Mortgage Blog

This week has brought the latest monthly home sales data from the National Association of Realtors. Once again, prices are dropping sharply.

• Fontana has an average decline of -31% in home prices across three zip codes.
• Ontario has an average decline of -33.46% across three zip codes.
• Rancho Cucamonga has an average decline of -20.25% across four zip codes.
• San Bernardino has an average decline of -41.16% across six zip codes.

There are a few locations with positive numbers: Big Bear Lake, Cedar Glen, Morongo Valley, Needles, and Wrightwood.

Click Here to find your city.

The Federal Reserve has cut its key interest rate from 2.25% to 2.0%, It is the seventh rate cut since last September. Commercial banks immediately announced that they were cutting their prime lending rate to 5 percent. That will mean cheaper credit for the millions of business and consumer loans tied to the prime. This impacts how much consumers pay on credit card debt, home equity lines of credit and auto loans.

The Fed will continue to monitor economic and financial developments and will act as needed to promote sustainable economic growth and price stability

The California Association of Realtors (CAR) has released the San Bernardino County Economic Profile for March 2008. Some of the highlights for January 2008 include:

• Sales were down 40.1% for the month with 227 units sold.
• The average price for San Bernardino County was $283,000, down 23.6%.
• Unsold inventory was at 17.7 months.
• Unemployment was at 6.3%.
• New Housing Permits down 78.1% with 231 units.
• New Home Sales at 595 units (2007 Q4).
• Asking Rents up 1.8% ($1,162) 2007 Q4

HUD has amended the FHA Secure Initiative with additional underwriting guidelines. FHA Mortgagee letter 2008-09 was issued and it basically states:

A second appraisal will be required on FHA loans when:

1. The loan amount exceeds $417,000, AND

2. The LTV equals or exceeds 95%, AND

3. The property is determined as being in a declining market.

The second appraisal must be performed by a FHA approved appraiser and can be done as an exterior-only appraisal using Fannie Mae/Freddie Mac 2055 form. This applies to SFR's only. Condo's and manufactured will require a complete second appraisal. You can use the same case # for both appraisals.

Also, cash-out LTV changes-

If the loan amount is greater than $417,000, the LTV may not exceed 85% of the appraised value.