Weekly News Round-Up
Has Countrywide decided to stop offering jumbo loans? Well, it seems that way when they now require a 25% down payment. While that may have been the norm of the day 30, 40, even 50 years ago, it isn’t a realistic option for new buyers in the Bay Area. On a $500k home, that’s $125,000 down. So maybe they are just snubbing you first-timers and going for the gold—those that are upwardly mobile, buying larger homes or empty nesters with huge equities that are buying down. Seems to be getting harder and harder to get a loan these days between down payment requirements, credit scores, and income requirements. But maybe that’s a good thing?
Of course, maybe Countrywide is trying to avoid the same fate as IndyMac, which experienced a federal takeover on Friday. Closing the bank early on Friday, regulators spent the weekend getting the house in order and re-opened on Monday. Concerned customers lined up to withdraw money, reminiscent of the beginnings of the Great Depression. Kathleen Pender over at the SF Chronicle wrote an article that appeared this morning titled “‘Who Is Next’ lists 7 banks in ‘danger zone’.” Based on an analysis done by Dick Bove of Ladenburg Thalmann & Co., those institutions which are the likeliest to falter are: Downey Financial, Corus Bankshares, Doral Financial, IndyMac Bancorp, FirstFed Financial, Oriental Financial Group and Bank United Financial. Pender went on to say that “IndyMac is by far the largest of these. Washington Mutual, one of the nation’s 10 largest financial institutions, was 12th on Bove’s list.”
And then there is the Freddie Mac/Fannie Mae debacle. Articles abound all over the ‘net reporting doom and gloom and the fact that these government-established agencies own $5 trillion (yes, that is a T) in mortgage debt. I suggest The New York Times piece “The Freddie Fannie Fallout” by Gretchen Morgenson to shed a little light.
Fire Update: Things are settling down a bit across the state, with only 81 fires actively burning at this time, compared to the 323 that we reported on last week. The firefighters have been doing an amazing job, with a little help from a drone and resources from New Zealand, Australia, and Greece, which have kindly sent us manpower to ease the burden of our overworked elite. The drone is actually an unmanned NASA plane that has been flying up and down the state snapping infrared photos and identifying hotspots for firefighters. (Read more about it at SFGate.) Images from the drone helped contain a potentially devastating hotspot in a canyon in Butte County, where one of the biggest fires has raged for weeks. It is now 75% contained, while the Basin Complex Fire down near Big Sur is 61% contained. The highway and businesses in Big Sur have re-opened and welcoming visitors, but beware of smoke and poor air quality if planning a visit.
Just the other day I was having breakfast with our realtor and mulling over possible relocation areas, as we do hope to semi-retire to a more rural area in the next year or two. Her recommendation was to hold on to the house if we could, until the market starts correcting. She felt that we could rent it easily and make a profit, given the rental market in Emerald Hills. I hadn’t given that much thought, but her suggestion was reinforced today on Burbed, in an article about the rise in Silicon Valley rents. The increase in San Mateo County jumped 8% over the same time last year and vacancy rates are low across the board in the Bay Area. Certainly something new to mull over.
The hot buzz in San Francisco this week is about GottaPark, a new community parking network. For those of you with a car in SF or who have to take a car to SF for work or play, now you can find parking spaces in advance. Drop in the address you are planning to be at and the hours you will be there. Those with available space will email you with offers. You can pick and choose. Of course, nothing is free. You will have to pay to park, but my guess is that you could negotiate. Parking is made available by homeowners renting out their lawns and driveways, businesses renting out excess parking spaces, and commercial garages making space available. I’d love to hear from someone who tests this out.
