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Weekly Real Estate Roundup – November 25

November 25, 2020

2 MINUTE READ

Happy Turkey Day, California! While you’re mashing potatoes, basting the bird and slicing pie, we’re keeping an eye on the mortgage situation around the state, as well as Governor Newsom’s moves to make housing more affordable. Let’s dig in!

‘Seriously Late’ CA Mortgages Jump 6-fold 

What’s this all about?

Statewide, 3.8% of California home loans were in deep trouble in August, compared with 0.6% a year earlier. That’s a six-fold jump in mortgage payments delinquent by 90 days or more – levels not seen since the Great Recession, though to be fair, those rates were in the double digits.

What it means

With many still dealing with the pandemic’s economic fallout, mortgage forbearance programs were one aspect of the stimulus welcomed with open arms by all. As those programs wind down, though, many are clamoring for the incoming Biden administration to continue or expand them. Luckily, troubled borrowers can put missed payments on the back end of the mortgage — penalty-free, with no impact on their credit history.

Gov. Newsom Vetoes Financing Program

What’s this all about? 

A.B. 69, also known as the Help Homeowners Add New Housing Program, though supported by state lawmakers, was ultimately vetoed by Governor Newsom. A.B. 69 would have established a state-backed lending mechanism to encourage banks, credit unions and other mortgage originators to make construction loans to homeowners to bridge existing federally backed loans.

What it means

Gov. Newsom cited the bill’s financial structure as too harmful to affordable housing production and the California Housing Finance Agency’s (CalFHA) credit ratings. But take heart! Newsom did direct the Business, Consumer Services and Housing Agency to increase access to capital markets and opportunities to encourage broader adoption of ADUs and JADUs.

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One more thing 

Happy Thanksgiving! Remember to pace yourselves, and we’ll see you next week.

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