Mortgage limits hit luxury home market hard in California - News & Observer
09.02.09
The dropoff was slightly worse in the Sacramento area: 50 percent in Sacramento County and 45 percent in Placer. A total of 442 homes sold for at least $1 million in El Dorado, Placer, Sacramento and Yolo counties last year, more than half in Placer.
Luxury sales sputtered even as the low end of the market, nursing on cheap foreclosed properties, showed signs of life. The high end was battered by the downward price pressure at all levels of the market and was hit by a severe shortage of financing, said DataQuick analyst Andrew LePage.
Those buyers are locked out of most mortgage assistance programs like Fannie Mae, which cap loan limits at $474,950 in greater Sacramento. As a result, they are charged higher interest rates and often have to make down payments of 30 percent or more, LePage said.
"Anything for the upper-end market, there's no financing," said Scott Johnson of Pipeline Capital Group, a mortgage broker in Granite Bay. "You're effectively looking for a cash buyer."
Source: News & Observer, NC
Where Is The Bailout Money When You Need It?
Where is all this bailout money that we as tax payers have paid banks? As a Sacramento Realtor/Broker and owner of Riede Real Estate I am here to tell you that the banks have taken our money and bought out other banks and no telling what else...but they aren't helping the distressed homeowner.
For over a year there have been TV commercials stating that all you have to do is call your bank. If you would like to see what a typical scenario of "just calling your bank," is like you really need to watch ABC news video were Congresswoman Waters of Los Angeles tried to do just that with IndyMac Bank, Bank of America and Countrywide (was this when Countrywide outsourced these calls to India?...of course it's no better now, either). It is a joke calling the banks for help! If they treat a Congresswoman like this, how do you think they treat the troubled homeowner calling?
If that doesn't beat all! Loan modifications so far have been a joke with the banks. Many won't do them and some of those that have simply buy the troubled homeowner a couple of months at a reduced rate with an exorbitant balloon payment at the end of 3 months. Who in the world do they think they are helping? No wonder their recitative rate is what it is. Who in the world do they think they are helping?
My guess is that the banks are hoping for more of a bailout and are simply buying time until they get it...we don't seem to give them any restrictions with the bailout money so what in the world do we expect? Until and unless Americans stand up, contact their congress representative and demand the U.S. Government either stop the bailouts or put restrictions on how the money is spent, this will continue. As long as we continue to have foreclosures, the economy can not and will not recover.
Today, Forbes reported on an article in the Associated Press that Wells Fargo is expanding their mortgage modification program. Supposedly, since they bought out Wachovia they are touting to extend loan terms 40 years, reduce interest rates and reducing the principal of the loan to troubled homeowners where housing prices have significantly declined. Let's see if this is hype or if they actually perform. In the past they have not helped any of their current Wells Fargo clients needing loan modifications but there is also hope.
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