What's going into escrow - Irvine and maybe some Tustin too

NEW -> Contingent Buyer Assistance Program
[quote author="Masterofdamoney" date=1210990839][quote author="ipoplaya" date=1210989813]Master, Maestro, et all. If I were to acquire a property at auction, could I then turn right around and slap a mortgage on it?



I might be able to scrounge up a half mil that I'd have to pay back super fast...</blockquote>


Yes, you could... be careful how much you buy it for, tho. :)</blockquote>


I will master. If graph is right, and houses are getting sold off at auction for 2003 or 2002 equivalent prices, while it might not be a good buying op for investors, it could be for someone intending to use as a primary residence. If I could get a place for 40% off peak at auction (assuming it didn't require too much work to get up to snuff) to move the IPO fam to, then slap a mortgage on it, could be a good way to work it.



Would a mortgage on an already owned property be considered a refi or purchase loan? I assume cash-out refi...
 
[quote author="Masterofdamoney" date=1210987131][quote author="graphrix" date=1210984992][quote author="Masterofdamoney" date=1210886468]Oh, and FNMA just released their new guidelines yesterday, which are effective June 1st, 2008. The new guidelines clip out about 1/3 or the people who can currenlty qualify for a loan. They are much stricter - lower LTV's and CLTV's, they have imposed steep credit score requirements, etc.... that should make it even more fun for Joe and Jane consumer!</blockquote>


I am not trying to high jack this thread, <a href="http://www.housingwire.com/2008/05/16/fannie-nixes-declining-market-ltv-restrictions/">but FNMA said they are dropping the regional declining market LTV reduction</a>. <em>



Starting June 1, Fannie Mae said it will accept up to 97 percent loan-to-value ratios for conventional, conforming mortgages processed through its automated underwriting system, and 95 percent loan-to-value ratios for loans manually underwritten, in all geographic locations in the United States. The LTV requirements will apply only to single-family, primary residences; other properties will face different underwriting restrictions.</em>



So, my question, because I am too lazy to search FNMA right now, is what other guidelines did they change to compensate for this increased risk? I mean, I know they will change the LTV, but even they are not stupid enough to not change something else in the guidelines to make it just as difficult to qualify for as before.</blockquote>


Effective June 1st, 2008 all new FNMA submitted loans must adhere to brand new FNMA guidelines. The new guidelines are far sweeping, across all product lines.



They are implementing STEEP credit score minimums on conforming loans. They have reduced the LTV and CLTV's allowed ON ALL LOAN PRODUCTS, across the board. They implemented a new DU version that everything will have to run through that incorporates these guidelines.



I have read the new guidelines about 5 times now, my estimation is that it effectively removes 1/4-1/3rd of the current pool of 'qualified' people from that category... just what we need. :)</blockquote>


Funny, It is not being spun that way by the bulls...



Are they still allowing 45% DTIs? IMO, That will be the last shoe to drop. Prices can still be supported by a few knife catchers if they are allowed to borrow huge sums with the combination of low interest rates and high DTIs. The GSEs must know that high DTIs will have high default rates. When they begin tightening the DTIs, the amounts borrowed will plummet and prices will plummet along with it.
 
IR,



FANNIE and FREDDIE allow DTI up to <span style="font-size: 16px;">65%</span>.



That is not a typo, they will allow a back-end DTI of 65%. back end refers to monthly gross income divided by all monthly obligations REPORTED ON THE CREDIT REPORT. This does not take into account, food, gas, and utilities, etc... It really is freakin' ridiculous.



It is funny how they removed the "5% LTV reduction for declining markets" yet instituted sweeping reform on ALL products by reducing max LTV by 5%. The net effect is ZERO if you are in a declining market and a reduction in LTV if are not in such a market.
 
Updated my inventory graph with the figures that came out today:



<img src="http://www.ipoplaya.com/ocmoinv.jpg" alt="" />



OC median first hit $500K in mid March and is still at $500K as of 4/28... We're going sideways for now.
 
[quote author="lendingmaestro" date=1211001352]IR,



FANNIE and FREDDIE allow DTI up to <span style="font-size: 16px;">65%</span>.



That is not a typo, they will allow a back-end DTI of 65%. back end refers to monthly gross income divided by all monthly obligations REPORTED ON THE CREDIT REPORT. This does not take into account, food, gas, and utilities, etc... It really is freakin' ridiculous.



It is funny how they removed the "5% LTV reduction for declining markets" yet instituted sweeping reform on ALL products by reducing max LTV by 5%. The net effect is ZERO if you are in a declining market and a reduction in LTV if are not in such a market.</blockquote>


That is absolutely insane! Here I am frieking out that we just signed on to a loan that has our DTI with our for PITI at .33%. We're frugal and this is going to be so tight for us. Do they realize that these loans are going to make it IMPOSSIBLE to save a dime for retirement, much less an emergency. I'm outraged by this irresponsibility.





We have a large population of stupid people in this country, which is why we need to regulations to protect people from their stupidity and the tax payers for having to clean up stupidity. As I understand it there will be stronger oversight of these guys with the bail out bill. Does anyone know if this ridiculous DTI is going to go away with the regulation?
 
Ipop,



How do you get that there is only 6 months inventory. You are posting that there are 4 entering escrow every day. If 4 sales close a day, that is 120 in a month. There are currently nearly 1,151 units for sale as of yesterday's MLS which puts months of inventory over 9.5 months.



Even if 150 homes sell a month, that puts the months of inventory over 7.5 months. This is just using the MLS listed properties which doesn't take into account many foreclosures.
 
[quote author="IrvineRenter" date=1210992593][quote author="Masterofdamoney" date=1210987131][quote author="graphrix" date=1210984992][quote author="Masterofdamoney" date=1210886468]Oh, and FNMA just released their new guidelines yesterday, which are effective June 1st, 2008. The new guidelines clip out about 1/3 or the people who can currenlty qualify for a loan. They are much stricter - lower LTV's and CLTV's, they have imposed steep credit score requirements, etc.... that should make it even more fun for Joe and Jane consumer!</blockquote>


I am not trying to high jack this thread, <a href="http://www.housingwire.com/2008/05/16/fannie-nixes-declining-market-ltv-restrictions/">but FNMA said they are dropping the regional declining market LTV reduction</a>. <em>



Starting June 1, Fannie Mae said it will accept up to 97 percent loan-to-value ratios for conventional, conforming mortgages processed through its automated underwriting system, and 95 percent loan-to-value ratios for loans manually underwritten, in all geographic locations in the United States. The LTV requirements will apply only to single-family, primary residences; other properties will face different underwriting restrictions.</em>



So, my question, because I am too lazy to search FNMA right now, is what other guidelines did they change to compensate for this increased risk? I mean, I know they will change the LTV, but even they are not stupid enough to not change something else in the guidelines to make it just as difficult to qualify for as before.</blockquote>


Effective June 1st, 2008 all new FNMA submitted loans must adhere to brand new FNMA guidelines. The new guidelines are far sweeping, across all product lines.



They are implementing STEEP credit score minimums on conforming loans. They have reduced the LTV and CLTV's allowed ON ALL LOAN PRODUCTS, across the board. They implemented a new DU version that everything will have to run through that incorporates these guidelines.



I have read the new guidelines about 5 times now, my estimation is that it effectively removes 1/4-1/3rd of the current pool of 'qualified' people from that category... just what we need. :)</blockquote>


Funny, It is not being spun that way by the bulls...



Are they still allowing 45% DTIs? IMO, That will be the last shoe to drop. Prices can still be supported by a few knife catchers if they are allowed to borrow huge sums with the combination of low interest rates and high DTIs. The GSEs must know that high DTIs will have high default rates. When they begin tightening the DTIs, the amounts borrowed will plummet and prices will plummet along with it.</blockquote>




45% max backend for conforming Jumbo ($417K-$729K)



There is NOT a set # for the backend on regular FNMA conforming, DU will determine the characteristics of the file and decide... I have seen very strong files go as high as 65%... if they have great credit, reserves, and lowwww LTV (not always... need very strong other factors) (under $417,000 Loan amounts)



31/43 for FHA (31 front, 43 back)



There are no changes beign made to the DTI requirements listed in the changes taking place June 1st.



Those numbers might seem 'easy' to hit, but almost no one can hit that trifecta. People just don't make the money/have the credit/have the reserves/hav the down payment or equity...
 
[quote author="lendingmaestro" date=1211005611]Ipop,



How do you get that there is only 6 months inventory. You are posting that there are 4 entering escrow every day. If 4 sales close a day, that is 120 in a month. There are currently nearly 1,151 units for sale as of yesterday's MLS which puts months of inventory over 9.5 months.



Even if 150 homes sell a month, that puts the months of inventory over 7.5 months. This is just using the MLS listed properties which doesn't take into account many foreclosures.</blockquote>


Keep in mind that foreclosures that complete their lifespan are recorded sales. They are either sold back to the bank, or to a buyer at auction.



Better to keep track of homes that go into escrow and actually sell.
 
Point is that even with the possibility of qualifying with a DTI of 65% is not enough. People by and large still don't make enough money compared to what houses are priced at to fall below 65% DTI.
 
[quote author="lendingmaestro" date=1211006157]Master,



I see you changed your Avatar, what gives? The other one was hilarious!!</blockquote>


Too many people said they were offended by the mere sight of George Bush... man his popularity must really be in toilet! :)
 
[quote author="ipoplaya" date=1211002946]Updated my inventory graph with the figures that came out today:



<img src="http://www.ipoplaya.com/ocmoinv.jpg" alt="" />



OC median first hit $500K in mid March and is still at $500K as of 4/28... We're going sideways for now.</blockquote>


Do you have a link to the figures you use? There are so many sources... just curious. My #'s look quite a bit different.
 
Are you serious? Please tell me you are kidding. I guess there are people with nothing better to do than complain about anonymous people's avatars on FREE non-commercial websites huh?
 
[quote author="lendingmaestro" date=1211006383]Point is that even with the possibility of qualifying with a DTI of 65% is not enough. People by and large still don't make enough money compared to what houses are priced at to fall below 65% DTI.</blockquote>


The people I am qualifying these days are mostly in the $200,000 - $300,000 price ranges. Strangely, they can qualify for financing. Even more confusing is the fact that their houshold incomes are pretty much identical to the people who want to get financing on $700,000 homes and refi their million dollar mansions... weird! :)
 
[quote author="lendingmaestro" date=1211006551]Are you serious? Please tell me you are kidding. I guess there are people with nothing better to do than complain about anonymous people's avatars on FREE non-commercial websites huh?</blockquote>


Honestly, he offended me too. I am much happier with Buddy Christ! :)
 
[quote author="lendingmaestro" date=1211005611]Ipop,



How do you get that there is only 6 months inventory. You are posting that there are 4 entering escrow every day. If 4 sales close a day, that is 120 in a month. There are currently nearly 1,151 units for sale as of yesterday's MLS which puts months of inventory over 9.5 months.



Even if 150 homes sell a month, that puts the months of inventory over 7.5 months. This is just using the MLS listed properties which doesn't take into account many foreclosures.</blockquote>


I only track larger homes in Irvine (2000sf+) and condos in 92602. My site only has a portion of what is going into escrow each day in Irvine.



For inventory, I use the data from the Zip Realty graph that IHB links to. That one indicates around 900 Irvine units available now... I have no idea which data source is correct. I am tracking mostly to see trend so as long as the data source are consistent, the trend information is useful.



For sales, I use the monthly DQ figures. Maybe we have 7-8 months on the market, maybe its around 6... Either way, the figure has been level or decreaing slightly over the past few months.
 
[quote author="ipoplaya" date=1211007183][quote author="lendingmaestro" date=1211005611]Ipop,



How do you get that there is only 6 months inventory. You are posting that there are 4 entering escrow every day. If 4 sales close a day, that is 120 in a month. There are currently nearly 1,151 units for sale as of yesterday's MLS which puts months of inventory over 9.5 months.



Even if 150 homes sell a month, that puts the months of inventory over 7.5 months. This is just using the MLS listed properties which doesn't take into account many foreclosures.</blockquote>


I only track larger homes in Irvine (2000sf+) and condos in 92602. My site only has a portion of what is going into escrow each day in Irvine.



For inventory, I use the data from the Zip Realty graph that IHB links to. That one indicates around 900 Irvine units available now... I have no idea which data source is correct. I am tracking mostly to see trend so as long as the data source are consistent, the trend information is useful.



For sales, I use the monthly DQ figures. Maybe we have 7-8 months on the market, maybe its around 6... Either way, the figure has been level or decreaing slightly over the past few months.</blockquote>


I am showing about 12 months inventory right now... I'm using MLS to identify all current condos/homes on the market in the city of Irvine, and I'm seeing almost 1200 currently 'on market' in some stage (primarily active status). I do not have a reliable source for true 'sales' that exclude auction/REO purchases. But figuring maybe 100? real sales per month vs a 1200 inventory (for the last few months) gives me around a 12 month supply currently.
 
[quote author="Masterofdamoney" date=1211006474][quote author="ipoplaya" date=1211002946]Updated my inventory graph with the figures that came out today:



<img src="http://www.ipoplaya.com/ocmoinv.jpg" alt="" />



OC median first hit $500K in mid March and is still at $500K as of 4/28... We're going sideways for now.</blockquote>


Do you have a link to the figures you use? There are so many sources... just curious. My #'s look quite a bit different.</blockquote>


DQ's sales figures via Lansner's site and the inventory graph linked to the IHB home page...



I use the inventory count as of the last day of the preceding month



<a href="http://www.ipoplaya.com/irvinv.pdf">Here is my table</a>
 
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