Aug. 21, 2008 Page 1 of 5

San Francisco Chronicle

As a result of the current market and a return to proper underwriting guidelines, appraisers are finding it increasingly difficult to get lenders to accept appraisals. Some lenders even are declining low appraisals and

scrutinizing loan applications more carefully than in previous real estate cycles. Whereas most lenders used to evaluate a home appraisal’s credibility based on comparisons generated from their desk, now some banks are

requesting that appraisals be verified by on-site visits to the property, as well as the nearby homes listed as

comparables.

KEEP THIS IN MIND

• Since real estate markets are local and prices can greatly fluctuate from one area to the next, experts recommend that sellers and REALTORS® work with local appraisers that have knowledge of the region.

• Similar to utilizing a REALTOR® versus a sales agent, it is recommended that sellers work with an appraiser that is a member of the Appraisal Institute or the American Society of Appraisers, the appraisal industry’s two largest trade groups. Appraisers that are members of these organizations are required to complete more coursework than those just licensed by the state.

• Because some lenders are declining appraisals, some mortgage brokers recommend that buyers leave their financing contingencies in place until the lender has signed off on the appraisal.

To read the full story, please click here:

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/08/17/RELP12AF53.DTL

Aug. 21, 2008 Page 2 of 5

U.S. News & World Report

The recently signed federal housing bill has many provisions, including changes to reverse mortgages, which are loans against a house that the borrower is not required to pay back as long as they live in the home. Some of the amendments include raising the amount that seniors, age 62 and older, can borrow using a federally backed reverse mortgage; and lowering the cost of receiving the home’s equity. Some ageing experts advise consumers

to be cautious before refinancing into a reverse mortgage.

KEEP THIS IN MIND

• Although seniors can access their home equity by refinancing into a reverse mortgage, many of these loans come with a variety of fees. Once the fees are paid, borrowers may choose to receive a lump sum payment, monthly payments, a credit line, or a combination based on the home’s value. A

provision in the housing bill reduce the maximum fee to 2 percent on the initial $200,000 of a home’s value and 1 percent on the remaining balance, with a maximum set at $6,000. Some lenders charge less fees, so similar to finding a traditional mortgage, consumers should shop around and negotiate

with their lender on these fees. In some cases, closing costs, service fees, mortgage insurance premiums, and interest rates also can be negotiated.

• Most reverse mortgages are Home Equity Conversion Mortgages (HECM), which are backed by the Federal Hosing Administration. In order for a borrower to qualify for an HECM, they must discuss the loan with a loan counselor employed by a nonprofit or public agency approved by the U.S. Dept. of Housing and Urban Development. This ensures borrowers understand all of their options and make the right decision.

• Some borrowers may not understand that although the loan does not have to be repaid, as long as they remain in the home, they still are responsible for property taxes, insurance, utilities, fuel, maintenance, and other homeowner expenses. If some of these items are not kept up to date, the borrower risks the lender calling the loan due. It is important to note that reverse loans must be paid back with the proceeds, along with any remaining equity, if the home is sold.

To read the full story, please click here:

http://www.usnews.com/articles/business/retirement/2008/08/18/how-the-housing-law-affects-reversemortgages.html

Aug. 21, 2008 Page 3 of 5

Los Angeles Times

Good news for California housing. Home sales in Southern California increased in July compared with a year ago, while foreclosures decreased in

month-over-month comparisons, according to a recent report. The California Legislature also is working with consumer and lending groups on a bill that would protect consumers from predatory lending and establish guidelines and restrictions on brokers and lenders.

KEEP THIS IN MIND

• Although the foreclosure rate is approximately double what it was a year ago, in month-over-month comparisons, it is 8 percent lower, indicating that foreclosures could be reaching a plateau. In a report released by RealtyTrac, default notices, which are the first phase in foreclosure proceedings, declined 4

percent from June.

• If signed, the bill will prohibit lenders from offering pick-a-payment loans to subprime borrowers; establish limits and timeframes on prepayment penalties to subprime borrowers; and prohibit brokers from leading

subprime borrowers into loans with higher interest rates if they can qualify for one with a lower interest rate. The bill also would prohibit lenders from paying a financial incentive to brokers for steering borrowers into loans with prepayment penalties or higher interest rates. Additionally, mortgage brokers

would be required to place the consumer’s financial interests above their own.

To read the full story, please click here:

http://www.latimes.com/news/opinion/editorials/la-ed-lending20-2008aug20,0,6588225.story

Aug. 21, 2008 Page 4 of 5

Reuters

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http://www.reuters.com/article/ousiv/idUSNAT00429620080818

Press Enterprise

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http://www.pe.com/business/local/stories/PE_Biz_S_dataquick19.3e7c8f3.html#

San Francisco Chronicle

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http://www.sfgate.com/cgibin/article.cgi?f=/c/a/2008/08/12/BULK1293VV.DTL&hw=Home+values+hold+in+few+places+in+Bay+Area&sn=001&sc=1000

Reuters

To read the full story, please click here:

http://www.reuters.com/article/ousiv/idUSN1912583420080819

Aug. 21, 2008 Page 5 of 5

• Many mortgage brokers are finding that consumers do not fully understand the home loan process and as a result, make mortgage mistakes. Some common mistakes that borrowers make are: not cleaning up their credit; failing to search out first-time home buyer programs; paying junk fees; and not planning for closing costs.

• Borrowers can increase their chances of being approved for a home loan by requesting their credit report and FICO score at least six months prior to applying for a loan. This allows the consumer to dispute errors and/or pay any outstanding debt.

• Borrowers also should seek out a first-time home buyer program because they often offer better interest rates and terms, and some even are tailored to people with poor credit, or can assist those that do not have enough saved for a down payment.

• To avoid paying junk fees, such as those charged for “document preparation,” for example, a borrower can use a mortgage broker or call a variety of lenders to compare loans, interest rates, and fees.

• Some borrowers are shocked when they realize that they must bring cash to the closing table, typically anywhere from 2 percent to 7 percent of the home’s selling price. To avoid this “sticker shock,” experts

recommend that borrowers get a good-faith estimate from their lender early in the loan process.

Aug. 7, 2008 Page 1 of 6

CNN Money

Time to lock in your mortgage rate. Although still historically low, mortgage rates are rising slightly. Some analysts predict that mortgage rates will continue to increase over the next six weeks, while some forecasters expect rates to reach 7 percent by year’s end. Experts recommend that consumers work with their mortgage servicer to lock in a low interest rate. A “locked” or fixed rate will provide consumers long-term savings, and allow home buyers to determine their monthly homeowner expenses several weeks before closing.

KEEP THIS IN MIND

• With inflation rising and some investors in mortgage-backed securities demanding higher rates to purchase bonds, home buyers should work with their broker to lock in a low interest rate. For every half point interest rate increase, the monthly payment on a typical $294,600 mortgage increases by

approximately $100. That adds up to a savings of roughly $1,200 annually and $36,000 over the life of a 30-year loan. The calculations are based on the median price of a single-family existing home in California in June of $368,250 and the borrower providing a 20 percent down payment.

• To lock in an interest rate, consumers should contact their broker and request the rate in writing. As long as the home buyer has a contract or a binder on the home, this should be a simple request. Rates can

be locked in for up to 60 days, by only adding an extra eighth of a point to the rate. If a consumer would like the interest rate to be guaranteed for longer than 60 days, most lenders will request some payment up front.

• Locking in interest rates is not without risk. If prevailing interest rates decrease, consumers with a locked rate may have to pay the higher interest rate. Some lenders may offer consumers the lower rate plus an

eighth of a point, if the rates drop substantially. That scenario does not seem likely though, based on current economic conditions.

To read the full story, please click here:

http://money.cnn.com/2008/08/04/real_estate/mortgage_rate_lock/index.htm

Aug. 7, 2008 Page 2 of 6

Bloomberg

Recent economic developments indicate that California may be the first state to find the bottom, based on the increase in sales volume in the previous three months. In June, home sales rose for the third consecutive month,

following a 30-month decline. Although approximately 40 percent of the transactions were foreclosure sales, the increase is allowing the market to stabilize by depleting some of the excess inventory. Some experts believe that

once a neighborhood’s median home price declines to 50 percent from the peak value that the homes in that neighborhood will no longer depreciate.

KEEP THIS IN MIND

• Although California leads the nation in foreclosures, the state’s foreclosure process is more efficient than other states, which likely will lead to a quicker rebound. Foreclosed properties are receiving multiple bids and financial institutions are selling these homes quicker than the market would typically allow.

• The Unsold Inventory Index in June decreased to 7.7 months from 10.2 months a year earlier, demonstrating that the market is improving.

To read the full story, please click here:

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aAL047pyn7t4

Aug. 7, 2008 Page 3 of 6

Los Angeles Times

With home prices in California declining by 37.7 percent in June compared with a year ago, some consumers are wondering if now is the right time to purchase a home, or if they should wait for prices to stabilize. Some real

estate experts believe that home prices will continue to decline and that buyers should wait, while others recommend that home buyers take factors other than price into consideration, such as the benefits of owning

versus renting.

KEEP THIS IN MIND

• Consumers who are hesitant about purchasing a home today because they fear price depreciation, need to understand that real estate is cyclical and that prices will increase again. Home buyers should view a house as a long-term investment and not be fixated on short-term prices. Some economists believe that consumers should purchase a house if they plan to live in or hold the property for at least seven years. This will allow the market to stabilize and homeowners to possibly profit from their investment, if they decide to sell.

• Although a typical monthly mortgage is higher than a rent payment, home buyers who qualify for a fixedrate mortgage, such as those backed by the Federal Housing Administration, will have consistent monthly payments, while renters are generally subjected to annual rent increases. Mortgages also can be paid off and the house can be owned free and clear, while renters will consistently have a monthly payment.

• To help home buyers lower the financial risk of homeownership, experts recommend that consumers purchase a home within their means and have enough in savings or other assets to cover the mortgage payment for at least six months if they lose their job.

To read the full story, please click here:

http://www.latimes.com/classified/realestate/news/la-fi-cover3-2008aug03,0,5001601.story

Aug. 7, 2008 Page 4 of 6

Los Angeles Times

To read the full story, please click here:

http://www.latimes.com/classified/realestate/news/la-hm-landlord2-2008aug02,0,6576792.story

Wall Street Journal

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http://online.wsj.com/article/SB121737339689294987.html

CNN Money

To read the full story, please click here:

http://money.cnn.com/2008/07/30/real_estate/mortgage_apps.ap/index.htm

The New York Times

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http://www.nytimes.com/2008/08/04/business/04lend.html?_r=1&hp&oref=slogin

Los Angeles Times

To read the full story, please click here:

http://www.latimes.com/business/nationworld/wire/ats-ap-construction-spendingaug01,1,1533012.story

Aug. 7, 2008 Page 5 of 6

CNN Money

To read the full story, please click here:

http://money.cnn.com/2008/07/31/real_estate/mortgage_rates/index.htm

San Francisco Chronicle

To read the full story, please click here:

http://www.sfgate.com/cgibin/article.cgi?

f=/c/a/2008/07/31/MN22121BPS.DTL&hw=Housing+plan+signed+but+concerns+linger&sn=001&sc=1000

CNN Money

To read the full story, please click here:

http://money.cnn.com/2008/07/29/real_estate/June_HopeNow_report/index.htm

Aug. 7, 2008 Page 6 of 6

• As a result of some first-time home buyers’ subprime or adjustable-rate loan payments resetting and becoming unaffordable, many condominium units have entered foreclosure, allowing bargain hunters to

purchase these properties at very reasonable prices. Nationwide, 1,254 condo units were sold, in June, a 115 percent increase from May, and the largest number of condo units sold in one month since July 2007.

• Homeowners with a Freddie Mac-owned loan, and who are at risk of foreclosure, now have 10 months from the due date of the last payment before the house will be sold at a foreclosure sale. Freddie Mac

also has doubled the financial incentives it provides to mortgage servicers that help its borrowers avoid foreclosure. The mortgage servicers will receive increased compensation for assisting homeowners with repayment plans, loan modifications, and pre-foreclosure sales.

• Governor Schwarzenegger recently launched a $200-million program to assist first-time home buyers who purchase homes in communities hardest hit by foreclosures. This is in addition to the $7,500 tax credit offered to first-time home buyers through the recently signed federal housing bill. Under the new loan program, prospective buyers will be eligible for below-market interest rate loans to purchase a foreclosed home in an area identified as having a high rate of foreclosures. For more information, visit

www.calhfa.ca.gov.