Subprime problems
Undeterred by national news of turmoil in the subprime mortgage sector or the stock market, buyers are competing for some homes in these communities, especially those in the most sought-after school districts, such as Cupertino, Los Altos and Los Gatos. Job growth is also bolstering the market, and many house-hunters are seeking short commutes to tech company jobs.

Demand for homes in these areas is such that some sellers are specifying the date upon which they’ll review offers - just like during the boom years from 2003 to mid-2005 - and insisting on “as-is” sales.

“I’m sorry for the buyers, to be frank with you,” said Coldwell Banker agent Stacy Chung as she toured a newly listed Cupertino home Thursday. Other agents agreed that the four-bedroom home - perfectly staged, with granite kitchen counters, stainless steel appliances and immaculate wood floors - would sell for more than its $928,000 list price. Chung told of a recent attempt by one of her clients to buy a Saratoga house priced at about $1.4 million. “We put in $120,000 more and didn’t get it.” –mercurynews.com

Home loan defaults skyrocket in county
To sell the properties, Vinson said he and other agents often identify the homes as “bank owned,â€? market them through open houses, advertising and other means and reduce the asking price as needed. This week, he sold one of the 11 homes, a 2,148-square-foot, five-bedroom property on Lassen Peak Place for close to the $569,900 asking price set in December. “That’s pretty average for this neighborhood,â€? he said.

The average loan involved in a default filed in January and February also reflected the broad range of San Diego real estate – from $978,000 owed on five houses in Rancho Santa Fe to $115,500 on one house in Borrego Springs. “Every time there’s drama, there’s opportunity,â€? Rivera said. “This is going to be an excellent time for a lot of people and terrible time for a lot of people. It depends on your point of view.â€? –signonsandiego.com

Debate between borrowers and lenders rages over ‘no-cost’ mortgage loans
When you look at the number of prime and subprime loans that are repricing this year from around 3.45% to somewhere near 6.3%, it doesn’t take a genius to see that there will be severe sticker shock for many borrowers. What has happened is that the mortgage industry has created all of these new mortgage products simply to increase their profits. Any way you slice it, “gouge” the consumer has been the watchword of the day. We will now all pay a severe price as the current down-cycle unfolds. Whether or not the economy moves into a recession is immaterial. The pain will be felt by the consumer, who has been the core engine for spending.
I love how self-serving mortgage guys love to tell everyone that what they did was for the client’s benefit, when really the purpose was to ring the bell on their bonus for that new condo or automobile. The bad actors are now all on stage, and all we have to do is wait. No amount of interdiction will change the final ending of the play. –marketwatch.com

Mortgage Delinquencies Increase in the 4th Quarter 2006
The delinquency rate for loans on one- to four-unit residential properties in Hawaii rose 42 basis points to 2.40 percent during the 4th quarter. The percentage of loans in which foreclosure was started during the quarter rose 6 basis points to 0.21 percent, while the percentage of loans in the foreclosure process at the end of the quarter rose 8 basis points to 0.34 percent. “While the state delinquency is rising, this is still half of the national average,” said Russell Miyashiro, President of the Mortgage Bankers Association of Hawaii. “People must remember that we are coming off a period of extremely low delinquencies so nearly all the statistics are showing a rise.”

The delinquency rate varied for each of the four loan types during the 4th quarter. The rate of prime loans was 1.43 percent, up 28 basis points from the previous quarter; the rate of subprime loans was 7.87 percent, up 128 basis points from the previous quarter; and the rates for FHA and VA loans were 7.10 percent and 2.73 percent, up 80 basis points for FHA loans and 36 basis points for VA loans. –marketwire.com

Indymac Provides Additional Credit Loss Analysis on Alt-A and Subprime Lending
IndyMac Bancorp, Inc. (NYSE: NDE) (Indymac®) is the holding company for IndyMac Bank, F.S.B. (Indymac Bank®), the 7th largest savings and loan and the 2nd largest independent mortgage lender in the nation. Indymac Bank, operating as a hybrid thrift/mortgage banker, provides cost-efficient financing for the acquisition, development, and improvement of single-family homes. Indymac also provides financing secured by single-family homes and other banking products to facilitate consumers’ personal financial goals.

With an increased focus on building customer relationships and a valuable consumer franchise, Indymac is committed to becoming a top five mortgage lender in the U.S. by 2011, with a long-term goal of providing returns on equity of 15 percent or greater. The company is dedicated to continually raising expectations and conducting itself with the highest level of ethics. –home.businesswire.com

Australia drags feet on mortgage broker crackdown
Hundreds of thousands of Americans have lost their homes after being sold home loans they should never have been given and they couldn’t afford to pay. As a result there is now a push in the US for national laws to rein in mortgage brokers and to stop predatory lending.

The chairman of an influential Congress committee foreshadowed a bill on the issue this week, as the head of the US Federal Reserve, Ben Bernanke, criticised lending practises. In Australia, laws to regulate mortgage brokers have been proposed for years. But they’ve been delayed by what critics say is buck-passing by State and Commonwealth governments. Economics Correspondent Stephen Long prepared this report. –abc.net.au

Mortgage Loans – Should I Refinance Now With Rates Increasing?
When rates are rising should you consider refinancing your mortgage loan? When rates are falling this is a moot question. Of course you should consider doing a refinance whether it be a fixed loan or home equity loan. When rates are rising you should, in my opinion, only consider refinancing if you want to take cash out of the equity in your home or if you feel now is the time to lock in a fixed rate.

If the market appears to be on a longer rise, locking in a fixed rate now can save you money in the future. Homeowners with adjustable rate mortgages can rise at the end of the initial low rate ARMs charge for the first twelve months. This currently means your rate can rise 2.75 points or so based on your original agreement. This translates to much higher payments than you currently are paying. –bestsyndication.com

Financing your own slice of paradise
Money is relatively cheap today and banks readily have their hand extended if you qualify. The usual down payment requirement for a lot loan is between 5-10 percent of the purchase price. With interest rates this low, you may want to consider putting down the least-possible down payment allowed by your bank for the lot financing. There are certain costs that arise when designing and planning your new home and having those assets available to you may help ease some stress. Your bank may even consider lending you 100 percent of the lot cost if your credit, income, and assets support your request.

Your next step in this process, the construction financing, has changed quite a bit over the last three to five years. Most construction loans were based on the prime lending rate, and as mentioned before, prime is standing at 8.25 percent. Banks have become very creative with this piece of the puzzle. It is now possible for you choose an option that allows you to lock your construction rate at the same rate as today’s low permanent mortgage rates that you would receive when the home is complete. Today’s mortgage rates are anywhere between 5.50-6.0 percent, depending on the loan product. If you were to borrow $1 million at a prime rate of 8.25 percent on the total project, your total interest cost over a 12-month construction period would be $82,500. But if you base your construction rate on a locked permanent rate of 5.75 percent, your interest cost is now just $57,500, saving you $25,000. If it takes you longer to build, an 18-month build time would save you close to $40,000 in interest. Ask your bank to protect yourself from rising interest rates and lock yourself in to today’s mortgage rates now. Waiting until the home is complete to “lock in” to a rate could cost you thousands. –thedanielislandnews.com