FOUST Team Listing Will Be Featured in LA Times

Just a quick heads up that one of our listings in the city of Whittier, CA will soon be featured in an upcoming article on real estate in the area. The listing is this 3 bedroom 2 bath 1800 square foot home in the popular Morningside community.





The author of the story should be Lauren Beale and we imagine the spotlight section should take place in the real estate section.



This is just another example of how a strong web presence pays big dividends in the current real estate market.

We'd like to thank the LA Times for featuring us and invite all interested parties to check out our Whittier real estate and Whittier homes for sale pages.

Sorrento Hills Neighborhood Review Now Up!

Here is the link to the Fullerton's Sorrento Hills Neighborhood Review and the Sorrento Hills Homes For Sale Pages.

And while we're at it, check out this great house for sale in Sorrento Hills -Fullerton, CA that we just had a price reduction on.

Let us know if you have any questions about this or any other piece of real estate.

If You Think You’re Facing Foreclosure, You Need To Understand the New California Law.

As a California real estate professional, my clients have been asking me quite a few questions about the new law that will take effect on May 21, 2009 involving extending foreclosure periods by 90 days.

Instead of explaining all of the legal mumbo-jumbo (and believe me there is a lot of it); let me take a few moments to explain the new law in easy-to-understand terms.

The first and most important thing to do if you’re facing a possible foreclosure situation is to check with your mortgage lender. The new law (extension of time) does not apply to lenders that currently offer a loan modification program.

The new law only applies to owner-occupied homes only where the first loan was recorded between January 1, 2003 and January 1, 2008. The new law will extend the time period before the filing of notice of sale by 90 days beyond the current three month period following the filing of the original notice of default.

In order for your lender to qualify for an exemption from this new law, your lender must offer a comprehensive loan modification program that includes the following features:

1. The program is intended to keep borrowers (you) in your home when the anticipated recovery period under a loan modification exceeds the recovery period through foreclosure on a net value present basis.

2. It targets a debt-to-income ratio of 38% or less.

3. It includes a combination of the following features:

· An interest rate reduction for at least five years
· An extension of loan term to no more than 40 years
· A deferral of some portion of the unpaid principal balance
· A reduction in principal
· Full compliance with a federally mandated loan modification program
· Seeks to achieve long-term sustainability for the borrower (you) when determining a loan modification solution.

Additionally it’s very important to understand that the following loans are exempted from the 90 day extension under the new law.

1. A loan made, purchased, serviced or used as collateral by a California State or local housing finance agency.

2. Loans where the borrower (you) has surrendered the property, contracted with an organization regarding how to extend the foreclosure process, or filed for bankruptcy and the case has not been closed or dismissed.

All of the provisions of this new law will be repealed on January 1st, 2011 unless the California Legislature extends them.

To learn more about the law or other real estate issues visit http://www.foustonline.com/
If you’re thinking of foreclosing or doing a short sale, please contact us. We will be glad to spend time answering all of your questions and helping you find the critical resources you will need during this challenging time.

Real Estate Market Update - Some Markets Red Hot Others Ice Cold

It's April 15th and the first thing we'd like to do is have you read no further and go pay your taxes if you have not already. Now then , let's get to the fun stuff. The real estate market across Los Angeles and Orange Counties seems to be a hot topic and nobody can seem to get a straight answer when it comes to its' condition. Here's what we can tell you from our "boots on the ground" experience.


Hot Markets

Entry level single family residences - Without a doubt the hottest selling market in the area is that for entry level homes. In particular, single family residences priced between $250,000 and $350,000. This is the same market that was the hottest selling during the boom days and the same that has been hit hardest by foreclosure. Most of the property in this price range is some sort of distress sale, whether it be bank owned or short sale. Homes priced well for their features are seeing multiple offers, overbids, and short market times. These homes are selling so well because of three factors:

1. The banks are pricing them ultra aggressively.
2. The monthly payments on these homes often makes more sense than renting so we're seeing a boom of first time buyers. With interest rates around 4.5-4.75% and the potential for $8,000 in tax credit, and homes selling for nearly half price, this is no surprise.
3. Investors (not to be confused with speculators) are reappearing in the market to snatch these homes up with cash-heavy offers and turn them into income-producing rental properties.

Any Lower Priced Neighborhood - From Santa Ana to Long Beach, Downey to Anaheim, the story remains the same. If the neighborhood is seen as "affordable", and had substantial sales activity due to sub prime mortgages, it is sure to again be a hot-selling neighborhood. Only now, the prices are nearly half of what they were previously selling at.

Luxury Real Estate - Guess it goes without saying that those who are able to afford estate property aren't terribly concerned with the absence of 100% financing. Low interest rates and realistic pricing on these homes have helped the luxury market to see an increase in sales activity. Again, it pales in comparison to the entry level market pace but its still a better market than many think.




Cold Markets

Mid-Range Housing - While it may not be seeing the largest amount of price drops, the coldest market has to be homes falling somewhere between upper-end and entry-level. There just is not a lot of action on these homes for a few reasons:

1. There are less foreclosures in this price range; therefore, less motivated sellers. Despite possibly being "upside down", owners are looking to hold on to their homes and ride out the market cycle. (Something many owners in the entry-level market are not able to do.)


2. This segment of the market relies on people in the entry-level market moving up to the mid-range in order to spur home sales. Without a large pool of owners in the entry-level market with equity AND the need to sell, the mid level just isn't seeing many of the step-up buyers.


3. Lateral moving buyers (or buyers moving from one house to a similar priced house, just in a different location) are the majority of the buyers in this market. The problem is that these people will face the same issues with sale; lower prices and slower sale times.

The bottom line for this market is motivation. If you are motivated to sell (and by this we mean ready to price very competitively) the job can get done. If you are looking to buy and sell in this market, the current market may not matter as much as evidenced by our 10% sales theory.

Many factors such as location, updates, and overall condition of the property are really helping to keep some neighborhoods and houses from being on the market for too long. We've had some very recent success in this market, something we attribute to our unique marketing plan and maybe more importantly, our clients willingness to trust our judgement and sincerely listen to our recommendations.

Who Is Buying?

Investors and first time buyers for the most part.


Who Is Selling?

Banks with their REO entry-level homes priced under market to induce a bidding war. Still, homes in all market segments are still selling with the right combination of price and marketing.


Loan Market

Wow! We're seeing loan rates hit the mid to high 4% range these days. FHA loans for first time buyers are also still available, requiring only 3-5% down payment, and following suit with interest rates under 5%. And yes, this is for a 30 year fixed rate. Buyers should expect to be asked for full documentation of income, credit, and proof of funds for down payment.

Even if your not in the market to buy a home, you may want to consider refinancing if you have some equity . If you haven't refinanced your house in the last 4 months, you need to call us for a recommendation to some loan officers who can save you some money with these types of rates.


New Laws and Trends

The Stimulus Package - Already taking affect as it relates to first time buyers. First time buyers will be receiving a tax credit, not just a deduction, for up to $8000 if they purchase a home this year. For more information please see our guide to understanding the stimulus package.

Foreclosure Time Frames Extended in CA - Assembly Bill 7 (ABX27) has extended foreclosure proceedings an extra 90 days from the original 3 months needed from the time a notice of default was filed until the time they could post a trustee sale. The idea is to let many homeowners who are in trouble have time to reinstate the loan or consummate a short sale. We are seeing this law pan out by limiting the amount of bank owned listing coming to market the last two months. We are unsure whether this will continue to slow the flow of REO listings and increase the amount of approved short pay sales, but do know that it will at least give troubled owners a chance to keep their house or avoid foreclosure.



FOUST Team News

We're excited to announce that we just had one of our articles published by not only Realty Times, a great real estate news publication, but also Yahoo Real Estate. If you'd like to check it out just do a quick Google search with keywords "Todd Foust on Yahoo Real Estate" and it should be your first organic result.

Thank you for reading our real estate update, if you found it useful feel free to bookmark it, send it to a friend, save it as a favorite, or subscribe to our blogs RSS feed for automated updates. If you have any questions feel free to contact us at info@FOUSTonline.com.

First-time Buyer's Guide to Understanding the Federal Income Tax Credit

Are you afraid to buy a home now worrying that you might not be able to afford it because of the crash in our economy? No need to worry! The IRS new stimulus plan might help. This policy, effective for purchases on or after January 1, 2009 and before December 1, 2009 has become a hot topic.

Let us make it simple for you...It is a great time to buy a home now! Not only are interest rates lower than 5%, there is also an offer of tax credits. $8,000 is the maximum amount a homeowner can get for credit, no matter how much the purchased home may be. We know that last summer, the refundable credit required a repayment. But the new stimulus plan promises nothing but a refund. There is no repayment by the homebuyer whatsoever. It is just pure heavenly income tax credit.

And who may be qualified for this income tax credit?

• Anyone who purchases a single-family residence, as long as it is the homebuyer's principal residence. This includes condominiums, townhouses, or a co-op.
• First-time homebuyers. Meaning, those who have not owned a home in the 3 years before purchasing an eligible property.
• A homebuyer who utilizes revenue bond financing.
• For a full refund in tax credits, the homebuyer may have a total annual taxable income of no more than $75,000 ($150,000 on a joint return).
• For a reduced tax credit, the homebuyer may have a total adjusted income up to $95,000 ($170,000 on a joint return) or those who qualify as a first-time homebuyer. Also for the first-time homebuyers, if the $8,000 is greater than the tax you owe, then you will get a refund check for the difference.
• A home buyer meeting the basic requirements who purchase before December 1, 2009
  

Obviously, there are many homebuyers who will benefit from these tax advantages when buying real estate in 2009. We advise prospective home buyers to talk with their tax professional first and then see us about finding a home before the deadline. In fact, this new home buying incentive may already be taking effect. According to the California Association of Realtors, buyers took advantage of a 41 percent decline in the median price of an existing home as California home sales doubled in January from a year earlier. We hope this guide will help those considering the purchase of a home in 2009. Please contact us with any further questions.

Home Buying for Veterans – Understanding The VA Loan Program

Many Veterans, including those returning from overseas need assistance in transitioning to civilian lives. Buying a home is often a first step in doing this and VA loans is one way our great nation helps them to do just that. Here are some important facts about VA loans that veterans, both old and young, need to know.

The Veterans Administration (VA) does not make loans. It guarantees loans made by an approved institutional lender, much like the FHA. The main differences between the two government programs are:

1) Only an eligible veteran may obtain a VA loan.
2) The VA does not require a down payment up to a certain loan amount.

Both programs were created to assist people in buying homes when the conventional loan programs do not fit their needs. When a veteran finds a home they wish to purchase, they will need to see a VA approved lender who will make the application and process the loan for them.

Important Facts About VA Loans

- A veteran must possess a Certificate of Eligibility, which is available from the VA, before applying for a VA loan. The certificate will show the veteran’s entitlement, or right to obtain a loan.

- A major benefit of a loan guaranteed by the VA is that no down payment is required on many of the loans. There is a maximum loan amount that is allowed for a zero down type of loan, and a very reasonable formula for calculating the minimum down needed for higher loans.

- If a veteran sells his or her home and the buyer gets a new loan that pays off the VA loan, then the veteran may restore the VA eligibility and apply for a new VA loan.

- A VA appraisal is called a Certificate of Reasonable Value (CRV). A loan may not exceed the value established by the CRV.

- Maximum loan amounts vary by state and by local community values, but there is no upper maximum price that a veteran can pay for a home.

Veteran Must Live In The Home

For VA loans the veteran must live in the home, there are no exceptions to this rule. Other criteria apply for these loans, and points are charged to the seller, which can be a big drawback. Also, there are no prepayment penalties allowed on VA loans and the seller usually has to pay discount points on these loans, unless it is a refinance. Many different types and terms of loans, also known as length of time to pay back the loan, are available for VA buyers.


Special Advantages for VA Loans

Even if you have foreclosure in your past, the VA has special programs to help buy another home but you have to contact them first to see if you qualify. Two of the biggest advantages are that there are no mortgage insurance premiums required and assumable loans are available.

We would like to extend our sincerest gratitude and thank all of our veterans, both young and old, for serving our country. The United States truly is the greatest nation in the world as evidenced in part by programs like VA home loans. Our hope is that this information will educate veterans about all the home buying and loan opportunities available to them. It is our desire that veterans will take advantage of this liberty. If you are a veteran or a family member of a veteran and have any further questions regarding VA loans, please contact us.

Anaheim, CA Real Estate – Buying A Home With FHA Financing.

Anaheim home buyers, especially those with minimum downpayments are finding FHA loans to be very desirable for financing real estate in Anaheim. An FHA loan gives home buyers the option of putting down a very small amount of money, some FHA loans require as little as three percent down payment. Here is some valuable FHA loan information that prospective buyers can use while looking at homes for sale in Anaheim, CA.

FHA History

The popularity of FHA loans in Anaheim, California is on the rise. Although the institution has been around since 1934, it may have never been as popular as it is now. The Department of Housing & Urban Development (HUD) absorbed the Federal Housing Administration (FHA) under its umbrella in 1965. Previously the lack of FHA loan popularity in California was due to rising home prices and very low loan limits set by the agency. Also, the FHA appraisal guidelines were very stringent and caused frustration among both buyers and sellers in Anaheim, CA. Fortunately, both of these issues have been greatly improved.

The FHA insures loans that are made by approved lenders. They do not make loans, but only insure loans made by approved lenders who service or sell the loans on the secondary mortgage market. As long as FHA guidelines are used in funding the loan, the FHA, upon default by the borrower, insures the lender against loss. If the borrower does default, the lender may foreclose and will receive cash up to the established limit of the insurance. The lender is protected, in the case of foreclosure, by charging the borrower a fee for an insurance policy called Mutual Mortgage Insurance (MMI). The premium is paid either as a cash cost at closing or it is added to the mortgage amount. The later being the most common preference.

FHA Mortgage Limits on Real Estate in Anaheim

The FHA periodically changes its mortgage limits and as of January 14, 2009, the maximum mortgage limit in high-cost areas is 115% of the local median price, but not to exceed a maximum of $625,500. In many parts of the country the upper limit is $417,000 for a single family home and can even be lower for some depressed areas. Orange County homes, including those in Anaheim are now at the upper limit of $625,000.

Anaheim Home Buyers with Blemished Credit History

If you are looking at homes for sale in Anaheim and your credit is less than perfect, FHA might just be the loan for you. You may qualify for a FHA loan even if you have had financial problems.

1) FICO scores can be lower than those for a conventional loan.
2) Bankruptcy - You might obtain an FHA loan two to three years from the date of your bankruptcy discharge, as long as you have maintained a good credit since your debts were discharged.
3) Foreclosure - If you keep your credit in excellent shape since a foreclosure, an FHA loan may be available to you two to three years from the final date of your foreclosure.

Competitive Rates and Terms

Today’s rates and terms are very straightforward and very competitive.

1) The lenders have very little adjustments to the FHA loan rates, with the rates usually within .125 % of conventional loans.
2) Mortgage insurance is funded into the loan with just a very small premium added to the monthly payment, usually less than other private mortgage insurance.
3) As of January 1, 2009 buyers can get by with as small as 3.5% down payment. The FHA even allows downpayment money in the form of gifts from others.
4) Allowable debt ratios are higher with FHA than with the limits imposed by conventional loans. This simply means they are not as picky if you already have other debt from student loans, cars, credit cards, etc.

Fewer Required Repairs than the FHA of Yesterday

At one point, FHA repair demands were so excessive that the sellers would discount the selling price if the buyers would agree to obtain conventional loans instead of FHA. Today the requirements are much more reasonable.

1) Defective roofs that leak must still be replaced but an older roof that does not leak does not need to be replaced.
2) Windows that stick when opening or windows with cracks in the glass do not need to be repaired.

Home buyers in Anaheim should be advised that FHA appraisals never take the place of a professional home inspection. Buyers should still obtain a professional home inspection before a purchase is closed. FHA still does require some repairs to be done that a non FHA loan would not ask for. Some may consider these repairs to be “ticky tack” but they are mandatory nonetheless. This can often present a problem when the property in question is being sold “as is” such as often case with bank owned real estate.

After reading this information on FHA loans, Anaheim home buyers should have a better understanding of another type of loan available to them. An FHA loan can be extremely helpful if you are only able to make a minimum down payment and can be a valuable tool for buyers to have at their disposal. There are many important aspects to remember about FHA loans, so be sure to contact a reputable agent or loan officer with further questions about loans or real estate in Anaheim.