Been a while - market changes

Sorry I haven't blogged ina while. A lot has been happening in the Real Estate and mortgage world.
Some large subprime lenders have been closing their doors. Due to risky loans they have offered (which probably artifically extended the last real estate boom) many borrowers have defaulted on their rising interest rate loans.
This could signal further weakness in the housing sector and force many home sellers to drop their prices to attract buyers.
If you have a house on the market, and don't have to move, you might want to reconsider selling. Buyers are waiting for prices to fall further, and nobody knows when they will come back out to shop.
What surprises me is the herd mentality most people share. It's like thewhistle only a dog can hear...Someone blew that whistle a few years ago and buyers were out buying anything at any price available. Then last fall, the stop buying whistle blew and buyers disappeared.
What buyers don't realize is that this is such a great market for them. Interest rates are still at or below 6%. They have more selection than ever, and those sellers on the market now are willing to negotiate.
Who knows when the "BUY" whistle will be blown, but if you are sitting on the fence about buying, you should beat the crowd and jump on a great deal now.

Divorce - It's not just your spouse...It's your Credit

Divorce can be a nasty process filled with bad emotions, attorneys, and court visits. You are terminating a relationship and dividing up assets and liabilities. Lawyers will take an inventory of assests and debts, put them into columns and divide them up, but in many cases, once the debts have been assigned to one side or the other, they just wash their hands of the situation.

Nobody seems to consider the long term implications of this sloppy division. Sure, everyone knows who's responsible, right? WRONG!

The lenders are not a party to the divorce. Just because the court says Mr. is now responsible for the car loan, or Mrs. is now responsible for the mortgage, that doesn't change the fact that both parties share that item on the credit report. The lender does not sign off on the divorce and your ex-spouse (who now has to maintain their own residence and utilities) may not be able to make all their payments on time.

Why should you care? Because your credit report can and will show negative marks if your ex becomes late or delinquent on an account that was opened with you.

When you divorce, you should:
1. Get a copy of your credit report, a joint report if possible.
2. Close all joint accounts you held with your spouse. Do it in writing and make it irrevokable (meaning the account may not be re-opened without your written permission).
3. Apply for credit on your own.
4. Make sure to refinance the mortgage or if you are not the one keeping the property, make sure your spouse is made to refinance by court order in a reasonable period of time.

These simple steps will help you keep your credit report looking good even if your spouse's credit rating suffers.
Remember, if you don't want to share their life any longer, you shouldn't share their credit report either.

Why you shouldn't co-sign a loan for ANYONE

With years of mortage lending experience, I've seen it all. One situation that gets the best credit homeowner/buyer into trouble is a co-signed loan.

You start out with the best of intentions...helping out a family member or "trusted" friend who has some trouble securing their own loan. Sure all they ask you for is your signature, but what you are doing in fact is borrowing the money WITH them, and lending them YOUR credit report.

If they miss a payment, are late, or just stop pating for any reason....guess what? Your credit report gets hit with negative marks. Your credit score goes down like a sinking ship. And, you probably lose the warm fuzzy feeling for that family member or friend.

The worst part of all of this is it usually happens initailly without your knowledge. You get no warning, no notices in the mail, and usually the person you co-signed for is the last person to ask for help making their payments. You end up with a nasty little surprise on your credit report the next time you go to finance a house or car.

You may think it won't happen to you, but keep in mind...most people who need a co-signer need one because they have a bad credit history in the first place, or they have not proven themselves credit worthy.

So when someone asks you to be their co-signer.....just say no.

Introducing DesertNewHomes.com

If you are in the market for a new home in the Coachella Valley, you should check out a new home shopper service at www.desertnewhomes.com.

There you can search through the over 185 new home communties from Desert Hot Springs to Coachella in order to decide which developments you should visit. No other home shopping website has the coverage or capabilities to help.

In addition to the web search, you can earn up to 1% rebate on your new home when you have a community counselor register you at your new home community on your first visit there.

With a personal consultant, personal tour, and 1% rebate when you buy, why wouldn't you use this service?

Esperanza Fire Near Palm Springs

If you've watched TV or read a newsthread on the internet in the past couple of days, you have heard about the Esperanza fire burning 17 miles west of Palm Springs.

Yesterday when I got up, there were smoke clouds over the mountains and as the day progressed, the clouds disappeared. Since the winds are heading west, Palm Springs appears to be out of the line of the fire (although national news seems to be making people think that the fire is knocking on our doorstep).

4 firemen lost their lives yesterday while fighting the fire. This tragedy along with loss of homes, personal property and numerous animals both wild and domestic was caused by some sick individual who set this fire. I hope the arsonist is caught and taken out of society so they are not free to cause another tragedy ever again.

Now is the best time to buy a new home in years!

There is an old saying related to investing. "Buy low" sell high". This is great advice, of course, the tough part is knowing when prices are actually high or low relative to the future.

When it comes to real estate in today's market, the simple law of supply and demand favors homebuyers more so now than at any time in the past 5 years.

When it came to Southern California real estate, when buying a new home, you would have to put your name on a priority list, camp out for a phase release or "win" a lottery at a new home development, just to have the opportunity of paying whatever price a builder asked for their new homes. As home prices soared, the desperation of homebuyers only led to bidding wars in resale and frustration on being locked out of the housing market. While none of this may be news to you, consider the following:

1. It takes years for developers to aquire land, plan a development, get permits and build a staff of people who can build and market their product.
2. Most builders bought their land years ago before the real estate run-up, so their pro-formas factor in a lower sale price than even current market conditions allow for.
3. While it's a home to you and me, it's a product to builders, much like cars are to Ford and GM.
4. Builders have stockholders to answer to and their own jobs to worry about, so even if they lose money on a house, a sale helps cover their built-in overhead.

What does this mean to a homebuyer today?
1. You have many more choices. You don't have to take the 1st house you win in some lottery.
2. Builders have backed off their prices faster than resale homes have.
3. Builders can throw in goodies like upgrades, landscaping, and/or attractive financing to move their inventory.
4. You get a great deal on a new house...

Some examples: A new development in Indio by a well known national builder. Asking price on a new 1900 SF house $355,000 including upgrades. Discounted $40,000 for a 30 day escrow.
A new home in Coachella - 1 year of mortgage payments made for you by the builder. Estimated value $25,000 on a $300,000 house.
How about a luxury development in Rancho Mirage with asking prices starting at $1,350,000 - 30 day escrow price under $1 million...
La Quinta house fully upgraded including pool and spa $100,000 discount, sold at $599,000.
La Quinta golf course retirement community. New homes discounted by $100,000. Available in the low $300,000's

Here's the catch...once the builders clear out their backlogged inventory, the deals tend to moderate. Discounts disappear.
Why? Because they have slowed down their building to firm up pricing.

I saw this happen in 1991 in South Orange County. I bought a house for $100,00 less than the advertised price of $375,000. Within 6 months, comparable homes were selling for $50,000 more.

So you might be saying: Ok, but I'm waiting for prices to hit bottom. The problem with that is you never know when they have hit bottom until after they start rising again. Since now most others are doing the same...waiting, now is the best time to do the opposite and buy...especially new and from a builder with standing inventory.

Last year while the market was still "hot" and rising, I sold 2 properties. I got more for them than any comparables have sold for since. I knew if everyone was buying, it was time to sell. Was I lucky? Yes, but I also had a gut feeling that I should do the opposite of what the herd was doing.

Well, This is my first post on my first blog. I hope I can help you with my real estate and mortgage experience. Hopefully my insight will help you make the right choices you might be facing.