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Whittier homeowners who have negative equity and have been experiencing a personal hardship could soon have help from the Federal Housing Finance Agency. Effective November 1, 2012, new short sale rules go into effect that will streamline the process for all mortgages backed by Freddie Mac and Fannie Mae. Since these government-sponsored agencies support over half of all active mortgages in the country, the changes could have wide-reaching impact.

Until now, homeowners who were current on their mortgages were not usually eligible for a short sale. This created an unfortunate "incentive to default" which often led to foreclosure. The new rules cure that issue, and improve other important elements of the process. Here's a sample of the major changes.

1. Homeowners who are up-to-date on their mortgage payments can now be considered for a short sale, if they have a qualifying hardship. For the purpose of the program, a qualifying hardship involves any one of the following:

  • Divorce
  • Death of borrower or co-borrower
  • Disability
  • Job loss
  • Job relocation, or new job, located 50 miles away or more from current home

2. Homeowners who are behind on their mortgage payments, and are suffering from a qualified hardship, will have their cases reviewed in an expedited manner, with fewer documentation requirements.

3. Second lien holders will have a financial incentive to cooperate with the short sale on the first mortgage. The incentive is capped at $6,000.

4. Mortgage servicers working on behalf of Freddie Mac and Fannie Mae will be empowered to approve qualifying short sales directly.

5. Homeowners who have financial resources at their disposal will be required to make a contribution to the short sale. In return, they will not face deficiency judgments for the remaining balance of the mortgage.

If you are thinking of selling your home and it has negative equity, contact your mortgage lender to find out if your loan is part of Freddie Mac or Fannie Mae's portfolio. From there, it's a matter of obtaining the appropriate forms and staying in touch with your lender throughout the process. Keep in mind that lenders will need to update their internal processes to match the new rules, and information at this point could be a bit lean.

When selling your Whittier home, it pays to gather good information from the start! Our Whittier real estate market changes quickly and these new rules are just one example why. Also, the new short sale guidelines could affect our market in the upcoming months by adding inventory. These are just a few reasons why working with dedicated, experienced real estate professionals is an absolute must.

Do you have questions about real estate, or need information about your neighborhood sales activity? Contact us today for the very best in local expertise and friendly, professional service! We will be happy to provide the latest Whittier market information and help you succeed with your goals!

The Domis Team
Prudential California Realty
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7 Steps to Home Ownership in Whittier!

by The Domis Team

Home buyers have good bargains in front of them, according to David Crowe, the chief economist for the National Association of Home Builders. During an interview last week on NBC, Crowe stated that the favorable combination of low mortgage rates, bottoming home prices and home builder discounts would not last forever.

While home demand is on the upswing, there are still buyers on the fence who may be uncertain about their ability to qualify for a mortgage. Or, they are discouraged by the reduction of home inventory on the market. At the Domis Team, we understand the challenges facing home buyers today, and we're here to help you!

The best way to prepare for Whittier home ownership is to organize your home buying plan. Here is a 7-step checklist to get you started:

1. Know what you want. Condo? Single-family home? 2 bedrooms, or three? Take a long-term view. If you plan on growing your family, an extra bedroom could make sense. If you enjoy the convenience of apartment living, but want the benefits of ownership and the tax breaks, you might enjoy a condo.

2. Know where you want to live and why. Is being close to your child's school important? Do you need a shorter commute? Would you like to be in walking distance to the neighborhood park, or would you rather be closer to shopping and dining?

3. Prioritize. Once you know the type of home and location you desire, start narrowing down the "must-haves" from the "wants." For example, an older home may not have all the amenities you would like, but it may have a terrific location - and a lower price. 

4. Prepare your credit. Pull a free copy of your credit history from AnnualCreditReport.com. Get your credit score from MyFico.com. Contact the reporting agencies about any errors or discrepancies that may exist in your report.

5. Prepare your down payment. You may be able to qualify for an FHA mortgage with as little as 5% down! If you have nothing put aside yet, start a practical budget that includes regular contributions to savings.

6. Talk to a mortgage lender about your financing options, and fine-tune your home ownership plans.

7. Work with your local real estate professionals, the Domis Team! No matter what point you are at in the home buying process, we can help you! We have the latest home sales data, and we can alert you to new listings as they come on the market! We can also help you connect to industry professionals such as mortgage lenders and home inspectors.

Whether you are a first-time home buyer, or looking for your next home in Los Angeles or Orange County, we have the local expertise you can count on! Contact the Domis Team for the best in friendly, professional service!

The Domis Team
Prudential California Realty
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Are First-Time Home Buyers Too Hesitant in Whittier?

by The Domis Team

A recent article by Bloomberg claims that adults 20 to 34 years old are reluctant to buy a home, due to the lingering effects of the Great Recession. Stagnant wages, high student loan debt, and slow economic recovery daunt the financial mettle of "Generation Y."  Per Bloomberg, this generation is reluctant to commit to home ownership, due to the previous decline in home values and shaken confidence in their own earning power.

At the same time, an article by USA Today points out once again that home ownership is the better long-term solution to rising housing costs. Here are some reasons to buy a home now:

1. Homes are very affordable. The national median home prices today are near 2003 levels. Note, prices have risen about 8% as a national average, from June 2011 to June 2012. Those waiting for prices to fall further may find themselves disappointed!

2. Diminishing home inventory. Yes, we will continue to see foreclosures on the market, but it is predicted that surplus inventory will be cleared by the end of 2013 - which in turn will cause increases in home prices. Here in Whittier, we have seen the effects of reduced inventory in our market, and home prices have firmed up.

3. Low mortgage interest rates. With 30-year mortgage rates running just under 4%, a fixed-rate mortgage protects you from inflation much better than a landlord will! Our prior blog illustrated the compounding effect of annual rent increases, and how home ownership allows you to get ahead after just a few years.

This doesn't mean you should throw all caution to the wind and buy whatever you can get. Instead, plan your home purchase based on long-term needs, using practical budgeting and a sensible mortgage as your guide.

That said, you shouldn't let media-driven fears prevent you from home ownership. First-time homebuyers in Whittier who are prepared for a mortgage can do very well in today's market! And if you're not quite ready to buy a home yet, that's ok! You can still gather information about the Whittier real estate market and learn about the home buying process.

For full-service home buying help, turn to the Domis Team, your Whittier real estate professionals! Whether you're just starting to look, or you're ready to buy, we can help you! Take advantage of our free, automated alerts and enjoy the benefits of our local expertise! For friendly, professional assistance, contact us today!

The Domis Team
Prudential California Realty
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Home Ownership vs. Renting in Whittier, CA

by The Domis Team

If you are a renter in Whittier, you probably pay over $1,240 for a two-bedroom apartment, and upwards of $1,500 to $1,900 for three bedrooms or more. How does renting compare to owning a home?

No matter how nice your apartment is, there are limits to your freedoms. Pets may not be allowed, and parking may be limited. Your abilities to paint, host parties or barbeque on the deck are subject to the terms of your lease. While renting makes sense in some cases, the quality of life for the money is seldom equal to home ownership.

During the decline in the housing market, proponents of renting gleefully cheered falling home values as a reason to remain a tenant. Most of those doing the cheering were landlords! Annual rent increases have topped 5% in some markets. The City of Los Angeles limits rent increases for existing tenants, with a 3% increase being allowed for 2013. Annual increases of at least 3% have been allowed since the Rent Stabilization Ordinance.

Los Angeles County as a whole saw an average rent increase of 6.2%. Even if your household budget can accommodate these kinds of increases, there's no chance of earning equity.

Zillow's analysis of buying vs. renting takes you to the bottom line. After comparing costs of home ownership, including tax advantages, against the progressive costs of renting, home ownership is the better deal 75% of the time. In Los Angeles, the break-even point of home ownership against renting is 4.3 years. Meaning, in the short-term, renting might be cheaper than buying a home, until you've rented for about four years. The rising tide of annual rent increases turn against long-term tenants.

What's right for you depends on your personal situation. Why not take a look at the beautiful homes for sale we have in Whittier and make some comparisons of your own?

For full-service home buying help, turn to the Domis Team, your Whittier real estate professionals! Whether you're just starting to look, or you're ready to buy, we can help you! Take advantage of our free, automated alerts and enjoy the benefits of our local expertise! For friendly, professional assistance, contact us today!

The Domis Team
Prudential California Realty
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Photo of Linda & Ryan Domis - The Domis Team Real Estate
Linda & Ryan Domis - The Domis Team
Keller Williams Realty
16310 E. Whittier Blvd. Suite F
Whittier CA 90603
Cell: 562-884-5373
Cell:562-458-6947
Fax: 562.902.5158
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