News, tools, tips and strategies for home buying, selling and living the good life…
FHA EXTENDS ‘ANTI-FLIPPING WAIVER’ TO HELP STABILIZE HOUSING MARKET:
In a continues effort to boost home values and accelerate resale of vacant properties:
In an effort to continue stabilizing home values and improve conditions in communities experiencing high foreclosure activity, Federal Housing Administration (FHA) Commissioner David H. Stevens today extended FHA’s temporary waiver of the agency’s ‘anti-flipping rule.’ The extension announced today is intended to accelerate the resale of foreclosed upon homes in neighborhoods struggling to overcome possible property abandonment and blight.
With certain exceptions, FHA regulations prohibit insuring a mortgage on a home owned by the seller for less than 90 days. Early last year, FHA temporarily waived this regulation through January 31, 2011. FHA today posted a notice extending this waiver through the remainder of 2011. This action will permit buyers to continue to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. It will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.
“As I noted when we first announced this policy change early last year, because of the tightened credit market, FHA-insured mortgage financing is often the only means of financing available to potential homebuyers,” said Stevens. “Today I can report that this policy change has been effective. Since the original waiver went into effect on last February, FHA has insured more than 21,000 mortgages worth over $3.6 billion on properties resold within 90 days of acquisition.”
FHA research finds that in today’s market, acquiring, rehabilitating and reselling these properties to prospective homeowners often takes less than 90 days. Prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition adversely impacts the willingness of sellers to allow contracts from potential FHA buyers because they must consider holding costs and the risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time.
Stevens added, “Because of past restrictions, FHA borrowers have often been shut out from buying affordable properties. This action enables our borrowers, especially first-time buyers, to take advantage of this opportunity and buy a home that has recently been rehabilitated. It will also help to move more foreclosed properties off the market and reduce the number of vacant homes in neighborhoods throughout this country.”
The extension announced today is effective through December 31, 2011, unless otherwise extended or withdrawn by FHA. All other terms of the waiver will remain the same, and HUD continues to invite public comment on it. The waiver contains strict conditions and guidelines to assure that predatory practices are not allowed.
To protect FHA borrowers against predatory practices of “flipping” where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver continues to be limited to those sales meeting the following general conditions:
• All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
• In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the waiver will only apply if the lender meets specific conditions.
The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.
James T. Camara
Sr. Loan Officer
Ph (209) 981-5626
Fax (209) 249-5280
jcamara@scenicoaks.net
Ca Dept of Real Estate License #01774620 NMLS #257972
A USDA Guaranteed Loan is Government insured 100% purchase loan. These Loans are only offered in rural areas. Under the terms of the program, an individual or family may borrow up to 100% of the appraised value of the home, which eliminates the need for a down payment.
To be eligible, applicants must:
- Have an adequate and dependable income.
- Be a U.S. citizen, qualified alien, or be legally admitted to the United States for permanent residence.
- Have an adjusted annual household income that does not exceed the moderate income limit established for the area. A family’s income includes the total gross income of the applicant, co-applicant and any other adults in the household. Applicants may be eligible to make certain adjustments to gross income— such as annual child care expenses and $480 for each minor child—in order to qualify. SEE INCOME GUIDELINES ATTACHED
Have a credit history that indicates a reasonable willingness to meet obligations as they become due.
- Have repayment ability based on the following ratios: Principle, Interest, Taxes, and Insurance (PITI) divided by gross monthly income must be equal to or less than 29 percent.
- Total debt divided by gross monthly income must be equal to, or less than, 41 percent.
Homes That Qualify:
- Guaranteed loans can be made on either new or existing homes.
- Existing homes must be structurally sound, functionally adequate, and in good repair.
- There are no restrictions on the size or design of the home financed.
- The home must not be used for income-producing purposes.
- Homes must be located in rural areas. Rural areas include open country and places with a population of 10,000 or less and—under certain conditions—towns and cities with between 10,000 and 25,000 residents. SEE WEB ADDRESS BELOW.
You can check a home’s eligibility by typing in the address of the following website. http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do?pageAction=sfp&NavKey=property@11. Just hit the accept button, type in the address and hit the “GET MAP” button.
I have attached the income and sale price limits for California.
Income Guidelines
Sales Price Limits
REMEMBER THAT USDA HAS BOTH SALES PRICE LIMITS AND INCOME LIMITS. MAKE SURE YOU CONSIDER THESE LIMITS WHEN RECOMMENDING THE USDA LOAN PROGRAM TO A POTENTIAL BUYER. USDA ONLY LENDS ON HOUSES WITHIN THE USDA AREAS. PLEASE MAKE SURE THE HOME IS LOCATED IN A USDA AREA. YOU CAN USE THE WEB ADDRESS ABOVE TO VERIFY IF THE PROPERTY IS ELIGIBLE.
If you have any questions, please contact me at the contact information below.
James T. Camara
Sr. Loan Officer
Ph (209) 981-5626
Fax (209) 249-5280
jcamara@scenicoaks.net
Ca Dept of Real Estate License #01774620 NMLS #257972
This week bring us the release of only three monthly reports that are relevant to the bond market and mortgage rates, but two of them are considered to be highly important. In addition to those three reports, we also will get the minutes from the last FOMC meeting that may influence the markets and possibly mortgage rates.
The first report is the Institute for Supply Management’s (ISM) manufacturing index for December late tomorrow morning. This highly important index measures manufacturer sentiment.
The Commerce Department will post November’s Factory Orders data late Tuesday morning. This report generally does not have a huge impact on the bond market or mortgage rates, but it can influence bond trading enough to create a minor change in rates. The larger the decline, the better the news for mortgage rates.
Also Tuesday is the release of the minutes from the last FOMC meeting. This will give market participants insight to the Fed’s thinking and concerns regarding the economy, inflation and monetary policy. It is one of those pieces of information that may cause a great deal of volatility in the markets or be a non-factor, depending on what the minutes show.
The final report of the week comes Friday morning when the Labor Department will post December’s employment figures. The Employment report is arguably the most important monthly release we see. It gives us the national unemployment rate, the number of jobs added or lost during the month and average hourly earnings, which is a key measure of wage inflation. Rising unemployment, a larger than expected drop in new payrolls and a decline in earnings would be ideal news for the bond market and mortgage rates.
Also worth mentioning is an appearance by Fed Chairman Bernanke in front of the Senate Budget Committee late Friday morning. We will give testimony about monetary policy, economic conditions and fiscal issues. The markets pay close attention whenever he speaks, so any surprises in his words will cause volatility in the financial markets and mortgage rates.
Overall, the key data of the week will be Friday’s Employment report, but look for tomorrow and Tuesday to be active due to the economic data and FOMC minutes scheduled. If they give us favorable results, mortgage rates will likely move lower for the week. But if not, we can expect to see mortgage rates move higher.
Below is a chart of the 10-Year bond over the last month. Although mortgage rates do not directly mirror the 10-year bond, they do follow the direction of the 10-year bond. As you can see the mortgage rates have been on the rise over that past month.
James T. Camara
Sr. Loan Officer
Ph (209) 981-5626
Fax (209) 249-5280
jcamara@scenicoaks.net
Ca Dept of Real Estate License #01774620 NMLS #257972
Recently a friend told me that reading fiction was a great cure for insomnia. If you are like me, sometimes you can get so cranked up by a busy day that it’s hard to unwind and get a good night sleep. My friend Stan was right. Start reading novels was his advice…and it worked. Being the type-A, work-a-???? (never mind let’s skip that description) who only read “serious” stuff, I found myself ignorant about how to find good fiction and unwilling to plop down $15-$30 every time I wanted to buy a book and read it. I was especially concerned that I might purchase books and not like them. Not to mention that living in Oakdale (a.k.a. “the sticks”) we don’t have a Barnes and Noble or Borders to quickly stop into. It’s just simply inconvenient to “drive to town” for a book.
I now see reading fiction and intentional unwinding as a positive discipline and life skill. Developing the habit and making it part of my life has been much like developing any other good habit. One of the biggest challenges is simply removing the hurdles of lack of information about fiction and the inconvenience of getting my hands on good books. Here’s what I did:
Step One: Choosing Books. I googled phrases like, “top novels,” “top 100 novels,” “best novels” and came up with many lists. My favorite is found at Wikipedia’s Modern Library 100 Best Novels article. This is a list of 100 novels selected by the Modern Library publishing company. I am not suggesting that this is the only list to use, but it works for me as a great starting point. What I really like about this list is that each novel has a hyperlink to Wikipedia articles about the book and the author. Warning: you may want to simply skim the article so as not to ruin your experience of the plot when you read the book.
Step Two: Getting the Books. As I have already mentioned, I needed a quick, inexpensive (preferably free), convenient way to acquire books. Using the list from Wikipedia I simply select a few books that I want to read and then go online to the Stanislaus County Library online search to see if the Library has them (most library systems have a similar online system). This online search tool allows me to search the entire Stanislaus Library system and pulls results from all branches. When I find the books I want, I simply request them and they are shipped to my local Oakdale Library. An email is sent to me letting me know that the book or books have arrived. I simply drive over to the library and pick them up.
I would love to hear about your experience with fiction reading, books you like and more. Please comment below.
Last night I had another great meal at one of my favorite restaurants in Oakdale, Bamboo Garden. This eatery serves up delicious Chinese food in a simple, clean family atmosphere. My favorite is their Mongolian Chicken, but I have a lot of close seconds to that dish. For one, their Orange Chicken is awesome. They also make great Chow Mein.
There are some great options for dining. You can order their luncheon special which is an entrée served with steam rice and soup. For a little more (about fifty cents) you can add Chow Mein and Fried Rice. They also have a dinner special that includes an entrée, egg roll, fried shrimp and soup. In addition to ordering by the plate you can order ala carte from Bamboo Garden’s abundant menu. An other option is their dinners. These are multi-course meals with lots of food and various price options.
The hot and sour soup makes my mouth water and is one of the things that brings me back time and time again. 
My family and I have been eating at this establishment for years … and we love it. If you are traveling through Oakdale on your way to or from Yosemite or other mountain destinations this is an easy stop off of Hwy 120/108. There is plenty of parking as they are in the same shopping center as Kmart.
Sometimes when we have had a busy day we simply oder take-out. We call their number and order. The food is usually ready right when we get there.
Getting There….
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Knights Ferry’s COVERED BRIDGE A brief history…
On a recent trip to Knights Ferry I found an old brochure about the covered bridge. Following is information gleaned from that brochure. -JG
The covered bridge at Knights Ferry, California attracts many visitors to the Stanislaus River Parks system. With the number of authentic covered bridges in the United States declining to less than 900, the Knights Ferry bridge is one of only 12 remaining authentic covered bridges in California. It is over 130 years old, and boasts at being the longest covered bridge west of the Mississippi.
Relatively unscathed by time, the bridge stands much the same as it did when it opened for traffic on March 30, 1863. Although closed to vehicular traffic, the bridge continues to play an important role in the history and development of the surrounding community.
Historically important in its role during the rush for gold in the “lower mines” of the Stanislaus River, it was the economic cornerstone for those dependent on the flow of commerce along the Stockton-Sonora Road through the Central Valley and surrounding foothills.
The covered bridge that now stands across the Stanislaus River at Knights Ferry was not the first bridge or crossing constructed there. Originally, the crossing had been a ferry built from an old whaling vessel by Dr. William Knight, and his partner James Vantine in 1848. The ferry was said to have been built to increase the business at their trading post, yet toll charges could run as high as $200 for a single crossing. By the end of 1849, however, Dr. Knight had been shot and killed in an argument, and a new partnership between John Dent and Vantine was established.
Dent, Vantine and Company replaced the old whaling boat ferry with a modern style ferry, and were issued a San Joaquin County ferry permit for $300. As businessmen, they reduced the toll charge to two dollars, hoping that the increased travel on the ferry would improve the patronage at their newly built restaurant and building boarding house at Knights Ferry. Captain Ulysses S. Grant, while visiting his brothers-in-law, earned from “fifty to one hundred dollars per day”. (It was during one of his visits that he was purported to have drawn the plans for the first bridge at the present site.)
In 1852, Vantine sold his holdings at the Dent and moved back to the East. Profiting from the increase in business from the growing population and prosperity in the are, the Dents agreed to finance the construction of David Locke’s millworks. With help from his brother Elbridge, David Locke completed the sawmill in 1854. by mid-January of the following year, the Lockes opened their highly profitable grist mill (the buildings still stand next to the bridge). To help ensure the success of the mill, the Lockes needed to guarantee the flow of commerce over the Stockton-Sonora Road, and they accomplished this by purchasing the ferry from the Dents for the $26,000 on the first of November, 1865. The purchase price included the timber that had been cut previously for a bridge that Dent and Vantine had been planning to build.
Although there was some discussions between Locke and the town’s business community on where the location should be, Locke won out. In early 1857, construction began at the site of the current bridge, next to the mill.
Upon completion of the bridge, the ferry system was dismantled, and it was hoped that the new open-truss bridge would curtail the effects of the winter flooding on transportation, which had plagued the ferries. Up until the 1861-62 winter, the uncovered bridge had served well, and Knights Ferry’s population had grown continuously. As the community prospered, Locke entered into a partnership with other bridge and ferry owners, forming the Stanislaus Bridge and Ferry Company. He sold the bridge to the company in July 1858, but remained in authority of the Knights Ferry Bridge.
As warm unreasonable rain swept across the Sierra Nevada in early 1862, the previous month’s heavy snows melted. As the icy water from the Sierra Nevada joined with the Stanislaus, the height of the river began rising three to four feet per hour, peaking at a remarkable 35 feet above low water mark. As the sweeping water battered the homes and most of the businesses ion Knights Ferry, the bridge held fast.
However, the fate of the bridge had been sealed not from collapse, but from collision. The bridge at Two-Mile Bar, only a short distance up river, had been torn from its foundation. Pushed by the raging floodwater, it crashed into the Knights Ferry Bridge, crushing the truss supports and knocking it from its rock foundation. The bridge, the mill and the town lay in ruin.
Loss of the bridge was set at $20.000. Undaunted, the Stanislaus Bridge and Ferry Company set to work on a new bridge, a covered bridge that would set eight feet higher than its predecessor above the fiery river. Within the month as the floodwater subsided, the retired ferry was forced back into service, along with a new foot bridge. In March, actual construction of the covered bridge began, and fifteen months later, it would be open to traffic.
As stonemasons and metalsmiths were called into action, Locke himself collected the necessary timber to be used for the truss structures, Fir, pine and oak woods were all utilized, with linseed oil added for preservation and lubrication. Hundreds of other laborers converged on the area, as construction in and around the town proceeded. By May, 1864, the craftsmen had completed their work on the bridge that had been designed for low maintenance, large loads, and a long lifespan.
Along with the new bridge, came new toll rates. The county, acting on the request from the owners, set new charges. Tolls ranged from two cents for hogs or sheep, to five dollars for horse or mule teams. Rates were even set for circus animals which crossed the Stanislus in pursuit of a paying audience. Dromedaries (camels) were two dollars with all other undomesticated beasts set at a dollar (Elephants were the exception; they carried a three dollar toll charge.)
In 1869, Locke sold the controlling interest in the bridge to Thomas Roberts,a prominent citizen of Knights Ferry. For the next few years, the bridge was a profitable enterprise, yet the popularity of the crossing would change as the neighboring communities of Modesto and Oakland grew. In 1871, the center of government for Stanislaus County relocated, moving from Knights Ferry to Modesto.
The Stockton-Visalia Railroad also added to the decline of Knights Ferry. The railroad had opted to build the depot at Oakland, bypassing Knights Ferry. As the center of transportation and commerce shifted, the flour mill (bought by David Tulloch in 1859) was sold, and a small room was used to house a single turbo generator. This generator was served by water brought down the hill in a penstock leading out of the old San Joaquin Ditch. The company, declining in importance as a producer of flour, was renamed the Stanislaus Water and Power Company on October 26, 1897. The power plant stayed in operation until 1920 when the New Melones Powerhouse began operations.
As the economic and political changes compiled, travel across the bridge allowed, and the public vocalized the need for a free bridge crossing. On November 12, 1884, the county purchased the bridge from Edwards for $7,000. They had agreed to pay lost toll charges of $ 126.83 from tolls not collected while the agreement was finalized.
Few modifications have been made to the bridge since it was built in 1863. The wooden rood was replaced with tin shortly after the county purchased the bridge in 1884.
The deck was repaired, and the sand that protected the decking was eventually replaced by asphalt.
New felloe guards were added to keep the wagon and auto traffic from hitting the trusses as they passed one another. In 1970, the chain-like fence was added to keep individuals from knocking the wooden sidings out and diving from the bridge.
With the load capacity of the bridge rated at 5 tons, the large trucks and autos strained the aging span, and in 1981, county engineers spotted cracks in the support structures. The bridge was finally closed to vehicular traffic on the 2nd of June, 1981.
The Sacramento District Corps of Engineers received title to the Knights Ferry covered bridge on April 18, 1985. In addition to safeguarding the bridge under the National Historic Preservation Act, the Corps of Engineers operates and manages nine recreation areas along a 59-mile stretch of the Stanislau River.
Visitors can take a short walk from the Knights Ferry Information Center past the restored mill and mill office to the bridge, its length and dimension giving rise to the historic nature of the landmark. Massive beams loom overhead, while thousands of inch-thick planks lie on their side to form the deck, having allowed over 100 years of history to pass through.
Knights Ferry’s Covered Bridge Physical Information…
CONSTRUCTION START: March 1862
CONSTRUCTION FINISHED: May 30, 1863
BUILDER: Schuykill Construction Company
DESIGNER: Historically speculated to be U.S. Grant (design was originally used to construct 1857-58 bridge that was destroyed during the 1862 winter flood.)
TYPE: Howe double-intersection, although struss. Four span wood and wrought iron. Metal verticals in tension. Wood diagonals in compression.
FLOORING: Original deck built with 12 ft. Planks laid over eleven 3” x 12” x 20” stringers attached to the lower chords and floor beams. A one to four inch layer of sand and gravel was spread across the deck surface to protect the planking. Renovation between 1918-19 included replacing worn stringers, and installing a new deck of 1” x 4” x 16” planking, laid on side, laminated and surfaced with asphalt.
SIZE: Truss length………330 ft.
Span length………360 ft.
Outer height………20 ft.
Clearance………….12 ft.
Width………………18 ft.
Spans……………….44 ft. 0 in.
……………….96 ft. 6 in.
……………….80 ft. 6 in.
……………….136 ft. 0 in.
BUILDING COSTS: Construction cost was unknown. Appraised value in 1875 $14,000. Purchased in 1884 for $7,000 plus $128.36 in lost tolls.
Getting There….
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Now that the November elections are behind us, the long term rates (mortgage interest rates) have been moving upward. This is normal for long term rates to drop going into an election and raise after an election. The slight upward movement of mortgage rate might in fact help our real estate market. The uptick in rates could get buyers off the fence waiting for the most opportune time to buy. Make sure and let your buyers know that “TODAY IS A GREAT TIME TO BUY REAL ESTATE”. No one knows what tomorrow will bring as far as housing prices or interest rates. Those buyers waiting for falling home prices could in fact pay more later due to increasing interest rates or maybe even raising home prices in some areas.
In my 25 years of lending experience I have never seen a real estate market that is so in balance regarding home prices, interest rates and personal income. Many buyers I am working with have a lower mortgage payment than rental payments on a comparable home. There is plenty of opportunity out there. We just need to get the word out to renters and investors how affordable home prices are right now. Investors need to know the rate of return on their money with today’s rental opportunities. Most investors are yielding 7% or more on their initial investment without considering any future appreciation of the homes value. This yield is based on the rental income minus the mortgage payment (including taxes and insurance) compared to the initial investment (down payment plus closing cost.
Loan products are readily available with down payments as low as 3% (0% for USDA and VA) for owner occupied properties. Investments properties are available with 10% down (however most loan products require 20% down). Don’t let the holidays stand in the way of promoting your business. What you do today provides rewards 2-3 months from now. If you wait until the beginning of the year it will be that much longer until your next payday.
Scenic Oak Funding and all of our loan officers are at your service. Remember to form teams with title companies, lenders, inspectors and warranty companies. As a team we can achieve greatness. I look forward to working with you and your clients. If I can be of any assistance, please don’t hesitate to call or email me.
James T. Camara
Sr. Loan Officer
Ph (209) 981-5626
Fax (209) 249-5280
jcamara@scenicoaks.net
Ca Dept of Real Estate License #01774620 NMLS #257972
