The website SignOnSanDiego.com ran the story below that makes one want to believe that maybe more than just the job market is improving. Read the article and you be the judge ...
California may finally have turned the corner into recovery, with the job market slated for slow but steady growth over the next two years, according to a report released today by UCLA's Anderson Forecast.
"Have we turned the corner in the Golden State? Perhaps we have," wrote UCLA senior economist Jerry Nickelsburg. "The last two months have yielded both job growth in excess of the U.S. rate and job growth which is widespread throughout the state."
It was the second time in two days that a Southern California think tank has predicted increased job growth in the state. On Tuesday, Chapman University in Orange issued a similar report, predicting slightly higher growth than UCLA. (To see the Union-Tribune's article on the Chapman report, click HERE.)
The UCLA report notes that since July, job growth throughout each major region of California has outpaced the national average. San Diego County, Orange County and Ventura grew at an average rate of 2 percent, compared to the U.S. average of 1 percent.
"In coastal California export and technology growth has been the key to recovery," Nickelsburg wrote. "A resurgence of investment and exports in 2012 will continue to drive the coastal economies."
On the other hand, the forecast warns that the U.S. and international outlook is so weak that it is doubtful that the growth will be robust enough to chop down the unemployment rate anytime soon, especially in the Inland Empire and the Sacramento region. As a result, the unemployment rate will likely not dip below 10 percent until late 2013 or early 2014, and it could be 2016 before it returns to pre-recession levels.
And partly because of the continuing problems in the job market, the report projects that the downturn in the housing market will continue, with no dramatic growth in home construction - a key growth engine for the inland areas of the state - until 2013.
"The end of a recession does not mean 'recovered from a recession,'" Nickelsburg wrote. "It only means the contraction has ended. The pain remains real and persistent until solid and sustained gains occur."
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After reading the story you should have an opinion. While the article only referenced one specific region in California (Coastal) it mentioned the driving force in gains there but no mention of the other state regions. This might tend to make one attribute the recent employment gains to seasonal hiring however only time will awnser that.
Thursday, December 15, 2011
Tuesday, December 6, 2011
Freddie's New Loan Modification Option
Freddie has a new rogram "Standard Modification" This program is for borrowers ineligible for a HAMP modification or may have defaulted on a HAMP or toher modification.
The program is designed to reduce one's mortgage princiapl AND monthly payments by at least 10% each ensuring the [ayments are more affordable.
How do you qualify? Are you 60 days late (past due) or prove you are in imminent danger of default, demonstrate an eligible hardship and provide verification of income. If you tried to modifiy previously you know the requirements: paystubs, bank statements, etc...
Best of Luck!!!
The program is designed to reduce one's mortgage princiapl AND monthly payments by at least 10% each ensuring the [ayments are more affordable.
How do you qualify? Are you 60 days late (past due) or prove you are in imminent danger of default, demonstrate an eligible hardship and provide verification of income. If you tried to modifiy previously you know the requirements: paystubs, bank statements, etc...
Best of Luck!!!
Foreclosure's impact on our heath
Recently a study by economists discovered that an increase in foreclosures may be associated with increases in medical visits. Reasearchers at Princeton and Gerogia State universities focused on Arizona, Florida, New Jersey and California - some of the states hardest hit by the foreclosure crisis.
They found that an increase in the number of foreclosure was associated to increases in medicals visits for anxiety and suicide attempts, hypertension and a broad array of stress-related physical complaints. Within the 20-49 age group, an increase of 100 foreclosures corresponded to a 7.2% increse in emergency room visits, 8.1 increase in diabetes realtes visits, 12% more anxiety realted vists and 39% more suicide attempts.
The researchers were clear to point out that foreclosures aren't necessarily teh direct cause of health problems, that stress could be linked to financial troubles preceding the los of a home.
They found that an increase in the number of foreclosure was associated to increases in medicals visits for anxiety and suicide attempts, hypertension and a broad array of stress-related physical complaints. Within the 20-49 age group, an increase of 100 foreclosures corresponded to a 7.2% increse in emergency room visits, 8.1 increase in diabetes realtes visits, 12% more anxiety realted vists and 39% more suicide attempts.
The researchers were clear to point out that foreclosures aren't necessarily teh direct cause of health problems, that stress could be linked to financial troubles preceding the los of a home.
Friday, November 25, 2011
PROGRAM CHANGES BRING HOPE FOR MANY TO REFINANCE
The government's expanded refinance program for underwater homeowners, dubbed HARP 2, looks better than expected for both borrowers and banks.
The Obama administration announced the broad outlines of the plan on Oct. 24. Fannie Mae and Freddie Mac filled in most of the details in guidance bulletins issued late Tuesday.
The new program greatly reduces or eliminates the risk-based fees Fannie and Freddie charge on many loans and virtually eliminates the chance that lenders will have to pay for losses on loans that go into default if they made underwriting mistakes. It also vastly streamlines the underwriting process.
Many borrowers won't qualify for the new program, but those who do could find it much easier and possibly cheaper to refinance than those who don't. Although lenders can begin taking applications Dec. 1, it could take several months before the new loans are made. Fannie Mae said it won't begin buying certain types of refinanced loans until March.
To qualify, your existing loan must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009. Your loan balance must be more than 80 percent of your home's market value. You can have no late payments on your existing mortgage in the past six months and no more than one late payment in the past 12 months. You are ineligible if you previously refinanced through HARP.
They've eased up on the qualifying factors over the HARP program.
The new program improves on the existing HARP refi program by letting borrowers refinance into a new fixed-rate loan no matter how much they owe. The existing program caps the new loan at 125 percent of the home's market value.
You can also refinance into a new adjustable rate loan that has a fixed rate for at least the first five years, but in this case your new first mortgage cannot exceed 105 percent of the home's value.
The new program greatly reduces or eliminates the fees Fannie and Freddie charge on loans based on risk characteristics such as the borrower's credit score and loan-to-value ratio. On a riskier loan, these fees sometimes exceed 3 percent of the loan balance and make refinancing uneconomical for many borrowers.
Under HARP 2, the fees will be capped at 0.75 percent on most loans and will be zero on fixed-rate loans with a term of 20 years or less.
In most cases, borrowers won't have to pay for a new appraisal (Fannie or Freddie will use their automated in-house appraisals) or have any particular debt-to-income ratio or credit score.
Borrowers who refinance through their existing loan servicer generally won't have to document their income or assets or have a particular credit score or debt-to-income ratio. The lender will only have to verify that one borrower on the loan has a job or other source of income, but not the amount of income.
If they refinance through a new lender, they will have to meet additional underwriting requirements, but not as many as people who are refinancing through traditional routes.
Effects on Second Mortgages.
Borrowers can have a second loan on the house of any amount and still qualify, as long as the holder of the second mortgage resubordinates it to the new loan. Most of the big lenders have agreed to do so, but there is no guarantee they or others will. "It's going to be case by case," says Brad Seibel, director of residential lending with Fremont Bank.
If borrowers have mortgage insurance on the existing loan, they must maintain it, but they should be able to transfer that insurance to the new loan at the old premium rate, according to Freddie Mac. The big mortgage insurers have agreed to allow this, but again there is no guarantee all will.
It's a big plus if they do. Normally refinancers must take out a new policy at today's rates, and rates have gone up significantly in the past few years. The higher cost has discouraged some homeowners from refinancing.
Although the original HARP program let homeowners take out a new loan of up to 125 percent of the home's value, many lenders were unwilling to make them up to that limit because if the borrower defaulted, the lender might have to pay for losses if they made any underwriting errors. And no lender wanted to run that risk on a deeply underwater home.
The new program, in many cases, will virtually eliminate the risk that lenders will have to pay for losses on either the existing or the refinanced loan under HARP 2. This could be a big incentive for lenders to refinance loans, especially ones they already own.
FBR analyst Edward Mills said the details on the liability waiver and the fee reduction were both better than he was expecting.
But there are still many questions about the program, such as what interest rates banks will charge, whether they will impose additional fees or underwriting requirements beyond what Fannie and Freddie require and whether investors will be willing to buy securities backed by these new HARP 2 loans.
Most lenders I spoke to said they are eager to make the new loans, but are still digesting the extremely complex details. (You can read Fannie's guidance at sfg.ly/uFNuOj and Freddie's at sfg.ly/tUqbdp.
Mills says the program will definitely reach the government's target of refinancing 1 million loans, and possibly even 2 million.
There will be losses for some but seemingly only to profits
While borrowers will clearly benefit, the losers will be investors who own the guaranteed loans that are refinanced. They will be repaid, but will have to reinvest their proceeds, probably at a lower rate. These investors include Fannie and Freddie, the U.S. Treasury and the Federal Reserve - in other words, U.S. taxpayers.
The hope is that taxpayers as a whole will benefit if homeowners who lower their monthly payments under the program spend some of their savings (thus boosting the economy) and become more likely to stay in their underwater homes and not default.
The Obama administration announced the broad outlines of the plan on Oct. 24. Fannie Mae and Freddie Mac filled in most of the details in guidance bulletins issued late Tuesday.
The new program greatly reduces or eliminates the risk-based fees Fannie and Freddie charge on many loans and virtually eliminates the chance that lenders will have to pay for losses on loans that go into default if they made underwriting mistakes. It also vastly streamlines the underwriting process.
Many borrowers won't qualify for the new program, but those who do could find it much easier and possibly cheaper to refinance than those who don't. Although lenders can begin taking applications Dec. 1, it could take several months before the new loans are made. Fannie Mae said it won't begin buying certain types of refinanced loans until March.
To qualify, your existing loan must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009. Your loan balance must be more than 80 percent of your home's market value. You can have no late payments on your existing mortgage in the past six months and no more than one late payment in the past 12 months. You are ineligible if you previously refinanced through HARP.
They've eased up on the qualifying factors over the HARP program.
The new program improves on the existing HARP refi program by letting borrowers refinance into a new fixed-rate loan no matter how much they owe. The existing program caps the new loan at 125 percent of the home's market value.
You can also refinance into a new adjustable rate loan that has a fixed rate for at least the first five years, but in this case your new first mortgage cannot exceed 105 percent of the home's value.
The new program greatly reduces or eliminates the fees Fannie and Freddie charge on loans based on risk characteristics such as the borrower's credit score and loan-to-value ratio. On a riskier loan, these fees sometimes exceed 3 percent of the loan balance and make refinancing uneconomical for many borrowers.
Under HARP 2, the fees will be capped at 0.75 percent on most loans and will be zero on fixed-rate loans with a term of 20 years or less.
In most cases, borrowers won't have to pay for a new appraisal (Fannie or Freddie will use their automated in-house appraisals) or have any particular debt-to-income ratio or credit score.
Borrowers who refinance through their existing loan servicer generally won't have to document their income or assets or have a particular credit score or debt-to-income ratio. The lender will only have to verify that one borrower on the loan has a job or other source of income, but not the amount of income.
If they refinance through a new lender, they will have to meet additional underwriting requirements, but not as many as people who are refinancing through traditional routes.
Effects on Second Mortgages.
Borrowers can have a second loan on the house of any amount and still qualify, as long as the holder of the second mortgage resubordinates it to the new loan. Most of the big lenders have agreed to do so, but there is no guarantee they or others will. "It's going to be case by case," says Brad Seibel, director of residential lending with Fremont Bank.
If borrowers have mortgage insurance on the existing loan, they must maintain it, but they should be able to transfer that insurance to the new loan at the old premium rate, according to Freddie Mac. The big mortgage insurers have agreed to allow this, but again there is no guarantee all will.
It's a big plus if they do. Normally refinancers must take out a new policy at today's rates, and rates have gone up significantly in the past few years. The higher cost has discouraged some homeowners from refinancing.
Although the original HARP program let homeowners take out a new loan of up to 125 percent of the home's value, many lenders were unwilling to make them up to that limit because if the borrower defaulted, the lender might have to pay for losses if they made any underwriting errors. And no lender wanted to run that risk on a deeply underwater home.
The new program, in many cases, will virtually eliminate the risk that lenders will have to pay for losses on either the existing or the refinanced loan under HARP 2. This could be a big incentive for lenders to refinance loans, especially ones they already own.
FBR analyst Edward Mills said the details on the liability waiver and the fee reduction were both better than he was expecting.
But there are still many questions about the program, such as what interest rates banks will charge, whether they will impose additional fees or underwriting requirements beyond what Fannie and Freddie require and whether investors will be willing to buy securities backed by these new HARP 2 loans.
Most lenders I spoke to said they are eager to make the new loans, but are still digesting the extremely complex details. (You can read Fannie's guidance at sfg.ly/uFNuOj and Freddie's at sfg.ly/tUqbdp.
Mills says the program will definitely reach the government's target of refinancing 1 million loans, and possibly even 2 million.
There will be losses for some but seemingly only to profits
While borrowers will clearly benefit, the losers will be investors who own the guaranteed loans that are refinanced. They will be repaid, but will have to reinvest their proceeds, probably at a lower rate. These investors include Fannie and Freddie, the U.S. Treasury and the Federal Reserve - in other words, U.S. taxpayers.
The hope is that taxpayers as a whole will benefit if homeowners who lower their monthly payments under the program spend some of their savings (thus boosting the economy) and become more likely to stay in their underwater homes and not default.
Thursday, November 17, 2011
Congress decides in favor of Borrowers
Today, the vote is in to return the FHA loan limits to the previously set amounts which expired on october 1st. Read the complete Wall Street Journal story below:
U.S. lawmakers moved Thursday to increase the maximum size of loans that can be guaranteed by the Federal Housing Administration, even as a top Obama administration official expressed doubt about the need for the change.
A spending bill passed by Congress increases to $729,750 the maximum size of a mortgage that can be backed by the FHA, which guarantees loans to buyers with down payments as low as 3.5%. The Senate voted to approve the bill Thursday evening, after the House voted earlier in the day.
Some Republicans in the House and Senate were upset by the move, arguing that it contradicts a goal of both parties to reduce the U.S. government’s role in propping up the housing market. “I am just absolutely so discouraged at Congress in lacking the courage to deal with this issue,” said Sen. Bob Corker (R., Tenn.).
An earlier version of the legislation in the Senate would have increased loan limits for mortgage finance companies Fannie Mae and Freddie Mac as well, but that was stripped out due to opposition from House Republicans.
The loan limit fell to $625,500 on Oct. 1 in expensive markets like New York, San Francisco and Washington. They declined in around 250 counties for Fannie and Freddie, and around 600 counties saw FHA limits drop. In some cases, the FHA loan limits fell below those of Fannie and Freddie.
Carol Galante, the Obama administration’s nominee to lead the FHA, told Senate lawmakers that the administration continues to support reducing the limits.
“We maintain that it is appropriate to take a step back on the loan limits,” Ms. Galante told Senate lawmakers. However, she noted that because housing markets around the country remain weak, “there are reasonable people who may want to see us continue to stay in the business.”
The move by Congress will give borrowers seeking loans between $625,500 and $729,750 in pricey markets two options. They can take out “jumbo” loans that carry higher interest rates than those backed by Fannie and Freddie and require down payments of at least 20%. Or, they can take out an FHA loan, which allows for lower down payments but charges insurance premiums that add to borrowers’ costs.
Housing industry lobbyists pushed for Congress to reinstate the higher limits for Fannie, Freddie and FHA, citing concerns that any steps to raise borrowing costs might be too much for fragile housing markets to bear. Another Republican criticism of the action is that it would primarily benefit affluent neighborhoods.
“This means that taxpayers will be subsidizing the purchase of expensive homes by wealthy buyers,” said Sen. Richard Shelby (R., Ala.).
However, Sen. Robert Menendez (D., N.J.) said that restoring the loan limits will benefit the housing market at a time when it is weak. Doing so, he said, “won’t cost taxpayers a dime” and will benefit the housing market in many other parts of the country besides those cities.
The move by Congress came after an annual independent audit found the FHA’s cash reserves are now so depleted that there is close to 50% chance the agency could run out of money and require a taxpayer bailout in the next year.
In the past four years, as private lenders have pulled back from the mortgage market, the FHA’s market share has swollen. It backed one third of mortgages used to finance home purchases last year, up from around 5% in 2006. The FHA doesn’t make loans but insures lenders against defaults on mortgages that meet its standards.
U.S. lawmakers moved Thursday to increase the maximum size of loans that can be guaranteed by the Federal Housing Administration, even as a top Obama administration official expressed doubt about the need for the change.
A spending bill passed by Congress increases to $729,750 the maximum size of a mortgage that can be backed by the FHA, which guarantees loans to buyers with down payments as low as 3.5%. The Senate voted to approve the bill Thursday evening, after the House voted earlier in the day.
Some Republicans in the House and Senate were upset by the move, arguing that it contradicts a goal of both parties to reduce the U.S. government’s role in propping up the housing market. “I am just absolutely so discouraged at Congress in lacking the courage to deal with this issue,” said Sen. Bob Corker (R., Tenn.).
An earlier version of the legislation in the Senate would have increased loan limits for mortgage finance companies Fannie Mae and Freddie Mac as well, but that was stripped out due to opposition from House Republicans.
The loan limit fell to $625,500 on Oct. 1 in expensive markets like New York, San Francisco and Washington. They declined in around 250 counties for Fannie and Freddie, and around 600 counties saw FHA limits drop. In some cases, the FHA loan limits fell below those of Fannie and Freddie.
Carol Galante, the Obama administration’s nominee to lead the FHA, told Senate lawmakers that the administration continues to support reducing the limits.
“We maintain that it is appropriate to take a step back on the loan limits,” Ms. Galante told Senate lawmakers. However, she noted that because housing markets around the country remain weak, “there are reasonable people who may want to see us continue to stay in the business.”
The move by Congress will give borrowers seeking loans between $625,500 and $729,750 in pricey markets two options. They can take out “jumbo” loans that carry higher interest rates than those backed by Fannie and Freddie and require down payments of at least 20%. Or, they can take out an FHA loan, which allows for lower down payments but charges insurance premiums that add to borrowers’ costs.
Housing industry lobbyists pushed for Congress to reinstate the higher limits for Fannie, Freddie and FHA, citing concerns that any steps to raise borrowing costs might be too much for fragile housing markets to bear. Another Republican criticism of the action is that it would primarily benefit affluent neighborhoods.
“This means that taxpayers will be subsidizing the purchase of expensive homes by wealthy buyers,” said Sen. Richard Shelby (R., Ala.).
However, Sen. Robert Menendez (D., N.J.) said that restoring the loan limits will benefit the housing market at a time when it is weak. Doing so, he said, “won’t cost taxpayers a dime” and will benefit the housing market in many other parts of the country besides those cities.
The move by Congress came after an annual independent audit found the FHA’s cash reserves are now so depleted that there is close to 50% chance the agency could run out of money and require a taxpayer bailout in the next year.
In the past four years, as private lenders have pulled back from the mortgage market, the FHA’s market share has swollen. It backed one third of mortgages used to finance home purchases last year, up from around 5% in 2006. The FHA doesn’t make loans but insures lenders against defaults on mortgages that meet its standards.
Saturday, September 10, 2011
Refinancing while underwater
Like so many homeowners across the country, you can start to sense a feeling of helplessness when attempting to refinance a loan which is higher than the current value of your home ... yes, you are underwater and looking for a fresh breath. Here's some info you may find helpful in your endeavor.
“A lot of people have been sitting and not doing anything,” said Cari Sweet-Kostoplis, a senior mortgage banker at Atlantic Home Loans in Lincoln Park, N.J. But they may qualify to refinance their loans through a variety of programs aimed at avoiding late or partial payments or foreclosure. “I don’t think a lot of people are aware that they have this option,” said Jeff Kinney, the vice president for innovation and development of Fannie Mae, who oversees refinancing activity. Because interest rates remain low, he said, refinancing may bring their payment “to a level that is sustainable to them and put money in their pockets.”
In the New York region, according to Zillow.com, some 17.1 percent of single-family homes right now are considered underwater, which means the owners owe more on the mortgage than the home is worth. (The national average of underwater properties is 28.4 percent.)
Those looking to refinance through programs offered by Fannie Mae and Freddie Mac, the government buyers of home loans, will first need to find out who holds or services their mortgage so they can determine whether they qualify. On their Web sites, both agencies provide links that show whether a particular address is in their portfolio.
Be careful, though, if you own an apartment. “Sometimes the system doesn’t recognize the unit” number, said Matt Hackett, the underwriting manager of Equity Now, a direct mortgage lender based in New York.
If your loan is owned by Fannie or Freddie, you may qualify for the Home Affordable Refinance Program, or HARP. Some 2.5 million to 3 million homeowners may be eligible to use HARP, according to government estimates — provided, among other things, that they have not been late on their payments more than once in the last 12 months.
Instead of the 80 percent loan-to-home-value required in most initial mortgages today (the remaining 20 percent comes from your down payment), HARP loans offer up to 125 percent, to cover the home’s shrunken value. That means a home appraised at $500,000 could warrant a loan of up to $625,000, if the owner’s income was sufficient to repay it, instead of the maximum $400,000 in most conventional mortgages.
Federal Housing Administration loans also have refinancing options. One of them, the F.H.A. Short Refinance option, requires the lender to write down at least 10 percent of the remaining balance of the loan and the homeowner to be current on payments, among other requirements. Still other programs are available for people who have lost their jobs.
If your loan is held by a bank or has been bundled up and sold to an investment group, your options may be more limited. “It is case by case,” Mr. Hackett said. You may need to call around to locate other lenders willing to refinance underwater loans.
Lenders like Atlantic Home Loans have started offering loans with lender-paid mortgage insurance, and will refinance at 95 percent of the value, Mrs. Sweet-Kostoplis said. She added that one of her clients reduced her mortgage payment by $850 a month when the rate came down to 4.5 percent from 6.7 percent.
When you meet with your mortgage officer, Mrs. Sweet-Kostoplis advised, don’t hide anything in your financial situation. “The mortgage person is on your team” and wants to help you stay in your home, she said. If you need help sorting out your options, HUD lists agencies and counselors whose advice is generally free.
Fannie Mae also has a broader umbrella, called Refi Plus, that can be used by people whose mortgages finance second homes and income properties. The programs have flexibility; most of them run through June 30, 2012.
Given where rates are, your immediate action could ring you the results you are looking for ... so pick up the phone and Good Luck to you.
“A lot of people have been sitting and not doing anything,” said Cari Sweet-Kostoplis, a senior mortgage banker at Atlantic Home Loans in Lincoln Park, N.J. But they may qualify to refinance their loans through a variety of programs aimed at avoiding late or partial payments or foreclosure. “I don’t think a lot of people are aware that they have this option,” said Jeff Kinney, the vice president for innovation and development of Fannie Mae, who oversees refinancing activity. Because interest rates remain low, he said, refinancing may bring their payment “to a level that is sustainable to them and put money in their pockets.”
In the New York region, according to Zillow.com, some 17.1 percent of single-family homes right now are considered underwater, which means the owners owe more on the mortgage than the home is worth. (The national average of underwater properties is 28.4 percent.)
Those looking to refinance through programs offered by Fannie Mae and Freddie Mac, the government buyers of home loans, will first need to find out who holds or services their mortgage so they can determine whether they qualify. On their Web sites, both agencies provide links that show whether a particular address is in their portfolio.
Be careful, though, if you own an apartment. “Sometimes the system doesn’t recognize the unit” number, said Matt Hackett, the underwriting manager of Equity Now, a direct mortgage lender based in New York.
If your loan is owned by Fannie or Freddie, you may qualify for the Home Affordable Refinance Program, or HARP. Some 2.5 million to 3 million homeowners may be eligible to use HARP, according to government estimates — provided, among other things, that they have not been late on their payments more than once in the last 12 months.
Instead of the 80 percent loan-to-home-value required in most initial mortgages today (the remaining 20 percent comes from your down payment), HARP loans offer up to 125 percent, to cover the home’s shrunken value. That means a home appraised at $500,000 could warrant a loan of up to $625,000, if the owner’s income was sufficient to repay it, instead of the maximum $400,000 in most conventional mortgages.
Federal Housing Administration loans also have refinancing options. One of them, the F.H.A. Short Refinance option, requires the lender to write down at least 10 percent of the remaining balance of the loan and the homeowner to be current on payments, among other requirements. Still other programs are available for people who have lost their jobs.
If your loan is held by a bank or has been bundled up and sold to an investment group, your options may be more limited. “It is case by case,” Mr. Hackett said. You may need to call around to locate other lenders willing to refinance underwater loans.
Lenders like Atlantic Home Loans have started offering loans with lender-paid mortgage insurance, and will refinance at 95 percent of the value, Mrs. Sweet-Kostoplis said. She added that one of her clients reduced her mortgage payment by $850 a month when the rate came down to 4.5 percent from 6.7 percent.
When you meet with your mortgage officer, Mrs. Sweet-Kostoplis advised, don’t hide anything in your financial situation. “The mortgage person is on your team” and wants to help you stay in your home, she said. If you need help sorting out your options, HUD lists agencies and counselors whose advice is generally free.
Fannie Mae also has a broader umbrella, called Refi Plus, that can be used by people whose mortgages finance second homes and income properties. The programs have flexibility; most of them run through June 30, 2012.
Given where rates are, your immediate action could ring you the results you are looking for ... so pick up the phone and Good Luck to you.
Friday, August 19, 2011
I just bought my house and Homeowner mortgage write-off may be in jeopardy
Decisions in coming weeks by the 12-member bipartisan congressional committee tasked with reducing the federal deficit could affect mortgage interest deductions.
If you take mortgage interest tax deductions, the next 100 days could have significant financial implications for you because of Congress' new federal debt ceiling plan.
Although the compromise legislation itself involved no new taxes, it created an unusual mechanism — an evenly split, 12-member bipartisan super-committee that could call for major cutbacks on real estate write-offs by Thanksgiving.
All it will take is a single vote by a lone senator or House member who breaks with his or her party to put the mortgage interest deduction into serious play.
Here is what's about to unfold and how it could affect you: The legislation signed by the president Aug. 2 calls for a two-step increase in the federal debt ceiling plus spending cuts of about $917 billion. It also created the Joint Select Committee on Deficit Reduction with the goal of slashing an additional $1.5 trillion from the deficit during the coming decade.
The committee is required to vote on a plan to achieve these objectives by Nov. 23, using revenue increases, spending cuts or a combination. If the committee members cannot agree on a plan or if either chamber of Congress votes it down, automatic and severe spending cuts of $1.5 trillion will be imposed equally on the Department of Defense and domestic programs including Medicare provider payments.
Membership consists of six Republicans and six Democrats — three each from the Senate and House — chosen by party leaders. To approve a final package of deficit cuts and extend the debt ceiling, all that will be needed is a simple majority — seven votes.
House and Senate leaders selected their six members last week: Democratic Sens. Patty Murray of Washington, Max Baucus of Montana and John F. Kerry of Massachusetts; Democratic Reps. James E. Clyburn of South Carolina, Xavier Becerra of California and Chris Van Hollen of Maryland; Republican Sens. John Kyl of Arizona, Pat J. Toomey of Pennsylvania and Rob Portman of Ohio; and Republican Reps. Jeb Hensarling of Texas, Dave Camp of Michigan and Fred Upton, also of Michigan.
The selections appear to include members who have taken stances in the past that are consistent with party positions — Democrats typically favor revenue increases to help close the deficit, whereas Republicans generally want to slash spending without raising taxes. But there is a real possibility that one or more members on either side could be concerned enough about the prospect of painful automatic military or social-program spending cuts that they would go with their conscience and break party ranks.
That compromise might well involve new revenue — one of the lowest-hanging sources of which is the mortgage interest deduction. Lobbying groups who seek to preserve housing write-offs already are gearing up for battle on Capitol Hill.
The National Assn. of Realtors sent an urgent alert to its 1.1 million members asking them to directly "engage their members of Congress on the importance of preserving real estate tax provisions" during the coming several weeks. Officials acknowledge that the super-committee's structure — with its guaranteed punishments for failure aimed squarely at Republicans (military spending) and Democrats (social programs) — makes it more difficult than usual to influence the final outcome.
After decades of being considered politically sacrosanct, why are homeowner mortgage write-offs suddenly on the chopping block? No. 1 is sheer size. The congressional Joint Committee on Taxation estimates that the home mortgage interest deduction will cost the federal government $100 billion during fiscal 2011 and $107.3 billion in fiscal 2012. Between 2008 and 2012, the cumulative write-offs for mortgage interest are projected to total just under half a trillion dollars.
Among the options open to the super-committee: Lower the maximum mortgage amount eligible for interest deductions to $500,000 from the current $1.1 million; replace the deduction with a tax credit that would be usable by lower- and moderate-income owners as well as those with higher incomes; eliminate interest deductions on second homes; and phase out the deductibility of homeowner property tax payments.
Defenders of the write-offs argue that high levels of homeownership are essential to economic growth and social stability, and fully justify the tax system preferences they receive. National opinion polls regularly find widespread support for the write-offs, even among renters. Also, academic and trade group studies project that any abrupt, across-the-board reduction in the deductibility of mortgage interest would have a severe effect on home values, possibly sending them plummeting as much as 15%.
Critics, on the other hand, consider the write-offs inherently unfair: They're skewed to benefit upper-income owners disproportionately, and are highly concentrated geographically along the West Coast, the Northeastern states and mid-Atlantic.
Where's this debate ultimately headed? It's much too early to predict. But any way you look at it, real estate write-offs could be in greater political jeopardy in the next three months than they have been at any time in the last 25 years.
If you own a home, and this plan is successful, the current Administration is attempting to partially fund their monetary decisions with your tax writeoffs, whether you agree or not; AND if you don't own a home, it will be exponentially more difficult for you to realize the American dream.
This decision could create an even wider gap between the rich and the rest. Now's the time, even if you've never done this before to write your Senator and Congressman to let them know your opinion... and as always -
Keep the faith!
reproduced from a Kenneth R. Harney article - Reporting From Washington—
If you take mortgage interest tax deductions, the next 100 days could have significant financial implications for you because of Congress' new federal debt ceiling plan.
Although the compromise legislation itself involved no new taxes, it created an unusual mechanism — an evenly split, 12-member bipartisan super-committee that could call for major cutbacks on real estate write-offs by Thanksgiving.
All it will take is a single vote by a lone senator or House member who breaks with his or her party to put the mortgage interest deduction into serious play.
Here is what's about to unfold and how it could affect you: The legislation signed by the president Aug. 2 calls for a two-step increase in the federal debt ceiling plus spending cuts of about $917 billion. It also created the Joint Select Committee on Deficit Reduction with the goal of slashing an additional $1.5 trillion from the deficit during the coming decade.
The committee is required to vote on a plan to achieve these objectives by Nov. 23, using revenue increases, spending cuts or a combination. If the committee members cannot agree on a plan or if either chamber of Congress votes it down, automatic and severe spending cuts of $1.5 trillion will be imposed equally on the Department of Defense and domestic programs including Medicare provider payments.
Membership consists of six Republicans and six Democrats — three each from the Senate and House — chosen by party leaders. To approve a final package of deficit cuts and extend the debt ceiling, all that will be needed is a simple majority — seven votes.
House and Senate leaders selected their six members last week: Democratic Sens. Patty Murray of Washington, Max Baucus of Montana and John F. Kerry of Massachusetts; Democratic Reps. James E. Clyburn of South Carolina, Xavier Becerra of California and Chris Van Hollen of Maryland; Republican Sens. John Kyl of Arizona, Pat J. Toomey of Pennsylvania and Rob Portman of Ohio; and Republican Reps. Jeb Hensarling of Texas, Dave Camp of Michigan and Fred Upton, also of Michigan.
The selections appear to include members who have taken stances in the past that are consistent with party positions — Democrats typically favor revenue increases to help close the deficit, whereas Republicans generally want to slash spending without raising taxes. But there is a real possibility that one or more members on either side could be concerned enough about the prospect of painful automatic military or social-program spending cuts that they would go with their conscience and break party ranks.
That compromise might well involve new revenue — one of the lowest-hanging sources of which is the mortgage interest deduction. Lobbying groups who seek to preserve housing write-offs already are gearing up for battle on Capitol Hill.
The National Assn. of Realtors sent an urgent alert to its 1.1 million members asking them to directly "engage their members of Congress on the importance of preserving real estate tax provisions" during the coming several weeks. Officials acknowledge that the super-committee's structure — with its guaranteed punishments for failure aimed squarely at Republicans (military spending) and Democrats (social programs) — makes it more difficult than usual to influence the final outcome.
After decades of being considered politically sacrosanct, why are homeowner mortgage write-offs suddenly on the chopping block? No. 1 is sheer size. The congressional Joint Committee on Taxation estimates that the home mortgage interest deduction will cost the federal government $100 billion during fiscal 2011 and $107.3 billion in fiscal 2012. Between 2008 and 2012, the cumulative write-offs for mortgage interest are projected to total just under half a trillion dollars.
Among the options open to the super-committee: Lower the maximum mortgage amount eligible for interest deductions to $500,000 from the current $1.1 million; replace the deduction with a tax credit that would be usable by lower- and moderate-income owners as well as those with higher incomes; eliminate interest deductions on second homes; and phase out the deductibility of homeowner property tax payments.
Defenders of the write-offs argue that high levels of homeownership are essential to economic growth and social stability, and fully justify the tax system preferences they receive. National opinion polls regularly find widespread support for the write-offs, even among renters. Also, academic and trade group studies project that any abrupt, across-the-board reduction in the deductibility of mortgage interest would have a severe effect on home values, possibly sending them plummeting as much as 15%.
Critics, on the other hand, consider the write-offs inherently unfair: They're skewed to benefit upper-income owners disproportionately, and are highly concentrated geographically along the West Coast, the Northeastern states and mid-Atlantic.
Where's this debate ultimately headed? It's much too early to predict. But any way you look at it, real estate write-offs could be in greater political jeopardy in the next three months than they have been at any time in the last 25 years.
If you own a home, and this plan is successful, the current Administration is attempting to partially fund their monetary decisions with your tax writeoffs, whether you agree or not; AND if you don't own a home, it will be exponentially more difficult for you to realize the American dream.
This decision could create an even wider gap between the rich and the rest. Now's the time, even if you've never done this before to write your Senator and Congressman to let them know your opinion... and as always -
Keep the faith!
reproduced from a Kenneth R. Harney article - Reporting From Washington—
Thursday, August 11, 2011
HUD ruling brings new hope and higher 'Cash for Keys' to BofA borrowers
The Department of Housing and Urban Development has reached a settlement with Bank of America that releases the company from liability for failing to adequately provide alternatives to foreclosure on 57,000 delinquent government-insured mortgages.
The agreement, a draft of which was obtained by American Banker, was previously undisclosed. It has been forged on a separate but parallel track from continuing settlement talks between Bank of America, state attorneys general and other regulators over alleged mortgage origination and servicing failures.
B of A's pact with HUD requires it to waive a minimum of $10 million in unpaid mortgage payments and vet each of the 57,000 delinquent borrowers for a possible loan modification, short sale or other foreclosure alternative.
"Our total costs for the program will be multiples of that" $10 million minimum, B of A spokesman Dan Frahm said. The deal calls for measures to "ensure these customers have every opportunity to stay in their homes," he added.
After such outreach, the settlement paves the way for B of A to foreclose on homes that borrowers could not afford even after a mortgage modification and those that have been left vacant by owners.
In forging the agreement, HUD decided to forgo steep monetary damages or admissions of error from the bank.
Instead, it pushed for the lender to implement steps that in most cases it was supposed to have already taken under the terms of its FHA-guaranteed loans, with the apparent aim of minimizing foreclosures and related insurance claims.
"We took the borrowers into account first," said HUD general counsel Helen Kanovsky. "We think that that's really the best thing for the FHA [insurance] fund as well."
The agreement is HUD's first involving settlement of claims in which a servicer failed to offer loss mitigation to borrowers. It does not, however, prevent HUD from seeking damages from B of A for unrelated origination and servicing failures.
"We fought for as narrow a [legal] release as possible and as much money as possible," Kanovsky said.
Under HUD's standard terms, borrowers must be less than 12 months delinquent to qualify for loan modifications. With the B of A settlement, the minimum of $10 million the bank agreed to pay will go to covering past-due arrearages and giving borrowers who are more than a year behind the possibility of qualifying for foreclosure alternatives.
The agreement was signed July 11 by B of A senior vice president Robert Gaither, who directed queries to a company spokesman.
All of the 57,000 borrowers covered by the agreement are 12 to 24 months delinquent. They account for only 4% of the total 1.5 million FHA loans that B of A services but a substantial portion of the company's seriously delinquent loans. B of A holds $19.8 billion in FHA-insured loans that are 90 days or more delinquent, and another $3.1 billion in FHA loans 31 to 89 days delinquent, the bank said in its second-quarter earnings release.
Under its terms with HUD, B of A will have to pay an independent monitor to review its modification work and report to HUD. It is also obligated to seek borrowers through database searches, letters, phone queries and visits to properties. Borrowers who fail to qualify for loan modifications, will receive from B of A $4,000 for a short sale and $7,500 for a deed-in-lieu of foreclosure.
The deal reflects the high levels of financial uncertainty surrounding such negotiations. In May, B of A agreed to pay $20 million, or double the minimum for the latest settlement, for improperly foreclosing on a relatively few 160 homes of military service members.
The settlement is "not a lot of money for the potential losses that the federal government may have to make good on," said Diane Thompson, an attorney for the National Consumer Law Center.
The minimum $10 million payment of borrowers' arrearages is unlikely to defray the FHA's losses on foreclosures, she said.
But if Bank of America is "able to identify the loans, and if people are still in the homes, and if they waive payments over past 12 months, then that's more valuable than a big fine for Bank of America," Thompson said. "But there are a lot of ifs there."
The largest banks hold billions of dollars of delinquent FHA loans on their balance sheets for which they have not yet filed claims. This may be because of concerns that they may have violated stringent HUD servicer requirements and could be held liable for treble damages related to false claims. One sticking point in settling such claims is that the FHA requires all servicers to have employees conduct face-to-face interviews with FHA borrowers once they become 60 days delinquent, a procedure most servicers either did not undertake or cannot document.
As part of the deal HUD has also agreed to pay any mortgage insurance claims and waive any pending administrative actions against B of A, its officers, directors or employees "in connection with servicing or loss mitigation deficiencies." The only exclusion is for allegations involving improper transfers of titles.
B of A also has agreed not to claim expenses on any FHA insurance claims for taxes, liens or property preservation incurred from November 2010 through July 2011.
The agreement, a draft of which was obtained by American Banker, was previously undisclosed. It has been forged on a separate but parallel track from continuing settlement talks between Bank of America, state attorneys general and other regulators over alleged mortgage origination and servicing failures.
B of A's pact with HUD requires it to waive a minimum of $10 million in unpaid mortgage payments and vet each of the 57,000 delinquent borrowers for a possible loan modification, short sale or other foreclosure alternative.
"Our total costs for the program will be multiples of that" $10 million minimum, B of A spokesman Dan Frahm said. The deal calls for measures to "ensure these customers have every opportunity to stay in their homes," he added.
After such outreach, the settlement paves the way for B of A to foreclose on homes that borrowers could not afford even after a mortgage modification and those that have been left vacant by owners.
In forging the agreement, HUD decided to forgo steep monetary damages or admissions of error from the bank.
Instead, it pushed for the lender to implement steps that in most cases it was supposed to have already taken under the terms of its FHA-guaranteed loans, with the apparent aim of minimizing foreclosures and related insurance claims.
"We took the borrowers into account first," said HUD general counsel Helen Kanovsky. "We think that that's really the best thing for the FHA [insurance] fund as well."
The agreement is HUD's first involving settlement of claims in which a servicer failed to offer loss mitigation to borrowers. It does not, however, prevent HUD from seeking damages from B of A for unrelated origination and servicing failures.
"We fought for as narrow a [legal] release as possible and as much money as possible," Kanovsky said.
Under HUD's standard terms, borrowers must be less than 12 months delinquent to qualify for loan modifications. With the B of A settlement, the minimum of $10 million the bank agreed to pay will go to covering past-due arrearages and giving borrowers who are more than a year behind the possibility of qualifying for foreclosure alternatives.
The agreement was signed July 11 by B of A senior vice president Robert Gaither, who directed queries to a company spokesman.
All of the 57,000 borrowers covered by the agreement are 12 to 24 months delinquent. They account for only 4% of the total 1.5 million FHA loans that B of A services but a substantial portion of the company's seriously delinquent loans. B of A holds $19.8 billion in FHA-insured loans that are 90 days or more delinquent, and another $3.1 billion in FHA loans 31 to 89 days delinquent, the bank said in its second-quarter earnings release.
Under its terms with HUD, B of A will have to pay an independent monitor to review its modification work and report to HUD. It is also obligated to seek borrowers through database searches, letters, phone queries and visits to properties. Borrowers who fail to qualify for loan modifications, will receive from B of A $4,000 for a short sale and $7,500 for a deed-in-lieu of foreclosure.
The deal reflects the high levels of financial uncertainty surrounding such negotiations. In May, B of A agreed to pay $20 million, or double the minimum for the latest settlement, for improperly foreclosing on a relatively few 160 homes of military service members.
The settlement is "not a lot of money for the potential losses that the federal government may have to make good on," said Diane Thompson, an attorney for the National Consumer Law Center.
The minimum $10 million payment of borrowers' arrearages is unlikely to defray the FHA's losses on foreclosures, she said.
But if Bank of America is "able to identify the loans, and if people are still in the homes, and if they waive payments over past 12 months, then that's more valuable than a big fine for Bank of America," Thompson said. "But there are a lot of ifs there."
The largest banks hold billions of dollars of delinquent FHA loans on their balance sheets for which they have not yet filed claims. This may be because of concerns that they may have violated stringent HUD servicer requirements and could be held liable for treble damages related to false claims. One sticking point in settling such claims is that the FHA requires all servicers to have employees conduct face-to-face interviews with FHA borrowers once they become 60 days delinquent, a procedure most servicers either did not undertake or cannot document.
As part of the deal HUD has also agreed to pay any mortgage insurance claims and waive any pending administrative actions against B of A, its officers, directors or employees "in connection with servicing or loss mitigation deficiencies." The only exclusion is for allegations involving improper transfers of titles.
B of A also has agreed not to claim expenses on any FHA insurance claims for taxes, liens or property preservation incurred from November 2010 through July 2011.
Friday, August 5, 2011
BofA offers to lower the balance of distressed mortgages ... if you qualify
If you're a cash-strapped homeowner in California with a mortgage serviced by Bank of America, you may have a chance at getting your principal lowered through a state program that helps people stay in their homes.
The California Housing Finance Agency said earlier this week that Bank of America is now part of Keep Your Home California’s principal-reduction program, making it the largest loan servicer involved in lowering loan balances for those with economic hardships.
A servicer is a company homeowners make their mortgage payments to every month. Bank of America serves more than two million home loans in the state, agency officials said.
Other servicers involved are the California Department of Veterans Affairs, the California Housing Finance Agency, Community Trust/Self Help, GMAC, Guild Mortgage Company and Vericrest Financial.
Agency officials hope that list continues to grow.
"We believe principal reduction can be an appropriate tool for helping qualified homeowners obtain an affordable and sustainable modification," said Claudia Cappio, California Housing Finance Agency's executive director, in a statement.
Keep Your Home California’s principal-reduction program is one slice of a $2 billion effort to help struggling homeowners avoid foreclosure.
Qualified homeowners could be eligible for up to $50,000 in assistance from the Keep Your Home California program, which requires the mortgage investor to match dollar-for-dollar the amount provided by the program.
For instance, if the program agrees to reduce the principal by $50,000, then the mortgage investor must match that $50,000 reduction, resulting in a total $100,000 reduction.
Bank of America borrowers who don't qualify for the principal-reduction program will be evaluated by bank representatives to explore other options, including a loan modification.
Keep Your Home California is funded by the U.S. Treasury Department.
If you have questions, call 888.954.KEEP (5337) or visit KeepYourHomeCalifornia.org.
The California Housing Finance Agency said earlier this week that Bank of America is now part of Keep Your Home California’s principal-reduction program, making it the largest loan servicer involved in lowering loan balances for those with economic hardships.
A servicer is a company homeowners make their mortgage payments to every month. Bank of America serves more than two million home loans in the state, agency officials said.
Other servicers involved are the California Department of Veterans Affairs, the California Housing Finance Agency, Community Trust/Self Help, GMAC, Guild Mortgage Company and Vericrest Financial.
Agency officials hope that list continues to grow.
"We believe principal reduction can be an appropriate tool for helping qualified homeowners obtain an affordable and sustainable modification," said Claudia Cappio, California Housing Finance Agency's executive director, in a statement.
Keep Your Home California’s principal-reduction program is one slice of a $2 billion effort to help struggling homeowners avoid foreclosure.
Qualified homeowners could be eligible for up to $50,000 in assistance from the Keep Your Home California program, which requires the mortgage investor to match dollar-for-dollar the amount provided by the program.
For instance, if the program agrees to reduce the principal by $50,000, then the mortgage investor must match that $50,000 reduction, resulting in a total $100,000 reduction.
Bank of America borrowers who don't qualify for the principal-reduction program will be evaluated by bank representatives to explore other options, including a loan modification.
Keep Your Home California is funded by the U.S. Treasury Department.
If you have questions, call 888.954.KEEP (5337) or visit KeepYourHomeCalifornia.org.
Saturday, July 9, 2011
Fannie Mae and Freddie Mac possible merger introduced in new bill
It's been an interesting topic going back to 2009 and today, legislation was introduced by Republican Representative Gary Miller of California and Democratic Representative Carolyn McCarthy of New York to merge Fannie Mae and Freddie Mac. This would create a single entity allowing the government held organization to collectively purchase mortgages and sell them to investors as government backed securities.
The new entity would seemingly operate in a not-for-profit setup, creating a “secondary market facility” for residential mortgage loans. Secondary Market Operations is no news to us however the idea is ... Operating costs would be supported by buying home loans and then pooling them into bonds sales which would generate income. All realized profits would be returned to the U.S. Treasury. Banks would pay a “guarantee” fee on loans which would also serve to financially support the new entity. The plan claims to address severe losses by requiring investors to pay a fee to finance an insurance fund.
Read the full story here: http://agentgenius.com/real-estate-mortgage-economy/bill-introduced-to-merge-fannie-mae-freddie-mac-realistic/
Rep. Miller said, “we don’t want Congress meddling,” so the bill notes the new operation would be governed by a presidentially appointed board.
The new entity would seemingly operate in a not-for-profit setup, creating a “secondary market facility” for residential mortgage loans. Secondary Market Operations is no news to us however the idea is ... Operating costs would be supported by buying home loans and then pooling them into bonds sales which would generate income. All realized profits would be returned to the U.S. Treasury. Banks would pay a “guarantee” fee on loans which would also serve to financially support the new entity. The plan claims to address severe losses by requiring investors to pay a fee to finance an insurance fund.
Read the full story here: http://agentgenius.com/real-estate-mortgage-economy/bill-introduced-to-merge-fannie-mae-freddie-mac-realistic/
Rep. Miller said, “we don’t want Congress meddling,” so the bill notes the new operation would be governed by a presidentially appointed board.
Thursday, July 7, 2011
Fannie Mae courts Investors with Cash-Out Refinancing program
You know, these are all the bad guys who ran up home prices to their own profit, with no concern for the inevitable fallout; they colluded with overzealous, borderline blind, lenders who gave anybody and everybody a loan with no attention paid to their ability to repay said loan.
CNBC.com
--------------------------------------------------------------------------------
That's all over now. You can't get a loan without pledging your first born in collateral, and if you're an investor, you rank somewhere just below Angelo Mozilo.
Or do you? Last month Fannie Mae made a little change in the rules for all-cash buyers to apply for mortgages. I don't recall a press release, and I'm quite sure I'm on their mailing list. But there it is, "Announcement SEL-2011-5," a "Selling Guide Update:"
Currently, Fannie Mae requires a minimum of six months to elapse between the time a borrower purchases a home and subsequently applies for a cash-out refinance.
The Selling Guide has been updated to allow a cash-out refinance within six months of a purchase transaction when no financing was obtained for the purchase transaction.
There are of course all kinds of parameters, including maximum LTV (loan-to-value ratio), documentation, arms-length transaction and "all other cash-out refinance eligibility requirements and cash out pricing applied." The mortgage cannot be larger than the value of the home of course.
Read the full story here: http://www.cnbc.com/id/43668757
CNBC.com
--------------------------------------------------------------------------------
That's all over now. You can't get a loan without pledging your first born in collateral, and if you're an investor, you rank somewhere just below Angelo Mozilo.
Or do you? Last month Fannie Mae made a little change in the rules for all-cash buyers to apply for mortgages. I don't recall a press release, and I'm quite sure I'm on their mailing list. But there it is, "Announcement SEL-2011-5," a "Selling Guide Update:"
Currently, Fannie Mae requires a minimum of six months to elapse between the time a borrower purchases a home and subsequently applies for a cash-out refinance.
The Selling Guide has been updated to allow a cash-out refinance within six months of a purchase transaction when no financing was obtained for the purchase transaction.
There are of course all kinds of parameters, including maximum LTV (loan-to-value ratio), documentation, arms-length transaction and "all other cash-out refinance eligibility requirements and cash out pricing applied." The mortgage cannot be larger than the value of the home of course.
Read the full story here: http://www.cnbc.com/id/43668757
Monday, July 4, 2011
Thursday, June 30, 2011
Conforming loan limits change would impact California housing
More than 30,000 California families will face higher down payments, higher mortgage rates, and stricter loan qualification requirements if conforming loan limits on mortgages backed by the Federal Housing Administration (FHA), Fannie Mae, and Freddie Mac are reduced beginning October 1, 2011, according to analysis by C.A.R.
Barring congressional action, the maximum FHA, Fannie Mae, and Freddie Mac conforming loan limit will decline to $625,500 beginning Oct. 1, 2011, from the current $729,750 limit, though the majority of counties will fall far below the $625,500 maximum. The conforming loan limit determines the maximum size of a mortgage that FHA, Fannie Mae, and Freddie Mac government-sponsored enterprises (GSEs) can buy or guarantee. Non-conforming or jumbo loans typically carry a higher mortgage interest rate than a conforming loan and require a higher down payment, increasing the monthly payment and negatively impacting housing affordability for California home buyers.
C.A.R. and NAR have long advocated making higher conforming loan limits permanent. As a result of C.A.R.’s and NAR’s efforts, in 2008, Congress temporarily raised the conforming loan limits from $417,000 to $729,750 and has extended them annually through fiscal year 2011.
To view charts showing how the changes would impact various areas throughout California, visit http://www.car.org/newsstand/newsreleases/2011newsreleases/loanlimits/
and as always - Keep the faith!!!
Barring congressional action, the maximum FHA, Fannie Mae, and Freddie Mac conforming loan limit will decline to $625,500 beginning Oct. 1, 2011, from the current $729,750 limit, though the majority of counties will fall far below the $625,500 maximum. The conforming loan limit determines the maximum size of a mortgage that FHA, Fannie Mae, and Freddie Mac government-sponsored enterprises (GSEs) can buy or guarantee. Non-conforming or jumbo loans typically carry a higher mortgage interest rate than a conforming loan and require a higher down payment, increasing the monthly payment and negatively impacting housing affordability for California home buyers.
C.A.R. and NAR have long advocated making higher conforming loan limits permanent. As a result of C.A.R.’s and NAR’s efforts, in 2008, Congress temporarily raised the conforming loan limits from $417,000 to $729,750 and has extended them annually through fiscal year 2011.
To view charts showing how the changes would impact various areas throughout California, visit http://www.car.org/newsstand/newsreleases/2011newsreleases/loanlimits/
and as always - Keep the faith!!!
Wednesday, June 22, 2011
Coachella Valley Update - Sales Prices up in May
Home sales rose 6 percent across the Coachella Valley in May in contrast to double-digit declines in Riverside County and the rest of Southern California.
Last month, 1,087 single-family homes and condominiums sold in the valley, San Diego-based DataQuick Information Systems reported. Cities with the strongest sales included Palm Desert with 203, Palm Springs with 187 and La Quinta with 142.
The median price — half sold for more, half for less — was $204,000 in May, a 3 percent decline from May 2010, DataQuick reported.
Compared to May last year, sales fell 12.5 percent in Riverside County and 17.4 percent across Southern California.
In recent months, the valley's home sales have fared significantly better than the rest of Southern California, driven by second-home buyers and bargain hunters.
That hasn't helped stabilize prices, but it is helping to slowly clear out the huge inventory of real estate, a critical step in rebuilding the local economy.
Read the whole story:
http://www.mydesert.com/article/20110621/BUSINESS04/106210314/Home-sales-rise-6-percent-valley?odyssey=tab|topnews|text|Frontpage
Last month, 1,087 single-family homes and condominiums sold in the valley, San Diego-based DataQuick Information Systems reported. Cities with the strongest sales included Palm Desert with 203, Palm Springs with 187 and La Quinta with 142.
The median price — half sold for more, half for less — was $204,000 in May, a 3 percent decline from May 2010, DataQuick reported.
Compared to May last year, sales fell 12.5 percent in Riverside County and 17.4 percent across Southern California.
In recent months, the valley's home sales have fared significantly better than the rest of Southern California, driven by second-home buyers and bargain hunters.
That hasn't helped stabilize prices, but it is helping to slowly clear out the huge inventory of real estate, a critical step in rebuilding the local economy.
Read the whole story:
http://www.mydesert.com/article/20110621/BUSINESS04/106210314/Home-sales-rise-6-percent-valley?odyssey=tab|topnews|text|Frontpage
Sunday, June 19, 2011
New law July 1st - you must have CO2 detectors in your home
All single-family homes in California with attached garages and fireplaces are supposed to have a carbon monoxide detector starting July 1 when a new California law takes effect.
Owners of apartment buildings have until Jan. 1, 2013, to comply with the law. “Carbon monoxide is a silent killer, each year claiming the lives of an average of 480 people and sending more than 20,000 people to emergency rooms across the nation,” acting State Fire Marshal Tonya Hoover said in a news release.
The colorless, odorless gas is produced from heaters, fireplaces, furnaces, and many types of appliances and cooking devices. It's also produced when gas, oil, kerosene, wood or charcoal is burned.
CO detectors are easy to install and can be purchased at most stores that also sell smoke detectors, said Bill Peters, an information officer for Cal Fire. But not just any detector will do.
“You must buy one that's approved by the state fire marshal's office,” Palm Desert director of buildings and safety Russell Grance said.
They have to be connected to the home's electrical wiring and also have a battery back-up. The exception is homes without attic access and then a battery-operated detector is OK, Grance said.
The fire marshal has a list of approved devices and installation requirements on its website, http://osfm.fire.ca.gov/.
Read the full story as it appeared in the Desert Sun:
http://www.mydesert.com/article/20110616/NEWS01/106160310/New-law-takes-aim-silent-killer-CO-fumes
As always - Keep the faith !!
Owners of apartment buildings have until Jan. 1, 2013, to comply with the law. “Carbon monoxide is a silent killer, each year claiming the lives of an average of 480 people and sending more than 20,000 people to emergency rooms across the nation,” acting State Fire Marshal Tonya Hoover said in a news release.
The colorless, odorless gas is produced from heaters, fireplaces, furnaces, and many types of appliances and cooking devices. It's also produced when gas, oil, kerosene, wood or charcoal is burned.
CO detectors are easy to install and can be purchased at most stores that also sell smoke detectors, said Bill Peters, an information officer for Cal Fire. But not just any detector will do.
“You must buy one that's approved by the state fire marshal's office,” Palm Desert director of buildings and safety Russell Grance said.
They have to be connected to the home's electrical wiring and also have a battery back-up. The exception is homes without attic access and then a battery-operated detector is OK, Grance said.
The fire marshal has a list of approved devices and installation requirements on its website, http://osfm.fire.ca.gov/.
Read the full story as it appeared in the Desert Sun:
http://www.mydesert.com/article/20110616/NEWS01/106160310/New-law-takes-aim-silent-killer-CO-fumes
As always - Keep the faith !!
Thursday, June 9, 2011
Be careful if your receive a letter to mail your payments to a new Lender
An old scam has raised it's ugly head once again ...
A simple letter that looks official notifies you that your loan has been sold or your servicing transferred and that your payments should now be made to XYZ company. Be darn careful that you don't fall into this trap, lose a few months payments and really hurt your credit in the interim.
When a Lender sells your loan or transfers your servicing, you should receive a letter from them telling you so and this is what these scammers are banking on; HOWEVER, you should also receive a letter from the new entity telling you the same thing and letting you know how to accomplish this and if there is any new loan/account number to refer to and any other pertinent information in this introductory letter ... AND IF YOU ONLY GET THE FIRST LETTER ... call your old company and verify the information with customer service ... BUT DO NOT USE A PHONE NUMBER THAT MAY BE IN THIS SUSPICIOUS LETTER ... Use the number on your payment coupon or in the loan documentation you have copies of or just Google it, i.e. Bank of America customer service.
Be careful and protect yourself from loss with a 2 mintue phone call.
To read the entire story in the LA Times article, click here: http://www.latimes.com/business/realestate/la-fi-lew-20110605,0,7596418.story
As always ... Keep the faith!!!
A simple letter that looks official notifies you that your loan has been sold or your servicing transferred and that your payments should now be made to XYZ company. Be darn careful that you don't fall into this trap, lose a few months payments and really hurt your credit in the interim.
When a Lender sells your loan or transfers your servicing, you should receive a letter from them telling you so and this is what these scammers are banking on; HOWEVER, you should also receive a letter from the new entity telling you the same thing and letting you know how to accomplish this and if there is any new loan/account number to refer to and any other pertinent information in this introductory letter ... AND IF YOU ONLY GET THE FIRST LETTER ... call your old company and verify the information with customer service ... BUT DO NOT USE A PHONE NUMBER THAT MAY BE IN THIS SUSPICIOUS LETTER ... Use the number on your payment coupon or in the loan documentation you have copies of or just Google it, i.e. Bank of America customer service.
Be careful and protect yourself from loss with a 2 mintue phone call.
To read the entire story in the LA Times article, click here: http://www.latimes.com/business/realestate/la-fi-lew-20110605,0,7596418.story
As always ... Keep the faith!!!
Thursday, May 26, 2011
Great Info I wanted to share ...
Home sales dipped slightly in the Coachella Valley during April but fared better than in Riverside County, the state and the nation, new data show.
Valley home sales fell 0.5 percent in April compared to April 2010. That's better than the sale drop of 13.7 percent in Riverside County and 6.1 percent in California, San Diego-based DataQuick Information Systems reported.
Nationwide, existing home sales slipped 12.9 percent in April compared to April 2010, when a federal home-buyer tax credit helped out, the National Association of Realtors reported.
DataQuick's monthly tally for the Coachella Valley showed 1,027 existing single-family, new homes and condos sold in April, down slightly from 1,104 in March but up from 848 in February and 727 in January.
The swing in sales numbers — and prices — hasn't been dramatic, but it illustrates the road to recovery remains uneven when it comes to the local housing market, said Greg Berkemer, executive vice president of the California Desert Association of Realtors.
“Although the market has yet to hit a consistent rhythm, available inventory, interest rates and attractive prices still make the dream possible — in a beautiful desert where rising rivers and tornadoes won't take it away,” Berkemer said.
CDAR, which compiles sales and price data differently based on Multiple Listing Service information, noted that 914 single-family homes and condos sold in April compared to 966 in April 2010.
Berkemer said the average days on market in April was 72 for single-family homes, up from 60 in April a year ago. The average days on market for condos was 93, up from 78 the same month a year ago.
Between Jan. 1 and April 30, overall home sales in the valley increased about 6.5 percent compared to the same four-month period last year, DataQuick reported.
DataQuick noted the median price for valley homes fell 7 percent compared to April 2010. But April's $200,000 median price was the same as February and March and up from $181,250 in January, DataQuick reported.
Valley home sales fell 0.5 percent in April compared to April 2010. That's better than the sale drop of 13.7 percent in Riverside County and 6.1 percent in California, San Diego-based DataQuick Information Systems reported.
Nationwide, existing home sales slipped 12.9 percent in April compared to April 2010, when a federal home-buyer tax credit helped out, the National Association of Realtors reported.
DataQuick's monthly tally for the Coachella Valley showed 1,027 existing single-family, new homes and condos sold in April, down slightly from 1,104 in March but up from 848 in February and 727 in January.
The swing in sales numbers — and prices — hasn't been dramatic, but it illustrates the road to recovery remains uneven when it comes to the local housing market, said Greg Berkemer, executive vice president of the California Desert Association of Realtors.
“Although the market has yet to hit a consistent rhythm, available inventory, interest rates and attractive prices still make the dream possible — in a beautiful desert where rising rivers and tornadoes won't take it away,” Berkemer said.
CDAR, which compiles sales and price data differently based on Multiple Listing Service information, noted that 914 single-family homes and condos sold in April compared to 966 in April 2010.
Berkemer said the average days on market in April was 72 for single-family homes, up from 60 in April a year ago. The average days on market for condos was 93, up from 78 the same month a year ago.
Between Jan. 1 and April 30, overall home sales in the valley increased about 6.5 percent compared to the same four-month period last year, DataQuick reported.
DataQuick noted the median price for valley homes fell 7 percent compared to April 2010. But April's $200,000 median price was the same as February and March and up from $181,250 in January, DataQuick reported.
Thursday, May 19, 2011
New Mortgage Disclosures being tested but...did they get them right this time?
Properly disclosing the cost, both upfront and over time, has been a long debated subject. The whole debate started many years ago and the original fix was RESPA - 'Real Estate Settlement Procedures Act' passed by Congress back in 1974. I vividly remember nobody believing that it would last, expecting it to never be enforced. I was working for a Title and Escrow company in downtown San Francisco. I remember that we were instructed to ignore it. It was onerous and time-consuming and would require additional expense for the training of employess and implementation in order to comply. The company held out as long as they could and finally succumbed; then they called for volunteers who had been trained properly and paid us overtime to pull all the old files and bring them into compliance. That original ruling 'RESPA' stayed in place for many years until someone decided that noone could understand the disclosure and amended it in 2008 and again in 2010, adding several pages of disclosure that made it even more difficult to understand because one had to read a page and go follow it on the other pages - it was a ridiculous accountant-like attempt at making something understandable for the consumer that became even more ridiculous at each amendment.
Well....They're at it again and you can read that article here: http://www.sfgate.com/cgi-bin/article/article?f=/n/a/2011/05/18/financial/f090501D83.DTL
In the article, you can click on the new samples which are available for consumers to comment on between now and June 12th. I found the newer versions to be a little better but I noted several things on my single perusal: There is no definition for Government Fees (which seem to be nearly 1% of the new loan amount...You'd think they'd try to explain that a little-I've been around the block and have no clue what that is); there appears to be a duplication of title fees (generally there is the following: Owner's policy fee, Lender's policy fee, Endorsements, and related miscellaneous charges); There is no disclosure of the amount of the Private Mortgage Insurance the disclosure purports is a requirement of the loan and we all know that's not free; and there is no reference to the deposit to the Escrow Account for future payment of Private Mortgage Insurance. These were items that stood out immediately for me and I didn't pull my fine tooth comb out of my pocket or read them a second time.
I would say that the good news is that somebody's out there trying for us all but like a novelist would have a proofreader, it would seem prudent to enlist the aid of industry professionals to give it the ol' once over before releasing it.....but Kudos for watching our backs.
As always .... Keep the faith!
Well....They're at it again and you can read that article here: http://www.sfgate.com/cgi-bin/article/article?f=/n/a/2011/05/18/financial/f090501D83.DTL
In the article, you can click on the new samples which are available for consumers to comment on between now and June 12th. I found the newer versions to be a little better but I noted several things on my single perusal: There is no definition for Government Fees (which seem to be nearly 1% of the new loan amount...You'd think they'd try to explain that a little-I've been around the block and have no clue what that is); there appears to be a duplication of title fees (generally there is the following: Owner's policy fee, Lender's policy fee, Endorsements, and related miscellaneous charges); There is no disclosure of the amount of the Private Mortgage Insurance the disclosure purports is a requirement of the loan and we all know that's not free; and there is no reference to the deposit to the Escrow Account for future payment of Private Mortgage Insurance. These were items that stood out immediately for me and I didn't pull my fine tooth comb out of my pocket or read them a second time.
I would say that the good news is that somebody's out there trying for us all but like a novelist would have a proofreader, it would seem prudent to enlist the aid of industry professionals to give it the ol' once over before releasing it.....but Kudos for watching our backs.
As always .... Keep the faith!
Saturday, April 30, 2011
Say HAPPY BIRTHDAY to the City of La Quinta
Here's a few of the La Quinta Windermere troops who gathered to make the celebration a better time for all. Windermere Real Estate is a City Partner and it is our pleasure to contribute in making this a fantastic event for our residents. The troops gathered early to make preparation to dispense bottles of water (always greatly appreciated), balloons for the kids and conduct a little putting event while introducing the The First Tee to the parents of the kids.
In summary, 2011 was another success ... Fun was had by all !!!!!
Tuesday, April 26, 2011
Easter Bunny steals the show
A fine time was had by all at the La Quinta Annual Easter Egg Hunt and Chalk Drawing Contest. Windermere Real Estate is a City Partner and it was my privelege to donate a few hours to this great event. The looks on the kids faces was worth the battle of the wind -vs- Mother Nature. Once I started seeing those faces, I forgot all about the elements. Here's a group photo featuring KMIR's Johnny Atkinson (a celebrity judge)in the back row and yours truly center back.
Thursday, April 7, 2011
Mortgage Aid for those who took equity out of their property
California has decided that people who stripped equity out of their homes deserve taxpayer help after all.
The California Housing Finance Agency said Tuesday that people will no longer be excluded from three of the four Keep Your Home California programs just because they took out a home equity line of credit or did a cash-out refinance.
Keep Your Home California is a state-run program getting $2 billion from the U.S. Treasury's Hardest Hit Fund. It is designed to help low- and moderate-income people who are unemployed or owe more than their home is worth pay their mortgage.
There are four individual programs under the umbrella program. Eligible homeowners can get up to $50,000 in assistance from one or more of the four programs combined.
When Keep Your Home started taking applications in early February, it barred people from all four programs if they had tapped the equity in their homes.
"We knew we didn't have enough money to serve everyone," says Diane Richardson, CalHFA's director of legislation. "We wanted to help people who were in some kind of trouble through no fault of their own, who weren't upside down because they had taken out equity."
Of the roughly 28,000 people who have called the program seeking assistance, about 10,000 were found ineligible. Of those, about 40 percent or 4,000 were turned down because they had taken equity out of their homes.
CalHFA has now decided that people who can't pay their mortgage because they are unemployed or suffered a financial hardship shouldn't be penalized just because they robbed their homes of equity.
Under the new rules, people who took equity out of their homes will be eligible for the unemployment mortgage assistance, mortgage reinstatement assistance and transition assistance programs if they meet all the other program requirements.
These same programs have also been expanded to include mortgages that were originated after Jan. 1, 2009.
The program originally excluded mortgages originated after that date because they also are excluded under the federal Home Affordable Modification Program. "We wanted to be consistent with HAMP," Richardson says.
But CalHFA found that a lot of homeowners in trouble had refinanced after that date and it did not want to exclude them.
Homeowners who took cash out of their homes or whose mortgage was originated after Jan. 1, 2009, remain ineligible for the fourth program, which offers principal reduction.
To qualify for any of the four programs, homeowners must fall below certain income limits ($119,300 in San Francisco, San Mateo and Marin counties; $108,350 in Contra Costa and Alameda counties).
They also must be living in the home and cannot own a second home, but there are no other asset limits. Applicants will not be asked how they spent any cash they took out of their homes or how much they have in bank or investment accounts.
For other requirements, see www.keepyourhomecalifornia.org/eligibility.htm.
Richardson says that "a couple hundred" people have received help from the program and that about 2,000 more are in the final stage of confirming their eligibility.
CalHFA is contacting people who were previously disqualified but would qualify under the new rules. These homeowners can also contact the program at (888) 954-5337.
Some people have been turned down because their loan servicer is not participating in one or more of the programs.
All of the major private-sector servicers - Bank of America, Wells Fargo, Chase, CitiMortgage and GMAC - are participating in the unemployment mortgage assistance plan, which makes mortgage payments on behalf of unemployed homeowners in imminent danger of foreclosure. The plan will pay 100 percent of the borrower's payment, up to $3,000 a month, for six months.
None of those servicers are participating in the principal reduction program, but BofA has agreed to join a pilot program that will start in a few weeks, Richardson says.
This program will provide capital to reduce the principal balances of qualifying borrowers who are underwater, or owe more than their homes are worth. For every dollar the program contributes, BofA will also reduce the borrower's principal by a dollar, Richardson says.
For borrowers who have received no other assistance from Keep Your Home California, this program could reduce their balance by up to $100,000 - $50,000 from the program and $50,000 from BofA.
However, the program cannot reduce loan balances to less than 115 percent of the home's market value and it won't reduce the borrower's debt-to-income ratio to less than 31 percent, Richardson says.
California is one of 18 states receiving money from the Hardest Hit Fund. Each state could set up its own program, within limits. Many never prevented homeowners from receiving assistance because they had withdrawn equity from their homes. However, many also have much less generous payouts than California.
To learn more, go to www.keepyourhomecalifornia.org, then click on Programs.
Reprinted from SFGATE.com the official website of the S. F. Chronicle
The California Housing Finance Agency said Tuesday that people will no longer be excluded from three of the four Keep Your Home California programs just because they took out a home equity line of credit or did a cash-out refinance.
Keep Your Home California is a state-run program getting $2 billion from the U.S. Treasury's Hardest Hit Fund. It is designed to help low- and moderate-income people who are unemployed or owe more than their home is worth pay their mortgage.
There are four individual programs under the umbrella program. Eligible homeowners can get up to $50,000 in assistance from one or more of the four programs combined.
When Keep Your Home started taking applications in early February, it barred people from all four programs if they had tapped the equity in their homes.
"We knew we didn't have enough money to serve everyone," says Diane Richardson, CalHFA's director of legislation. "We wanted to help people who were in some kind of trouble through no fault of their own, who weren't upside down because they had taken out equity."
Of the roughly 28,000 people who have called the program seeking assistance, about 10,000 were found ineligible. Of those, about 40 percent or 4,000 were turned down because they had taken equity out of their homes.
CalHFA has now decided that people who can't pay their mortgage because they are unemployed or suffered a financial hardship shouldn't be penalized just because they robbed their homes of equity.
Under the new rules, people who took equity out of their homes will be eligible for the unemployment mortgage assistance, mortgage reinstatement assistance and transition assistance programs if they meet all the other program requirements.
These same programs have also been expanded to include mortgages that were originated after Jan. 1, 2009.
The program originally excluded mortgages originated after that date because they also are excluded under the federal Home Affordable Modification Program. "We wanted to be consistent with HAMP," Richardson says.
But CalHFA found that a lot of homeowners in trouble had refinanced after that date and it did not want to exclude them.
Homeowners who took cash out of their homes or whose mortgage was originated after Jan. 1, 2009, remain ineligible for the fourth program, which offers principal reduction.
To qualify for any of the four programs, homeowners must fall below certain income limits ($119,300 in San Francisco, San Mateo and Marin counties; $108,350 in Contra Costa and Alameda counties).
They also must be living in the home and cannot own a second home, but there are no other asset limits. Applicants will not be asked how they spent any cash they took out of their homes or how much they have in bank or investment accounts.
For other requirements, see www.keepyourhomecalifornia.org/eligibility.htm.
Richardson says that "a couple hundred" people have received help from the program and that about 2,000 more are in the final stage of confirming their eligibility.
CalHFA is contacting people who were previously disqualified but would qualify under the new rules. These homeowners can also contact the program at (888) 954-5337.
Some people have been turned down because their loan servicer is not participating in one or more of the programs.
All of the major private-sector servicers - Bank of America, Wells Fargo, Chase, CitiMortgage and GMAC - are participating in the unemployment mortgage assistance plan, which makes mortgage payments on behalf of unemployed homeowners in imminent danger of foreclosure. The plan will pay 100 percent of the borrower's payment, up to $3,000 a month, for six months.
None of those servicers are participating in the principal reduction program, but BofA has agreed to join a pilot program that will start in a few weeks, Richardson says.
This program will provide capital to reduce the principal balances of qualifying borrowers who are underwater, or owe more than their homes are worth. For every dollar the program contributes, BofA will also reduce the borrower's principal by a dollar, Richardson says.
For borrowers who have received no other assistance from Keep Your Home California, this program could reduce their balance by up to $100,000 - $50,000 from the program and $50,000 from BofA.
However, the program cannot reduce loan balances to less than 115 percent of the home's market value and it won't reduce the borrower's debt-to-income ratio to less than 31 percent, Richardson says.
California is one of 18 states receiving money from the Hardest Hit Fund. Each state could set up its own program, within limits. Many never prevented homeowners from receiving assistance because they had withdrawn equity from their homes. However, many also have much less generous payouts than California.
To learn more, go to www.keepyourhomecalifornia.org, then click on Programs.
Reprinted from SFGATE.com the official website of the S. F. Chronicle
Sunday, April 3, 2011
Change to tax filing date for 2011
This year, because of weekends and holidays, your federal tax return is due on April 18 instead of the usual April 15 deadline. April 18 is also the deadline for several other important tax-related actions. For example, your first estimated tax payment for 2011 is due April 18. If you need an extension, you must file the appropriate form and it mail by April 18th.
Saturday, March 26, 2011
First Time Home Buyer Tax Credit Update
The IRS recently released information on processing issues that are impacting a small percentage of tax returns involving repayment of the First Time Homebuyer Credit (FTHB), primarily involving 2008 home purchases. While most of these returns are processing normally, the IRS recognizes the hardship caused by delayed refunds, and it has assigned additional staff and resources to address the issues promptly.
It is important to note that taxpayer returns claiming a home purchase in 2010 are not affected, and those returns are being processed as are the vast majority of other homebuyer returns.
Here’s an update on the source of the processing issues:
1. Married Filing Joint taxpayers who received the FTHB credit on a 2008 purchase
There seems to be an identified processing issue primarily impacting refunds for married couples filing joint returns this year who received the First Time Homebuyer credit on their 2008 tax return. This credit was an interest-free loan, and must be paid back beginning this year under the provisions of the law.
This issue, related to Form 5405, First-Time Homebuyer Credit and Repayment of the Credit, primarily impacts Married Filing Jointly taxpayers who filed their tax returns this year before Feb. 22. The IRS is working aggressively to manually process tax returns for this group of taxpayers. It expects most, if not all, of these refunds to be available by April 5, and others the following week. (The date assumes that there are no other issues with their return, and that their refunds are not subject to any offsets for unpaid federal taxes or other debts.)
2. Taxpayers who received the FTHB credit and are now reporting the sale or disposition of their home
3. Taxpayers who received the FTHB credit and are attempting to pay back more than the amount required (typically $500)
These two issues require changes to IRS’ core tax processing systems. The IRS is actively working on the development and testing of the required changes that will allow these impacted tax returns to be processed and appropriate refunds issued. The IRS does not currently have a definitive date for when these changes will be complete, although it will be in April.
What should taxpayers do?
The IRS understands that taxpayers affected by this issue are anxious to get the status of their refund. For those who have already filed, no action is necessary. They can check “Where’s My Refund” at www.IRS.gov for updates. Because the IRS is already aware of this issue and is taking corrective action, there is no need to call.
For those who have not yet filed and are making a repayment of a First Time Homebuyer Credit this year, there is a simple step taxpayers can take to help speed processing. Couples filing a joint return for tax year 2010 who received the credit on their jointly filed 2008 tax return should file two 5405 forms, one for each taxpayer. For couples filing a joint return for 2010 but who had a different filing status in 2008 and only one spouse received the credit, the IRS recommends filing one Form 5405 for the taxpayer who received the credit.
For more information visit www.IRS.gov.
RISMEDIA, March 26, 2011
It is important to note that taxpayer returns claiming a home purchase in 2010 are not affected, and those returns are being processed as are the vast majority of other homebuyer returns.
Here’s an update on the source of the processing issues:
1. Married Filing Joint taxpayers who received the FTHB credit on a 2008 purchase
There seems to be an identified processing issue primarily impacting refunds for married couples filing joint returns this year who received the First Time Homebuyer credit on their 2008 tax return. This credit was an interest-free loan, and must be paid back beginning this year under the provisions of the law.
This issue, related to Form 5405, First-Time Homebuyer Credit and Repayment of the Credit, primarily impacts Married Filing Jointly taxpayers who filed their tax returns this year before Feb. 22. The IRS is working aggressively to manually process tax returns for this group of taxpayers. It expects most, if not all, of these refunds to be available by April 5, and others the following week. (The date assumes that there are no other issues with their return, and that their refunds are not subject to any offsets for unpaid federal taxes or other debts.)
2. Taxpayers who received the FTHB credit and are now reporting the sale or disposition of their home
3. Taxpayers who received the FTHB credit and are attempting to pay back more than the amount required (typically $500)
These two issues require changes to IRS’ core tax processing systems. The IRS is actively working on the development and testing of the required changes that will allow these impacted tax returns to be processed and appropriate refunds issued. The IRS does not currently have a definitive date for when these changes will be complete, although it will be in April.
What should taxpayers do?
The IRS understands that taxpayers affected by this issue are anxious to get the status of their refund. For those who have already filed, no action is necessary. They can check “Where’s My Refund” at www.IRS.gov for updates. Because the IRS is already aware of this issue and is taking corrective action, there is no need to call.
For those who have not yet filed and are making a repayment of a First Time Homebuyer Credit this year, there is a simple step taxpayers can take to help speed processing. Couples filing a joint return for tax year 2010 who received the credit on their jointly filed 2008 tax return should file two 5405 forms, one for each taxpayer. For couples filing a joint return for 2010 but who had a different filing status in 2008 and only one spouse received the credit, the IRS recommends filing one Form 5405 for the taxpayer who received the credit.
For more information visit www.IRS.gov.
RISMEDIA, March 26, 2011
Friday, March 25, 2011
Do you really understand "As Is"?
As part of continuing education, I recently had the pleasure of attending a presentation by a noted Author and Professional Expert who explains "As Is" in this News Article...
• Do You Really Know What “As Is” Is? By Barbara Nichols
Most standard real estate contracts for existing construction sales, now have a clause included, which states that the property is sold “as is.” In questioning both buyers and sellers, and real estate sales agents, it is apparent that there exists some confusion regarding this term.
When a contract is signed by a buyer and seller, which includes the “as is” clause, this means that at the time of signing it is the seller’s desire not to repair, or credit the buyer any funds, for any defects the buyer may find in the property through the process of their inspections, or investigations. The buyer agrees to the “as is” clause, but usually has the contingency to inspect the property for defects, and the right to withdraw from the transaction if those defects are of a number, or type, or cost to repair, the buyer deems to be unsatisfactory.
The “as is” clause in no way limits the right of the buyer to determine what the “as is” is, through their diligent inspection of the property. It is strongly recommended that no buyer eliminate their inspection right contingency in a real estate purchase.
The “as is” clause does not reduce, or eliminate, the duty of the seller or agents to fully disclose all property defects, and other material facts, of which they may be aware.
A contract is an agreement between the parties, which can be changed by further agreement between the parties. Should the buyer discover significant defects in their inspection process, either unknown to the seller or agents, or more significant and costly to repair, than previously believed; they have every right to request credits toward those repairs, or that the repairs be made by the seller.
Because of the “as is” clause, the seller has the right to say that they will not give credits, or make repairs, and that the buyer may withdraw from the transaction if this is not acceptable to the buyer. However, the seller may now have new information on his property’s condition he did not have before, and this new information must be disclosed to the next prospective buyer.
The usual result of this situation, is that the buyer and seller agree to some credits, or some repairs, through further negotiation, and thereby change the agreement, in spite of the prior “as is” clause. Although in hot markets, with multiple offers, the buyer may have to accept the property “as is,” or cancel the transaction and look for another property.
• Do You Really Know What “As Is” Is? By Barbara Nichols
Most standard real estate contracts for existing construction sales, now have a clause included, which states that the property is sold “as is.” In questioning both buyers and sellers, and real estate sales agents, it is apparent that there exists some confusion regarding this term.
When a contract is signed by a buyer and seller, which includes the “as is” clause, this means that at the time of signing it is the seller’s desire not to repair, or credit the buyer any funds, for any defects the buyer may find in the property through the process of their inspections, or investigations. The buyer agrees to the “as is” clause, but usually has the contingency to inspect the property for defects, and the right to withdraw from the transaction if those defects are of a number, or type, or cost to repair, the buyer deems to be unsatisfactory.
The “as is” clause in no way limits the right of the buyer to determine what the “as is” is, through their diligent inspection of the property. It is strongly recommended that no buyer eliminate their inspection right contingency in a real estate purchase.
The “as is” clause does not reduce, or eliminate, the duty of the seller or agents to fully disclose all property defects, and other material facts, of which they may be aware.
A contract is an agreement between the parties, which can be changed by further agreement between the parties. Should the buyer discover significant defects in their inspection process, either unknown to the seller or agents, or more significant and costly to repair, than previously believed; they have every right to request credits toward those repairs, or that the repairs be made by the seller.
Because of the “as is” clause, the seller has the right to say that they will not give credits, or make repairs, and that the buyer may withdraw from the transaction if this is not acceptable to the buyer. However, the seller may now have new information on his property’s condition he did not have before, and this new information must be disclosed to the next prospective buyer.
The usual result of this situation, is that the buyer and seller agree to some credits, or some repairs, through further negotiation, and thereby change the agreement, in spite of the prior “as is” clause. Although in hot markets, with multiple offers, the buyer may have to accept the property “as is,” or cancel the transaction and look for another property.
Thursday, March 24, 2011
FreddieMac working Social Media to disseminate information to borrowers
Freddie Mac Turns to YouTube to Dispel Common Foreclosure Myths
Freddie Mac (OTC Bulletin Board: FMCC) is helping consumers separate foreclosure fact from fiction in a new video series launched today on its YouTube Channel (http://www.youtube.com/FreddieMac). Each 90- to 120-second video dispels one of five common myths that could prevent people from keeping their homes if they face foreclosure. It is based on content from the Freddie Mac Get the Facts on Homeownership education and outreach materials.
News Facts
Myth 1: If my house is foreclosed, I can never buy a house again -- the foreclosure will stay on my record forever.
Truth 1: Foreclosure can have a devastating effect on your finances and you personally, but you can recover. Use the time after foreclosure to prepare yourself for successful homeownership the second time around by creating a spending and savings plan and rebuilding your credit.
Myth 2: I should stop paying my mortgage so I can get assistance with my mortgage payments.
Truth 2: Stopping payment on your mortgage only hurts your situation and can expose you to foreclosure and credit difficulties that could require years to rebuild.
Myth 3: If I'm late on my monthly payments, I'll lose my house.
Truth 3: If you have a financial hardship and fall behind, it's possible to keep your house and get back on track if you contact your lender as soon as possible to discuss your options. You can also contact a HUD-approved housing counselor by calling the Homeowner's HOPE Hotline at 888-995-HOPE (4673).
Myth 4: I am getting many offers for help from a variety of people. They are probably all scams.
Truth 4: Scam artists often target homeowners who are struggling to meet their mortgage commitment or anxious to sell their home. It's important to always open and respond to communications from your lender, particularly if you've already missed a mortgage payment. In addition, if you are in a financial crisis or facing foreclosure, make sure you work with your lender or a HUD-approved counseling agency to avoid common scams.
Myth 5: My lender is not responding to my inquiries, so I should just give up and face foreclosure.
Truth 5: Whatever you do, don't walk away, and don't give up. It may take several attempts to reach your lender because their call volume can be very high.
Freddie Mac (OTC Bulletin Board: FMCC) is helping consumers separate foreclosure fact from fiction in a new video series launched today on its YouTube Channel (http://www.youtube.com/FreddieMac). Each 90- to 120-second video dispels one of five common myths that could prevent people from keeping their homes if they face foreclosure. It is based on content from the Freddie Mac Get the Facts on Homeownership education and outreach materials.
News Facts
Myth 1: If my house is foreclosed, I can never buy a house again -- the foreclosure will stay on my record forever.
Truth 1: Foreclosure can have a devastating effect on your finances and you personally, but you can recover. Use the time after foreclosure to prepare yourself for successful homeownership the second time around by creating a spending and savings plan and rebuilding your credit.
Myth 2: I should stop paying my mortgage so I can get assistance with my mortgage payments.
Truth 2: Stopping payment on your mortgage only hurts your situation and can expose you to foreclosure and credit difficulties that could require years to rebuild.
Myth 3: If I'm late on my monthly payments, I'll lose my house.
Truth 3: If you have a financial hardship and fall behind, it's possible to keep your house and get back on track if you contact your lender as soon as possible to discuss your options. You can also contact a HUD-approved housing counselor by calling the Homeowner's HOPE Hotline at 888-995-HOPE (4673).
Myth 4: I am getting many offers for help from a variety of people. They are probably all scams.
Truth 4: Scam artists often target homeowners who are struggling to meet their mortgage commitment or anxious to sell their home. It's important to always open and respond to communications from your lender, particularly if you've already missed a mortgage payment. In addition, if you are in a financial crisis or facing foreclosure, make sure you work with your lender or a HUD-approved counseling agency to avoid common scams.
Myth 5: My lender is not responding to my inquiries, so I should just give up and face foreclosure.
Truth 5: Whatever you do, don't walk away, and don't give up. It may take several attempts to reach your lender because their call volume can be very high.
Wednesday, March 16, 2011
Ladies, you don’t have to be a Jack to be a Jack of all trades.....
What Makes Us Tick…
If you're like many of us, the idea of taking on home improvement projects might seem beyond your realm. You may have convinced yourself that you don't have the skills, you're not physically able, or that home improvement is just too scary. Well, we're here to let you know that you can change your home on your own. You can take on any home improvement task, and you can turn the house you live in into a home you'll love.
Ladies, you don’t have to be a Jack to be a Jack of all trades. You can Be Jane.
And once you tackle home improvement, then life improvement and even world improvement are just around the corner.
That’s right. At Be Jane, we believe that when women gain the confidence to enhance their homes, they also become inspired to remodel their lives and from there impact the lives of those around them.
That’s why Be Jane is more than just the women’s home improvement community. We’re the women’s home power portal!
Once Upon a Time…
We envisioned an online neighborhood where women of all ages and DIY skill levels could find the inspiration, information and encouragement to change their homes. So we created a dynamic community for all women, be they beginners who have never picked up hammers, weekend do-it-herselfers, or professionals in the industry.
Be Jane offers an ever expanding range of home improvement articles, tips and tricks, videos, tutorials and how-to guides. We're here as a resource for you to turn to whether you're in the planning stage or knee-deep in plaster and having an "Ai yai yai, what have I done?!" moment (and trust us, we've been there).
What differentiates us from other DIY sites is our focus on home improvement from a woman's perspective. No, that doesn't mean that we're all about pink. It means that we not only show you the "how-to" that gets the project done in a way that's relatable and easy to follow, but we also focus on how that project will enhance your life—or, what we like to call the "why-to."
Building the Jane Community…
Be Jane continues to grow with your help. No matter how big or small you may think your project or experience is, know that your story—whether it's a spark of inspiration (like the faux finish you put on your bedroom walls), a relatable issue that begs to be told (such as your dealings with the rude tile guy), or that sense of empowerment you felt from doing it yourself—is worth telling. After all, there might be a Jane out there who just needs some words of encouragement to get through her project. Whatever you have to say, we want to hear from you!
Vision for the Future…
As you may have noticed, we've recently relaunched our new website with a new look and design, more DIY projects and community features, and novel inspirations for becoming empowered Janes in our homes, communities, and world. We’re expanding our reach to include a breadth of information, social networking tools, services and user generated content across multiple home channels, including Home Improvement, Home Decor, Home Buying, Home Building, Finance, Mommy Jane, and Going Green. We want to be the place where you plug in and get charged, fueled with ideas and encouragement to extend the full reach of your Jane power.
Be Jane is here to lead you to the next level of positive change and self expression, so get ready for some powerful motivation and mobilization. Remember: Do-It-Yourself doesn't mean you have to do it alone! BeJane.com is part of the Builder Homesite, Inc. family of home sites. ABOUT BUILDER HOMESITE, INC.
Builder Homesite, Inc. was founded with a mission to bring homebuilding industry leaders together to develop world-class technology solutions. Builder Homesite is a consortium of 35 of the nation's largest homebuilders, and its flagship product is NewHomeSource.com, a consumer website offering the Internet's most comprehensive information and selection of new homes available. For more information about Builder Homesite, visit BuilderHomesite.com. BeJane.com offers a full range of home improvement articles, tips/tricks, videos, and how-to guides.
reprinted from the website, I hope you find this useful -
Roger A. Sullivan (760) 610-3245 http://LQRealtor.com
If you're like many of us, the idea of taking on home improvement projects might seem beyond your realm. You may have convinced yourself that you don't have the skills, you're not physically able, or that home improvement is just too scary. Well, we're here to let you know that you can change your home on your own. You can take on any home improvement task, and you can turn the house you live in into a home you'll love.
Ladies, you don’t have to be a Jack to be a Jack of all trades. You can Be Jane.
And once you tackle home improvement, then life improvement and even world improvement are just around the corner.
That’s right. At Be Jane, we believe that when women gain the confidence to enhance their homes, they also become inspired to remodel their lives and from there impact the lives of those around them.
That’s why Be Jane is more than just the women’s home improvement community. We’re the women’s home power portal!
Once Upon a Time…
We envisioned an online neighborhood where women of all ages and DIY skill levels could find the inspiration, information and encouragement to change their homes. So we created a dynamic community for all women, be they beginners who have never picked up hammers, weekend do-it-herselfers, or professionals in the industry.
Be Jane offers an ever expanding range of home improvement articles, tips and tricks, videos, tutorials and how-to guides. We're here as a resource for you to turn to whether you're in the planning stage or knee-deep in plaster and having an "Ai yai yai, what have I done?!" moment (and trust us, we've been there).
What differentiates us from other DIY sites is our focus on home improvement from a woman's perspective. No, that doesn't mean that we're all about pink. It means that we not only show you the "how-to" that gets the project done in a way that's relatable and easy to follow, but we also focus on how that project will enhance your life—or, what we like to call the "why-to."
Building the Jane Community…
Be Jane continues to grow with your help. No matter how big or small you may think your project or experience is, know that your story—whether it's a spark of inspiration (like the faux finish you put on your bedroom walls), a relatable issue that begs to be told (such as your dealings with the rude tile guy), or that sense of empowerment you felt from doing it yourself—is worth telling. After all, there might be a Jane out there who just needs some words of encouragement to get through her project. Whatever you have to say, we want to hear from you!
Vision for the Future…
As you may have noticed, we've recently relaunched our new website with a new look and design, more DIY projects and community features, and novel inspirations for becoming empowered Janes in our homes, communities, and world. We’re expanding our reach to include a breadth of information, social networking tools, services and user generated content across multiple home channels, including Home Improvement, Home Decor, Home Buying, Home Building, Finance, Mommy Jane, and Going Green. We want to be the place where you plug in and get charged, fueled with ideas and encouragement to extend the full reach of your Jane power.
Be Jane is here to lead you to the next level of positive change and self expression, so get ready for some powerful motivation and mobilization. Remember: Do-It-Yourself doesn't mean you have to do it alone! BeJane.com is part of the Builder Homesite, Inc. family of home sites. ABOUT BUILDER HOMESITE, INC.
Builder Homesite, Inc. was founded with a mission to bring homebuilding industry leaders together to develop world-class technology solutions. Builder Homesite is a consortium of 35 of the nation's largest homebuilders, and its flagship product is NewHomeSource.com, a consumer website offering the Internet's most comprehensive information and selection of new homes available. For more information about Builder Homesite, visit BuilderHomesite.com. BeJane.com offers a full range of home improvement articles, tips/tricks, videos, and how-to guides.
reprinted from the website, I hope you find this useful -
Roger A. Sullivan (760) 610-3245 http://LQRealtor.com
Sunday, March 13, 2011
Listingbook - the people's champ for property searches in the desert
Listingbook is a new product available to Realtors. I happen to subscribe to it so that I am able to offer it to my clients and friends. Whether a Seller, Buyer or just interested in property trends, you can enter the site and request an account or receive an invitation from a subscribing Realtor. Account setup is real simple. Some Realtors will restrict account approval by requiring you to include your phone number when signing up - here is one that doesn't require that ... http://DesertListingBookFree.com
The property data is solely for available properties / active listings and is updated every 15-30 minutes so no bothering with properties that are already in contract or sold. Other than the Multiple Listing Service 'MLS' is has the most photos of any search site and includes: days on the market, price history, map reports, price reduction notifications, new listing alerts, virtual tours and property favorites folder (You can keep data on properties that interest you ... along with keeping multiple separate searches). With the MLS, you can't keep all the search data and results for future review.
Upon successfully opening you account, you will find that the sign-in scenario is not too cumbersome and I think you may find the results help you immensely. So, whether you are Selling, Buying, or curious about neighborhood activity (what your neighbor has listed their property for), this is the cream of the crop in property data websites...
more free listingbook domains: http://DesertListingbookRealtor.com, http://LaQuintaListingbook.com, http://IndioListingbook.com, http://IndianWellsListingbook.com, http://RanchoMirageListingbook.com, http://CathedralCityListingbook.com, http://DesertListingbookRealtor.com, http://ListingbookIndio.com, http://ListingbookLaQuinta.com, http://ListingbookIndianWells.com, http://ListingbookPalmDesert.com, http://ListingbookDesert.com, http://ListingbookRanchoMirage.com, http://ListingbookCathedralCity.com, http://ListingbookPalmSprings.com...so along with http://DesertListingbookFree.com... your future search efforts for Desert property should be much improved.
The property data is solely for available properties / active listings and is updated every 15-30 minutes so no bothering with properties that are already in contract or sold. Other than the Multiple Listing Service 'MLS' is has the most photos of any search site and includes: days on the market, price history, map reports, price reduction notifications, new listing alerts, virtual tours and property favorites folder (You can keep data on properties that interest you ... along with keeping multiple separate searches). With the MLS, you can't keep all the search data and results for future review.
Upon successfully opening you account, you will find that the sign-in scenario is not too cumbersome and I think you may find the results help you immensely. So, whether you are Selling, Buying, or curious about neighborhood activity (what your neighbor has listed their property for), this is the cream of the crop in property data websites...
more free listingbook domains: http://DesertListingbookRealtor.com, http://LaQuintaListingbook.com, http://IndioListingbook.com, http://IndianWellsListingbook.com, http://RanchoMirageListingbook.com, http://CathedralCityListingbook.com, http://DesertListingbookRealtor.com, http://ListingbookIndio.com, http://ListingbookLaQuinta.com, http://ListingbookIndianWells.com, http://ListingbookPalmDesert.com, http://ListingbookDesert.com, http://ListingbookRanchoMirage.com, http://ListingbookCathedralCity.com, http://ListingbookPalmSprings.com...so along with http://DesertListingbookFree.com... your future search efforts for Desert property should be much improved.
Wednesday, March 9, 2011
CALIFORNIA ASSOCIATION OF REALTORS® working for us all
Tomorrow morning the following letter will appear in major newspapers throughout the state...the Bakersfield Californian, Fresno Bee, Los Angeles Times, Mercury News, Sacramento Bee, San Diego Union-Tribune and San Francisco Chronicle.
March 10, 2011
An important message from the CALIFORNIA ASSOCIATION OF REALTORS®:
I write on behalf of the CALIFORNIA ASSOCIATION OF REALTORS®, whose 170,000 members continue to witness the devastating consequences the home foreclosure crisis is having on California’s families, neighborhoods, and communities on a daily basis.
The number of families affected by foreclosure is staggering. During the past three years, more than 640,000 Californians have lost their homes. With the number of homeowners who owe more than their home is worth hovering at 30 percent, experts predict there will be many more foreclosures in 2011 and 2012. Unless we take immediate, aggressive action to assist these homeowners, any meaningful recovery in the housing market and overall economy will continue to be delayed.
Tragically, only a fraction of those who face foreclosure will remain in their homes when all is said and done. Those whose incomes and financial circumstances meet strict guidelines may qualify for a loan modification that will reduce their monthly payment to more affordable levels. Yet the federal Home Affordable Modification Program (HAMP) is expected to prevent only 700,000 to 800,000 foreclosures nationwide before it expires at the end of 2012, and the program does little to help those homeowners who are unemployed or otherwise no longer able to meet their financial commitments. Their last hope is to sell their home, which often means convincing their lender or the investor who “owns” the loan (and, in many cases, the holder of a second mortgage lien and the mortgage insurer) to accept a “short sale.”
With a short sale, homeowners with a proven hardship negotiate an agreement to sell their home for less than the balance owed. Although not every homeowner or mortgage is eligible, those who are able to finalize a short sale avoid a foreclosure on their credit record and can move on with their lives. Last year, 20 percent of home sales in our state involved short sales.
Short sales can play an important role in our state’s economic recovery by accelerating the pace of home sales and reducing the inventory of bank-owned homes on the market. There are other benefits as well. Homebuyers who can qualify for a mortgage at today’s low interest rates also are able to purchase a home at below-market prices. Banks get a nonperforming asset off their books and avoid the headaches associated with disposing of assets they don’t want to own in the first place. Neighborhoods have fewer abandoned homes, and local businesses have more customers with money to spend.
Unfortunately, many homeowners are unable to successfully negotiate a short sale. According to a recent survey of 2,150 California REALTORS® who have assisted clients with a short sale, only three out of five transactions closed – even when there was an interested and qualified buyer.
What’s the problem? For one, no two mortgage agreements are the same, so it can be difficult to standardize short sale processes and procedures. Many homeowners have second mortgages, which further complicate matters. Then there’s the challenge of convincing multiple parties to take a financial loss or, in the case of loan servicers, to forego fees they otherwise might earn during the course of the foreclosure process. Poor and slow service by many banks and servicers has only exacerbated the problem. Horror stories abound from potential homebuyers and REALTORS® forced to wait 90 or more days for a response to a purchase offer or being required to fax short sale applications or other paperwork as many as 50 times. These delays discourage potential homebuyers from considering a short sale purchase and undermine the process for those who short sales are intended to benefit – the hundreds of thousands of families facing foreclosure.
Increasing the number of closed short sales by speeding up and streamlining the short sale process is one important way we can help California families avoid foreclosure and move our economy closer to recovery. That’s why the California Association of REALTORS® is taking steps to enable more families to arrange a short sale. Recently, we advocated for improvements to short sale guidelines established under the federal Home Affordable Foreclosure Alternative (HAFA) program. We’re meeting with major banks, U.S. Treasury officials, government-sponsored entities (including Fannie Mae and Freddie Mac), and others to urge them to standardize processes, comply with federal guidelines, improve communication with other stakeholders and increase staffing with the goal of eliminating service issues. We’ve also offered our members training in every aspect of the short sale process so they can assist their clients.
But we can’t do it alone. That’s why we’re focusing the spotlight on short sales and calling on regulators, elected officials, nonprofits, business organizations, companies, and individuals with a stake in California’s economic future to resolve this issue and others that get in the way of a recovery. It won’t be easy, and some compromises will be required. The important thing is that we need to act today. Our families and our communities can’t wait any longer.
Sincerely,
Beth L. Peerce
President
CALIFORNIA ASSOCIATION OF REALTORS®
March 10, 2011
An important message from the CALIFORNIA ASSOCIATION OF REALTORS®:
I write on behalf of the CALIFORNIA ASSOCIATION OF REALTORS®, whose 170,000 members continue to witness the devastating consequences the home foreclosure crisis is having on California’s families, neighborhoods, and communities on a daily basis.
The number of families affected by foreclosure is staggering. During the past three years, more than 640,000 Californians have lost their homes. With the number of homeowners who owe more than their home is worth hovering at 30 percent, experts predict there will be many more foreclosures in 2011 and 2012. Unless we take immediate, aggressive action to assist these homeowners, any meaningful recovery in the housing market and overall economy will continue to be delayed.
Tragically, only a fraction of those who face foreclosure will remain in their homes when all is said and done. Those whose incomes and financial circumstances meet strict guidelines may qualify for a loan modification that will reduce their monthly payment to more affordable levels. Yet the federal Home Affordable Modification Program (HAMP) is expected to prevent only 700,000 to 800,000 foreclosures nationwide before it expires at the end of 2012, and the program does little to help those homeowners who are unemployed or otherwise no longer able to meet their financial commitments. Their last hope is to sell their home, which often means convincing their lender or the investor who “owns” the loan (and, in many cases, the holder of a second mortgage lien and the mortgage insurer) to accept a “short sale.”
With a short sale, homeowners with a proven hardship negotiate an agreement to sell their home for less than the balance owed. Although not every homeowner or mortgage is eligible, those who are able to finalize a short sale avoid a foreclosure on their credit record and can move on with their lives. Last year, 20 percent of home sales in our state involved short sales.
Short sales can play an important role in our state’s economic recovery by accelerating the pace of home sales and reducing the inventory of bank-owned homes on the market. There are other benefits as well. Homebuyers who can qualify for a mortgage at today’s low interest rates also are able to purchase a home at below-market prices. Banks get a nonperforming asset off their books and avoid the headaches associated with disposing of assets they don’t want to own in the first place. Neighborhoods have fewer abandoned homes, and local businesses have more customers with money to spend.
Unfortunately, many homeowners are unable to successfully negotiate a short sale. According to a recent survey of 2,150 California REALTORS® who have assisted clients with a short sale, only three out of five transactions closed – even when there was an interested and qualified buyer.
What’s the problem? For one, no two mortgage agreements are the same, so it can be difficult to standardize short sale processes and procedures. Many homeowners have second mortgages, which further complicate matters. Then there’s the challenge of convincing multiple parties to take a financial loss or, in the case of loan servicers, to forego fees they otherwise might earn during the course of the foreclosure process. Poor and slow service by many banks and servicers has only exacerbated the problem. Horror stories abound from potential homebuyers and REALTORS® forced to wait 90 or more days for a response to a purchase offer or being required to fax short sale applications or other paperwork as many as 50 times. These delays discourage potential homebuyers from considering a short sale purchase and undermine the process for those who short sales are intended to benefit – the hundreds of thousands of families facing foreclosure.
Increasing the number of closed short sales by speeding up and streamlining the short sale process is one important way we can help California families avoid foreclosure and move our economy closer to recovery. That’s why the California Association of REALTORS® is taking steps to enable more families to arrange a short sale. Recently, we advocated for improvements to short sale guidelines established under the federal Home Affordable Foreclosure Alternative (HAFA) program. We’re meeting with major banks, U.S. Treasury officials, government-sponsored entities (including Fannie Mae and Freddie Mac), and others to urge them to standardize processes, comply with federal guidelines, improve communication with other stakeholders and increase staffing with the goal of eliminating service issues. We’ve also offered our members training in every aspect of the short sale process so they can assist their clients.
But we can’t do it alone. That’s why we’re focusing the spotlight on short sales and calling on regulators, elected officials, nonprofits, business organizations, companies, and individuals with a stake in California’s economic future to resolve this issue and others that get in the way of a recovery. It won’t be easy, and some compromises will be required. The important thing is that we need to act today. Our families and our communities can’t wait any longer.
Sincerely,
Beth L. Peerce
President
CALIFORNIA ASSOCIATION OF REALTORS®
Friday, February 4, 2011
2011 - New laws affecting California Real Estate
No Short Sale Deficiencies -
•A seller's first trust deed lender cannot obtain a deficiency judgment against the seller after a short sale. Providing written consent to a short sale shall obligate the first trust deed lender to accept the sales proceeds as full payment and discharge of the remaining amount owed on the loan. This applies to first trust deeds secured by one-to-four residential units, but it does not limit the lender from seeking damages for fraud or waste by the borrower. Senate Bill 931, effective January 1, 2011.
Energy Audit in Home Inspection Report -
•A home inspection and inspection report may, upon a client's request, include an audit of the energy efficiency of a home, according to the standards of the Home Energy Rating Systems (HERS). REALTORs® are encouraged to provide new HERS booklet to residential buyers, and delivery of this booklet will be adequate to inform the buyer about statewide HERS program. Assembly Bill 1809 and California Civil Code section 2079.10, effective January 2, 2011.
Restriction on Adverse Possession Claim -
•A claim for adverse possession requires, among other things, certified records of the county tax collector showing that all state, county, or municipal taxes have been timely paid for the five-year period the property has been occupied and claimed. Existing law merely requires proof that taxes have been paid for the five-year period, not certified proof of timely payments. Assembly Bill 1684, effective January 1, 2011.
Enforcement of Mortgage Loan Originator Requirements -
•Anyone acting as a mortgage loan originator (MLO) without an MLO license endorsement will be guilty of a crime punishable by six months imprisonment plus a $20,000 fine. And a broker cannot employ or compensate a real estate licensee for MLO activities unless that licensee has a license endorsement. This law has also given the Department of Real Estate (DRE) the authority to deny or revoke a MLO license endorsement or take other action. This amends the MLO requirements for finance lenders and residential mortgage lenders under the Department of Corporation. Senate Bill 1137, effective January 1, 2011.
Protections Against Real Estate Fraud - new laws protecting consumers from real estate fraud include:
•Expanding the foreclosure consultant law to include someone who performs a forensic audit of a residential mortgage loan (Assembly Bill 2325)
•Requiring any mailed solicitation that offers to provide a copy of an owner's grant deed or other title records for a fee to include a prominent statutory disclosure that the copy service is not associated with any governmental agency and that the homeowner can obtain such records from the county recorder (Assembly Bill 1373).
•Increasing the criminal punishment for renting out a residential dwelling without the owner's consent from six months imprisonment plus a $1,000 fine, to one year imprisonment, plus a $2,500 fine (Assembly Bill 1800, effective January 1, 2011).
Other new California laws impacting real estate and real estate professionals -
•Post-foreclosure protection for tenants (Senate Bill 1149)
•Tenant protection for domestic violence victims (Sentate Bill 782)
•Changes to the mechanics' lien law (Senate Bill 189)
•Clarification that prohibition against discrimination of tenants based on source of income pertains to lawful and verifiable income (Senate Bill 1252)
•Extension of CalVet Home Loan program to include 2-to-4 residential units (Assembly Bill 2087)
•Lien enforcement by a municipal utility district for a tenant's delinquent charges (Senate Bill 1035).
•A seller's first trust deed lender cannot obtain a deficiency judgment against the seller after a short sale. Providing written consent to a short sale shall obligate the first trust deed lender to accept the sales proceeds as full payment and discharge of the remaining amount owed on the loan. This applies to first trust deeds secured by one-to-four residential units, but it does not limit the lender from seeking damages for fraud or waste by the borrower. Senate Bill 931, effective January 1, 2011.
Energy Audit in Home Inspection Report -
•A home inspection and inspection report may, upon a client's request, include an audit of the energy efficiency of a home, according to the standards of the Home Energy Rating Systems (HERS). REALTORs® are encouraged to provide new HERS booklet to residential buyers, and delivery of this booklet will be adequate to inform the buyer about statewide HERS program. Assembly Bill 1809 and California Civil Code section 2079.10, effective January 2, 2011.
Restriction on Adverse Possession Claim -
•A claim for adverse possession requires, among other things, certified records of the county tax collector showing that all state, county, or municipal taxes have been timely paid for the five-year period the property has been occupied and claimed. Existing law merely requires proof that taxes have been paid for the five-year period, not certified proof of timely payments. Assembly Bill 1684, effective January 1, 2011.
Enforcement of Mortgage Loan Originator Requirements -
•Anyone acting as a mortgage loan originator (MLO) without an MLO license endorsement will be guilty of a crime punishable by six months imprisonment plus a $20,000 fine. And a broker cannot employ or compensate a real estate licensee for MLO activities unless that licensee has a license endorsement. This law has also given the Department of Real Estate (DRE) the authority to deny or revoke a MLO license endorsement or take other action. This amends the MLO requirements for finance lenders and residential mortgage lenders under the Department of Corporation. Senate Bill 1137, effective January 1, 2011.
Protections Against Real Estate Fraud - new laws protecting consumers from real estate fraud include:
•Expanding the foreclosure consultant law to include someone who performs a forensic audit of a residential mortgage loan (Assembly Bill 2325)
•Requiring any mailed solicitation that offers to provide a copy of an owner's grant deed or other title records for a fee to include a prominent statutory disclosure that the copy service is not associated with any governmental agency and that the homeowner can obtain such records from the county recorder (Assembly Bill 1373).
•Increasing the criminal punishment for renting out a residential dwelling without the owner's consent from six months imprisonment plus a $1,000 fine, to one year imprisonment, plus a $2,500 fine (Assembly Bill 1800, effective January 1, 2011).
Other new California laws impacting real estate and real estate professionals -
•Post-foreclosure protection for tenants (Senate Bill 1149)
•Tenant protection for domestic violence victims (Sentate Bill 782)
•Changes to the mechanics' lien law (Senate Bill 189)
•Clarification that prohibition against discrimination of tenants based on source of income pertains to lawful and verifiable income (Senate Bill 1252)
•Extension of CalVet Home Loan program to include 2-to-4 residential units (Assembly Bill 2087)
•Lien enforcement by a municipal utility district for a tenant's delinquent charges (Senate Bill 1035).
Tuesday, January 25, 2011
Making Offers on Bank Owned Properties (REO's)
Interest in buying a foreclosed home is on the rise, but so are concerns about the risk involved in the process. In a December survey, Trulia found that 49 percent of Americans were at least somewhat likely to consider buying a foreclosure, up from 45 percent in May 2010. But the number of US adults who believed there are disadvantages to buying foreclosures had also increased, from 78 percent to 81 percent over the same time frame. Among those folks who had qualms about purchasing a foreclosure, the top concerns were:
•that buying a foreclosure might involve hidden costs,
•that the buying process itself is risky, and
•that the home might continue to lose value, after escrow closes.
While there certainly are risks that run with buying a foreclosed home, the most risky way to do it is also the least common method: at the foreclosure auction itself. Auction buyers often don't have the opportunity to fully vet the foreclosure to ensure that they are receiving clear title and/or to make sure they're not getting a lemon. With that said, most foreclosures are resold not at the foreclosure auction, but as an REO (short for Real Estate Owned - by the bank), listed by a real estate broker on the Multiple Listing Service and on Trulia!
When you buy an REO in this way, you have lots of opportunities to use some tricks of the trade, so to speak, to avoid some of the traps you may fear. Here are my Top 4 Tricks and Traps for Foreclosure Buyers:
1. As-is means as-is, period. (Most of the time.) Banks have very little interest, inclination or even the logistically necessary resources to execute repairs on your home. Many of these homes are managed by an asset management company in another state, and may not even have a local person besides the agent who can handle large repairs. Generally speaking, bank-owned homes are sold on a very strict "as-is, where-is" basis, which just means that you should expect to take possession of it, if you buy it, in exactly the position and location it is, no matter how defective. Do not walk into a viewing of a foreclosed home, notice how the plumbing is all ripped out of the wall, and make an offer for it, assuming you'll be able to get the bank to "fix" the issue later. Usually, if the bank is willing to do any repairs to a foreclosed home, they do so, on the advice of the listing agent, prior to the home being listed.
Out of hundreds of foreclosure transactions I have personally been involved in, I have seen exactly four where the bank did agree to do some level of repairs at a buyer's request. Every one of those times, the repair was to fix a health-and-safety endangering property defect, like a gas-leak or an electrical fritz. And every one of those times, the property defect was highly non-obvious - not something even a diligent buyer could have detected visually prior to making an offer. Maybe another few times I've seen a bank agree to a small price reduction due to surprising condition problems. And dozens of times, I've seen transactions fall apart or buyers take on the property’s repair costs, when they request repair credits, price reductions or actual repairs from the ban seller.
If a foreclosure you're considering has obvious property damage, have your contractor stop by with you or gather whatever information you need to get as comfortable as possible with your offer price, assuming that the bank will not be chipping anything in for repairs, before you make the offer.
2. The bank speaks no evil. When it comes to real estate disclosures, the fact is, the bank speaks not much of anything! Many states exempt banks and other types of corporate homeowners from making substantive disclosures about the condition of the property. Even in jurisdictions where the bank is not legally exempt, most banks will simply write across the required disclosures something to the effect that the bank has no knowledge of the property's condition. (Before you protest with a "that's not fair!!" keep in mind that the bank never lived in the property, so most often truly does have no idea of any important facts or details about its condition or location, the things an average home seller would be required to disclose.)
Even in a normal transaction, it behooves a buyer to be thorough in having the property inspected and meticulous about reviewing the resulting inspection reports. But buying a foreclosure ups even that ante, as you have no seller disclosures to highlight particular problems you should have looked at, and none of the usual legal recourse you would have if a “regular” seller made incomplete disclosures. Get a property inspection. A pest inspection. A roof inspection. A sewer line inspection. A pool inspection, if you have a pool and care about its condition.
Yes - all these inspections cost money, but the drama and thousands each of them can save you is well worth it. And read your state’s buyer inspection advisory or similar document (ask your agent), just to make sure you’re aware of all the inspections that are available to you, and work with your agent to determine which ones make sense, and which are not appropriate.
Some insider tips:
•Vacant foreclosures often have their utilities disconnected. Work with your agent to make sure the utilities get turned on - even for a single day - so that your property inspector can run the water taps, test the stove and dishwasher, see if the water heater and electrical outlets work, and so forth.
•If appliances are there, the bank will probably leave them there, even though they may not have technical “legal” ownership of them, so they may not be included in the contract, like in a "normal" home sale.•However, the bank will not give you any sort of warranty on appliances, so try to obtain any warranty coverage you want or need elsewhere - from a home warranty company or, potentially, the original manufacturer/retailer.
3. The contract terms, they are a changin'. One thing squarely in the wheelhouses of local real estate pros are local market standard practices. From negotiating practices to which party pays which closing costs, every market is different, and experienced local agents are experts on this information. If you’re buying a foreclosure, though, the bank will often require you to use it’s own purchase contract, rather than the more commonly used state forms. Many times, this is done to advise the buyer of the bank’s refusal to make substantive disclosures (see above) and to change some of the normal practices for your area to the bank’s standard practices.
For instance, if you are buying a home in a contingency state, where you would usually have to sign a document proactively releasing contingencies, the bank’s contract will probably change that, so that your transaction operates on an objection period. In "objection" based transactions, you have a certain period of time in which you must either speak up about your concerns with the property and/or cancel the deal, or you will automatically be presumed to be moving forward with the deal and your deposit money will be forfeited if you change your mind after that date.
If you’ve been making offers on non-foreclosures on the standard contract form, or you’ve bought homes before and think you know the drill, please - I implore you - READ every word of the contract you sign when you buy a home from the bank, and ask your broker, agent or attorney to explain anything that doesn’t make sense.
4. Expect the unexpected. When you buy a foreclosure, you might end up working with the bank’s escrow company, instead of a company you or your agent selects. And the bank's escrow provider might be slow or disorganized. C’est la vie. The bank might rush you for your deposit money, but take their own sweet time coming up with the necessary signatures on their end to close the deal. Par for the course. You might expect that the bank would be desperate for buyers, and instead find out that there are 20 offers on the same REO. Or, you might be the only offer and still get your aggressively low (but still reasonable) offer rejected, only to have the bank reduce the list price of the home to the same price of your offer! (They often want to see if exposing it to other buyers at the new, lower list price might generate more interest and higher offers.)
When you’re buying a foreclosure, expect glitches, expect your calendar to be derailed, expect the bank to be inflexible and possibly even unreasonable. It’s not overkill to ask your broker or agent to brief you on the common complications they see in REO transactions. Having realistic expectations may keep you from pulling your hair out. And if the transaction turns out to run smooth as silk? You’ll be pleasantly surprised
reproduced from Trulia
•that buying a foreclosure might involve hidden costs,
•that the buying process itself is risky, and
•that the home might continue to lose value, after escrow closes.
While there certainly are risks that run with buying a foreclosed home, the most risky way to do it is also the least common method: at the foreclosure auction itself. Auction buyers often don't have the opportunity to fully vet the foreclosure to ensure that they are receiving clear title and/or to make sure they're not getting a lemon. With that said, most foreclosures are resold not at the foreclosure auction, but as an REO (short for Real Estate Owned - by the bank), listed by a real estate broker on the Multiple Listing Service and on Trulia!
When you buy an REO in this way, you have lots of opportunities to use some tricks of the trade, so to speak, to avoid some of the traps you may fear. Here are my Top 4 Tricks and Traps for Foreclosure Buyers:
1. As-is means as-is, period. (Most of the time.) Banks have very little interest, inclination or even the logistically necessary resources to execute repairs on your home. Many of these homes are managed by an asset management company in another state, and may not even have a local person besides the agent who can handle large repairs. Generally speaking, bank-owned homes are sold on a very strict "as-is, where-is" basis, which just means that you should expect to take possession of it, if you buy it, in exactly the position and location it is, no matter how defective. Do not walk into a viewing of a foreclosed home, notice how the plumbing is all ripped out of the wall, and make an offer for it, assuming you'll be able to get the bank to "fix" the issue later. Usually, if the bank is willing to do any repairs to a foreclosed home, they do so, on the advice of the listing agent, prior to the home being listed.
Out of hundreds of foreclosure transactions I have personally been involved in, I have seen exactly four where the bank did agree to do some level of repairs at a buyer's request. Every one of those times, the repair was to fix a health-and-safety endangering property defect, like a gas-leak or an electrical fritz. And every one of those times, the property defect was highly non-obvious - not something even a diligent buyer could have detected visually prior to making an offer. Maybe another few times I've seen a bank agree to a small price reduction due to surprising condition problems. And dozens of times, I've seen transactions fall apart or buyers take on the property’s repair costs, when they request repair credits, price reductions or actual repairs from the ban seller.
If a foreclosure you're considering has obvious property damage, have your contractor stop by with you or gather whatever information you need to get as comfortable as possible with your offer price, assuming that the bank will not be chipping anything in for repairs, before you make the offer.
2. The bank speaks no evil. When it comes to real estate disclosures, the fact is, the bank speaks not much of anything! Many states exempt banks and other types of corporate homeowners from making substantive disclosures about the condition of the property. Even in jurisdictions where the bank is not legally exempt, most banks will simply write across the required disclosures something to the effect that the bank has no knowledge of the property's condition. (Before you protest with a "that's not fair!!" keep in mind that the bank never lived in the property, so most often truly does have no idea of any important facts or details about its condition or location, the things an average home seller would be required to disclose.)
Even in a normal transaction, it behooves a buyer to be thorough in having the property inspected and meticulous about reviewing the resulting inspection reports. But buying a foreclosure ups even that ante, as you have no seller disclosures to highlight particular problems you should have looked at, and none of the usual legal recourse you would have if a “regular” seller made incomplete disclosures. Get a property inspection. A pest inspection. A roof inspection. A sewer line inspection. A pool inspection, if you have a pool and care about its condition.
Yes - all these inspections cost money, but the drama and thousands each of them can save you is well worth it. And read your state’s buyer inspection advisory or similar document (ask your agent), just to make sure you’re aware of all the inspections that are available to you, and work with your agent to determine which ones make sense, and which are not appropriate.
Some insider tips:
•Vacant foreclosures often have their utilities disconnected. Work with your agent to make sure the utilities get turned on - even for a single day - so that your property inspector can run the water taps, test the stove and dishwasher, see if the water heater and electrical outlets work, and so forth.
•If appliances are there, the bank will probably leave them there, even though they may not have technical “legal” ownership of them, so they may not be included in the contract, like in a "normal" home sale.•However, the bank will not give you any sort of warranty on appliances, so try to obtain any warranty coverage you want or need elsewhere - from a home warranty company or, potentially, the original manufacturer/retailer.
3. The contract terms, they are a changin'. One thing squarely in the wheelhouses of local real estate pros are local market standard practices. From negotiating practices to which party pays which closing costs, every market is different, and experienced local agents are experts on this information. If you’re buying a foreclosure, though, the bank will often require you to use it’s own purchase contract, rather than the more commonly used state forms. Many times, this is done to advise the buyer of the bank’s refusal to make substantive disclosures (see above) and to change some of the normal practices for your area to the bank’s standard practices.
For instance, if you are buying a home in a contingency state, where you would usually have to sign a document proactively releasing contingencies, the bank’s contract will probably change that, so that your transaction operates on an objection period. In "objection" based transactions, you have a certain period of time in which you must either speak up about your concerns with the property and/or cancel the deal, or you will automatically be presumed to be moving forward with the deal and your deposit money will be forfeited if you change your mind after that date.
If you’ve been making offers on non-foreclosures on the standard contract form, or you’ve bought homes before and think you know the drill, please - I implore you - READ every word of the contract you sign when you buy a home from the bank, and ask your broker, agent or attorney to explain anything that doesn’t make sense.
4. Expect the unexpected. When you buy a foreclosure, you might end up working with the bank’s escrow company, instead of a company you or your agent selects. And the bank's escrow provider might be slow or disorganized. C’est la vie. The bank might rush you for your deposit money, but take their own sweet time coming up with the necessary signatures on their end to close the deal. Par for the course. You might expect that the bank would be desperate for buyers, and instead find out that there are 20 offers on the same REO. Or, you might be the only offer and still get your aggressively low (but still reasonable) offer rejected, only to have the bank reduce the list price of the home to the same price of your offer! (They often want to see if exposing it to other buyers at the new, lower list price might generate more interest and higher offers.)
When you’re buying a foreclosure, expect glitches, expect your calendar to be derailed, expect the bank to be inflexible and possibly even unreasonable. It’s not overkill to ask your broker or agent to brief you on the common complications they see in REO transactions. Having realistic expectations may keep you from pulling your hair out. And if the transaction turns out to run smooth as silk? You’ll be pleasantly surprised
reproduced from Trulia
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