to be out of their price range.
“Some of these homes that are selling in the 200 or $300,0000 range were selling for 4, 5, $600,000.”
“They're priced extremely competitively and aggressively. It's all a matter of pricing and products.”
Coachella Valley home sales during the third quarter of 2008 jumped 51.5 percent compared to 2007, driven predominately by buyers nabbing foreclosures and other distressed properties that have been sharply discounted.
The rise in sales is a dramatic turnaround from 2007, when third-quarter housing sales were down 23.3 percent from the same period in 2006.
The new housing analysis comes from Real Data Strategies, which provided statistics to The Desert Sun for a comprehensive look at sales from July through September 2008.
While sales are up, average prices are down as banks try to clear out the rising number of foreclosures and other sellers try to compete with the deals offered on distressed properties.
“It's creating new market-level prices and competition,” said Patrick Veling, president and founder of Brea-based Real Data Strategies.
“Traditional sellers can agree to meet or beat (bank prices) or simply wait it out.”
The quarterly analysis of homes sold through the Desert Area Multiple Listing Service reveals:
A total of 1,935 Coachella Valley homes were sold during the third quarter of 2008.
That's up from the 1,277 sold during the same three months of 2007 and up from 2006, when 1,665 homes were sold.
The bulk of homes sold are going for less than $500,000, a price point that traditionally has been described as the entry-level market
In 2007, homes priced under $500,000 made up 68 percent of all local sales. In the third quarter of 2008, they accounted for nearly 85 percent.
Traditional entry-level communities such as Coachella, Cathedral City and Desert Hot Springs saw a boom in sales of homes priced under $500,000.
Experts say not all those are traditional entry-level homes. Some are move-up or upscale homes that have seen dramatic price reductions in order to draw buyers.
“You're seeing condos with a ‘1' in front of it instead of a ‘2,'” Palm Springs Regional Association of Realtors executive officer Sam Schenkl said. “You're getting a second chance at a home that may have been priced out of your reach.”
The sales of foreclosures and the resulting predominance of falling prices across the board are having a notable influence on the valley's market.
In many cities where sales are up, the total volume of sales — the value of all the sold homes' prices — is on par or even less than years where they saw fewer sales.
Take the 92240 ZIP code of Desert Hot Springs.
In third quarter 2006, 176 entry-level homes were sold equating to nearly $50.1 million in sales.
Compare that to third quarter 2008, when 220 homes were sold — a 25 percent increase — but average prices have dropped about $150,000.
Total sales equated to $29.5 million.
Cathedral City, where entry-level home sales jumped 144.4 percent in third quarter 2008.Significant number of his buyers are people looking for second homes who are now able snag properties that used to be out of their price range.
“Some of these homes that are selling in the 200 or $300,0000 range were selling for 4, 5, $600,000.”
“They're priced extremely competitively and aggressively. It's all a matter of pricing and products.”
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