Archives for January 2014

What’s Behind the Drastic Drop in Foreclosure Rates for California?

What’s Behind the Drastic Drop in Foreclosure Rates for California?

In California, foreclosure starts fell to an eight-year-low in fourth quarter 2013—down 60% from 2012. This drop is mainly due to rising home prices which has allowed for homeowners to gather enough equity to no longer be upside down in their mortgages.

Another reason why we’re seeing these numbers continue to drop is because of vigilant foreclosure prevention efforts used to help homeowners in a financial peril. In fact, California’s Homeowner Bill of Rights has one of the most aggressive set of foreclosure regulations.

Implemented in January 2013, it put a series of procedures in place which prevent lenders from starting the foreclosure process while loan modification applications are still pending. It also states that homeowners must be provided with a single point of contact—one designated person to assist with foreclosure prevention plans.

These guidelines have led to potential foreclosures turning into short sales and homeowners modifying loans or refinancing; resulting in less properties falling to the foreclosure wayside.

Diminishing foreclosure numbers are a yet another positive sign that the housing market is strengthening—and proof that measures taken to protect homeowners are working.

Rates May Edge Higher after This Week’s FOMC Meeting

Mortgage rates moved even lower last week—falling to right around 4.33%. But what effect will the Federal Open Market Committee (FOMC) meeting have on the unexpectedly long-lasting low rates?

The Fed is a major driver of interest rates. And depending what is discussed when the FOMC gathers, it could drive up rates across the board.

Should the Fed announce another round of bond-buying cuts, we could see rates jump immediately; as much as an eighth to a quarter of a percent.

That’s why homebuyers, or homeowners wanting to refinance, should lock in their rates right away.

We’ve been fortunate that December’s poorer-than-anticipated job numbers have kept the rates relatively low. But, no one knows for sure how much longer they will remain at this level.

However, in the midst of all this uncertainty, one thing is for sure… even if you miss locking in your rate this week, February still is a great time to buy a home. Because even if rates climb slightly, they are considerably better than the near 7s we saw in 2005. And with experts predicting that we won’t hit 5% for another six months or so, some great interest rates are still up for grabs.

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