San Diego Ranks 302nd out of 379

Ouch. Doesn't sound like good news, does it?

Actually, it is good news, relatively speaking. There has been lots of press recently about all the short sales, foreclosures and fraud in the mortgage industry, not to mention the subprime issues we have been hearing so much about (sorry - I'm a REALTOR so this stuff interests me, although these issues can impact our overall economy here in SD, so it affects you too).

The good news is San Diego ranks 302nd out of 379 markets in terms of mortgage fraud. Which means there are 301 markets that are worse. Mark Fleming, chief economist for CoreLogic Systems (a Sacramento firm that measures lending risks) goes on to say that we also are 85th on the list of the 100 largest markets. Certainly there is concern about the rate of short sales and foreclosures that we are seeing, with a dramatic increase since 2006, but the news, at least for now, indicates that we are not suffering to the extent that many areas are.

But there is concern that we will see the rates of mortgage fraud rise with the changes that have occurred in housing prices and the increase in foreclosures. Folks that may be in danger of losing their homes through foreclosure are, unfortunately easy prey for criminals who are out to make a quick buck through fraudulent loans and other means.

To read more on this issue, take a look at the article that was in Sunday's Home section by Emmet Pierce.

Market Update (Guest Blog)

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Here is a great update on the housing market in San Diego with a focus on the issues we have all heard about in the sub-prime lending area. If you have any questions, be sure to contact Chris at Pacific Mortgage. Rather than try to paraphrase, I included it here verbatim.

To All,

What a crazy time for lenders. As you may have heard, subprime lenders are going under by the day and the repercussions are being felt throughout the entire mortgage industry. We're finding more and more buyers who were qualified are now not. This whole shakeup has cause all lenders to revamp their lending standards in order to generate mortgage loans that are marketable on the secondary mortgage market. From what we're experiencing here at PCM, the biggest changes are with 100% financing, increasing minimum credit score standards for qualifying, and more scrutiny with Alt-A lending (stated income, no ratio, no doc, stated income/stated assets, etc.) For now, the days of free flowing money from lenders has ceased. If you'd like to discuss this further, please give me a call.

Now on to the good news. Inflation in check, easing job market, slowing GDP, mortgage market issues, slowing national housing market, and an overbought stock market has helped push the 10 year bond yield to 4.49%. The bond yield briefly hit this level earlier this year and last December but we haven't seen it hold at this level since January 2006. Should bond yields hold or move lower, we can expect mortgage rates to do the same. We're still in that narrow band of 5.75% to 6.25% for all programs but rates are moving to the lower end of that range and I'm optimistic they'll remain there for the short term. There is still talk of if and when the FED will start to lower rates but that's all it is, 'talk'. Until the market data is continuously bearish for say 2-4 months, it's unlikely the FED will make a move.

Right now it's not a bad idea for borrowers to float their rate. As long as their loan officer has a handle on bond market tendencies, then that loan officer should be able to shield their client from market increases and possibly get them a lower rate if the market moves lower. Keep in mind too, with many sellers offering incentives, 5 year and 7 year ARMs can be bought down to the low to mid 5% range.

For more daily market updates, please visit my website at Ask Comer.

As always, I'll keep you posted.

Best Regards,
Chris Comer
Pacific Capital Mortgage
760-533-5174

Upcoming Guest Bloggers and a Market Update

I am in the process of inviting some guest bloggers to share their thoughts on a variety of real estate related topics and other things. Stay tuned - I'll let you know who they are.

Chris Comer from Pacific Capital Mortgage just posted a market update on my First Time Buyer Central blog. Stop by and take a look.

Have a great weekend.

Jeff