It’s official folks, the bottom of the market is all around us.  First time home buyers and investors pour into the market as home prices continue to plummet.

Here is an article that appeared in the OC Register on November 18th, 2008:

“Bargain-basement sales helped pull down home prices in the SoCal region last month and boosted the number of transactions by a record 67%, DataQuick reported today.

The median price of a Southern California home fell to $300,000 in October — the lowest since April 2003 and down 41% below the peak price hit in the spring and summer of 2007.

The record gain in sales was attributable to very weak sales last year and high foreclosures this year. Since sales fell to record lows a year ago — remember the twin meltdowns in the mortgage market last year? — October’s gain was a percentage record. But at 21,532 transactions, the total still was 12% below average, DataQuick reported.

Record foreclosures also boosted sales while pulling down prices. DataQuick’s figures show that half of October’s sales were recently foreclosed homes. In Orange and Los Angeles counties, foreclosed homes accounted for four out of 10 sales. Lower-priced neighborhoods, where foreclosures predominate, made up the lion’s share of last month’s sales figures.

For example, a third of all SoCal sales last month occurred in the Inland Empire, where foreclosures accounted for two out of every three transactions. The median home price in those counties dropped below $230,000 last month, or almost half of the median sale price at the market peak.”

Once again, It is my contention that this is the bottom of the market for most areas in the State of California.  Credit continues to be available for first time home buyers and there is no better time than now to take advantage of this market.

If you would like more information about foreclosed homes in your area and low to no down payment loan options available to you, either give us a call at 1-866-667-6724 or complete this simple on-line form for more information

The CalSTRS 80/17 home purchase loan is hands down the best loan program out there if you are an employed by or teach at any California public school or community college.

If you have already attended one of our on-line classes then you know that this loan program simply does not have enough lenders that are raving fans.  My suspicion is that because CalSTRS sets the Rates and Fees for these loan programs, many lenders seem to have the attitude that it’s not worth their time to offer the CalSTRS 80/17.

We are home ownership experts specializing in California Teachers, Public employees and First Time home buyers.  As a result of our on-line classes about the CalSTRS 80/17 we get to talk to a lot of home buyers that never knew this program existed.

Working with a lender that specializes in these loan programs is the very best way to make sure you don’t get caught by surprise during the process.  These loans are not complicated but they are significantly different in the way they are structured.

The last thing you want is to let a lender “experiment” with your family as they try to learn about how this loan works.  I am confident that there are many other lenders out there that have an expertise in this loan program, just make sure that you’re working with one.

The closing costs on a CalSTRS 80/17 are different from an FHA loan due to the fact that CalSTRS does not allow the lender to “roll in” closing costs into the interest rate.  You are guaranteed by CalSTRS that the lender can not manipulate your interest rate in order for them to make more money.

The good news is that you always have full disclosure about what the rates are - the bad news is, the closing costs associated with a high loan to value loan trickle down to the bottom line of your good faith estimate.  These fees are by no means exorbitant, especially when compared to an FHA loan and the Mortgage Insurance Premium (MIP) that is due both upfront and monthly.

Beware of bait and switch tactics that try to push you toward a FHA loan.  This is becoming more and more common as more eligible borrowers are asking about the CalSTRS 80/17.

The “bait and switch” usually goes something like this:

• You are pre-approved for the CalSTRS 80/17 with a lender
• About two weeks into the process you are informed that the underwriting guidelines changed
• An FHA loan is presented as the solution to this challenge

What you need to know about a CalSTRS 80/17 is that the approval is automated and instant.  If you have a loan approval and the rate has been locked, the underwriting guidelines can not be changed retroactively.

Get a second opinion on the GFE if you are even remotely concerned about your lender’s expertise in this program.  It’s not worth the losing your deposit and possibly your dream home because the bank is trying to make a few extra bucks off you.  Buyer beware always.

I’m not saying take my word for it either.  But if i can help to educate you about the process and empower you with the knowledge of how these loans work, then there’s a possiblility that I can help one more family move confidently forward toward the American dream of homeownership….and I call that a good day.

If you have any questions about the CalSTRS loan program, feel free to contact us at 1-866-667-6724 or you can get more info here.

This is a very telling article I ran accross today.  MercuryNews.com out of Silicon Valley featured this article today - Southern California home sales jump 65% in September.

What struck me as the most telling statistic from this story is the fact that the median home price in the six county region dropped 33.2% from $462,000 to $308,000.

The Southern California region they are referring to include Riverside, San Bernardino and San Diego counties which were some of the hardest his areas of mortgage fraud and ultimately is also among the nationwide leaders in foreclosures and short sales.

This is another testament of the fact that this is an incredible buyer’s market for those that qualify for home loan financing.

For a more information about the Affordability Index and Median Home Prices in California, join us for one of our informative web classes.  All of the classes currently scheduled discuss the CalSTRS 80/17 home purchase program in detail as well as reviewing Median Home Prices and the Affordability Index.

Click here to Register for one of these Web Classes

Ok, it’s come to the point where I can no longer brush this off as a coincidence.  The conversation that I am having over and over again goes something like this…..

“Hi Scott, I am in the process of buying a home and was qualified for a Teacher loan (Extra Credit Teacher Program or CalSTRS 80/17) and my loan officer just told me that the underwriting guidelines have changed and I no longer qualify for this program.

I was doing some research on the internet and ran across your blog.  Have there been any changes?  I can’t seem to find anything to back up what i’m being told by my loan officer.  Please help!”

This is not an actual conversation ver batim but I assure you it’s really, really close!

Here’s what the “other guys” don’t want to tell you - They don’t like to offer these loans because…ok, brace yourself…….drum roll please……..They don’t make a lot of money giving you one of these special loans.

Can you believe it?  I know you’re shocked that a loan officer or lender would actually ignore the best interest of their client just to make more money for themselves……Come on Scott, that doesn’t happen.

I know I sound a little irritated and even bordering on hostile as I write this and I guess it’s because I am.

I sincerely hope that you have run across this post because you didn’t take “no” for an answer.  I want you to know that although there are often changes in loan qualification guidelines, there have been relatively few changes in these programs.

The reason why there is little information out there about these programs is that lenders and loan officers are not eager to work for a reasonable wage and help a segment of our community that quite frankley does not get enough credit for the contributions you make to society.

Ok, I feel a little better now that I’ve gotten this off my chest.  I’ve put together a bunch of resources for you and we hold free web classes regularly to educate teachers, public employees and first time home buyers about these special programs.

Click Here for these valuable resources

There are links all over this site to contact us for more information or you can call my cell phone anytime.  I can be reached at 714-336-8286.  The office number is 866-667-6724 and anyone here will give you an honest answer and look out for your best interest.

The conservatorship forced upon fannie mae and freddie mac by the U.S. Treasury department has spawned an industry wide  trend of dropping interest rates.  Government loans and Conventional loans alike have experienced similar slides since Monday.

Interest Rates have dropped below 6% in the first time in a very long time - you can check CalSTRS interest rates on their website anytime - Here is a link to the CalSTRS Interest Rates page

One of my favorite features of the CalSTRS 80/17 home purchase program is the one time free float down.  What this means is that after you have locked your interest rate, once you are in escrow, and the interest rates drops as they did this week, you are allowed to reduce the rate at no charge.

This program just keeps getting better and better if you’re a Teacher or Employee at a California public school or community college.  If you would like more information about this program give us a call today at 1-866-667-6724.

If you haven’t already, go to DPA Groundswell to keep up to date on the fight to preserve Nehemiah, HART and Ameridream.  I received this email on Tuesday night with great news about the fight to save DPAs

Chairman Frank and HUD Secretary Preston Negotiate DPA Agreement

Chairman of the House Financial Services Committee, Barney Frank, has discussed publicly the fact that he has negotiated an agreement with HUD Secretary Steve Preston that will provide for the continuation of privately funded downpayment assistance.

The agreement allows HUD to impose risk-based pricing on downpayment assistance transactions which provides Secretary Preston the fiscal protection he seeks for the FHA insurance fund.

According to an Inman News article published today, Chairman Frank is quoted as saying “The FHA loved the ban on down-payment assistance (but) hated the ban on risk-based pricing,” Frank said at Saturday’s hearing. “That seemed to me to offer an opportunity. So (HR 6694) will replace both bans with middle ground — and it will pass the House, I can guarantee you. What you want to do now obviously is talk to your senators. We think it will go through there — it has the approval now of the Secretary of HUD.”

Thanks to the advocates of downpayment assistance, there is significant momentum in this direction. Nehemiah urges all supporters to continue their campaign to save DPA by contacting their Senators and request a swift passage of pro-DPA legislation.

Read the entire article:http://www.inman.com/news/2008/09/10/congress-weighs-reprieve-seller-funded-gifts

Stay tuned for news on this subject - It looks like we may see something by October 1st if we’re lucky!

Every day seems to bring new challenges for new home buyers looking to purchase homes in the State of California.  As home prices drop to seemingly jaw dropping levels California Teachers and Public Employees are making up a large percentage of first time home buyers entering this market.

If you do not belong to special organization like CalSTRS or CalPERS there are still programs available to purchase with little or no money down, but not nearly the options available to members of these organizations.

CalSTRS made a startling announcement earlier this week that it have successfully defended an important underwriting guideline with Fannie Mae that has resulted in many more California Teachers and Employees being able to qualify for the 80/17 loan program.

There is no program available anywhere in the State or Country that has the benefits of this loan program.  No mortgage insurance, low interest rates, low fees, deferred payments on down payment for 5 years - Inquire here for more information on this program.

CalHFA still offers great programs to first time home buyers, and specifically to Teachers working in high priority (title 1) schools in the State of California.  The Extra Credit Teacher program provides a 3% silent second mortgage with no payments due for the life of the first loan.  Teachers that qualify for this loan program may have to come in with as much as 2% down payment, but as little as nothing down with the use of other down payment assistance programs available through CalHFA and it’s affiliate DPA program.  Inquire here for more information on this program.

CalPERS offers a loan program that allows you to borrow up to 95% loan to value plus take a personal loan of up to $18,000 or half of your CalPERS value to cover the additional 5%.  The result is that you can borrow up to 100% of the purchase price.  Inquire here for more information on this program.

For more information on any of these programs feel free to call us at 866-667-6724 or Inquire here for more information.  To find out if you qualify for a low or no down payment home loan you can also complete this simple, online loan application and get approved today!

August 18th, 2008 - Important Update: Many of the lenders are cutting off Seller Assisted Down Payment Grants effective immediately.  The last day FHA will buy a loan with Nehemiah is October 1st, 2008.

As the fight for Nehemiah continues do not lose hope, there are still many down payment assistance programs available if you are a member of CalSTRS, CalPERS, or if you are a first time home buyer you can look to CalHFA for down payment assistance.

If you’re unsure what program you might qualify for, complete this simple form and we will get to work looking for a down payment assistance program to meet your home buying needs.

If you haven’t written your representative to tell them that you support keeping Nehemiah, AmeriDream and HART available to home buyers, please read this and follow the link to voice your support!

Nehemiah, Ameridream, HART and other private charities that offer seller assisted down payment grants score a win with the introduction of H.R. 6694.

This proposal counters the legislation passed last week that puts an October 1st, 2008 cutoff for seller assisted down payment assistance programs under title II of the National Housing Act (H.R. 3221)

H.R. 6694 calls the authorization of risk based mortgage insurance premiums for certain mortgagors that meet Fico requirements of 620 and above.

I believe this bill will move quickly through the process and be the saving grace of these valuable charities. This is responsible legislation and necessary to continue to stimulate the U.S. Housing market in a responsible way.

For more information, to take action against the ending of Nehemiah and programs like it and to follow the progress of this new legislation you can go to Nehemiah’s website here.

When I first wrote about H.R. 6694 it was after I wrote to my representatives through the Nehemiah and the DPAgroundSwell.org website in support of the bill - Received this email today from Dianne Feinstein.  I have to say that I at least appreciate the attempt to personally address me and speak specifically to the subject of my original contact which was Seller Paid DPA.

Take Action Now - Use this easy tool to email your representatives and tell them that you want to save Nehemiah!

Dear Mr. Schang:

I am writing in response to your letter regarding down payment assistance programs. Thank you for taking the time to write, and I welcome this opportunity to respond to your concerns.

On July 30, 2008, President Bush signed into law the Housing and Economic Recovery Act. This legislation, which provides critical relief for American homeowners facing foreclosure, also contains a provision prohibiting Federal Housing Administration (FHA) program participants from using down payment assistance programs in which the seller financially benefits from the transaction.

The U.S. Department of Housing and Urban Development (HUD) Inspector General, the Government Accountability Office, and the Internal Revenue Service have cited serious problems with some seller-funded down payment assistance programs that have lead to substantial losses for FHA. The agency had $4.6 billion in unanticipated long-term losses in its annual re-estimate this year, primarily as a result of the increased amount of seller-funded loans in its portfolio. Foreclosure rates for seller-funded down payment assistance loans have been found to be three times higher than other FHA loans.

You may be interested to know that on July 31, 2008, Representative Al Green (D-TX) introduced the “FHA Seller-Financed Down Payment Reform and Risk-Based Pricing Authorization Act of 2008″ (H.R. 6694). The bill would reinstate FHA seller-funded down payment assistance for individuals with certain credit scores. Currently, H.R. 6694 is pending consideration in the House Committee on Financial Services and a Senate companion bill has not been introduced. Given the major concerns of the Senate Banking, Housing, and Urban Affairs Committee with seller-funded down payment assistance programs, it is uncertain if similar legislation will be considered in the Senate. Please know that I will keep your views in mind should the Senate consider this legislation.

Again, thank you for your letter. If I can be of further assistance, please contact my Washington, DC office at (202) 224-3841. Best regards.

Sincerely yours,

Dianne Feinstein
United States Senator

Further information about my position on issues of concern to California and the Nation are available at my website http://feinstein.senate.gov/public/. You can also receive electronic e-mail updates by subscribing to my e-mail list at http://feinstein.senate.gov/public/index.cfm?FuseAction=ENewsletterSignup.Signup.

Program Overview

The Teacher Next Door Loan Program provides Downpayment Assistance loans to credentialed Teachers employed by the San Francisco Unified School District. The loans are forgivable according to the years of service the teacher remains in the school district.

Borrower Eligibility:

To be eligible for a TND loan, a borrower must be a credentialed teacher currently employed by the San Francisco Unified School District, and have a combined household income of no more than 200% of the AMI of SFMA.

First-time homebuyer: The TND loan is for the purchase of the teacher’s first property in San Francisco. The property must serve as the teacher’s principal residence (be owner occupied).

Homebuyer Education Requirement: Borrower will be required to complete a first-time homebuyer education course through one of MOH’s 5 approved housing counseling agencies. A certificate of completion of homebuyer education must be included with the application package.

First Mortgage: All City loan approvals are made in conjunction with a first loan commitment from a bank or mortgage lender.  The loan can be fixed or adjustable interest rate loans. The mortgage payment should include principal and interest, as long as it does not have interest only, option ARM, balloon or negative amortization payment options.

Debt-to-Income Ratio: Applicants monthly housing debt, including property taxes, property insurance, and if applicable mortgage insurance and homeowner’s association dues cannot be less than 38% of the household’s gross income. The ratio of monthly housing costs, plus all other household monthly debt (including credit cards, car payments, etc.) should not exceed 45% of the household’s gross income.

First time homebuyer counseling is required for all City Downpayment Assistance Loans

Property Eligibility

Properties purchased with TND funds must be single-family residences units in the City of San Francisco, which include: detached single-family house, condominiums and townhouses.

Maximum Loan Amount

The loan amount available for TND loans is $20,000.

Loan Terms:

The maximum loan amount under the TND program is $20,000. The loan may be used for either closing costs or downpayment. There is no interest, nor shared appreciation. TND loans may be layered with DALP,  City Second loans, and used for the purchase of BMRs and Condo Conversion units, if the teacher also meets the income eligibility criteria for those programs. If the teacher moves out of the City and County of San Francisco or leaves the San Francisco Unified School District within 5 years of the date the loan is issued, the loan must be paid back in full. After year five, the loan is forgiven at a rate of 20% per year, and at the end of the 10^th year, the loan is forgiven in its entirety. The following chart illustrates repayments for TND loans:

If the property is sold or the teacher leaves the SFUSD, then the following is due back to the City:

1. Refinance/Subordination – The City loan can be subordinated to refinance the existing first mortgage for a lower interest rate and better loan terms as long as no cash equity is taken out of the property. All refinances must meet MOH’s subordination requirements and be approved by MOH.

Owner Occupancy Requirement

· The borrower must occupy the purchased property as the primary residence within 60 days after close of escrow.

· Properties that have received City funding must remain owner occupied throughout the term of the loan. Compliance monitoring will be performed and documented proof of occupancy required at intervals determined by the Mayor’s Office of Housing.

To get more information about this Program

• Request More Information
• Apply NOW! - Get Pre-Approved
• Find a Local Realtor
• Call Toll Free:  866-667-6724