“In the short run, over the next half decade to decade, it’s going to be extremely unlikely, virtually impossible for that to happen because all the programs that created the bubble are outlawed now,” said David Stevens, CEO of the Mortgage Bankers Association. “What really concerns me is how are people going to behave outside the QM protection.”

(Read more: Why shut down Fannie and Freddie now?)

Lenders can still operate outside the QM rules but don’t get the same legal protections in cases of default, and they cannot sell the loans to Fannie and Freddie. They need to hold on to the risk. Still, the non-QM market is growing even before the QM rules take effect in January.

The leader of this movement is Date himself. He formed a firm, Fenway Summer, to launch the new mortgage products.

“I think the best credit models, the ones that really pay for themselves in terms of risk-adjusted returns over time, are the ones where you make great credit decisions and then you actually bear the risk of those decisions working out well or working out poorly,” said Date, adding that he is optimistic about this new market.

Loans outside QM will be more costly but will offer investors greater returns. They will still have to comply with ability-to-repay but not the QM standards. Therefore, borrowers who may have very large assets but little to no income could qualify. Interest-only, adjustable-rate mortgages would also fall into this category.

“I am quite confident that a senior funding market will develop for non-QM loans—I have no doubt about that at all,” Date said. “It is simply too big of a market.”

Wells Fargo will also operate outside QM for some loans.

“When you look at the entire profile of the borrower, we can be comfortable they have the ability to repay even though their income by itself may not fall into the standard dictated by the qualified mortgage,” said Codel, who added that non-QM loans may be an even safer product because lenders will hold more risk and be subject to legal action in the case of a loan failure.

(Read more: Map: Tracking the recovery)

Still, the non-QM market does open the doors for lenders seeking higher returns through higher risk, which is how much of the recent trouble began, at least in the mortgage-backed securities trading space. Regulations for investors in loans are still being finalized, but recent proposals follow the QM standards.

“That is where I think drawing the boundaries around the rules can be a good thing but it can also set up bad behaviors outside those boundaries, and we’re going to see those kinds of institutions being created, I’m confident of it,” said Stevens.

—By CNBC’s Diana Olick. Follow her on Twitter @Diana_Olick.

Questions?Comments? facebook.com/DianaOlickCNBC

Article source: http://www.cnbc.com/id/101036630

(Read More: Housing’s Big Challenge: Student Debt)

Back in the mid-eighties and nineties, Americans spent nearly 20 percent of their median monthly incomes on their home loans—compared to just 12.5 percent today, according to Zillow.

The trouble is that wages have either stagnated or dropped at the same time that home values are rising. Pre-bubble, U.S. homebuyers spent 2.6 times their median annual incomes on the purchase price of a typical home, but now they are spending three times their incomes—meaning homes are 14.5 percent more expensive relative to income, according to Zillow. That is all made possible by government-subsidized, record low rates.

(Read More: Betting on the Home Builders as Housing Battles Back)

“The days of historically high levels of housing affordability are numbered,” said Zillow Chief Economist Stan Humphries. “Current affordability is almost entirely dependent on low interest rates, and there’s no doubt that rates will begin to rise in the next few years.”

Rates will rise because the Federal Reserve will inevitably have to get out of the business of buying agency mortgage-backed securities, which currently drives down rates. This won’t happen immediately, but it will in the next two to three years.

Article source: http://www.cnbc.com/id/100631625

Foreclosures and default notices in California and the Bay Area have subsided back to their 2007 levels. Foreclosures are still running about double historical averages, but are a far cry from the sky-high levels during the worst of the housing crisis in 2008.

“The worst is absolutely past us,” said Christopher Thornberg, principal with Beacon Economics, an economics consulting firm. “There is no doubt about it – foreclosures are down, delinquencies are down. It’s clear we are in the healing process. The only question is the pace of recovery.”

In 2008, a quarter of a million California homes were repossessed by lenders, according to data from ForeclosureRadar.com, a Discovery Bay real estate service. This year, the state is on track for about 107,600 homes to go into foreclosure – a decline of 56 percent – assuming the rate established from January through August is maintained. From 1980 to 2011, California’s annual average number of foreclosures was 55,054, according to San Diego’s DataQuick.

In the nine-county Bay Area, 2008 saw 37,600 homes repossessed; this year the region should see about 15,600 foreclosures, a decrease of 58.5 percent, ForeclosureRadar said. That compares with an average of 6,917 Bay Area foreclosures a year from 1980 to 2011.

The pattern holds true in even the hardest-hit counties. Contra Costa, for instance, had 11,380 foreclosures in 2008 and this year is on track to have 4,120. Notices of default, the first step in the foreclosure process, are likewise on a downward trajectory, which presages fewer foreclosures ahead. Fewer than half of default notices result in foreclosures.

It’s not all pretty

To be sure, plenty of distress remains. Millions of homeowners are underwater, owing more than their house is worth. That condition, combined with a financial shock – job loss, illness, business reversal, divorce – lays the groundwork for getting behind on mortgage payments.

“We shouldn’t pretend that everything is hunky-dory,” Thornberg said. “Clearly, some of those underwater people are still delinquent. But there are simply fewer of them than there were before. And a lot of people who are underwater are only modestly so. They see the writing on the wall and know their houses will recover value.”

The recovery is the result of enough time having elapsed since the housing collapse in 2008, Thornberg said, pointing out that the people who received the most toxic subprime loans during the housing boom of the early 2000s have already lost their homes.

Sean O’Toole, CEO and founder of ForeclosureRadar, believes government intervention also made a difference. “There has been a lot of (political) pressure on banks and regulators to slow or stop foreclosures,” he said.

Modifications growing

Back in 2006, the time between notice of default and foreclosure averaged 133 days in California, according to ForeclosureRadar. As of August, it averaged 291 days, as various programs and laws went into effect to build in more ways for homeowners to get modified loans.

While help for homeowners remains frustratingly difficult for many, numbers show that loan modifications are slowly gaining traction.

In the second quarter, banks modified 416,036 loans, and started 302,636 new foreclosure actions nationwide, according to the Comptroller of the Currency, a federal government bank regulator that oversees 60 percent of all U.S. first-lien mortgages. Across the country, those modifications reduced borrowers’ monthly payments by an average of 24.6 percent, or $381, it said.

The decline in foreclosures and default notices rebuts the theory that the so-called “shadow inventory” – legions of homes already repossessed by banks or ones that eventually will go into foreclosure – could swamp the real estate market, undermining the recovery. Experts say there simply doesn’t seem to be that many homes in the foreclosure pipeline.

“The banks are not sitting on tens of thousands of vacant (foreclosed) homes,” O’Toole said. “I don’t think there is any chance (shadow inventory) could swamp the market. The regulatory and accounting framework now is geared around letting the banks slowly dole (foreclosures) out over a long period of time so there is no shock to the market.”

Controlling the flow

O’Toole believes there are many homeowners who are behind on payments but haven’t yet received notices of default. But he also thinks banks will make sure those not-yet-official delinquencies trickle through the foreclosure process, as it is to their advantage to avoid a tsunami of foreclosures that would depress prices.

Some people who think a shadow inventory could still overwhelm the housing market have bolstered their theories by pointing out that only about 10 percent of bank-owned foreclosures are on the market at any given time. O’Toole said that is simply a function of an orderly process.

“It takes banks on average nine months to sell a foreclosed home,” he said. “Most of that time is spent doing the eviction, cleaning up the house, and then it is on the market for a short period of time and goes into escrow before it is finally sold.”

So at any given point, most bank-owned foreclosed homes are either being readied for resale or in escrow, he said.

Shrinking numbers

People who work directly with struggling homeowners report that their numbers seem to be shrinking.

“There is still definitely a need, although it is lessening,” said Sheri Powers, director of Oakland’s Unity Council, a nonprofit community development group. “Fewer people are contacting us for assistance or coming to our foreclosure prevention workshops.” Inquiries for foreclosure-prevention help are down by 40 percent, she said.

“Of course, for each person, it is very personal and very urgent,” she said.

She’s also seeing a shift in demographics, with more higher-income homeowners seeking help.

Traditionally, about 5 percent of Unity Council’s homeowner clients earned above 120 percent of the median income for Alameda County (this threshold would be $112,200 for a family of four); in the past year, about 18 percent of clients were above that level, she said. Most commonly, their situation was caused by losing a job or seeing self-employment income decline.

“They have run out of options, out of equity, out of lines of credit,” she said. “Push has come to shove, and now they’re seeking assistance.”

Carolyn Said is a San Francisco Chronicle staff writer. E-mail: csaid@sfchronicle.com

Article source: http://www.sfgate.com/realestate/article/Foreclosures-default-notices-plunge-3910965.php

Dublin, CA (PRWEB) September 22, 2011

A native of Contra Costa County, Lisa Giannini brings to Tucknott Electric experience and insight in dealing with claims in auto body damage estimation, having interacted with insurance claim adjusters in that industry for six years. She recognizes that her greatest professional accomplishment to date is building a successful auto body business. Prior to her experience in the auto body damage business, Lisa worked in real estate sales.

“We are very excited about Lisa joining our team. I have no doubt her energy and people skills will bring new opportunities and new customers to Tucknott Electric, as well as maintaining personal contact with our long time clients,” states Robert Tucknott, owner of Tucknott Electric Company.

Bay Area electrical contractor, Tucknott Electric Company has built a solid reputation among major industrial and commercial accounts for being able to look at a project with a critical and objective attitude that results in substantial savings of time, money and energy to the client.

The company performs commercial remodeling, tenant improvements and a variety of electrical services. They have also performed a considerable amount of industrial work for clients such as General Motors in Fremont and other large manufacturing facilities throughout the San Francisco Bay Area. They have worked on a large number of office buildings, medical centers, shopping centers, strip malls, restaurants and other retail establishments.

For more information about Tucknott Electric Company, call 925-271-5643 or visit www.tucknott-bayarea.com. Tucknott Electric is located at 6850 Regional St., Ste. 110, Dublin, CA 94568.

About Tucknott Electric Company

Tucknott Electric specializes in electrical installations; reconstruction of fire, water and impact damage losses; electrical engineering and design; and other electrical construction for residential, commercial and industrial buildings throughout Northern California. Their electrical contractors can provide electrical wiring and other services as well. The company also provides Electrical Expert Witness work.

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For the original version on PRWeb visit: www.prweb.com/releases/prwebelectrical-contractor/bay-area/prweb8818155.htm

Article source: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/09/22/prweb8818155.DTL

Surprising news out of the census: San Francisco had 30,000 empty homes in 2010, reports Blanca Torres of the San Francisco Business Times. That’s an 8.3 vacancy rate, higher than the state average, and higher than any other county in the Bay Area. 

Torres asks the question that’s no doubt on everyone’s mind: “As many people who have moved to the City by the Bay can attest, finding housing here can be challenging whether you are renting or buying — and it’s not just the cost factor. I have to wonder why there are not fewer vacant units considering the high demand and seemingly tight supply. Who are these property owners holding the keys to empty homes?”

Marin County had the next highest vacancy rate at 7.2 percent, followed by Alameda County and Contra Costa County. Silicon Valley had the lowest vacancy. 

So what’s causing this high rate of vacancy in what is considered one of the most desirable cities to live in? According to Torres’ follow-up piece, possible explanations offered by Biz Times readers include: people waiting for a better real estate market to sell, people owning homes in San Francisco for investment or vacation purposes, and finally, landlords who are fearful of renting to bad tenants, given the tough protections for renters in the city.

Article source: http://www.baycitizen.org/blogs/pulse-of-the-bay/sf-leads-bay-area-vacant-homes/