Understanding Soft Markets in California

The entire State of California has been has now been classified as a "Soft Market" area. In short: A fear of falling home prices. If a lender was to loan on your home based on an appraisal done today, it could drop even lower, putting the bank in a higher risk loan position. Previously, certain areas or counties were picked out. Now, the entire state is suspect. From this general blanket, banks have further identified regions and counties for even higher risk...so every bank has some type of "Grade" or Scale to rate the severity of the risk. Some do an "A to D" rating, other resort to name calling from Soft to Severe: Soft Market, Distressed Market, Severely Distressed Market.

How does this impact you? It impacts your Loan To Value and it may impact your rate on a new loan. On a purchase or refi, banks will whack 5% right off the top of the loan-to-value in Soft Market areas to 25% off and increase rates in Severely Distressed Markets. Even Marin in now a "soft market" but it's got a good rating. Sonoma is increasing in risk, and Napa is considered a Severely Distressed Market. Call me for more information. Take action to refi before rates increase and your loan to value becomes unfinanceable (that's a real word with dark overtones). Pat Townsley, Mortgage broker: 415-485-1776. http://www.ptre.net/

Soft Market Policies: More challenges for loans

New and tougher underwriting policies are on the rise in markets where the trend is for declining property values. The banks, in order to avoid future over-leveraged properties (via continually decreasing values) and maintain a reasonable equity position in the loan to value (to protect themselves)n have identified many geographical areas as "Soft Markets" and will require either MORE down payment on PURCHASE or on a REFI, you may be out of luck, outside of lender guidelines or even "upside down" on your mortgage. If it's Money Down, Upside Down, or Goose Down Pillows...Soft Markets are on the rise. One more reason to TAKE ACTION NOW on any refinancing and to sock away more money. I'm here to help and advise. Don't get left down and out. Pat Townsley, Mortgage Broker. 415-485-1776. http://www.ptre.net/