New rules for jumbo loans, qualified residential mortgages could make homebuying more costly in 2014

On Jan. 1, 2014, a new provision in the Dodd-Frank Wall Street Reform and Consumer Protection Act goes into effect. The “qualified residential mortgage,” or QRM, may have far-reaching effects that will lessen the number of people who ultimately can obtain home loans.

Most agents and brokers have no idea what QRM is or how it will impact their businesses. Briefly, QRM was designed to set the bar for residential mortgages and to minimize the risk that borrowers may default. It requires that debt ratios be limited to 43 percent and loan fees limited to 3 percent, and interest-only loans and negative amortization are not allowed in most cases.

The Dodd-Frank bill also requires the lender to retain 5 percent of any mortgages they make. In other words, if they make a $100,000 loan they must retain $5,000 to secure the loan. QRM loans are exempt from the risk retention rules. This means that the lender can sell the loan on the secondary market without having to retain the 5 percent. The effect of these provisions is already being felt in the lending industry. Citibank has restricted its lending to those areas where it has a banking presence. Compliance departments have tripled in size at many large lenders. Community banks and credit unions are being choked by the regulations and often lack the resources to meet the new compliance requirements.

“Community banks and credit unions have historically had a much lower default rate as compared with other lenders. The reason is that they know their customers,” said Mark Bigelow, national sales manager at Towne Mortgage Co. and AmeriCU Mortgage. “Community bank loans have often been based on a handshake. In terms of credit union loans, people feel they are hurting themselves and other members if they default.”

Bigelow went on to explain what makes the Jan. 1, 2014, provisions so difficult for lenders: “In the past, loans have been turned down primarily due to credit issues. For the first time in history, lending decisions may be made based upon compliance issues rather than just credit issues.” Here’s why: Imagine that you made a mistake on a purchase agreement. The buyer and seller want to change the agreement to correct the mistake, except the law prohibits you from doing so.

If a lender makes a mistake with any part of the compliance, here’s what happens:

1. The lender now has to pay all of the borrower’s closing costs.

2. Even if the mortgage agent made the mistake, the mortgage agent must still be paid.

3. The lender cannot deduct any costs or losses resulting from the mistake.

4. The lender still has to close the loan.

 

These provisions will be particularly difficult for online mortgage sites such as LendingTree, Quicken and Zillow. In addition to the issues cited above, jumbo loans currently fall outside the QRM provisions. This creates tremendous uncertainty as to what will be required of lenders who want to sell jumbo loans on the secondary market. The result will most likely be that be even fewer jumbo loans will be available.

What this means for agents, brokers and their clients:

1. There will be fewer loan choices as community banks and credit unions are squeezed out of the market making it even harder for many borrowers to qualify.

2. The loan process will also probably take longer due to the increased compliance.

3. It will probably be much more difficult and costly to obtain a loan in the future.

 

Lenders generally want to issue loans that meet QRM criteria. It gives them an exception to a rule they find troubling. It allows them to sell a higher percentage of their mortgages into the secondary market, thereby reducing their long-term risks. As a result, the majority of lenders will impose these guidelines upon their customers. These rules will essentially set the bar for mortgage lending standards in the U.S. Borrowers who fail to meet these criteria will have a harder time finding a loan compared to borrowers who do meet the criteria. They might end up paying a higher interest rate as well. Lenders claim that risk retention increases their operating costs, so they will likely charge more for loans that are subject to risk retention. Financial analysts from J.P. Morgan Securities have estimated that borrowers might pay up to three percentage points more for loans that are subject to risk retention (i.e., loans that don’t meet the definition of a qualified residential mortgage). So here’s the bottom line: Encourage anyone who is on the fence about selling or buying to do so before the end of the year. Otherwise, they may be caught up in maelstrom of new regulations that can sink their sale and that might also sink the real estate recovery.

Source: Inman News

 

2332 Canyon Drive – Great 1920s Era Home in Los Feliz Village $939,000

2332 Canyon Drive Los Feliz, CA 90068

This Los Feliz retreat rests on a knoll above sought-after Canyon Drive. At one end are trendy boutiques and restaurants, and at the other, a peaceful park for hiking, kids, and pups. Inside the Roaring 20’s home are gleaming hardwood floors, soaring ceilings, a charming dining room with period built-in book cases, a living room with fireplace, a kitchen full of stainless-steel appliances, and a unique screening room. A walled and gated outdoor living area is perfect for entertaining!

http://www.2332canyondrive.com

Asking price: $939,000

2 bedrooms, 1.5 bathrooms, bonus room, separate dining room, large living room with high ceilings

TONS OF CHARM & CHARACTER!!!

Please contact me at jkryukova@gmail.com or (310)402-8181 for more information, private showings, or for any of your real estate needs.

 

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JUST LISTED: Private Celebrity Retreat In Outpost Estates (Hollywood Hills)

Address: 7009 Senalda Drive Hollywood Hills, CA 90068
Price: $2,479,000
Stats: 5BR/3.5BA; 2,884 sq.ft., 13,608 sq.ft. lot

Description:

This exclusive property is tucked above and away from Outpost canyon’s main drag, but is close enough to access all of Hollywood’s offerings. Located in a celebrity enclave (with A-listers sharing property lines), the property features elevator access from the 2-car garage to the kitchen, designer-landscaped serenity gardens, remodeled kitchen and bathrooms, updated systems, ultimate privacy, and fantastic canyon and mountain views. Get away from it all…in the middle of it all.

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Please contact me at (310)402-8181 or jkryukova@gmail.com for details and showings. 

JUST LISTED: Re-imagined Sunset Strip Spanish Estate! Offered at $5,300,000 Open Tuesday 11-2pm

1136 Doheny Dr.

1136 Doheny Drive Los Angeles, CA 90069

3bed/3bath Stunningly updated with spanish detail

2,996 sq. ft./Lot size 13,607 sq. ft.

Please click here for the virtual tour:  1136 Doheny Dr Lifestyle Video 

3BR/3BA Spanish residence in the Sunset Strip offers ultimate privacy (gates, hedges, no one “looking in” from above) and unparalleled access to all of the Sunset Strip’s offerings. Features include: formal step-down living room with 2-story vaulted ceilings and over-sized fireplace, cook’s kitchen with Viking appliances and eat-in peninsula, luxury-level master suite (overlooking park-like grounds) with large walk-in closet and spa-like bathroom with cathedral ceilings and soaking tub, 2 additional bedrooms en suite, family room and dining room with French doors to the completely private back yard, sparkling full-sun pool and spa with flagstone lounging/eating areas, expansive lawn with room for play, pups, and parties. Indoor-outdoor flow makes this home perfect for entertaining. Pre-wired for media, individual room-by-room volume controls, office area with custom built-in desk and cabinetry, basement/bonus room with storage, direct access to 2-car garage, security, intercom.

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Actress Halle Berry aims to sell Hollywood Hills West house!

Halle Berry’s Hollywood Hills West home is being shopped as a pocket listing for $15 million. It was the site of a recent altercation between her ex-boyfriend and her fiance.

Actress Halle Berry is trying to sell her Hollywood Hills West house. The home’s motor court was the site of a Thanksgiving Day altercation between her former boyfriend Gabriel Aubry and actor Olivier Martinez that landed both men in the hospital.

The home is being shopped off the Multiple Listing Service as a pocket listing for $15 million, area real estate agents confirmed.

Halle bought the house in 2005 from former “Malcolm in the Middle” star Frankie Muniz for nearly $6 million, according to Times archives. The five-bedroom house has 5,900 square feet of living space and sits on more than a half acre with a 1,400-square-foot guest house, a swimming pool and spa.

She and Aubry are in the midst of a heated custody battle.

Berry, 46, has starred in the “X-Men” movies and “Die Another Day” (2002). The former model starred this year in the film “Dark Tide.”

 

Source: LA Times

3 Tax Benefits of Owning Los Angeles Real Estate

Taxes

While there are many advantages to owning Los Angeles real estate, the tax benefits are some of the most important to consider. For decades, the Federal Government and the state of California have incentivized homeownership through tax benefits that are not available to renters. These benefits not only help to reduce the home ownership costs, but also the costs of buying and selling a home. Below are a few tips to help you get a better understanding of real estate and the many tax benefits that come with owning a home.

It’s important to note, however, that in order for a homeowner to take full advantage of most benefits, they must itemize their taxes.

1) Mortgage Interest Deduction

The mortgage interest deduction (MID) is easily one of the best tax benefits available to homeowners. After searching, finding, and purchasing one of the many Los Angeles homes for sale, a new homeowner is able to deduct all the interest paid on their mortgage payments. For the first few years of the loan, interest tends to be the largest component of the mortgage payment. Because of this, the MID is a very beneficial tax advantage to homeowners.

2) Property Tax Deduction

For income tax purposes, it’s possible to fully deduct the real estate property taxes paid on a first home. By taking advantage of these property tax deductions, a homeowner can effectively reduce their total tax burden. To learn more, check out Schedule A (Form 1040), line 6.

3) Capital Gains Exclusion
When considering Los Angeles homes for sale, it’s important for a buyer to develop a long-term plan that includes the capital gains exclusion. So long as a homeowner has lived in their home for two of the last five years, they can take advantage of the exclusion. Individuals can exclude up to $250,000, whereas couples can exclude up to $500,000. It’s possible to claim the exclusion once every 2 years.

Ultimately, there are a ton of tax advantages and benefits available to homeowners — the tricky part is finding them. For those who wish to learn more about these tax advantages and others, seek out a certified public accountant (CPA) or tax attorney to assess all the available options.

If you’re looking to buy, sell, or lease property in Los Angeles? If so, please contact me at (310)402-8181 or jkryukova@gmail.com.

To sign up for free, daily property emails, please go to my website and sign up: http://juliekproperties.com/free-listings-market-information/

Source: Yahoo! News

Moby lists Hollywood Hills West home for sale for $3.695M!

DJ and singer-songwriter Moby and Deanna Berkeley,head of the contemporary fashion brand Alice + Olivia, have listed a house in the Hollywood Hills West area for $3.695 million.

The Hollywood Regency style house, built in 1926, is described in the listing as a John Elgin Woolf reinvention. Details include 12-foot-high paneled ceilings, Palladian columns and parquet floors. The 3,700 square feet of living space includes a media room/den with built-in bookcases, an updated eat-in kitchen, three bedrooms and 41/2 bathrooms. There is a trapezoidal pool with a pergola and a guesthouse.

Moby, 46, saw his 1999 electronica album, “Play,” sell more than 10 million copies worldwide. His most recent album, “Destroyed,” was released last year. He published a book of his tour photography, also called “Destroyed,” the same year.

Public records show the property was purchased in 2008 for $2.95 million and has been leased out in recent years.

Source: LA TIMES

Ready to Buy? Five Steps in Getting Ready to Buy a Home!

Image The road to homeownership, AKA securing a mortgage or pre-approval letter, is paved with … paperwork.

First, avoid surprises—especially unpleasant ones—by getting your credit reports/FICO scores before the first sit-down with a banker. You are entitled to a free annual one. Check with any of the big three credit bureaus (Equifax, Experian or Transunion).

Proof of employment is next. Advise your boss to expect a verification of employment form. You will also need to submit two weeks’ to a month’s worth of pay stubs.

To prove that you can pay back the loan, banks want to see how much money you earn regularly. That means two years of federal tax returns and W-2s.

What you owe—and yes, lenders will ask—is the flip side of income. Outline your expenses, which most definitely include monthlies for rent, utilities, that new car, credit cards, child support, etc.

Asset verification requires documentation, too. This includes at least three months of bank statements. Investment accounts with bonds, stocks, mutual funds, etc. are also part of this, as are the titles of any cars you own if they are less than five years old. That you have funds for the security deposit is required, too.

The lender will also want a fully executed Purchase & Sale Agreement (signed and initialed by buyer and seller). Make certain the property address is correct.

Don’t forget the obvious: a valid ID and your Social Security number.

Final tip: Never turn in originals, and keep a copy of every piece of paper you send out so when the inevitable call arrives: “I don’t have…”, you will.

The Importance of Staging to Get Top Dollar

The answer to the real estate question “to stage or not to stage” a house for sale is a resounding: do it!

Higher prices is one reason. On average, a staged house commands a 17 percent higher final sale than a non-staged house. Faster sales is another. According to a Real Estate Staging Association report from 2010, homes that were not staged stayed on the market an average of 181 days (before owners gave in and had their homes professionally staged) as compared to 35 days for staged homes.

The why is pretty straightforward. Most homes are less than perfect, and staging can direct attention away from flaws in a room or throughout the house. In fact, even the best looking house can use a little help. For example, staging helps buyers focus on particular elements in the house—directing the eye to value such as a fireplace, custom woodwork, etc.

Although often confused, decorating and staging are very different. Decorating is personal; staging is business. In decorating, the goal is to make a house reflect the owners’ personality while staging takes personality out of the house but keeps it warm and inviting. Buyers need to be able to imagine themselves living in your house. Think about walking into a fine hotel: it’s not personal but you want to go in and stay a while. That’s staging.

Staging does cost money — anywhere from $300 to $5,000. But according to the 2011 HomeGain Home Improvement Survey, home staging produced an average of 299 percent return on investment, with sellers spending an average of $550 and seeing a $2,194 sale price increase.

Home staging is one of many low cost home improvements that can make a substantial difference in getting top dollar for your home.

 

If you’re interested in listing your property and need a valuation or staging suggestions, please contact us any time.

Home Ownership Matters

Home ownership has a significant impact on net worth, educational achievement, civic participation, health, and overall quality of life. And, home ownership helps create jobs—lots of them—right here at home.

Home Ownership matters…to people, to communities, and to America. Why?

  • For every two homes sold, one job is created in the U.S.
  • Each purchase generates as much as $60,000 in economic activity over time.

Buy a home or investment property: Call Today 310.402.8181

 

We work with buyers, sellers, investors, and those looking to lease in most of Los Angeles including: Hollywood Hills, West Hollywood, Hollywood, Sherman Oaks, Studio City, North Hollywood, Los Feliz, Silverlake, Beachwood Canyon area, all the way to Santa Monica and Venice! www.juliekrproperties.com