FNMA has released their proposed policy to lenders for comment, however, their final policy may not be released for a while.  

In the current real estate environment of soft markets and declining property values some borrowers are finding they are upside down on their home and owe more than the property is worth.   This has led to a new scheme that we’re seeing in many areas of the country referred to as “Buy and Bail”.  

Here is an example of the new scheme that we recently witnessed:  The borrower owed $430,000 on their existing house but the value of the house was roughly $270,000.  Houses very similar to the borrower’s current residence were selling for $270,000 in the same or competing neighborhoods.   The borrower applied for a loan to purchase a new home and claimed that he will lease out the existing house.   Once the new transaction closes, the borrower intended to walk away from the previous home leaving the lender with yet another foreclosure.

This scheme has a high risk of fraud because the lease agreement on the borrower’s existing house is often fraudulent.   In an effort to stop this from happening we are implementing the following guidelines immediately for any borrower who has an existing home that is either listed or will be kept as a second home or investment property that is in either a (i) Soft Market Category 4 or 5 or (ii) area in which the appraisal indicates that values are declining or there is an over supply or a marketing time in excess of 6 months.

Existing Property is Listed For Sale:
The borrower must qualify for both the PITI on the existing property and the PITI on the new proposed property.

Conversion of the existing property to a Second Home:
The borrower must qualify for both the PITI on the existing property and the PITI on the new proposed property.
The borrower must have 6 months PITI in reserves for BOTH properties.  We may consider reserves of no less than 2 months for both properties if there is any documented equity in the existing property. 

Conversion of the existing property to an Investment Property (with a positive equity position)
75% of the rental income may be used to offset the PITI of the existing property if the borrower has a positive equity position in the property.  The equity position must be based on a current AVM and the total liens against the property.
The rental income must be documented by a fully executed copy of a lease that extends for at least a 12 month term and receipt of a security deposit from the proposed tenant deposited into the borrower’s account.  The loan specialist must verify the lease term and rental amount by contacting the tenant by phone.

Conversion of the existing property to an Investment Property (with a negative equity position)
If the existing property is in a negative equity position NO credit may be given to any proposed rental income and the borrower must qualify with the full PITI of both properties.
The borrower must have 6 months PITI in reserves for BOTH properties.

I’ve not seen this happen in the Walnut Creek home market, and I did not publish this to encourage anyone to try to committ fraud.  May point is that this industry is self correcting and we will come out the other end of theis mess with better and more accurate guidlines and less creed.

Housing supply is defined by how many months would it take to sell all the existing inventory if no additional homes came on the market.

For example, in Walnut Creek we have 328 homes on the Multiple Listing Service as of today.  According to TRENDGRAPHIX, as real estate data company, this would take approximately 4.6 month to sell.

Here’s the interesting news.  TRENDGRAPHIX show that the worst month we had in Walnut Creek with housing supply was September 2007.  Real Estate in Walnut Creek had 8.6 month of inventory. We have absorbed about 50% of our supply in nine months.  There is a very good argument for the Walnut Creek housing market to be in balance.

Of course different price ranges have different statistics, I find this very interesting and hope that families that want to buy in Walnut Creek begin the process.  Sellers should also look at these statistics, as it’s a good time to look at specific data to see if there is a shortage of inventory in their neighborhood and price range.

My neighbor is selling her update Eichler.  It’s approximately 2200 square feet counting  a tremendous atrium, 4 bedrooms and 2 baths, ceramic tile floors and the radiant heat. 

It’s located in the Rancho San Miguel neighborhood, close to shopping, Heather Farm and all Walnut Creek has to offer. 

If you’re looking for a mid-century modern home in Walnut Creek, call or email me for a showing.

These days, public transportation in Contra Costa County is worth taking a look at.  Last week we took AMTRAK from Seattle to Martinez, California.  It was a great trip, AMTRAKemployees go out of their way to make you feel comfortable and the sightseeing was incredible.

The Coast Starlight runs through Puget Sound to Portland and then into the Cascade mountain in Oregon.  Breath taking views of snow covered mountains and pristine lakes.

Here’s my point.  AMTRAK does not stop in Walnut Creek, but the bus to AMTRAK does.  Take the 116 from Walnut Creek BART to Amtrak in Martinez.  It costs $2.oo per person and only take about 40 minutes.

Gas prices in Walnut Creek are increasing faster than a speeding Prius.  Alternative ways to get around are becoming a necessity.  Take the AMTRAK or the bus, it’s great for people watching too.

This is one of SAM’S TOP 20 HOMES ON THE 680 CORRIDOR.  My colleague, Margaret Garber-Teeter has this fantastic home listed for $549,000.  1329 square feet of great living space.  Recently updated with a great yard, hardwood floors, granite counters, the works.

If you’re in the market for a 3 bedroom, 2 bath Concord-close in single family home this is tremendous. Ask your Realtor to show you this home or give me a call.

Condominiums in Walnut Creek come in all shapes and sizes.  The picture above is a 2 bedroom home the The Keys.  The Keys are all about location.  Close to downtown Walnut Creek, convenient parking, several pools and activities.  Prices start at $199,000 and go to $339,000.  These condos make great starter homes as well a perfect place for retirees that want to spend time enjoying something other than taking care of a home and yard. Young families like Condos in Walnut Creek because many of them are in the Walnut Creek school district.

The high end of the Condo/Townhomes in Walnut Creek are Beacon Ridge and Monarch Ridge.  These spacious homes are located on Pleasant Hill Road.  Many have tremendous views of downtown Walnut Creek and the Walnut Creek open space.

The ultimate in privacy and exclusivity, these Walnut Creek homes are actually in the Lafayette schools district.

The Mercer of Walnut Creek is a very upscale condo project that is downtown Walnut Creek.  It’s like living in San Francisco, but with the lay-back life style of Walnut Creek. 
http://www.mercerwalnutcreek.com/

Financing a condo or Townhome in Walnut Creek is for the most part the same a a single family home.  There are many low down payment programs available.

People who are renting in Walnut Creek and the surrounding ares should consider buying a condo.  People who want to scale down the size of their home should also look at these great selection of condos and Townhomes in Walnut Creek.

My colleague at Alain Pinel Realtors, Peggy Cortez has a tremendous offering at the end of North Gate Road. 

It’s only a few steps to the entry to Mt. Diablo State Park.  4000 square feet on a level three quarters of an acre of land.  Built in 2007, brand new and ready for a family that want to be near nature, but only minutes from downtown Walnut Creek.  The floor plan has 4 good size bedrooms and 3 and a half baths.

 Appointments include hardwood floors, granite, marble, stainless appliances and a spectacular view of Mt. Diablo.  Priced at $1,898,000, and ready to move in.

 This price range in Walnut Creek continues to improve, as inventory is stable.  If you want to see this home or any other homes in Contra Costa, drop me an email or give me a call.

Homes in Walnut Creek and the 680 corridor have been excluded from Federal and State grants for years.  The purchase price and loan amounts were always too high.  The federal stimulus package continues to assist people who have the income to support the monthly mortgage payments to live in Walnut Creek and central Contra Costa County.  And here’s how.

The Nehemiah Program has been around for decades it has helped over a quarter of a million Americans purchase homes. Unlike some down payment assistance programs, Nehemiah offers down payment help to anyone who qualifies for an approved FHA loan. There are no limits on income or assets, but buyers must have an FHA loan or be pre-approved for an FHA mortgage. 

Nehemiah will allow up to 6% of the final contract sales price for down payment and/or closing costs.  It’s available for first-time and repeat homebuyers.  You can use it  for new construction and resale homes, with no geographical restrictions.

 This means a FHA loan up to a $750,000 loan amount with a supporting Nehemiah grant to cover the down payment. I’m sure certain restrictions are attache to this product, but if you want to buy a Walnut Creek home with nothing down, this may be one fo the ways to do it.

Another very interesting statistic is that inventory continues to increase, giving buyers more selection.  Sellers may be starting to realize that it’s a good time to sell a home and buy up or buy down.

If you are buying or selling, it may be time to re-enter the Walnut Creek real estate market.  Additional Walnut Creek real estate Statistics available upon request.

Simple arithmetic. 

The California State Department of Education has selected five Walnut Creek elementary schools to be named to list of CALIFORNIA DISTINGUISHED SCHOOLS.  This is a annual award that has gone to elementary schools in Walnut Creek for many years.  This year it means even more.

Walnut Creek real estate continues to crawl through these very tough times.  More inventory means more opportunity for home buyers.  Currently on the Walnut Creek MLS there are 318 homes for sale in Walnut Creek.  Condos from the low $200,000 to 6,000 square foot homes with an asking price of $3.5 million.  Indeed there is something for everyone.

The other piece of the pie is how long it’s taking homes to sell in Walnut Creek.  A great home on Rudger had mulitiple offers on 4 days and the flip side shows homes in Walnut Creek with days on market of over one year.  There is a tremendous amount of opportunity in Walnut Creek real estate right now.  Are you ready to take a look?