Newport Beach November 2019

Newport Beach, California  92660 Real  Estate Values

 November 2019 end of month Residential Real Estate Sales Report.

 Of note: Median Price for all price ranges and types declined 15.8% to $2,270,000,

 with sales increasing 8.2% year-over-year. 

42% of all homes listed for sale had their asking price reduced,

 and the Sales to List Price is at 95.8%. 

(Example: sellers reduced their sales price an average of 4.2% off

 the listing price: $2,000,000 listing price = $1,916,000 sales price.)

Number of listings on market slowed, but this is typical for Holiday Season

Markets inland did not fair as well

Reverse Mortgage Right For YOU?

IS A REVERSE MORTGAGE Right for You?

You must qualify to make the payment on taxes, insurance and HOA and any other revolving bills you have.

The property must appraise for enough to fit the HECM formula of age (number of years of life expected to extend) verses the equity. This is the secret sauce.

lavender wreath 

Home Equity Conversion Mortgage (HECM) are a good idea if you want to stay in your house until the day you die. Sounds rough; but that's what my Mom says. She wants to remain in her home. 

With a HECM You eliminate your monthly mortgage payment. The loan balance grows over time and the value of your estate may decrease over time. Closing costs add to your financial burden.

You must live in the home as your primary residence, continue to pay required property taxes, homeowners insurance and maintain the home according to Federal Housing Administration (FHA) requirements. Failure to meet these requirements can trigger a loan default that may result in foreclosure.

Eligibility To be eligible for a HECM loan, some key requirements are:

• The youngest borrower must be at least 62 years of age

• You must live in your home as your primary residence and have sufficient equity

• You cannot be delinquent on any federal debt

• Property must be a single family residence, an owner occupied 2-4 unit home, a condominium approved by the Department of Housing and Urban Development (HUD), or a manufactured home that meets FHA guidelines

• Must meet financial assessment requirements as established by HUD Obligations Once you obtain your HECM loan, you must continue to meet the following conditions to maintain your loan in good standing.

• Complete a HUD approved counseling session

• Maintain your home

• Continue to pay property taxes and homeowners insurance and HOA

• Continue to own and live in your home as your primary residence A HECM Loan Defined A Home Equity Conversion Mortgage (HECM), commonly known as a reverse mortgage, is a Federal Housing Administration (FHA) insured loan which enables you to access a portion of your home’s equity without having to make monthly mortgage payments. 

• Eliminates your existing monthly mortgage payments

• You can stay in your home and maintain the title - you still own the house 

• Heirs inherit any remaining equity after paying off the HECM loan. They can sell or refinance after you pass away

• The HECM loan is FHA insured 

 Federal Housing Administration (FHA), you will be charged an up-front mortgage insurance premium (MIP) at closing of 1.75% and, over the life of the loan, you will be charged an annual MIP based on the loan balance.  Your current mortgage, if any, must be paid off using the proceeds from your HECM loan. You must still live in the home as your primary residence, continue to pay required property taxes, homeowners insurance, and maintain the home according to FHA requirements. Failure to meet these requirements can trigger a loan default that may result in foreclosure.

The loan becomes due and payable if you fail to meet any of the above obligations or the last borrower or non-borrowing spouse passes away. The heirs must repay the loan in order to inherit the property. Failure repay the loan may result in foreclosure.

Loan Options There are two types of Home Equity Conversion Mortgage (HECM) loans. It is important to select the one that best meets your needs. Liberty offers fixed and adjustable rate HECM options. Either option can be used to access equity on a home you already own or to purchase a new home. If you have an existing lien on the property, it must be paid off as part of the HECM transaction. Both options eliminate monthly mortgage payments and do not require repayment as long as the loan obligations are met. Determining Your Proceeds The amount of funds available, also known as the Principal Limit, from a HECM loan is determined by: • Age of the youngest borrower or eligible non-borrowing spouse • The lesser of the appraised value of your home, sale price or the FHA national lending limit • Current interest rates • Balance of your existing mortgage (if applicable) and all mandatory obligations The funds available to you may be restricted for the first 12 months after loan closing, due to HECM requirements. You may need to set aside additional funds from the loan proceeds to pay for taxes and insurance. 

You must live in the home as your primary residence, continue to pay required property taxes, homeowners insurance, and maintain the home according to FHA requirements. Failure to meet these requirements can trigger a loan default that may result in foreclosure. 

We order an appraisal from an independent appraisal company. I am not allowed to speak with or consult with the appraiser. You MUST have carbon monoxide detectors and smoke detectors installed in the home BEFORE the appraiser arrives. They go inside all the rooms of the home. They take photographs. They measure the size. You may want to provide them some comparable sales in the form of a list on paper.

All borrowers need to provide current Identification and be notarized. In addition, any outstanding liens on your property will need to be satisfied at this time.

Income documentation needed:

Identification with current dates
Legible date of birth (DOB) verification
Legible Social Security Number (SSN) verification 

Social Security Award letters

Pension 1099

Bank statements all pages past two months

California has a seven day cooling off period from the start estimates, completing the class, then seven week days. This makes sure the borrower has had time to think about the choices.

Generally a reverse fits borrowers who don't have much monthly income to sustain the lifestyle they have led - BUT they have house equity and they want to stay independent

Caroline Gerardo Barbeau  - please call me C G

Cell phone  (949) 784- 9699

NMLS 324982

Location is Irvine

 P O Box 1902 San Juan Capistrano CA 92693  if you need to mail

Equal Credit Opportunity Lender 

A reverse can be closed a quickly as twenty days; but typically there is some discussions with

family which I encourage and the process takes forty days

Refinance After Modification

There is no easy answer as every borrower is unique.
Generally you need twelve payments as agreed to the modification
to refinance your home loan to a lower interest rate or to get cash out.

Here is what you need to gather:

a. All the documentation from the modification, not what you submitted,
everything you signed as agreements.

We will review the agreements with you as to:
Do they have a clause to call back forgiven principle?
Do they have a time limit where they can ask for the forgiveness back?
Did the 1099 you for the forgiveness of debt?
What is the existing rate and length of time this rate holds.
Some modifications are only good for a few years then accelerate rapidly.

b. Your income documentation-
w-2 2018 2017 and December pay stub, current paycheck
IRS taxes if self employed 2017 2018
bank statements past 2 months
mortgage bills
fire insurance bill
HOA bill if any




c. We will review your credit report with you.
Some lenders do not show the modification on the credit, some show the loss

Have you healed from the loss that got you into the modification?

The past is not important here. We want to look toward the future.

Time heals everything on your credit report.

Even if you aren't in a position to lower your interest rate today,
we can set forth a plan for the future.

Call me. Straight talk and answers always.
The talk is free. Planning always kind.

 (949) 784- 9699

C G

NMLS 324982

If self employed we can review bank statement loans

RATES are DOWN

10 Year Treasury is at 5 month lows, approaching 3 year lows which was the historic low. Mortgage Rates are DOWN!

Today has been quiet so far. MBS are about .125 better in price.

10 Year Treasury is back down to 1.55%.

          On 9/3/2019 and 9/30/2019 the 10 year closed at 1.51%

                                  On 7/5/2016 the 10 year closed at 1.37% and by 7/11/2016 was up at 1.59%.

                                              Take advantage of today’s low rates. 

Advance your files, get them ready to lock, help them understand what it means and simply do it. 

W-2 forms for 2019 are in the mailbox, easy to send a copy and download pdf copies of bank statements. Take advantage of the moment!

In this cycle, rates appear to go up much faster than they go down. (3rd chart below going back to 2013)                               Bank Holiday on: Monday 2/17/2020.

Some schools are closed all week for President's week

                                           Fed Wire is closed on bank holidays and loans typically cannot fund.

M

 You may be able to save on your monthly payment  with same remaining number of years

                                         

Market Snapshot

Past 90+ days Bollinger Band which are still in about the same 1.96% to 1.74% sideways range as it has been for the past 60 days.

(Bollinger band chart above today’s MBS & Treasury snapshot):

Today:

Bollinger Band chart since early September 2019

10 year rates going back to 2013. They seem to go up much faster than they go down.

And now for some photographs of almond orchards in the Central Valley. 

I drove up and there are all new water signs- now not so quirky the

are pointing out there is no food without water, and we need dams

not half built trains...

IRA Planning

The Setting Every Community Up for Retirement Enhancement (SECURE) Act, passed in December 2019, increases access to workplace plans 401K plans, other retirement savings accounts, and expands retirement savings. The retirement legislation includes policy changes that will impact defined contribution (DC) plans, defined benefit (DB) plans, individual retirement accounts (IRAs) and 529 plans. 


I am not a tax adviser, it's time to call them and polish the crystal ball.

💰💸🤑

Changes:

For taxable year 2020 and after - meaning after 2021, the law removes the age limit at which an individual can contribute to a traditional IRA. In the past an individual was not allowed to contribute after age 70½; the Act allows anyone that is working and has earned income to contribute to a traditional IRA regardless of age.
If you are unable to make a contribution at this time, you will have the ability to contribute via your preferred funding method soon. The deadline to make a Current Year 2020 contribution is April 15th, 2021.

So why would most want to add more money in after age seventy when your earning power has probably ended or decreased? This really is a way to shelter income for your children beneficiaries by spreading the tax gain over ten years after you die. Here is how:

For those who inherited an IRA from an original IRA owner who passed away prior to January 1, 2020, no changes to your current distribution schedule are required. However, for situations where the original IRA account owner passes away after December 31, 2019, fewer beneficiaries will be able to extend distributions from the inherited IRA over their lifetime. Account owners need to plan to withdraw all assets from the inherited IRA within 10 years following the death of the original account holder. Exceptions to the 10-year distribution requirement include assets left to a surviving spouse, a minor child, a disabled or chronically ill individual, and beneficiaries who are less than 10 years younger than the decedent.  Hmm wonder if this passed because Trump has children? 


This change will require some investors to reevaluate their retirement and/or estate planning strategies. While some beneficiaries may qualify for exemptions to the 10-year rule, others will be required to draw down assets more rapidly than required under the current rules. However, it is important to note that anyone who inherited an IRA from an original account owner who passed away prior to January 1, 2020, can continue their current distribution schedule.


My 529 plan for college is now depleted. I am so proud I was able to save for my children's college education. We were able to make it without loans until this past year, which is the last year - yippee!

The next stage of my life is to keep earnings high, contribute the maximum to IRA and 401k if matched, and figure out where I want to live in a single story house for the next thirty years. Big goals for 2020.

Mortgage rates remain low. It makes sense to invest in real estate in locations that are desirable and there is demand. With rates in the three and four percent you can still hold on to money better than a CD at 2 % . But the question is where is the stable location that won't see a decline? I say stay coastal if you can afford it, and single family. 

My crystal ball says:
Pay off credit card debt
Don't buy on credit cards
Keep driving the older car
Refinance to lower if you can
Grow a garden
Save 20% of what you earn


How is your financial planning shaping up for the next decade?

Royalty as a Bee 

Pearl Necklace Real Estate Chain of Title

Real Estate Chain of Title Is Like Grandmother’s Pearl Necklace

Chain of Title is the history on your home and a legal record of a property. The chain of title is provided by a title company when a buyer contracts to purchase a property. This document is in the preliminary title report and most lenders was a twenty-four-month chain to show any recent recordings as well as liens, deed, documents, covenants, restrictions, agreements, easements and more. The chain of title for any property is found in the relevant county recorder’s office. Some California cities provide these records visible online free, some ask for per page nominal fees, some require you visit their office in person.

Recorded documents show the history in a chain of title. The recent dated filing runs back to the original land that affects the real estate. Many types of documents can be recorded. There is not a regulating authority who stops a person from filing, filling out forms and paying the recorder to file a document thus fraud can come into the history of a property.

A number of documents that can be recorded. A skilled lender or title officer can interpret the needs of the following documents on the chain of title.

Transfer documents (deeds) document the transfer of ownership. The deed conveys the property from the seller, or grantor, to the buyer, or grantee. The deed also includes street address and legal and metes and bounds description of the property, often attached is a plat map and long legal description. There are sale transfers, family transfers, and a several types of grant transfer deeds.

Financial documents (deeds of trust) are liens, a creditor enters into an agreement with a lender to borrow money. The lender provides cash through a warehouse line to purchase the property. The cash is settled by an escrow company in Southern California and a title company in Northern California. When the mortgage debt is paid off, depending on the terms of the note say 15 or 30 years, the lender has title to the property. Once the mortgage is paid, the former creditor owns the property “free and clear.” The date of the mortgage or lien determines which lien is a priority for payment if there is more than one lien in competition. A deed of trust, also known as a trust deed, assigns the property to a trustee. The trustee holds the title as security for a loan between the lender and the borrower. In such a case, the lender is known as the beneficiary and the borrower as the trustor.

Involuntary lien documents include liens, lis pendens and tax liens. Involuntary liens, as the name implies, are liens that arise without the owner’s consent, usually due to nonpayment of debts. Examples of involuntary liens include property tax liens when local property taxes are not paid; income tax liens, for failure to pay the IRS; judgment liens from a creditor, ordered by the court, and mechanic’s liens. The latter is filed by contractors if the owner does not pay for work done on the property. If an owner is unable to pay for construction work of any type a contractor can place a mechanics lien. The release of the lien is a process and often owners fail to not just pay the bill, but properly follow up on the filing of the release. Involuntary liens “cloud” the title and require payment before the property changes hands. In some cases, the property is sold at auction to satisfy the lien. A lis pendens is notice that a lawsuit has been filed regarding the property’s title or ownership.

Covenants and restrictions are documents creating restrictions on the use of the subject property. Such restrictions may include limits on the types of improvements made to the property, uses of the property and property occupancy. Condominium and townhouse projects may have a long list of rules and regulations recorded against the subject property. Rules which violate United States laws are not considered enforceable.

Easements, also known as rights of way, are documents affecting usage rights. Utility easements allow access to the property for the purpose of maintaining electrical lines, water/sewer lines and the like. Some areas of California have water rights easements, oil and gas lines or mineral rights. Private easements allow another party, usually a neighbor, access through the property. It may mean direct access, such as a shared driveway, or non-direct access. A road maintenance agreement is often recorded between neighbors who share a road or driveway. If there is no agreement recorded it is a best practice to get such an agreement in place and recorded as an owner might not be able to drive or walk to their property. Other examples are for solar access, whereby a neighbor might be mot allowed to build a tall structure or plant trees that block their solar collection. Also, there are agreements to not have trees or structures blocking a neighbor’s view rights and so forth.

An easement by necessity, and the property owner cannot interfere with the neighbor’s ability to access his or her land.

Other documents involved in the chain of title may include:

·         Death certificates, when the property passes to a joint tenant through the right of survivorship. This joint tenant is generally the decedent’s spouse. An original certified copy of the death certificate is required by the Title Company to clear a recent death of an owner.

·         Affidavits, documents that affirm a fact related to the property

·         Correction deeds, correct an error in a previously recorded document.

·         Be mindful that persons can file a deed on a property without the knowledge of the owner, these pose special handling by the title officer and lender.

·         Filing a Living Trust, filing a family transfer deed or a Homestead can also cloud the title if not properly handled.

·         Death, divorce and disaster can cause a cloud on title. In California because we are a community property state it is required that a living spouse sign a grant deed to not be included in a transaction.

Chain of Title clouded is like a string of pearls without knots

Sometimes, there is a break in the chain of title. This occurs if the title transfer was inaccurate – or fraudulent. Errors include misspellings of names of the grantor or grantee, incorrect legal descriptions of the property, lack of signatures on the deed, mistakes in when the chain of title documents were recorded. Having a Grandfather, son who is Junior and grandson who is the III can complicate the title when their names are confused. When there is a break in the chain of title, correction is necessary. To correct such breaks the property owner may have to go to court and seek quiet title action. Depending on the nature of the break, a judge can rule that the break is not relevant and no longer exists. However, if the break is known to have resulted due to a particular party, the owner can seek out the party and have them fill out a quitclaim deed, be notarized and give up rights to the property. Organizing the proper form and making certain the party has current identification to be notarized is not a simple task.

Today there are four main title companies in the United States with many operating under the “umbrella” of one of the big four: Fidelity National Financial Inc., First American Financial Corp., Old Republic International Corp., and Stewart Information Services Corp. Perhaps by 2020 year-end there will be three when Fidelity takes ownership of Stewart Title.  In the past year a couple new Fintech Title companies have opened shop claiming to be faster and cheaper as they use only their secret sauce math, this remains to be seen how a title company without employees can repair broken chains of title and search down or bond around fraudulent liens. Will they be able to track down a bankrupt lender, find the correct Trustee and execute a reconveyance deed?

The future of the Title and Lending Industry is sure to change. Being able to fix a cloud on title requires skill. If you have a problem please feel free to contact me for assistance.

.

VA Loan Blue Water

JANUARY 1 2020 new VA loan terms

Blue Water Act dramatically changes the VA home loan program. 

• ve VA compensation.

 Blue Water Navy Vietnam Veterans Act of 2019 Is a law that goes into effect January 2020

JANUARY 1 2020 new VA loan terms

Blue Water Act dramatically changes the VA home loan program. 

In California high cost areas this is a game changer and listing agents need to be aware that Veterans making offers on million dollar homes may be the best offer they have on the table.

• No upper loan limit on VA mortgages as of 1 January 2020.
• An increase in the VA Loan Funding Fee for all non-exempt borrowers.
• Purple Heart recipients are now exempt from paying the VA loan funding fee the same as those who receive or are entitled to receive VA compensation.

 Blue Water Navy Vietnam Veterans Act of 2019 Is a law that goes into effect January 2020

The law creates benefits for veterans with medical conditions presumed to have been caused by Agent Orange or "herbicide exposure" during service in Vietnam. You may not  know all the chemicals that the enemy used to kill our men and women in the service of our country; but the after effects of these are great risk to health.

 House Resolution 299 (HR 299) and addresses a variety of Vietnam-era, Korean War-era, and Gulf War-era issues associated with VA medical claims. But the law also includes other items in the bill including a removal of VA loan limits for approved transactions, and an increase in the VA Loan Funding Fee.

The Blue Water Navy Vietnam Veterans Act expands maximum guaranty amounts for purchase, construction, and cash-out refinance loans greater than the Freddie Mac conforming loan limit. WOW!

Loan Limits still apply for those who have more than one active VA loan, only partial entitlement available or those who have defaulted on a previous loan.

The Purple Heart Exemption For The VA Loan Funding Fee

The VA Loan Funding Fee is an expense associated with VA mortgages that most veterans must pay unless they receive or are eligible to receive VA compensation for service-connected medical issues.

Due to HR 299, those who still serve on active duty, and were awarded the Purple Heart, are now also exempt from paying the funding fee as of January 1, 2020.

The Resolution also provides for the first increase in the VA loan funding fee program in some time.

VA Guaranty Requirements on and after January 1, 2020

It is important to assure that eligibility has been reinstated.

super important documents needed from the Veteran:

• Revised 26-8320 (Certificate of Eligibility) showing restored entitlement, or
• Unrevised 26-8320, 26-1880 (Request for Determination of Eligibility), and Closing Disclosure evidencing previous property has been sold on or before Closing date of the new Loan

VA Loan Funding Fee Increases In 2020

The VA loan funding fee is on a sliding scale with the lowest fees reserved for first-time VA borrowers, and higher fees for those who have used VA loans before.  Under the new 2020 rule, the VA funding fee for an active duty first-time borrower is increased to 2.30% and the subsequent use fee set at 3.60%.

Other VA loan funding fees are increased too; higher fees may apply for VA refinance loans and other transactions. Refer to the VA Funding Fee Chart and VA Product Matrix for additional details.

Type of Loan	Down payment	Percentage for First Time Use	Percentage for Subsequent   Use
Purchase & Construction	None	2.30%	3.60%
	5% or more (up to 10%)	1.65%	1.65%
	10% or more	1.40%	1.40%
Cash-Out Refinance	N/A	2.30%	3.60%
IRRRLs	N/A	0.50%	0.50%
Loan Assumptions	N/A	0.50%	0.50%

VA Loan Limit Rules

VA loan rules under the "Blue Water Act" remove the loan limits, however, the maximum loan amounts for VA loans funded with MWF remain at their current levels:

VA Non-IRRRL:

• FICO >=700: $1,500,000 max loan amount
• FICO <700: $1,000,000 max loan amount

VA IRRRL: $950,000 max loan amount

 01/01/2020.

Additional Resources

Blue Water Navy Vietnam Veterans Act of 2019

VA Circular 26-19-23

VA Circular 26-19-30

VA Circular 26-19-31

Mortgage

Volatility:  Low

 Current Conditions

 FNMA 3.0   101-10 (-01)

 GNMA 3.0   102-19 (+01)

 10YR UST 1.921 (+0.042)

 VIX              14.56 (+1.88)

Mortgage Rates hold in a quiet market.
Little change.
12/30/2019

Local Lender California

CG
(949) 784-9699
Your local lender
for all of California

Don't Buy Gifts Out of Guilt This Season

buying on line

This holiday season I encourage you not to purchase a bunch of gifts out of obligation. Teach those around you not to incur debt.

Instead make them something.

Can you bake? 

Can you knit?

Can you do yard work?

Can you walk a dog?

Can you make a wreath?

What can you do that shows love and joy rather than buying stuff?

Fill someone's bowls with fresh fruit. 

Clean up grandmother's garage.

Do some act of kindness.

You will feel so much more part of the season

Merry Christmas

link to my ugly Christmas sweater

https://sf3.tomnx.com/landingpage/?isPreview=true&token=e5pbSE&cid=woDelwted&userId=36lNIJD 

Mortgage Payment Calculated in Your Brain

Mental Mortgage Math or

How to figure a payment in your head like a genius

Okay show them you are a brainiac with this

Did you know you can calculate a principal and interest payment on the fly?

Let’s use a 6% interest rate as an example:

Payments - The payment for principal and interest equals about $600 on a $100,000 30-year loan. Use this as your benchmark. (Actual is $599.55.)
Principal Paid - At this rate, figure 1/10th of 1% of the loan amount each month. Example: $100,000 loan = $100 of principal paid. (Actual figure starts at $102.33, increasing with each payment.)
Interest Paid - Subtract the principal from the payment to determine the approximate cost of interest. Example: $600 payment - $100 principal = $500 interest.
As rates change all the time, call for an update on current levels, and we'll calculate a current benchmark applicable to today's markets.
Mental Mortgage Math is not meant to replace your calculator but is a great way to estimate numbers quickly on the fly. Call when you want us to do the rest.

Sincerely,

here I am at San Juan Capistrano mission at night doing my calculations in my head

Caroline Gerardo Barbeau please call me C. G. phone: (949)784-9699 NMLS 324982

© 2019 CMG Financial, All Rights Reserved. CMG Financial is a registered trade name of CMG Mortgage, Inc., NMLS# 1820 in most, but not all states. CMG Mortgage, Inc. is an equal opportunity lender. Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act No. 4150025. Registered Mortgage Banker with the Texas Department of Savings and Mortgage Lending. AZ license #0903132. Offer of credit is subject to approval. To verify our complete list of state licenses, please visit  and www.nmlsconsumeraccess.org.


This blog  is part of my effort to maintain our relationship and keep you well informed of market conditions. It could be interpreted as a commercial message
CMG Financial 19671 Beach Blvd. Suite 101 Huntington Beach CA 92648

Mortgage Rates Are Down

Mortgage Rates Are Down

Conforming Loan Limits Increased in most California Counties!

Let's talk about saving you money

Get your interest rate lower and a little cash back?

(949) 784- 9699

C G

NMLS 324982