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California Hard Money Lenders — An Alternative Source of Financing

SAN FRANCISCO, Aug. 1, 2013, The real estate market is hot, very hot, and both investors and consumers are in need of financing to take advantage of the real estate market.  An increasing number of individuals and companies are turning to hard money lenders, such as All California Lending, for financing their California property acquisitions.  This is especially true when the property is in need of repair.  Purchasing properties in need of repair is becoming more common as the inventory available on the market continues to stay tight.  As hard money loan specialists, this company is able to assist in the financing of real estate even in cases where the banks have declined the buyer a loan due to needed rehab or repairs on the property.

The loans offered for properties in need of rehab are truly unique in today’s market.  While these loans are not long-term solutions, they do include funding for acquisition, rehab and even interest payments.  With new guidelines these loans can fund up to 65% or more of the estimated after repair value, commonly referred to as ARV.  With loan terms ranging from six months up to two years, the structure is flexible enough to accommodate not only light rehab projects but also construction completion and major rehab projects on residential, commercial and multi-unit property.

One area of particular interest is Los Angeles and surrounding areas.  Hard money lenders in Los Angeles often times are making loans based on the purchase price.  With the programs All California Lending offers, however, more aggressive lending is realistic.  For investors who are looking to leverage their existing cash, these aggressive loans based on an estimated sales price at completion allows for the additional leverage they need.

In addition to the Los Angeles market, All California Lending can help provide financing for rehab loans in most other markets of California.  From San Diego all the way North to Sacramento and the North Coast, as long as the property is located in California there is likely an alternative financing option available.

With the California real estate market so hot right now, hard money lending offers many benefits.  These benefits include faster closing times than conventional loans, flexible underwriting requirements, aggressive loan amounts and creative solutions that bank lending simply cannot compete with.  While the cost is more for these types of loans, they make sense for many investors in the market today.

Chris Goulart is a seasoned professional and only works with California hard money loans.  He specializes in structuring alternative financing for real estate investors and has years of experience.  He is fully licensed both at the state and at the national level through the Department of Real Estate and the Nationwide Mortgage Licensing System.

Acalending.com

Media Contact: Chris Goulart, All California Lending, 877 462 3422, cgoulart@acalending.com

SOURCE:

All California Lending
http://www.acalending.com

 

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Annual Car Sales Strength Expected To Slow Following Three-Year Trend Of Double-Digit Growth, According To Kelley Blue Book Analysts

Industry Sales Will Continue to Outpace Economic Growth; Affordable Pricing and Credit Environment Keeps Consumers Coming Back

IRVINE, California, Feb. 13, 2013, New-vehicle sales are expected to grow nearly 6 percent in 2013 to 15.3 million units overall, breaking the three-year trend of double-digit sales growth that has persisted since 2010, according to Kelley Blue Book www.kbb.com, the leading provider of new and used car information.

“Although the sales pace is expected to slow this year, automakers have demonstrated that they can generate solid profits with sales at current levels, which is a strong indication that they will remain disciplined by continuing to match production to meet demand,” said Alec Gutierrez , senior market analyst of automotive insights for Kelley Blue Book . “Sales growth won’t come easily, especially considering the challenges facing the industry in today’s economy. While economic growth is expected to arrive slowly in 2013, there are several indications that point toward solid auto industry sales growth in the years ahead.”

Among the various factors contributing to the ongoing recovery, Kelley Blue Book believes that pent-up demand, high used-vehicle values, improving credit availability and low interest rates all have played a direct role in the auto industry’s ability to outperform the economy. Each of these factors has been critical to-date and will continue to drive sales this year and beyond.

Kelley Blue Book: New-Car Sales to Hit 15.3 Million Units in 2013

2007

2008

2009

2010

2011

2012

2013

Annual Sales Volume   (Millions)

16.1

13.2

10.4

11.6

12.8

14.5

15.3

Auto Industry Sales Will Continue to Outpace Economic Growth
The economy has come a long way since nearly collapsing in late 2008, yet a long road to recovery remains. At the depths of the recession in 2009, the unemployment rate hit a 30-year high of 10 percent, new-vehicle sales hit a 30-year low of 10.4 million units, and the Conference Board’s Consumer Confidence Index hit an all-time low of 25 (for perspective, in 1985 the index was at 100). Some feared the onset of a second Great Depression in 2009, and while a repeat of the 1930s doesn’t appear to be in the cards, the nation still has a long way to go before the economy is completely back on its feet.

Today unemployment remains at an uncomfortably high 7.8 percent, while consumer confidence is below 60, which is notably better than in 2009 but well below the 4.5 percent unemployment rate and 100+ consumer confidence readings from 2007. This is important to note since 2007 was the final year of a 10-year span in which the auto industry consistently posted sales of 16 million units or more. Although the economy has recovered slowly and still has a long way to go before unemployment and consumer confidence are back to levels last seen in 2007, Kelley Blue Book doesn’t see a reason why auto sales cannot continue to outperform the pace of the economic recovery.

“Looking at the historical relationship between unemployment and auto sales from the 1980s through 2007, unemployment would need to be below 6 percent to generate auto sales of 16 million units or more,” said Gutierrez. “According to estimates from the Federal Reserve, unemployment only will drop down to 7.4 percent in 2013 at best; a point that would historically justify sales of only 13 million to 14 million units. However, since 2010, new-car sales have outperformed their traditional relationship with unemployment, which means that sales in excess of 15 million units clearly are attainable.”

Auto sales also have outperformed their historical relationship to consumer confidence by a significant margin. Despite expectations for consumer confidence to remain well below levels historically required to justify sales of 15 million units or more, Kelley Blue Book believes auto sales will continue to grow as predicted provided that consumer confidence remains stable.

Pent-Up Demand Drives Growth Since 2010, Will Persist in 2013
While economic growth has remained relatively weak and only explains part of the auto sales recovery, Kelley Blue Book sees pent-up demand playing a more critical role in the rebirth of the industry. According to Polk, registered vehicles in the United States are 11 years old on average; the oldest ever recorded. The increase in vehicle age can be attributed to two key trends. First, vehicles have grown much older as consumers have opted to hold onto them longer, due to the weakened economy. Consumers have focused on deleveraging after the collapse of the real estate bubble, and unless they require a replacement or the model no longer meets the needs of its owners, many are choosing to hold on to their vehicle rather than acquire additional debt to purchase an all-new vehicle. This leads directly to the second major influence of increased vehicle age, which is improved vehicle quality.

Aging Vehicles to Continue to Generate Demand in 2013

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Avg. Registered

Vehicle Age

8.9

8.9

9

9.1

9.4

9.5

9.7

9.8

10

10.3

10.6

10.8

Source: Polk

“Vehicles produced during the past few model years are significantly higher in quality than those produced in previous decades,” said Gutierrez. “In the 1990s, consumers came to expect a vehicle produced by a Japanese manufacturer to last 100,000 miles and beyond. Now we can say the same about vehicles produced by all manufacturers. Whether shopping for a Toyota, Honda, Chevrolet, Ford or Hyundai, consumers can be reasonably assured that their vehicle will hit 100,000 miles with ease, and 200,000 miles or more with proper maintenance and care.”

With consumers delaying the purchase of a new vehicle due to economic hardship and improved vehicle quality, Kelley Blue Book expects the average age of vehicles on the road to continue to increase. As vehicles continue to get older and economic conditions slowly improve, buyers are expected to continue to return to market.

Leasing to Aid Sales Growth in 2013
When auto sales hit their low point in 2009, leasing all but dried up. The lack of lease returns during the past several years has played a pivotal role in the used-vehicle supply shortfall that has driven used-vehicle values to record highs. The reduced lease returns also have limited the number of consumers that traditionally would be seeking a new vehicle at the end of their lease term. While this reduced the number of in-market shoppers in recent years, Kelley Blue Book anticipates this trend to begin to reverse in 2013. Leasing bounced back in 2010, increasing nearly 700,000 units year-over-year. Kelley Blue Book believes that the return in leasing will generate as many as 300,000 additional in-market shoppers this year, a number that will increase in 2014 and beyond. With lease returns expected to approach more normal levels during the next few years, Kelley Blue Book anticipates new-vehicle sales to grow and used-vehicle values to soften.

Kelley Blue Book: Increase in Lease Returns to

Drive Boost in Demand for 2013

2006

2007

2008

2009

2010

2011

2012

Total

Vehicles

Leased

2,446,569

2,453,189

1,935,910

1,083,619

1,709,149

1,960,128

2,284,800

Source: Kelley Blue Book Automotive Insights

Affordable Pricing and Credit Environment Keeps Consumers Coming Back
Consumers looking to purchase a new vehicle in 2013 will find affordable pricing on some of the best vehicles being produced today. On average, consumers can expect to find new vehicles priced at approximately 94 percent of MSRP, not including incentives. Not only are transaction prices quite favorable for consumers, but interest rates also remain at historically low levels.

“Consumers with a solid credit history should have no trouble obtaining a loan for 3 percent or less for up to 72 months,” said Gutierrez. “Many automakers continue to offer loans of zero percent for up to 60 months, as well as rock-bottom lease payments around $160 per month for a compact and only a few dollars north of $200 per month for a mid-size.”

Leases accounted for approximately 18 percent of all vehicles sold in 2012, returning to levels regularly seen prior to the collapse in industry sales in 2009. Federal Reserve Chairman Ben Bernanke indicated that interest rates will remain near zero through at least 2015, so consumers looking for a new vehicle can expect to find affordable pricing on new models for several years to come.

The affordability of new vehicles has been made even more attractive by the high values maintained by used cars. Although approximately 8 percent below the all-time highs seen in 2011, late-model used-car values remain uncomfortably close to new-car transaction prices, influencing many consumers to purchase new rather than used. This phenomenon is most pronounced for high-demand vehicles such as subcompact, compact and mid-size cars. These vehicles all have been significantly upgraded in recent years and generate excellent fuel economy for an affordable price. As a result, they have maintained extraordinarily strong values in the used-car market. In fact, the difference between a five-year payment on a new car and a 1- to 2-year-old used model is as little as $30 per month apart in some cases. Kelley Blue Book expects used-car values to continue to ease from current highs, so this phenomenon likely will play less of a role in the years ahead.

Kelley Blue Book: New-Car Pricing Remains

Near Used-Car Pricing

MY2013
(New)

MY 2012 (Used)

MY2011

MY2010

MY2009

MY2008

Average Monthly

Payment for a Compact

$335

$302

$280

$253

$224

$202

Source: Kelley Blue Book Automotive Insights

For more information and news from Kelley Blue Book ‘s KBB.com, visit www.kbb.com/media/, follow us on Twitter at www.twitter.com/kelleybluebook (or @kelleybluebook), like our page on Facebook at www.facebook.com/kbb, and get updates on Google+ at https://plus.google.com/+kbb/.

About Kelley Blue Book (www.kbb.com)
Founded in 1926, Kelley Blue Book, The Trusted Resource®, is the only vehicle valuation and information source trusted and relied upon by both consumers and the industry. Each week the company provides the most market-reflective values in the industry on its top-rated website www.kbb.com, including its famous Blue Book® Trade-In and Suggested Retail Values and Fair Purchase Price, which reports what others are paying for new cars this week. The company also provides vehicle pricing and values through various products and services available to car dealers, auto manufacturers, finance and insurance companies as well as governmental agencies. KBB.com provides consumer pricing and information on cars for sale, minivans, pickup trucks, sedan, hybrids, electric cars, and SUVs. Kelley Blue Book Co., Inc. is a wholly owned subsidiary of AutoTrader Group.

SOURCE:

Kelley Blue Book

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Consumer Financial Protection Bureau issues rules to strengthen protections for high-cost mortgages

Bureau Also Expands Time Frame for Required Escrow Accounts

WASHINGTON, D.C., Jan. 10, 2013, Today the Consumer Financial Protection Bureau (CFPB) issued final rules to strengthen consumer protections for high-cost mortgages and to provide consumers with information about homeownership counseling. The Bureau also finalized a rule that requires escrow accounts be established for a minimum of five years for certain higher-priced mortgage loans.

“Addressing problems in the mortgage market is critical to helping our economy recover,” said CFPB Director Richard Cordray. “Today’s changes will better help consumers to understand the real costs of owning a home while protecting them from harmful practices that can trap them into high-cost mortgages.”

The Home Ownership and Equity Protection Act (HOEPA) was enacted in 1994 to address abuses in home-equity lending and refinances. Since then, HOEPA has deterred high-rate and high-fee lending in those markets. In recent years, high-cost mortgages have made up only about 0.2 percent of those types of loans.

The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) expanded HOEPA to cover home purchase loans and home equity lines of credit (“HELOCs”); revised HOEPA’s rate- and fee-thresholds for coverage; added a new coverage test based on a transaction’s prepayment penalties; and provided new limitations on risky loan features, as well as other new protections for high-cost mortgages. The CFPB has finalized rules to implement the Dodd-Frank Act’s amendments to HOEPA.

For loans that are high-cost mortgages, today’s final rule:

  • Bans potentially risky features: For mortgages that qualify as high-cost, the rule      generally bans balloon payments (a large, lump sum payment usually due at      the end of the loan) with some exceptions, such as for certain types of      loans made by creditors serving rural or underserved areas, and bans      penalties for paying the loan early.
  • Bans and limits certain fees and practices: The CFPB’s rule bans fees for modifying loans, caps      late fees at four percent of the payment that is past due, generally      prohibits closing costs from being rolled into the loan amount, and      restricts the charging of fees when consumers ask for a payoff statement      (a document that tells borrowers how much they need to pay off the loan).      The rule also prohibits certain bad practices, such as encouraging a      consumer to default on an existing loan to be refinanced by a high-cost      mortgage.
  • Requires housing counseling: The rule requires consumers to receive housing      counseling before taking out a high-cost mortgage.

In addition to strengthening the protections for high-cost mortgages, the Bureau today is implementing a requirement of the Dodd-Frank Act that lenders provide a list of homeownership counseling organizations to consumers shortly after they apply for a mortgage so consumers know where to get help when deciding what loan is best for them.

The Bureau is also implementing other changes made by the Dodd-Frank Act concerning escrow accounts. An escrow account is an account that a lender may set up to pay certain recurring property-related expenses on a consumer’s behalf, such as property taxes and homeowner’s insurance. Escrow accounts help to ensure that consumers have enough money to pay those bills when they come because the lender breaks the expenses down into monthly installments and adds them to the monthly mortgage payment. Through an escrow account, consumers can better see the true cost of owning a home with insurance and tax costs laid out with each mortgage payment and are better assured that those costs are paid in a timely manner.

Under current regulations, creditors are required to establish escrow accounts for certain higher-priced mortgage loans for a minimum of one year. Today’s final rule implements changes from the Dodd-Frank Act that generally extend the required duration of an escrow account on such mortgage loans from a minimum of one year to a minimum of five years. To preserve access to credit, the rule exempts loans made by certain creditors that operate predominantly in rural or underserved areas, as long as certain other criteria are met.

The rules will be available later today at: http://www.consumerfinance.gov/regulations

 

A consumer guide to the final HOEPA rule can be found at: http://files.consumerfinance.gov/f/201301_cfpb_high-cost-mortgage-rule_what-it-means-for-consumers.pdf

 

A consumer guide to the final Escrows rule can be found at: http://files.consumerfinance.gov/f/201301_cfpb_escrow-requirements-rule_what-it-means-for-consumers.pdf

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20.6 Million U.S. Homeowners Own Homes Free And Clear Of Mortgage Debt

 

Pittsburgh, Tampa and New York Top Metros For Free-And-Clear Homeownership; Age, Credit Score and Local Home Values Help Influence Ratios Of Debt-Free Homeowners

 

SEATTLE, Jan. 10, 2013 — Almost 21 million Americans, or 29.3 percent of homeowners, own their homes outright, unencumbered by a mortgage, according to a recent Zillow® analysis of mortgage data.

 

Analyzing data through the third quarter of 2012, Zillow found that 20.6 million homeowners nationwide own their homes free and clear of mortgage debt.

 

Among the nation’s 30 largest metro areas included in the study, Pittsburgh (38.6 percent), Tampa (33.2 percent), New York (29.7 percent), Cleveland (29.4 percent) and Miami (28.9 percent) had the highest percentage of free-and-clear homeowners. Washington, D.C. (15.5 percent), Atlanta (17.7 percent), Las Vegas (18.3 percent), Denver (18.5 percent) and Charlotte (20 percent) had the lowest percentage.

 

A number of elements influence the percentage of free-and-clear homeowners in a given area, including median home values. Zillow found that areas with lower home values generally have higher outright homeownership rates, as smaller loan amounts are easier to pay back more quickly.

 

Demographic factors including the age and credit rating of primary borrowers also influence free-and-clear homeownership rates. Zillow found that 65- to 74-year-olds are most likely to be free-and-clear (20.5 percent), followed by 74- to 84-year-olds (17.9 percent). This is attributed to the fact that the longer someone owns a home, the longer they have to pay off their mortgage. Interestingly, when examining free-and-clear ownership rates as a percentage of homeowners in various age groups, Zillow found 34.5 percent of 20- to 24-year-old homeowners are free of mortgages.

 

Among homeowners who own their homes outright, 44 percent have a high VantageScore – representing their credit rating – between 800 and 900. Only 15.5 percent of homeowners with the highest credit rating of 900-990 are free-and-clear.

 

“So far we have used our unique data on how much homeowners owe on their homes primarily to identify underwater and delinquent groups of homeowners,” said Zillow Chief Economist Dr. Stan Humphries . “But looking at those homeowners who are free-and-clear is important, too. Homeowners unencumbered by a mortgage may be more flexible than indebted homeowners, and therefore more apt or willing to list their homes or enter the market for a new property. By determining where these homeowners are located, we can also gain insight into potential inventory and demand in those areas, as well.”

 

Zillow’s analysis incorporates mortgage data from TransUnion®, a global leader in credit and information management. All personally identifying information is removed from the data by TransUnion before delivery to Zillow. Overall, the data covers more than 800 metro areas, 2,100 counties and 21,900 ZIP codes nationwide. To calculate the free-and-clear homeownership rate, we compute the number of overall homeowners and number of homeowners with no outstanding mortgage debt by location and demographics. We exclude investor and rental homes.

METRO

FREE-&-CLEAR
HOMEOWNERSHIP RATE

METRO

FREE-&-CLEAR
HOMEOWNERSHIP RATE

New York

29.7%

San Diego

21.5%

Los Angeles

20.7%

Tampa

33.2%

Chicago

23.8%

St. Louis

27.2%

Dallas-Fort Worth

24.5%

Baltimore

22.5%

Philadelphia

27.6%

Denver

18.5%

Washington, DC

15.5%

Pittsburgh

38.6%

Miami-Fort   Lauderdale

28.9%

Portland

21.8%

Atlanta

17.7%

Sacramento

21.5%

Boston

24.6%

Orlando

24.6%

San Francisco

21.8%

Cincinnati

23.7%

Detroit

28.8%

Cleveland

29.4%

Riverside, Calif.

20.6%

Las Vegas

18.3%

Phoenix

22.9%

San Jose, Calif.

22.1%

Seattle

21.0%

Columbus, Ohio

21.7%

Minneapolis-St   Paul

20.6%

Charlotte, NC

20.0%

For more data on free-and-clear homeownership, including data at the state, metro and county levels broken down by homeowners’ age and credit rating, please see the full research brief or contact press@zillow.com.

 

About Zillow:
Zillow (NASDAQ: Z) is the leading real estate information marketplace, providing vital information about homes, real estate listings and mortgages through its website and mobile applications, enabling homeowners, buyers, sellers and renters to connect with real estate and mortgage professionals best suited to meet their needs. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow’s Chief Economist Dr. Stan Humphries. Dr. Humphries and his team of economists and data analysts produce extensive housing data and research covering more than 350 markets at Zillow Real Estate Research. Zillow, Inc. operates Zillow.com®, Zillow Mortgage Marketplace, Zillow Rentals, Zillow Mobile, Postlets®, Diverse Solutions®, Buyfolio™, Mortech™ and HotPads™. The company is headquartered in Seattle.

 

Zillow.com, Zillow, Postlets and Diverse Solutions are registered trademarks of Zillow, Inc. Buyfolio, Mortech and HotPads are trademarks of Zillow, Inc.

 

TransUnion is a registered trademark of Trans Union , LLC.

 

SOURCE Zillow

RELATED LINKS
http://www.zillow.com

 

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New Report Shows How Federal Programs Help Low-Income Rural Families Become Homeowners

WASHINGTON, A new report issued by the National Rural Housing Coalition details how two USDA programs have expanded homeownership opportunities to the nation’s poorest rural families – at little expense to the federal government.

Over the past 60 years, more than 2.1 million low-income rural families have accessed affordable mortgages under the Section 502 Direct Loan program, which is credited with building more than $40 billion in wealth for the nation’s rural poor. The Section 523 Mutual Self-Help Housing program is the only federal homeownership program of its kind; small groups of six to twelve rural families join together on nights and weekends to build each other’s homes, reducing construction costs, earning equity, and making lasting investments in their communities.

The Coalition report presents key findings from their analysis of USDA program data. Overall, the report finds that despite serving families with limited economic means, these programs are among the most cost-effective federal housing programs. Section 502 Direct Loans cost an average $7,200 over the lifetime of the loan – less than the annual cost of other federal housing programs. Likewise, by providing at least 65 percent of the construction labor on each home – often more than 1,000 hours − Self-Help Housing families earn an average $27,000 in equity.

The report also shows that benefits extend beyond participating families to rural communities and the nation. In the past 5 years, the Section 502 Direct Loan program has led to the creation of over 100,000 jobs and $5.2 billion in local income. The Self-Help Housing program has resulted in nearly 18,000 jobs and $1.16 billion local income.

The report includes twelve success stories that illustrate how these programs have been used by rural families to become homeowners.

“Underlying this report is a simple truth: responsible homeownership continues to be the single, best, long-term investment for most Americans, and the primary source of wealth and financial security for low-income rural families,” said Bob Rapoza , Executive Secretary of the National Rural Housing Coalition. “For many low-income families, these programs are the only available source of safe, decent, and affordable housing. Instead of cutting funding for these programs, Congress should invest in them as key ways to help improve access to affordable housing.”

SOURCE National Rural Housing Coalition

RELATED LINKS
http://www.ruralhousingcoalition.org

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