Orange County CA Real Estate

The Castille tract of homes were built by the renowned Mission Viejo Company.  There are actually two tracts, one located in Central Mission Viejo and the other located North Mission Viejo.  Castille North is located by the intersections of Los Alisos Blvd. and Vista Del Lago and Castille Central is located by the intersection of Trabuco Rd and Marguerite Pkwy.   Both Castille North and Central were developed in the early 1970's. 

Castille North comprises of 264 single family detached homes and incorporates the streets of:  Altanero, Atomo, Balcon, Contento, Empanada, Esplendor, Esquina, Falencia, Medra, Oropel., Platino, Via Noveno, Vilia, and Visio Ln.

Castille Central is a much larger tract and comprises of 1,495 detached homes and includes the following streets:  Abeto, Agrado, Ancia ln., Arbolitos, Bellota, Bocina, Borrasca, Durazno, Escala Dr., Estribos, Golondrina, Hayuco, Lirio, Los Caballos, Nopales, Pasatiempo, Quetzal, Reflejo, Riendas, Ruisenor, Sinsonte, Siruela, Tirante, Via Astorga, Via Avila, Via Balsa, Via Vayona, Via Burgos, Via Calzada, Via Cebrero, Via Duero, Via El Rocio, Via Estella, Via Fineza, Via Flores, Via Guadix, Via La Coruna, Via Navarra, Via Olmo, Via Oviedo, Via Potes, Via Victoria, Via Vigo, and St. Elena.

Both Castille North and Central consist of the same one and two story homes comprising of 6 distinct and well designed floor plans as follows:

• El Greco (1) - 3 bedrooms, 2 baths, 1,294 square feet, single story
• El Dali (2) - 3 bedrooms, 2 baths, 1,394 square feet, single story
• La Lorca (3) - 3 bedrooms, 2 baths, 1,525 square feet, single story
• El Goya (4) - 4 bedrooms, 2 baths, 1,570 square feet, single story
• El Picasso (5) - 4 bedrooms, 3 baths, 1,850 square feet, two story
• El Ribera (6) - 4 bedrooms, 3 baths, 2,100 square feet, two story

Each floor plan includes a spacious lot and 2 car garage.  all floor plans include a family room except for the El Greco model.  Over the years, many of these original homes have been remodeled or room additions have been constructed to bring additional variety and character to these fine properties. Home owners in both Castille North and Central are members of the ever popular Lake Mission Viejo with dues that run about $17 per month (subject to change).  In addition, castille North has a small association due of approximately $38 per month at the time this article was written (subject to change). 

Castille North homes are serviced by the respected Saddleback Valley Unified School district.  The elementary school is Del Lago, and the middle school is Los Alisos Jr High School.  The high school for Castille north is Trabuco Hills. 

The Castille Central subdivision is serviced by the award winning Capistrano Unified School district. Due to the large size of this tract, there are two elementary schools which are Castille and Phillip Reilly grade schools.  The middle school is Newhart Jr High and the high school is Capistrano Valley. 

Castille Central commands slightly higher prices then Castille North, and prices currently range from the low $600K's for the smaller one story models on up to the high $800K's for the larger two story plans that have been recently remodeled.  Visit our main website to view all homes currently listed for sale in Mission Viejo.  If you would like to see the inside of any of these homes for sale, drop us an email at:  Info@OCRealtyGroup.com  

In today's challenging market conditions, homes for sale are setting on the market much longer then they used to just 18 months ago.  Back in the Spring of 2005', the average Days on Market for detached homes sold and closed in Laguna Niguel was 47 days, and in a 3 month period back then, there were 231 homes sold, and 65 that did not sell.  Today, the Days on Market for homes that sold and closed in the past 90 ways was 72 days, with a total of 102 homes sold and 128 that did not sell (canceled).   So what can you do to increase the odds of selling your home ?   Below are 10 renovation/fix-up tips you can use that can increase the value and marketability of your home for sale in Laguna Niguel, CA.

1. An Updated Kitchen.  Kitchens are critical.  Today, people like a big kitchen with lots of workspace, along with some special amenities.  The kitchen often sells the home.  If it isn't huge, update counters, fixtures, fresh paint, etc.

2. Modern Bathrooms.  Buyers are looking for master baths that give a little room to roam.  The big asset is a spa or whirlpool tub.  Other features:  separate showers with steam and/or multiple jets, a double sink and a separate room for the toilet.  Of course, make sure the plumbing system and the water heater are more than adequate.  It also helps to have a window over the sink.

3. A Well-Appointed Master Suite.  A master suite is a retreat from the world for most people.  They would like a lounging area and walk-in closets, as well as the luxurious bathroom.  The room needs to feel cozy so if the flooring is not fully carpeted, then make sure there are throw rugs, especially at the bedside so people can put their feet on something warm when they first get out of bed.  The room should be light and airy, with a spacious feel, so if the room in itself is not large, clear out any clutter when showing the house.

4. Natural Materials.  People like the natural materials - ceramic tile, hardwood floors, granite, as opposed to linoleum, which doesn't wear well.

5. Curb Appeal.  Clean and neat are first priority, along with well-manicured landscaping.  Add flowers for color and a good first impression but make sure everything looks planned out and organized.  Keep plants/trees from overshadowing the windows and the entrance but make sure there are plants at the entrance for a welcoming appeal.  Keep toys, trash cans, hoses, etc. out of the way as much as possible.

6. A Light, Airy and Spacious Feel.  People buy space and light.  Very few people feel comfortable walking into a dark cave. 

7. Good Windows.  It is important to have many windows, with no cracks in the glass or cracked caulking.  Make sure all windows are properly insulated.

8. Landscaping.  Mature trees are worth $1,000.  Have outdoor spaces with touches such as pergolas, Victorian garden swings and maybe a fountain.  Don't let anything get overgrown but have enough plants to make the place feel like you've put effort into the comfort of good landscaping.

9. Storage.  Very important to have more than adequate storage throughout the house.

10. Garage.  If there is a garage, make sure it is finished - dry walls rather than exposed wood planks, finished, perhaps epoxy flooring - and make sure there is lots of storage.  One or more windows would be good also, to make sure that there is plenty of ventilation.

Last week the Orange County register published an article about OC home sales still sliding using homes sales data from DataQuick.   This article included a graph (shown at right) that showed the number of homes sold and closed per month for the past 20 years.  This graph shows that last month (July 2007’) was the lowest level of sales in DataQuicks 20 year recording history.  And last months rate of sales was a bit lower then the lowest monthly total in 1995, which was the lowest years total during the real estate crunch in the early and mid 1990’s.  I see some good news in these numbers though, and it's not just because I'm an internal optimist.  Here's why. 

First, there are many more people living in Orange County CA. today then there were in 1995.. by about 300,000 to 400,000 people I estimate (See below graph) … California actually had a net negative population growth for several years during the mid 1990’s, but not today.  Also there are more homes in existence today then in 1995.  Not a whole lot more though, since available buildable land has been scarce for several decades.  (By the way, the number of homes built during these years has not kept pace with population growth.)   We now have a stronger job market today then in 1995. The overall economy in Orange County was much worse in 1995, and Orange County, CA actually went bankrupt in 1995, which happens to be the very same year containing the second lowest rate of sales month in the past 20 years.  


Another interesting observation.  Back in 1995, (the lowest rate of sales for the past 20 years) was the very same year when prices hit bottom in Orange County, and prices started to slowly rise in 1996 and beyond.  Am I going out on a limb and claiming that this year will also be the bottom of the pricing cycle (many areas throughout Orange County have already seen price decreases by 10% to 15%).  No, I'm not ready to go that far out on the limb, but if we haven't yet hit bottom in this pricing correction, then my hunch is that we are very close to the bottom. 

On the contrary side, the availability of easy Mortgage money over the last 3 years (zero down, with Stated Income with not so good FICO scores) no doubt artificially swelled the number of available buyers which drove up demand for homes which helped to move  home prices even higher.   Since the Mortgage industry has/is now correcting for this past error, and those loans no longer exist, there will be a period of time when the number of  potential Buyers are down below historic averages during this Mortgage finance correction. 

Another factor keeping the Sales numbers down to there lowest level in the past 20 years, is there is a lot of  'Doom and Gloom' in the press on TV, Newspapers and the Web, which to a certain degree becomes a self fulfilling prophecy.  All things considered, I just don’t think this low sales volume can last much longer, and I would expect the rate of sales to return to the 3,000 to 4,000 per month level in Orange County (or even higher) in the not to distant future (3 to 6 months).

The current real estate correction that is hitting south Orange County (and elsewhere in SoCal) is hitting the entry level marketplace the hardest.  This is primarily due to the recent collapse of creative financing loans and sub-prime lenders. 10 Years ago many of these types of loans did not exist, but an explosion in creative financing occurred about 6 years... From Zero Down conventional loans, loans for buyers with marginal credit ratings (ie: low FICO scores), and even loans that allowed borrowers to essential make up a figure as to how much they made per year ( ie: Stated Income loans).  Today, most of these types of loans have been terminated and many sub-prime lenders are out of business, and this has taken a toll on the entry level real estate marketplace, combined with the ebb and flow of regional price corrections.

To illustrate this fact, we conducted an analysis similar to last weeks analysis of distressed properties per south OC city.  Today's' price analysis looks at the number of distressed properties listed for sale in five (5) different price ranges throughout south Orange County.  A distressed property in this case means a home listed for sale that is Bank Owned (REO), in Foreclosure or is a Short Sale.  Below is a tabulation of the results.    The first column is the price range analyzed, the second column is the total number of distressed properties listed for sale, the third column is the grand total of all homes listed for sale in the price range, and the last column is the ratio of columns 2 and 3 per 1,000.  (The cities included in this analysis are:  Aliso Viejo, Dana Point, Coto De Casa, Corona Del Mar, Irvine, Laguna Beach, Laguna Hills, Laguna Niguel, Lake forest, Mission Viejo,  Rancho Santa Marg, San Clemente, San Juan Capistrano, and Tustin.)

Price Range	# of Distressed	Total # Listings	Ratio per 1,000
Less Then $450K	260	1345	193
$450K - $650K	209	1959	107
$650K - $850K	93	1525	61
$850K - $1.1Mil	32	962	33
Greater Then $1.1Mil	23	2097	11

In the Less Then $450K price range, nearly 1 out of 5 homes listed for sale in south Orange County is a distressed property (Bank Owned, foreclosure or short sale).  On the other end of the spectrum only about 1 in 100 homes listed for sale in the Greater Then $1.1 Million price range are distressed.   The good news is that if you are now a buyer looking for a home in the price range of $500K or less, there are a lot of good opportunities out there.

REO's can be a good opportunity, but as with any other real estate purchase, it depends on the details of location, condition and comparable properties.  But first, for those of you not familiar with the term REO let me explain.   REO (short for Real Estate Owned) is when a Bank or other Financial Institution takes back a home via Foreclosure sale.  A Foreclosure occurs when the home owner gets too far behind in their monthly mortgage payments, and the Lender files what's called a Notice of Default.  In Orange County, the home owner then has 3 months to pay the Lender all of the back payments that are due (called Arrears), and keep the monthly loan payments current.  If the home owner fails to do this in the 3 month period, then the Lender files what's called a Trustee Sale notice.  The home owner then has just 3 weeks  to pay the lender off in full for all of the arrears and the loan balance due.  If this does not happen in the 3 week period, then the subject property is sold at the Orange County courthouse to the highest bidder for all cash on the spot (No loans, no investigation, no contingencies).  If there are no takers at this open bid auction, the the subject property is officially Deeded back to the lending institution, and the property becomes an REO. 

It may take the lending institution anywhere from 1 to 4 months to place this REO property back on the market for sale, usually with a local Realtor who is experienced with REO sales.  This REO property is then listed in the local Orange County MLS just like any other property for sale. 

Now to answer to original question... Are REO's a good deal for a Buyer ?  Sometimes they are and here is why.  Banks are not in the business of owning homes, but to lend money.  REO properties hurt their financial balance sheets for they are a non-performing asset (no mortgage income nor rent income).  Therefore they are usually motivated to sell these properties in a reasonably short period of time.  The second reason the Banks are motivated to sell sooner rather then later, is that in some neighborhoods, vacant homes are sometimes subject to vandalism, or just simple detrimental acts of nature (ie: freezing temperatures), thus potentially costing the Banks even more money.   The third reason why REO's can sometimes be a good buying opportunity is that many of them are in need of some repairs... from minor tender loving care, on up to a Major Fixer Uppers.  And Fixers can sometimes be a good buying opportunity assuming that the Buyer is fully aware of the needed repairs and can cost effectively have repairs done.

How does one then determine if an REO property listed for sale is a good deal ?  Well, just like any other potential purchase, the Buyer, or the Buyers agent should conduct a comparable analysis of similar homes that have recently sold in the neighborhood.  If the property can be purchased for less then those comparables, minus the cost of repairs plus a little bit extra for any unknowns, then that property may qualify as a good deal.

We have many years of experience in finding, negotiating, repairing and selling REO, foreclosure and Fixer-upper homes.  Feel free to call us anytime at:  949-388-3396 or email us at:  Info@OCRealtyGroup.com     Feel free to visit our website to receive a free list of distressed properties (bank REO, foreclosure, Shot Sale) for sale in Orange County.  If you are a Bank or financial institution looking for a local Realtor in Orange County with REO experience, please visit our website at:  Orange County REO Sales.

It's a fact that the Orange County and the entire southern California residential real estate market is going through a correction.  But so far, the Laguna Niguel, Ca. real estate market for detached homes has held up well... let me illustrate.

In the past 90 days, there have been 100 detached homes that have sold and closed escrow in Laguna Niguel.  These homes range in price from a low of $575,000 for a 2 bedroom, 2.5 bath, 1,1501 square foot home on Mira Verde in the Altamar tract, on up to a high of $6,725,000 for a 6 bedroom, 9.5 bath, 7,000 square foot estate on Monarch Crest street in the Monarch Point Custom homes neighborhood, which boasts of panoramic ocean views.   The median price of these 100 homes was $880,000 and the average price $1,215,550.  The average price per square foot was $444/SqFt and the average days on market was 68 days.

Comparing these prices to exactly one year ago, we find that there were 138 detached homes that sold and closed escrow in Laguna Niguel in this same 3 month period of time last year.  These home ranged in price from $578,000 for a 2 bedroom, 2.5 bath, 1,326 square foot home on Via Entrada in the Del Prado Villas tract, on up to $4,000,000 for a 5 bedroom, 6 bath, 6,041 square foot home on Carmel Woods street in the Ocean Ranch subdivision.  The median priced detached home sold last year was $970,000 and the average priced home was $1,114,528.  The average price per square foot was $443/SqFt and the average days on market was 60 days.

Comparing last years sales today to today, we find that the Average price of a detached home has gone up by about 9%, and the Median priced home sold dropped by about 9%, and the Average Price per Square Foot has essentially stayed the same (increased by 0.2%).. So which number do you believe.  From our experience, we have found that the Average Price per Square Foot is the most accurate statistical method to determine the overall home price movement of an area over time.   The simple Average of prices can be highly influenced by a couple of high priced sales, and both the simple Median and Average of home prices can be skewed by a change in buying habits... for example, fewer sales numbers in the lower price ranged neighborhood and higher sales rates in the higher priced neighborhoods (which is what has been happening in the past year or so).   

To round out the analysis,  we'll also look at homes Pending and Active for sale.  Currently there are 302 detached homes that are Active for sale in Laguna Niguel.  These homes range in price from a low of $574,900 for a 3 bedroom, 2 bath, 1,303 square foot home on Casitas Ct in the Lake Park tract, on up to $7,900,000 for a 7 bedroom, 7.5 bath, 8,780 square foot estate on Asilomar street in the Ocean Ranch subdivision.  The    Median of these 302 detached homes is $1,075,000 for a typical 4 bedroom, 3 bath, 2,500 SqFt home. 

There are currently 47 detached homes that have are Pending under contract in escrow.  These homes range in price from a low of  $655,000 (actually range priced from $639,000 to $669,000) for a 4 bedroom, 2 bath, 1,897 square foot home on Caswell Ct in the Lake Park tract, on up to $7,295,000 for a 10 bedroom, 10 bath, 22,000 square foot estate on Morning Drive in the Bear Brand Ranch neighborhood.

If you would like to see all home listed for sale in Laguna Niguel, visit our website at:  Laguna Niguel Homes for Sale.   If you would like to see the inside of any home or condo currently listed for sale, please feel to contact us anytime at:  949-388-3396 or Info@SearchOCHomes.com

The condos in the Tiempo tract in the popular Westpark area of Irvine, CA. are located near the intersection of Culver Dr. and Irvine Blvd.  Irvine has grown into what many describe as a "total destination," a community boasting of state-of-the-art transportation programs and systems, an enterprising business environment, stellar educational institutions, loads of entertainment options, close to great beaches and perfect year round weather. The contemporary condos of Tiempo in Westpark have been very popular with first time home buyers.  Renowned builder William Lyon developed this neighborhood in the late 1980’s and the condominiums have been kept in immaculate condition ever since. The highly sought-after Tiempo tract in Westpark, Irvine consists of 397 units, 937 parking spaces, and a wide variety of floor plans to fit most everyone's needs. The different models are as follows:

• A- Aurora- 1 bedroom, 1 bath, 692 sqft, 1 carport
• B- Anada- 1 bedroom 1 bath, 830 sqft, 1 carport
• C- Brisas- 2 bedrooms 2 baths, 840 sqft, 1 carport
• D- Cresta- 2 bedrooms 2 baths, 897 sqft, 1 fireplace, 1 car garage
• E- Dorado- 2 bedrooms 2 baths, 1,002 sqft, 1 fireplace, 1 car garage
  
• F- Estrella- 2 bedrooms 2 baths, 903 sqft, 1 fireplace, 1 car garage
  
• G- Fiesta- 2 bedrooms 2.5 baths,  1,031 sqft, 1 fireplace, 2 car garage
  
• H- Granada- 2 bedrooms 2 baths, 1,075 sqft, 1 fireplace, 1 car garage
  
• I- Hermosa- 3 bedrooms 2 baths, 1,206 sqft, 1 fireplace, 1 car garage

Neighborhood amenities at Tiempo include; a recreation center, association pool, spa, basketball and tennis courts, as well as a bike path at the back of the complex. Home owners’ association dues are about $185 per month at the time of this article (and are subject to change).  There is Mello-Roos tax in this community but the rate is very low compared to other newer communities in the area.  The complex is close to shopping, UCI, employment centers, freeways, parks, bike trails and more.

The condominiums at Tiempo are serviced by the well admired Irvine Unified School District. The grade school classes are conducted by Westpark Elementary. The junior high students are taught at Southlake Middle School and the upper grades are held at Woodbridge High School. Just within minutes you will also find the popular and highly respected colleges of Concordia University, Irvine Valley College, and University of California Irvine (UCI).

The streets that comprise of the Tiempo tract are as follows:  Abrazo Aisle, Alberti Aisle, Alicante Aisle, Costero Aisle, Lombardy Aisle and Marbella.  Prices for the 1 bedroom floor plans currently range in the price from the low $300K's on up to the mid $300K's.    Prices for the 2 bedroom models will usually range in price from  the high $300K's on up to the high $400K's.  The 3 bedroom plans will range from the low $500K's up to the mid  $500K's.  (Prices are subject to change).  If you would like to find out more about the Tiempo condo community, or if you want to see the inside of  Irvine condos for sale, please feel free to call us at:  949-388-3396 or email us at:  Info@SearchOCHomes.com 

There is now doubt about it... the south Orange County real estate market is going through a market correction... But some market segments are being hit harder then others.  This correction is effecting the entry level market much harder then the older and staid move up markets.  To illustrate this point, we conducted market analysis of distressed properties for sale in the cities of Laguna Beach, Irvine, Dana Point, San Clemente, Laguna Niguel, Mission Viejo, Aliso Viejo, Rancho Santa Margarita, Ladera Ranch and Lake Forest.  This analysis comprised of counting the number of properties currently listed for sale that are either Bank Owned (REO), in Foreclosure, or  Short Sales, for each city.  We then took these numbers and divided by the Cities population (and then multiplied by 1,000).   This gives us a simple ratio of distressed properties for sale per 1,000 population for each city. 

This analysis illustrates that the entry level market is being hit much harder then the move up market.  The result of our analysis is shown in the chart below:   

CITY	Distressed Rate
Laguna Beach	0.10
Irvine	0.23
Dana Point	0.31
San Clemente	0.57
Laguna Niguel	0.65
Mission Viejo	0.80
Aliso Viejo	1.01
Rancho Santa Margarita	1.28
Ladera Ranch	1.55
Lake Forest	1.67

The coastal communities consisting of more expensive and older properties, have a much smaller percentage of distressed properties for sale compared to the more affordable and newer inland communities.  For example, Lake Forest has a 16 times higher rate of distressed properties  (bank REO, foreclosure, shore sale) for sale then Laguna Beach.    The reasons for this are several.  A higher percentage of the homes in Ladera Ranch, Rancho Santa Margarita, Aliso Viejo and Lake Forest (including Portola Hills, Foothill Ranch) are newly built in the past 15 years and geared towards entry level or first time move-up home buyers.  Compared to Laguna Beach, Dana Point, and Laguna Niguel which have a higher percentage of older properties that were targeted for move-up and estate buyers. A higher percentage of the newer entry level buyers who bought in the inland communities used lower down payment financing, some with adjustable rate mortgages, and some of these home owners have no equity or negative equity (short sale) due to the recent pull back in property values.  Whereas many of the home owners in these coastal communities bought long ago, or recently purchase with large down payments which shelters them from market corrections such as this one, in case they have to sell and move. 

Another angle to this analysis is the following.  We have been tracking the months of inventory for the south orange County real estate since July of 2002'.  The entry level price range of "Less Then $450K" has always been the hottest market segment until recently.  Now this price range  is the softest market segment at 10 months of inventory. 

It is hard to know how long this correction will last, but I guesstimate that the recovery will occur sometime in mid 2008', which actually makes this a good time to be thinking seriously about buying a home.  For more information about the orange County real estate market please feel free to contact us at:  949-388-3396 or email us at:  Info@SearchOCHomes.com    To view any home for sale, please visit:  south Orange County Real Estate

The real estate market in southern California has slowed down considerably in the past 18 months, but home prices is Dana Point have held up well and have actually increased by a healthy percentage.  Currently there are 225 homes currently active for sale in Dana Point, CA.  These detached homes range in from $550,000 for a 2 bedroom, 2 bath, 855 square foot home on Calle Juanita in Capistrano Beach. The maximum price is $10,199,900 for a 5 bedroom, 2 bath 1,842 square foot older home on Beach Rd., which essentially makes this a land purchase for a double sized ocean view beach front lot.  The median priced home is $1,299,000 and the average priced detached home for sale in Dane Point is $1,791,173.  The average price per square foot is $667 and the average days on market is 94 days. 

On this date, there are 27 detached homes in Dana Point under contract In Escrow.  These homes range in price from $655,000 for a 2 bedroom, 1 bath, 1,100 square foot home on La Cresta in the Lantern Village area of Dana Point.  On up to $6,995,000 for a 3 bedroom, 4.5 bath, 6,500 square foot estate on Beach Rd. in Capistrano Beach boasting of  sweeping Ocean views. The  median priced home is $1,095,000 for home pending In Escrow.

In the past 90 days, there have been 62 detached homes that have sold and closed in Dana Point, CA.  These homes range in price from a low of $595,000 for a 2 bedroom, 2 bath, 1,060 square foot home on Via Catalina in the Capistrano Beach area.  On up to $12,425.000 for a 5 bedroom, 7 bath, 7,652 square foot estate on Ritz Cove with sweeping ocean view in Monarch Beach. The median priced home is $1,135,000 and the average priced detached home that sold and closed in Dana Point in the past 3 months was $1,598,064.  The average price per square foot was $602, and the average days on market was 74 days.

Comparing the above sales prices to last year, we find that there were 55 homes that sold and closed in the same 90 period 1 year ago.  The median priced home back then was $999,000 and the average price home was $1,222,054.  The average price per square foot was $568/SqFt and the average days on market was 74 days.  Comparing today's prices to one year ago, we find that the median price has increased 13%, the average priced detached home increased 30% and the average price per square foot increased 6%.  The price per square foot is considered the most accurate measure of the price movement of a given market.  Even in the face of a major correction in the orange county real estate market, Dana Point homes prices have maintained well and actually increased by 6% in the last 12 months. 

For more information about Dana Point home prices or to view any home for sale in Dana Point, please feel free to contact us at:  949-388-3396 or email us at:  Info@SearchOCHomes.com  

There has been a loophole in the Fair Isaac credit score (FICO) methodology for years, which would allow people to quickly increase their credit score by being added as an authorized user on someones else's good and established credit card.   Edward Jamison, one of the leading authorities on credit card repair has been predicting that Fair Isaac would correct this loophole, and it now appears that they are.  Here is an excerpt from a recent article by Edward Jamison...

" For the most part, this loophole has stayed under the radar until recently when a few companies came out of the woodwork with a marketable service that catered to consumers who will benefit from this practice. These companies recruit people from all over the country who have older credit cards with low debt ratios and offer them $100-$300 for each person they add to their credit card as an authorized user. Then, they market to consumers with limited credit histories and/or high revolving debt ratios and offer to have them added as an authorized user on a seasoned trade line for around $1500 per credit card and pocket the difference. As this practice became more popular, it wasn't long before the over exposure of this loophole shed light on the flaws of Fair Isaac's software.

Under pressure from lenders, Fair Isaac made the decision to invest the money into correcting this loophole. The correction is fairly simple: When Fair Isaac takes that snapshot of somebody's credit file, they are going to look at one extra field that they previously had not looked at when generating the score. That field is the one that says who is responsible for that account. If the scoring software sees that the person is the primary on the account, then it will score the report just like it had done before and no change to the credit score will take place between the old and the new scoring model. This will also hold true if it says that the account is a joint account. But if they see that the responsibility on that account is as an authorized user designation, they will completely ignore that entire account when calculating the credit score. It doesn't matter if the authorized user was added five years ago or yesterday; they will instantly lose the benefits created, if any, from that account being shown on their credit report. ;

Due to the fact that the scoring model is changing in a few months coupled with the fact that some lenders are even denying applications in some instances if an authorized user account is present, I would advise that people refrain from getting added as an authorized user immediately. The benefit will soon be gone, and taking advantage of that benefit before it leaves may leave a person at risk for having a loan denied by some lenders."

So if you are planning on buying a home here in Orange County and this new change affects your FICO credit score, there are other alternatives.  One of  the more exciting ones that I have seen is an alternative loan program called the ACORN loan.  This loan does require a credit check, but they do not solely base the approval on a hard and fast FICO score, rather a more human analysis of one overall credit worthiness, and other factors.  For more details on this exciting No Down loan program, visit our blog at; Orange County ACORN Loans.  If you would like to discuss your mortgage loan finance options feel free to contact us at:  949-388-3396 or email us at:  Info@SearchOCHomes.com