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Housing Affordability Out of Reach to Many in Los Angeles

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New York and San Francisco have long been infamous for their excessive housing prices. Now, Los Angeles can be added to that list.

Compounding the problem in L.A. is the continuing conversion of once-impoverished areas into new, more affluent neighborhoods. The individuals and families who used to live in those sections of the city have been forced out into even worse dwellings like converted garages, because that’s simply all they can afford.

“They’re bottom earners living in a high-priced housing market,” said USC professor Dowell Myers. “The L.A. market’s messed up on so many fronts.”

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Colorado Luxury Development Offers Fractional Ownership

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One Steamboat Place, a luxury development in Steamboat Springs, Colorado, is offering up a new type of vacation property ownership that is similar to a timeshare.

Unlike timeshares, however, this new type of fractional ownership exclusively targets high-end properties. Plus, ownership is split by fewer people, meaning that each owner gets to spend a larger fraction of the year in the home.

Fractional ownership can be sold and can also be left in a will or a trust.

Image via onesteamboatplace.com

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Credit, News

Lenders Unlikely to Use New FICO 9

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Although the new FICO credit model, FICO 9, has been met with much optimism, it is unlikely that it will be used any time in the immediate future.

The new model could boost individuals’ scores by as many as 25 points by essentially ignoring paid collections and paying little attention to paid and unpaid medical debt.

While realtors love the idea of this more borrower-friendly model, lenders have been a bit more reserved in the wake of the recent mortgage crisis.

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News

Foreclosure Numbers Down

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The number of homeowners facing foreclosure in July was down from the month before and also saw a 34.4 percent decrease from July 2013.

According to CoreLogic, there were approximately 640,000 homes in foreclosure in July 2014 and 967,000 in July 2013.

Some experts believe that that number may drop as low as 500,000 by the end of this year.

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Mortgage Banks Back in the Black

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In the second quarter of 2014, mortgage banks reported an average net gain of nearly $1,000 per loan.

That number is up quite a bit from the previous quarter, when the banks were losing almost $200 for every loan taken out.

“The gains seen in the second quarter come after first quarter losses that were likely triggered by a variety of factors including the implementation of new Dodd-Frank regulations and extremely low origination volumes,” Marina Walsh, MBA’s Vice President of Industry Analysis, told Mortgage News Daily. “Some loan closings may have been pushed into the second quarter, resulting in an increase in profitability as per-loan production costs declined.”

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House Flipping on the Decline

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As home prices begin to level out again, the real estate market is seeing a decline in the number of houses getting flipped for a profit.
“Flippers no longer have the luxury of 20 to 30 percent annual price gains to pad their profits,” said Daren Blomquist, vice president of RealtyTrac. “As the market softens, successful flippers will need to focus on finding properties that they can buy at a discount and efficiently add value to.”
In the second quarter of 2014, only 4.6 percent of all single-family home sales in the U.S. were flips. That number is down from 5.9 percent in the previous quarter.
Image via flickr/Mark Moz