Real Estate Information

The new work out plan announced by Freddie Mac last week may help high risk Los Angeles borrowers stay in their homes.

The new workout plan focuses on the use of 3rd party servicers that specialize in servicing Alt A and other types of higher risk mortgages.

"A workout strategy is only as successful as the number of knowledgeable counselors available to answer the phone. Our strategy for high risk loans is designed to help servicers cope with today's unprecedented call volume by directing calls to a specialist with the specific staff and technical resources for handling a high volume of borrowers with these types of mortgages," said Ingrid Beckles, Freddie Mac's senior vice president of default asset management.

Read the entire story.

The number of Los Angeles high risk borrowers who are in default on their mortgage payments keeps growing at an alarming rate. If you are a Los Angeles homewoner in default there are options other than foreclosure. Give me a call for a private consultation.

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8 Low Cost Fixes To Getting Your Los Angeles Home Sold 

If you have a home that only you can love, you will benefit for these 8 low cost fixes to getting your Los Angeles home sold. We don't live in a house the way we sell a house. Buyers aren't interested in seeing dirty socks lying around, dirty dishes in the sink or towel bars falling off the wall. Below are a list inexpensive fix-ups, from Realtor Magazine, that you can do to make buyers fall in love with your Los Angeles home.

1. Move it.

Simply rearranging the furniture can re-energize a room. Add and remove furniture, lamps, rugs, and accessories from other parts of the house to create a whole new look. Mirrors are particularly useful when it comes to updating a room. Try one out in different rooms to see where it fits best. Even just moving a mirror to a different wall can create a more welcoming feel.

 2. Plant it.

Houseplants are a generally undervalued design component that can add texture, warmth, and color to any room. Just drop plants in their store containers into decorative planters. Small plants can be moved easily and regrouped to change a room's look, while larger ones make a statement on their own. 

Group plants together of differing heights, fullness, and color for the most dramatic effect. It's important to have plants that are well maintained and in tip-top condition.

 3. Paint it.

Paint is one of the easiest and most cost-effective ways to make a substantial change. Use dramatic colors in powder rooms and dining rooms, and more neutral colors in living spaces. When selecting colors, be sure to ask, 'What am I trying to do? How do I want this to feel?'" And always, always do a test before you paint the whole room. 

 4. Organize it. 

Clutter just happens. So neaten up!  A variety of organizing tools can make a space feel polished while maintaining utility. Hooks and shelves inside the door give people a place to hang coats and keys, while canvas bins or natural baskets help contain magazines and mail. Just a row of hooks pre-attached on a board is so easy to install. And shelves are a great way to neatly display collectibles. 

5. Hide it.

Have a banged-up wall? It may be easy to camouflage. Paintable wallpaper will smooth out an uneven wall or hide minor dents and dings. Adventurous home owners can even try a simple two-step painting process for a more complex finish. A apply a solid base coat, then a glaze. 

Your intent should never be to mislead buyers; be sure to disclose flaws that would affect home value. 

6. Replace it.

Cabinet handles, switch plates, and other small pieces of housing hardware can update a home for just a few dollars a piece. Scan each room to see what looks worn or outdated and then replacing it. Inexpensive quick-connect faucets can make upgrading the look of your bathroom a snap. Just be sure to measure before you go to the hardware store. Some sinks are drilled for an eight-inch spread. Others require just four inches. 

And don't forget the toilet seat. Fresh towels and a new toilet seat go a long way toward making a bathroom feel clean and new. 

7. Light it.

Lighting can have a major impact on a home's look and feel. Whether a room seems dark or too bright and harsh, try "layering" the lighting by adding accent pendants and lamps. Make sure they have independent controls, so that you can turn them on and off at will. 

Light is such a mood setter. You can create a cozy feel just by turning down the lights. Add dimmers in the dining room, bathrooms, kitchen, and even the hallways for less than $4 each. Then adjust the lighting to create the mood you want.

 8. Clean it.

Turn a critical eye to the flooring to make sure it's up to snuff. Scrub grout and seal natural stone. Rub out scratches and nicks on wood floors with scratch cover. Get down on your hands and knees and detail the floors. It takes a little elbow grease, but the results are well worth it. Vinyl flooring is a bit harder to spruce up but usually can be replaced easily and inexpensively.

Interested in selling your Los Angeles home? Give me a call, I'm glad to help!

What's my Los Angeles home worth?

One of the first steps to buying a Los Angeles home is to get your credit report in shape. It is not unusual for you to be doing everything right and to still have mistakes on your credit report, especially if you have a common name like Smith or Jones or if you are a Junior or the III or IV. 

Read what Realtor Magazine has to say about fixing your credit report:

The first step in fixing credit report errors is to identify what's wrong. Consumers have to obtain a copy of their credit report (everyone is entitled to one free report per year from each of the three credit bureaus: Experian, Equifax, and TransUnion) and review it for accuracy. Look for: 

• Late payments. There should be no late payments over seven years old on the report. This is important, as approximately 35 percent of a credit score is based on timely payments. 
   
• Collections. The report shouldn't show any collections or charge-offs more than seven years old. It's a good idea for consumers to save copies of their credit report for seven years so they have proof of when an item was added. 
   
• Payment records. All paid-in-full installment loans and all collections that have been paid in full or settled for less than the amount due should show a zero balance. Sometimes collections are not updated after they've been paid or settled. 
   
• Mysterious accounts. Consumers should be able to recognize all accounts listed on the report. Incorrect accounts do sometimes appear, either by mistaken identity or by identity theft. Consumers should contact the creditor immediately to compare their name and Social Security number with the one shown for the incorrect amount. In the case of an incorrect collection, consumers may have to request a "validation of debt," or what is sometimes called a "media packet," which provides details on the account holder. If the account is a case of identity theft, the consumer should request a fraud affidavit from the creditor. It's also a smart idea to file a police report. 
   
• Original dates. Length of credit history is 15 percent of a credit score, so consumers should be sure the original dates they opened their accounts are accurate. Original account dates could be reported inaccurately if a credit card company is acquired or merged, or if a credit card is reported lost or stolen. 
   
• Available credit. Credit limits on the credit report should match up with credit card statements. It's best to keep balances under 50 percent of the available limit; less than 30 percent is even better. Debt accounts for 30 percent of your score. 
   
• Types of accounts. Sometimes accounts are not categorized correctly. A home equity line of credit should be listed as a second mortgage, not just a line of credit. If the account type is not reflected properly, consumers should contact the creditor. 
   
• Reason codes. Consumers should read what the credit bureau has to say about why their score is what it is. These so-called "reason codes" appear in the credit report to explain what factors played into the credit score and what actions can be taken to improve the score over time. One caveat: If a consumer already has a good credit score, ignore the reason codes, as making changes could actually result in a lower score.  

One last word of advice for consumers: Think twice before closing that credit card, which shrinks the available credit listed on your report and hurts the credit utilization ratio. 

The key to good credit is being proactive in reviewing credit reports regularly. If consumers find their credit score is a respectable 680 or higher, removing minor dings may not be worth the effort. Otherwise, finding and eliminating errors is one way to get the high credit rating they deserve.

Learn more about Los Angeles home buying at EileenWalshRealtor.com or give me a call at 310-738-3807.

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Tax Lien Relief For Los Angeles Homeowners

The California Association of Realtors has reported the Internal Revenue Service (IRS) will expedite its process of providing relief from federal tax liens for distressed Los Angeles homeowners. With more than one million current federal tax liens against real and personal property countrywide, the IRS announcement should help Los Angeles homeowners resolve federal tax lien issues in their sale and loan transactions.

A homeowner seeking to sell or refinance a property must generally pay off an existing federal tax lien. However, during the current economic downturn, many homeowners don't have the cash or equity to do so. Hence, for a refinance, the homeowner may request that the IRS make its tax lien subordinate, or secondary, to the lien of the refinancing lender. For a sale, the homeowner may, under certain circumstances, request that the IRS discharge its claim. The IRS processing time for subordination or discharge requests has been about 30 days. The IRS currently is working to expedite that time frame to help distressed homeowners. For IRS instructions on requesting relief from federal tax liens, go to IRS Publication 783 for discharges and Publication 784 for subordinations at www.irs.gov.   

Learn more about Los Angeles homeownership by visiting EileenWalshRealtor.com.

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First Los Angeles Home Buying Step: Clean Up Your Credit

With lenders being more cautious than in previous years, Los Angeles home buyers are advised to closely monitor their credit history and FICO score to ensure they receive the best interest rates possible. Read advice from the Washington Post:

• Consumers considering the purchase of a home should first get their credit and finances in order. Reducing spending, limiting credit card balances to no more than 25 percent of the available balance, and monitoring credit reports are highly recommended by most financial experts. Even borrowers with less than ideal credit scores and credit histories still may qualify for a home loan. Some lenders will be more forgiving if the borrower has started meeting monthly debt obligations in the last six to 12 months. Consumers can view their credit reports from Experian, Equifax, and TransUnion by visiting www.annualcreditreport.com. The free credit reports will provide a borrower's credit history, but not the credit score. The credit score can be purchased for approximately $10 from the credit reporting bureaus.
• Borrowers who already have received their free annual credit report can purchase a copy from www.myfico.com. The cost is approximately $16 for the score from one credit bureau, or $50 for all three.
• Good credit doesn't mean simply paying bills on time; it also can mean job stability. Most lenders require borrowers to have worked for the same employer for at least one year, possibly longer before they will approve the home loan application. For self-employed individuals, most lenders will want at least two years of tax returns before approving a conventional loan. 
• Many large financial institutions have been forced to write off high levels of credit card debt. As a result, borrowers are being required to have higher FICO scores than previously required. A year ago, a FICO score of 720 was considered excellent. By today's standards, a credit score of 740 or higher likely will mean the borrower is approved, but not necessarily at the best interest rate possible, according to an executive with LowCards.com. 
• Inaccuracies on a credit report can be disputed with each credit reporting agency. Typically, the process takes 30 to 45 days for the bureau to investigate the dispute. Although this process can be time-consuming, it is well worth the time and effort. Incorrect notations, such as an account that has gone to collection or a home in foreclosure, could cost the borrower 100 points or more on their credit score. 
• Credit advisors recommend that borrowers pay their accounts in full each month, if possible. If that is not feasible, then borrowers should pay at least the minimum amount owed, and ensure the payments are made on time. Late payments will likely lower a credit score and could automatically result in a higher interest rate.

 Learn more about Los Angeles real estate by visiting EileenWalshRealtor.com.

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Prices are dropping, interest rates are at historic lows and changes in FHA guidelines make this a great time to get a loan to buy a Los Angeles home. Read what This Old House has to say about the changes:

If you dare to look out your window at houses for sale, you might be surprised at what you can buy and with how little money. Prices are falling, and inventory is plentiful; it's a buyers' market.

Alas, credit is so tight, potential buyers might think they need boat loads of cash or a superlative credit score to wade into the devastated housing market. But it isn't so, largely because of dramatic changes at the Federal Housing Administration (FHA), a federal housing loan insurer.

FHA makes it less risky for lenders to provide mortgages because it will pay a claim to the lender in the event that a homeowner defaults on their loan.

Until this year, FHA loans were capped so low that the program was out of step with the real price of a house. But in February 2008, the ceiling in the highest priced markets went from $362,790 to $729,750. That amount is scheduled to go down a bit.

As of January 2009, the new ceiling in the top markets will be $625,500. FHA loans in 2009 will cap out at 115 percent of the median home price in a county or metropolitan area. Still, huge swaths of the housing market will remain, as never before, eligible for an FHA loan.

With the implosion of the sub-prime market, the real estate industry has been working to explain to brokers, listing agents, homeowners, and anyone else who will listen, that FHA-backed loans have become the last best deal for many buyers.

FHA's rapidly increasing market share tells the story. Between 2003 and 2006, the number of homes purchased with the help of FHA had fallen to less than 4 percent of the houses sold. That number has rocketed up. FHA is now expected to back as many as 25 percent of the mortgages signed in 2009, according to the National Association of Realtors. Some predict FHA will soar right past that mark.

In other words, for many homeowners, an FHA loan has become the way to buy a house.

National Association of Realtors spokesman and veteran Minneapolis, Minnesota, realtor John Anderson says, "Most first-time buyers are going to be FHA ... (A)nd FHA is being used by second- or third-time buyers." Anderson recommends, "Anybody who doesn't have at least 10 percent to put down should think about an FHA loan." This Old House: Best places for first-time buyers to get old house

As lawmakers struggle to get ahead of the housing crisis, they've been making frequent changes to FHA. Buyers should keep an eye out for additional changes in the weeks ahead. But, in the meantime, here are the current rules of a program that -- unlike other mortgage options -- has become increasingly viable for many buyers.

• FHA loans must be obtained through an FHA-approved lender.

• Down payment requirements are minimal. Buyers need only 3.5 percent of the house's price tag.

• The down payment can be a gift from a family member, employer, local charity, or local government program.

• You can get an FHA loan even if your credit history is less than stellar.

• You must have a two-year employment record. Your mortgage payment must be less than 31 percent of your income, and your total debt (mortgage, students loans, etc.) must be less than 43 percent of your income.

• Help is provided if you ever have trouble making your mortgage payments.

Some brokers say even clients with good credit are thinking about FHA loans. Minneapolis realtor John Anderson says he's dealing with one couple that plans to use either a conventional or an FHA loan, depending on the house they buy. If the house needs work, they want to make a smaller down payment with an FHA loan, and hold some of their own cash for repairs. This Old House: Best places to buy a fixer-upper

If you don't have extra cash for repairs, and you're interested in buying a house that needs work, FHA has a program for you, too. Known as 203(k), this program allows buyers to borrow the price of the house and funds for home repairs all in one loan.

Marc Schwaber is president and COO of one of the largest broker firms in the Northeast, Preferred Empire Mortgage Company. He says the newly streamlined 203(k) program is becoming popular because it "can turn 'This Old House', into 'Your New House'." This Old House: 47 skills you need to survive homeownership

But Schwaber and Anderson warn against seeing FHA as a panacea. Here's why:

• FHA loans are more expensive than conventional loans backed by the traditional 20 percent down payment. Buyers with lower down payments, including those who turn to FHA, pay a bigger premium for mortgage insurance. "FHA is not like opening a gift on Christmas morning. It has good and bad to it," says Marc Schwaber.

• Borrowers should also watch out for predatory practices. Even though government regulators must approve FHA lenders, there have been reports of loan officers abusing the program and luring consumers into houses they cannot afford.

John Anderson says, "I warn consumers that when you shop for a lender, make sure that they are directly endorsed by the FHA." Anderson says those lenders are scrupulous, are experienced with FHA, know they can be audited, and work faster than mortgage companies who rely on a larger bank's FHA underwriters to close a loan.

How can a borrower make sure that their lender is on the up-and-up? Schwaber says, "Call the state banking department and ask if the company is well rated. If they say this company has a lot of complaints, just because they show you the golden goose doesn't mean it's made of gold. Run things by an accountant."

Despite all the bad news, these real estate pros are bullish on the deals to be had. Anderson says it's an ideal time to think about getting into the market with an FHA loan. "Interest rates are down, inventory is up, prices are down, and there are motivated sellers."

Learn more about Los Angeles real estate by visiting EileenWalshRealtor.com.

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Los Angeles Real Estate For Sale:

7167 Waring Avenue, Los Angeles CA 90046
MLS# 09-342411
$749,000

Cozy 2 BR + Office in a great West Hollywood location close to hip Melrose shops. Beautiful hardwood floors, SS appliances and gorgeous archways complete the charm of this home. The large secluded garden, including 2 separate seating areas, a distinct soothing fountain and a firepit, make this home a perfect retreat in the city. The office has separate access to the garden and there is even an inside laundry room. The home offers a sense of complete privacy rarely found in the city. Don't miss this one!

Learn more about 7167 Waring Avenue and other Los Angeles real estate by visiting EileenWalshRealtor.com.

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Los Angeles Home Prices Drop To 2003 Levels

Los Angeles and southern California home prices dropped to 2003 levels at the end of 2008. Read the article fro the Los Angeles Times:

Southern California home prices continued their decline at the end of 2008, closing the year at 2003 price levels, a real estate research firm reported today.

The December median sales price for all Southern California homes fell to $278,000, a 35% drop from the same month a year prior, according to San Diego-based MDA DataQuick.

Los Angeles Real Estate: 5 Factors That Decide Your Credit Score

Credit scores range between 200 and 800, with scores above 620 considered desirable for obtaining a mortgage when buying Los Angeles real estate. The following factors affect your score:

1. Your payment history. Did you pay your credit card obligations on time? If they were late, then how late? Bankruptcy filing, liens, and collection activity also impact your history.

2. How much you owe.  If you owe a great deal of money on numerous accounts, it can indicate that you are overextended. However, it’s a good thing if you have a good proportion of balances to total credit limits.

3. The length of your credit history. In general, the longer you have had accounts opened, the better. The average consumer's oldest obligation is 14 years old, indicating that he or she has been managing credit for some time, according to Fair Isaac Corp., and only one in 20 consumers have credit histories shorter than 2 years.

4. How much new credit you have. New credit, either installment payments or new credit cards, are considered more risky, even if you pay them promptly.

5. The types of credit you use. Generally, it’s desirable to have more than one type of credit — installment loans, credit cards, and a mortgage, for example.

For more on evaluating and understanding your credit score, visit www.myfico.com.

Learn more about Los Angeles real estate by visiting EileenWalshRealtor.com.

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Los Angeles CA Real Estate For Sale:
8467 Willoughby Avenue, Los Angeles CA
$949,000

Beautifully updated WEHO Adjacant 3 bedroom, 2 bath home. Interior includes gorgeous ebony-stained hardwood floors, Stainless steel appliances, granite countertops, slate floors. Central heat/air, tankless water heater, cat 6 wiring, all new custom blinds. French doors lead to grassy back yard + pastel brick patio. Walled and gated on all sides for maximum privacy. Rooftop deck for watching sunsets. Secure parking for 4. Immaculate condition. Move right in!

Learn more about 8467 Willoughby Avenue and other Los Angeles CA real estate by visiting EileenWalshRealtor.com.

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