Home Prices Rise for 14th Straight Month

U.S. home prices including distressed sales rose for the 14th straight month in April, posting their highest year-over-year increase in more than seven years, according to analytics firm CoreLogic.

"Increasing demand for new and existing homes, coupled with low inventory, has created a virtuous cycle for price gains, most clearly seen in the Western states with year-over-year gains of 20 percent," said Mark Fleming, chief economist for CoreLogic.

Home prices (including distressed sales) moved up 3.2 percent in April compared to March, and were up 12.1 percent year-over-year, the CoreLogic HPI found.

The streak of home-value appreciation is set to continue, the firm said, with the CoreLogic Pending HPI - which is based on price changes for the most recent month - predicting that home prices will register a 12.5 percent annual gain in May.

Nevada (up 24.6 percent), California (up 19.4 percent), Arizona (up17.3 percent, Hawaii (up 17 percent) and Oregon (up 15.5 percent) saw the highest price gains in April, CoreLogic reported.

Also to note: The business insider.com reported a dramatic decline in the number of single family homes for sale and saying the market is much leaner. In 2009, single family homes for sale inventory were approximately 3,600,000 - this year that inventory is approximately 1,700,000.


As reported from CoreLogic via Inmannews

Mortgage Debt Forgiveness Extended

The American Taxpayer Relief Act of 2012 was on January 1st, 2013. As a result, the Mortgage Forgiveness Debt Relief Act has been extended for another year. The measure will continue to exempt from taxation mortgage debt that is forgiven when homeowners and their mortgage lenders negotiate a short sale, loan modification (including any principal reduction) or foreclosure.   

When a homeowner experiences a debt reduction through mortgage principal forgiveness - such as through short sale, foreclosure, or even loan modification - the amount of debt forgiven is considered taxable income. In 2007, Congress passed the 2007 Debt Forgiveness Relief Act which exempted up to $2 million of debt forgiven on the home owner's principal residence as long as the debt was used to buy, build, or substantially improve their principal residence and be secured by that residence.  The Debt Forgiveness Relief Act has been an incredibly valuable tool in helping our nation's real estate industry recover.  However, the Act which was passed in 2007 had a 5-year sunset provision and was set to expire on December 31, 2012. The American Taxpayer Relief Act of 2012 extended the sunset provision until Jan. 1, 2014.

For the real estate industry and for upside down owners, especially those with short sales pending, they can now breathe a sigh of relief knowing that they won't get slammed with taxes and they can move on with their lives.

All indications are that we still have a long way to go to complete the resolution of the mess caused by the housing collapse.  But conditions are improving. The low inventory of properties for sale is causing price increases in many markets and, for the first time in many years, equity sales, ie: sales where the sellers actually receive some money, represent more than 50% of the market.

If you or someone you know would like to discuss this further than please contact us.

The information presented in this Article is not to be taken as legal advice. Every person's situation is different. If you are upside-down on your loan, especially if you're facing a lender lawsuit, get competent legal advice in your State immediately so that you can determine your best options.

Advantages & Disadvantages of Seller Financing

Seller Financing has been used in real estate and other transactions for thousands of years and still possesses the dual capacity to provide unique investment opportunities with equally unique risks for all parties. This Article is intended to introduce you to the benefits and detriments of Seller Finance. Of course, every transaction is unique as are the circumstances of every Seller and Buyer/Borrower.  Before making your decision concerning Seller Financing, be sure to consult with legal and tax professionals.

What's Great About Seller Financing

1.     No Lender Required - When institutional lenders tighten-up credit and loans become harder to get, Sellers with equity in their property can get their property sold by providing some or all of the purchase financing, also called "carrying back paper".

2.     Better Pricing - Unlike institutional lenders that must package sales commissions and other funding costs into the financing, Seller Financing generally avoids these added costs and can offer lower cost financing for which Buyers will pay more.

3.     Better Return on Investment - When a Seller carries back financing, they are acting in the place of an institutional lender by converting the cash that they would normally receive in sale proceeds (liquid assets) and converting it into a secured cash stream (hard assets). Cash in a bank today is earning less than 1% interest. Interest on loans is typically earning from 3-6%.

4.     Security - Seller Financing is generally secured by the real estate. If the Buyer/Borrower doesn't pay, the Seller can foreclose and either get paid or take the property back to rent or resell.

What's Not Great About Seller Financing

1.     Seller is the Lender - Normal loans are hard to get because lenders examine credit, and jobs, and income stability, and financial capacity. Seller financiers often lack the sophistication and access to provide the same level of "due diligence" as to the borrower's credit-worthiness. So Seller Financing may carry a higher risk of default.

2.     Loss of other investment opportunities - Because a Seller's sale proceeds are being loaned to the Borrower, those funds are not available to the Seller to make other investments which may be more lucrative.

3.     Income is at risk - If the Borrower defaults in repaying the Seller Financing, the Seller's income stream is cut-off and will stay cut-off until the Seller either forecloses or reaches some other agreement with the borrower. Foreclosure could take more than a year. Buyers sometimes seek to avoid paying Seller Finance by claiming that the Seller failed to disclose some defect that has cost the Buyer property value... often equal to the amount of the Seller Financing.

4.     Limited Recourse - If the Borrower fails to pay, the Seller must foreclose. In many States including California, Seller Financers are barred from suing the Borrower if they are not paid back in full. If the real property pledged as security has deteriorated or market conditions have fallen, the foreclosing Seller Financer may suffer the loss of their investment.

What Seller Financing Looks Like  

In most cases, real estate agents may be involved representing the Seller and the Buyer. They will provide the necessary Contract documents which explain the financing terms and, if required, will assist the Seller to provide any Seller Financing Disclosure. An escrow or title company will process the sale documents and may provide the Seller Finance loan documents for the Borrower to sign including: 1) a Promissory Note promising to repay the Loan to the Seller based on the terms set forth in the Note; and 2) a Deed of Trust (or Mortgage) giving the Seller a security interest in the real property which can be foreclosed if the Borrower defaults. The Deed of Trust would then be recorded establishing a lien on the Buyer's title for the amount of the Loan.

Alternatives to Seller Financing

While Seller Financing has a well-established place in real estate finance and investment, there are other alternatives when the Buyer cannot qualify for normal lender financing. The most common of these are:

1. Contract for Deed (also called Land Sale Contract)

This is very similar to typical Seller Financing except that the legal ownership of the real estate does not change from Seller to Buyer. There is no Grant Deed. Instead, Title to the property remains in the Seller's name until the Buyer performs some obligation. Typically, the Buyer signs a Contract to buy the real estate and pays the Seller a certain amount of money each month which the Seller then uses to pay any existing financing or other costs of ownership. When the Buyer obtains their own Loan, or pays off the Contract purchase price, or possibly even sells the Property, then the Contract amount is paid off and the Title transfer to the Buyer. Under current legal decisions, these arrangements are also considered to be a sale with Seller Financing.

    a. Pro's: This is fast and cheap and Seller retains ownership. Foreclosure is not needed.

  b. Con's: Although the Legal Title stays with the Seller, with each payment the Buyer gains "Equitable" Title, ie: they become a partial owner and cannot be evicted if they default in a payment. An expensive legal action must be brought. Further, this arrangement is typically a violation of any "Due on Sale Clause" which may be in any existing financing. If that Lender finds out, they could possibly start their own foreclosure which could wipe out the Seller's interest in the real estate and the Contract.

2. Lease with Purchase Option

This too may sound very similar to typical Seller Financing or Contract for Deed except there are major differences. The Seller actually leases (rents) the real property to the Tenant who pays the Seller a certain amount of money each month. The Seller and Tenant/Buyer also enter into an Option Agreement which provides a right (but not an obligation) for the Buyer to purchase the property at a future date on terms set forth in the Agreement and related documents.

    a. Pro's: The Buyer remains only a Tenant until the Buyer performs the obligations required to exercise their Purchase Option. If they default in paying, they may be evicted under Landlord-Tenant law which is fast (often 4-6 weeks). For a Buyer, the Option period may allow them to qualify for a purchase loan and even make improvements to the real property to increase it's value and gain the Buyer immediate equity.

    b. Con's: The Seller has not sold their real property and does not receive any money from the Property other than the promise of monthly rent payment which may not cover all of the Seller's costs in owning the property. Managing a rental property is not easy.

THE BOTTOM-LINE

Seller Financing offers distinct benefits and risks that should be considered when such an opportunity arises.  This Article is intended to introduce you to these issues but, of course, is limited in its scope. Entire books have been written on this subject but neither can specifically address your situation and the unique circumstances of your transaction. Before signing any Seller Financing agreement or any Contract providing for such financing, be certain to obtain the advice from legal and tax counsel of your own choosing.

 

If you or someone you know is considering using Seller Financing in a real estate transaction and would like to get additional information, than please contact us. 

The information presented in this Article is not to be taken as legal advice. Every person's situation is different. If you are upside-down on your loan, especially if you're facing a real estate or lender dispute, get competent legal advice in your State immediately so that you can determine your best options.

East Bay, CA Shortage of Homes

The current inventory of housing in the East Bay, CA is at least 20% less than last year. Therefore, creating a frency of qualified buyers which is resulting in shorter sale times and multiple offers. The economic laws of supply and demand tell us that this competition should push prices up but it's not happening. The other result is that, with so little purchase opportunities available, demand for rental housing has increased and rent is at an all-time high.

So what's going on? It appears to be a conflict between several varied market forces.

First - Buyers fear more price reductions to come - Market watcher Core Logic reports that there are currently 11.1 million borrowers underwater nationwide. Lender Processing Service (LPS) reports that 5.5 million borrowers are 30 days or more delinquent, over 2 million of which are already in the foreclosure process. And while statistically foreclosure rates are actually down, 56,258 new foreclosures were started in California in the 1st three months of 2012. Many call this the "shadow inventory": properties in trouble but not on the market for sale. With the recent National Mortgage Settlement resolving lender fears of possible blocks to foreclosure, most market watchers expect an increase in the 2nd quarter. If so, prospective buyers fear that increased foreclosure activity may push prices down further.

Second - Prospective Sellers hope for Loan Modifications - Despite the reality that success in obtaining a loan modification remains less than 10% and mods with principal reduction are even less, upside-down owners continue to hope that relief may be coming to enable them to keep their homes. The National Mortgage Settlement will eventually produce up to $25 billion in principal reductions, although it is still unclear who will qualify for these. The Settlement only applies to Wells Fargo, BofA, Chase, Ally, and Citi but does not apply to FNMA and Freddie Mac owned loans. Those two GSE's own 60% of the upside-down loans yet they refuse to participate in principal reduction.

Third - Lenders are tightening lending standards - According to a recent report in DS News, over 30% of residential mortgage lenders report an increase in demand. In response, lenders are actually tightening standards for residential mortgage loans. While the availability of loans remains better than it was immediately after the onset of the recession, prospective home owners are finding it more difficult to obtain purchase funds. This prevents them from competing with the large numbers of investors and others purchasing properties for all cash.

Fourth - REO holders are bypassing the real estate profession - Increasingly, lenders are offering to sell their REO (real estate owned) properties in bulk to investor groups at a discount. For lenders, this removes large numbers of properties from their non-performing inventory at a lower cost; and for investors, this provides a very significant opportunity to buy already devalued property at even further reductions. However, these properties never come on the market for Realtors to sell or prospective buyers to buy. This trend appears to be increasing.

Taken together, these market forces are likely to keep market inventory down for the foreseeable future.

The information presented in this Article is not to be taken as legal advice. Every person's situation is different. If you are upside-down on your loan, or would like to sell or buy a home, than please contact us by CLICKING HERE.

Bank - Settlement Means More Loan Modifications!

As reported in my February 9th Blog, the Federal and State Attorneys General entered into a Settlement of claims arising from the "robo-signer" scandals of 2010.  Under the Settlement which has come to be called the "National Mortgage Settlement", five major lenders - Wells Fargo, BofA, Chase, Citibank, and GMAC/Ally - agreed to pay $25 Billion in cash and credits which would then be spent on relief for upside down property owners with a small amount, $2,000, going to property owners who actually lost their homes as a result of the scandal.  What was unclear, was how would the lenders allocate their payment obligations. Wells Fargo has now given us a "road map" of what they intend to do.  This may be used as a model for the rest of the lenders to follow, but not guaranteed.

The Wells Fargo Settlement obligation is $5.3 Billion. Their plan to meet this was contained in their 2011 Annual Report filed last week with the Securities and Exchange Commission (Pg 74 of the 233 page Report).  What it does is identify three broad categories of payment:

1.  $1 Billion for Foreclosure Assistance Payments - These funds will be paid directly to Federal and State government agencies to use as they see fit for their own foreclosure assistance programs, including reimbursement of monies that such agencies may have already paid out.

2.  $3.4 Billion for Consumer Relief Programs - These funds are not actually "out-of-pocket" payments.  Rather, Wells Fargo will receive "credits" against this obligation in exchange for principal reductions on existing loans.  These will be made in two different categories:  

          (a)  1st Lien Principal Forgiveness - they will receive $1 of credit for each $1 of debt forgiveness on loans with a loan to value (LTV) ratio of 175% or less.  This must be a minimum of 30% of their credits.  If the LTV ratio is greater than 175%, they only get a 50% credit.  This would suggest that they will offer credits to keep loans in place when the property is more "affordable".  When it is not, ie: LTV over 175%, they probably will push these to foreclosure or short sale.

         (b)  2nd Lien Principal Forgiveness - they will receive a sliding scale of credits based upon how delinquent the borrower is:  Less than 90 days late = 90% credit; 91 to 179 days late = 50% credit; and 180+ days late = 10% credit.  We can reasonably expect that the bulk of these credits will go to those who are in default but not seriously in default.  Those who are not in default at all will presumably get no assistance.

3.   $900 Million for Loan Refinancing - These funds will be used to assist debtors in refinancing their existing loans.  There is a complex formula to follow that matches first the old interest rate against the new interest rate then multiplies that by a factor based upon the unpaid principal balance.  So, each loan can bring a different result.

The bottom-line in the above is this: Wells Fargo has a new incentive to offer principal reductions on loan modifications and refinances.  But these will most likely be used on loans where the credits will likely save the property from foreclosure.  Conversely, those that do not fit within this framework may be more likely targeted for foreclosure which will push the urgency of short sale to minimize the risk of judgment, tax, credit, and career damage.

Meanwhile, if you or someone you know is struggling with an upside-down property and don't know what to do, than have them please contact us to discuss options.  PLEASE CLICK HERE TO CONTACT US! Please make sure you provide a little description so we can contact you and address your needs.

The information presented in this Article is not to be taken as legal advice. Every person's situation is different. If you are upside-down on your loan, especially if your facing a lender lawsuit, get competent legal advice in your State immediately so that you can determine your best options.

Home Underwater? Need 300% or MORE LOAN TO VALUE!

New Refinance Program For Underwater Homeowners!

  

A new refinance program is going to be available in early March 2012 for underwater Homeowners. Per Fannie Mae, the estimated number of borrowers eligible to refinance under the new HARP 2.0 guidelines is an astounding 9 million homeowners. Below is an initial criteria as to who would qualify: 

1. It does not matter how much your home is underwater, you will be able to refinance at today's low rate.
2. Mortgage insurance will need to be obtained for underwater homes. 
3. No minim credit score
4. Eligibility - Owner occupied, 2nd homes and investment property up to 4 units.
5. Rate and term refinance only - NO cash-out
6. Mortgage should have been obtained prior to 6/1/09
7. Investor on the loan needs to be Fannie Mae. See if your loan is owned by Fannie Mae - Click Here. In order to find out when Fannie Mae purchase your loan- send an e-mail too resource_center@fanniemae.com.

More details to follow. Please check back.

Contact us for additional details- click here

To find out if your home is owned by Fa

HAMP ANNOUNCES INCREASED PRINCIPAL REDUCTIONS FOR LOAN MODIFICATIONS

As reported in DSNews.com, government officials have announced changes to the administration’s Home Affordable Modification Program (HAMP) which are expected to extend relief to a larger share of struggling homeowners as well as renters, according to federal officials.  One of the key adjustments to the program centers around principal reductions. HAMP currently includes an option for servicers to provide underwater homeowners who are struggling with their payments with a modification that includes a principal write down.

As we’ve often seen in the market, Fannie Mae and Freddie Mac remain obstacles to both loan modifications and short sales by refusing principal reduction in loan modifications and restricting short sale contributions to junior lenders.  Since these two GSE’s own or guarantee up to 80% of all residential loans, they have a significant effect on market recovery.

To encourage investors to agree to principal reduction modifications, Treasury is tripling the incentives for such restructurings, paying from 18 to 63 cents on the dollar, depending on the degree of change in the loan-to-value (LTV) ratio. The Federal Housing Finance Agency (FHFA) has prohibited Fannie Mae and Freddie Mac from employing HAMP’s principal reducing option for their borrowers. Treasury has notified FHFA that it will pay these same principal reduction incentives to Fannie and Freddie if they allow servicers to forgive principal in conjunction with a HAMP modification. FHFA issued a statement in response noting that it recently released analysis concluding principal forgiveness does not offer any greater benefits than principal forbearance as a loss mitigation tool. 

Among the other changes announced, borrowers who are struggling because of debt beyond their mortgages, such as second liens and medical bills, will be eligible for an alternative program evaluation with more flexible debt-to-income criteria. In addition, Treasury will expand eligibility to include investor properties that are currently occupied by a tenant as well as vacant properties slated for rental use.

The deadline for HAMP will be extended for an additional year through December 31, 2013.
Meanwhile, if you or someone you know is struggling with an upside-down property in California and don’t know what to do, our Consultation Program can offer knowledge of what to expect and form strategies to either keep the property or move on with as little financial risk as possible.  To schedule a Consultation, please contact us-Click Here.

The information presented in this Article is not to be taken as legal advice. Every person’s situation is different. If you are upside-down on your loan(s), especially if you’re facing a lender lawsuit, get competent legal advice in your State immediately so that you can determine your best options.

On April 13, 2011, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Office of Thrift Supervision announced enforcement actions against 14 large residential mortgage servicers and two third-party vendors for unsafe and unsound practices related to residential mortgage servicing and foreclosure processing.  As part of those consent orders, federal regulators required servicers to engage independent firms to conduct a multi-faceted review of foreclosure actions in process in 2009 and 2010. Under the orders, independent consultants are charged with evaluating whether borrowers suffered financial injury through errors, misrepresentations, or other deficiencies in foreclosure practices and determining appropriate remediation for those customers. Where a borrower suffered financial injury as a result of such practices, the agencies' orders require financial remediation to be provided.

To be eligible, the mortgage must have been active in the foreclosure process between January 1, 2009, and December 31, 2010, the property securing the loan must have been the primary residence, and the mortgage must have been serviced by one of the following mortgage servicers:

• America's Servicing Co.
• Aurora Loan Services
• BAC Home Loans Servicing
• Bank of America
• Beneficial
• Chase
• Citibank
• CitiFinancial
• CitiMortgage
• Countrywide
• EMC
• EverBank/EverHome Mortgage Company
• GMAC Mortgage
• HFC
• HSBC
• IndyMac Mortgage Services
• MetLife Bank
• National City Mortgage
• PNC Mortgage
• Sovereign Bank
• SunTrust Mortgage
• U.S. Bank
• Wachovia Mortgage
• Washington Mutual (WaMu)
• Wells Fargo Bank, N.A.
• Wilshire Credit Corporation

As part of that program, the 14 mortgage servicers covered by the enforcement actions will begin mailings November 1, 2011 that will continue through the end of the year. The mailings are intended to provide information to potentially eligible borrowers on how to request a review of their case if they believe they suffered financial injury as a result of errors, misrepresentations, or other deficiencies in foreclosure proceedings related to their primary residence between January 1, 2009 and December 31, 2010. The mailings will include a request for review form. Requests for review must be received by April 30, 2012.

The third-party consultant will assess whether any errors, misrepresentations, or other deficiencies resulted in financial injury to borrowers. Where a borrower suffered financial injury as a result of such practices, the consent orders require remediation to be provided.  During the review, customers may be contacted by mortgage servicers for additional information at the direction of the independent consultant.

Borrowers may also visit www.IndependentForeclosureReview.com for more information about the review and claim process. Assistance with the form and answers to questions about the process are available at 1-888-952-9105, Monday through Friday from 8 a.m. to 10 p.m. (ET) and Saturday from 8 a.m. to 5 p.m. (ET).

If you believe that you are eligible for the Review Program or need assistance with the process or determining your rights, than please let us know and we can put you in touch with somebody that may be able to assist. Please click here to contact us.

The information presented in this Article is not to be taken as legal advice. Every persons situation is different. If you are upside-down on your loan(s), especially if you're facing a lender lawsuit, get competent legal advice in your State immediately so that you can determine your best options.

Quiet title action a sneak attack on RMBS

A Virginia quiet title litigator won a nullified deed of trust in Fairfax County this week on a Onewest loan (as successor to Indymac). We are trying to get the property sold immediately. This time a property last sold for 1.8+ million$.  Briefly, this technique takes advantage of the layer of opaqueness purposefully created by MERS in the land record. MERS- or mortgage electronic registration systems, - Wall Streets’ mortgage swamp monster does four things for big bankers:  

 

A)  MERS Allows banks to illegally get away with NOT paying County promissory note transfer taxes each time the note passes to a new entity through chain of title in the securitization process.

 

B)  MERS Keeps a layer of Opaqueness in the land record through which the homeowner cannot see to find out who really owns their promissory note, but the banks can  see through it allowing dishonest representations to both homeowner and Courts alike with very little interference or penalty.

 

C)  MERS Allows banks to foreclose in MERS name so even through the foreclosure process in many states, the RMBS- (mortgage backed securities pool) that owns the note doesn’t have to reveal itself.

 

D) MERS is, According to MERS executives who have had to suffer depositions a “single use bankruptcy vehicle” therefore, when it all goes sideways and is exposed for being the demonic wealth transferring monster that it is, the banks plan on killing MERS ultimately and with it as much liability as they can dump into the legal sink hole..

 

However brilliant this piece of Wall Street magic was, there are problems.  As soon as MERS places a MIN number on a deed of trust and sells the note off to a depositor or trustee of an RMBS, the lender in the land record is now no longer a true party of interest. In deed of trust states like Virginia, California, Utah,  Nevada  & Texas the question immediately begged is well who is the trustee of the deed of trust?  Does this party have a relationship with the new note holder that MERS is dutifully hiding?  Do they even know who the note holder is?   Is the trustee a little title company who is no longer in business??     

 

The best case scenario for quiet title is in a deed of trust state where the trustee in the land record is out of business or doesn’t know who the real note holder is. The attorneys sue to demand that the party who doesn’t belong in the land record remove themselves. If the party is out of business, we’ll we call that a default judgment. There are lots of deeds of trusts that are susceptible to this very easy attack, because MERS made the banks think that the land record didnt require true parties of interest to be updated.    

 

If you would like to find out more about quite title action than please contact us and we can put you in touch with one of our attorneys.

Houses for $100 down!!!

That's all you'll need for a down payment to buy a foreclosure offered for sale by the government. 

This sounds like a heck of a deal: HUD now only wants $100 down to close the deal.

Yes, the U.S. Department of Housing and Urban Development has brought back the $100 down payment plan in Southern and Western states. It could be a tremendous opportunity for some people -- first-time homebuyers or perhaps those who are close to retirement and are looking to downsize to a smaller home. (Some of these are modest homes in locations where jobs may be scarce. Others are large homes in metro areas.)

Summary:

• The $100 down program is available only for people who will live in the home, not investors.
• Your real-estate agent has to submit a bid for the house online.  
• You have 12 months to get in on this deal.
• Your financing must be FHA-insured.
• You might have to have more skin in the game. 
  Explanation: The $100 down payment incentive is only available if the purchase price of the home is equal or less than the appraised value of the home. If you have an accepted bid for over the appraised value of the home you must bring the difference as down payment to the closing.
   

So, what might you buy with $100 down? You can find a database of HUD-owned homes here. (Click on each state in the map to see what's available.) There's quite a range, judging from the descriptions and photos of the properties. And the list can change every day.

Please contact us if you are seeking a home, investment property and financing.

 

California Home Sales Statistics

California home sales slowed in September, but the local housing market saw a record number of short sales. Buyers purchased 380 single-family homes last month, down 19% from August. Home sales often taper after Labor Day, and September sales were down just 2% from a year earlier. But buyers and sellers last month signed contracts on 175 short sale properties, those homes where the proposed sales price is less than the amount owed on the mortgage. Another 151 such contracts were signed in August. By comparison, for most of the past three years, the number of such deals hasn't exceeded 100 per month. Typically many of those agreements don't result in a final sale.  But demand for homes has reduced the short sale inventory to its lowest level in three years - less than a two-month supply at the current pace. In September, the county's median price for all single-family homes rose 6% from August to $350,000. A year ago the median price reached $366,500, but in the months since it has stayed in a range between $315,000 and $354,200. Home prices peaked in the county in the summer of 2005, when the median hit $619,000. From there, the median price plunged to $305,000 in February 2009.

Many home sellers this year seemed to stick to the seasonal pattern of marketing homes in spring and summer. The inventory of homes on the market rose steadily this year and peaked at about 2,000 homes in June. Since then inventory has fallen and by the end of September was down to about 1,600 homes - slightly more than a four-month supply at the current pace of sales. But last month the inventory of short sale properties on the market fell below 300, the lowest level in three years. A year ago that inventory amounted to nearly 600 such homes. The median price for a short sale last month was $305,500, compared to $269,450 for a bank-owned foreclosure property and $409,000 for homes where the seller still has some equity. Foreclosures and short sales made up 45% of all sales last month. To date this year, buyers have purchased slightly more than 3,400 single-family homes in the county. The pace is similar to last year, which was slightly below average.

Please click on Short Sales, Investments, and mortgages for more information.

UNDERWATER HOME OWNERS CAN REFINANCE - HARP Refinance Program Expanded

Borrowers who are current on their home loans may be able to refinance for lower interest rates, even if they are seriously upside down. The Federal Housing Finance Agency (FHFA) announced that it will broaden the scope of the Home Affordable Refinance Program (HARP) by removing the current 125 percent loan-to-value cap for fixed-rate mortgages backed by Fannie Mae and Freddie Mac. Other program enhancements include, among other things, reducing certain fees, eliminating the need for a new property appraisal if the FHFA has a reliable automated valuation model (AVM) estimate, and extending HARP until the end of 2013. New federal guidelines for the HARP changes should be released to mortgage lenders and servicers by November 15.

The basic eligibility requirements for an enhanced HARP loan are as follows:

• Existing mortgage loan must be owned or guaranteed by Fannie Mae or Freddie Mac. To check whether a borrower has a Fannie Mae or Freddie Mac loan, go to http://www.makinghomeaffordable.gov/get-assistance/loan-look-up/Pages/default.aspx.
• Existing mortgage loan must have been sold to Fannie Mae or Freddie Mac before June 1, 2009.
• Existing mortgage loan cannot have been refinanced under HARP previously (except for Fannie Mae loans refinanced between March and May 2009).
• Current loan-to-value (LTV) ratio must be more than 80%.
• Existing mortgage loan must be current, with no late payments in the past six months, and no more than one late payment in the past 12 months.

More information is available from FHFA at http://www.fhfa.gov/webfiles/22721/HARP_release_102411_Final.pdf.

Please contact us to discuss how this will benefit you and whether you qualify! We will publish more details as they come out.

How Fall Changes the Housing Market - and What to Do About It

The fall housing market is a very different beast from the spring market. The spring is traditionally a boom market, with plenty of homes up for sale and plenty of opportunities to bid on the right home. Spring markets also bring bidding wars, though, and it tends to be more of a seller's market than a buyer's market, so spring is a great time for variety but not necessarily for getting the best deals.

The fall and winter housing market is an entirely different entity. In the fall, people are settling in for winter. They're winterizing homes, kids are starting schools and people are preparing for the long, cold months ahead. Homeowners with kids are far less likely to sell at this time of year and disrupt schooling, and even in the warm climates the winter months are full of holidays and other obstacles that present difficulties for selling.
In short: the fall and winter pickings are slim.

The cold months do have an advantage, though; people who sell during fall or winter are typically more motivated to sell, and are doing so because of a life change. People who put their homes up for sale in the spring or summer may just be looking to see what the market will bring. People selling in fall and winter typically really need to sell, which means you might just get a better deal on a home.

Ultimately, you'll have fewer choices in the fall and winter. That doesn't mean you can't still find your dream home, though. You'll just need to look a little harder, and be a bit more aggressive. It helps to have an experienced professional on your side, though; one who knows the fall and winter market and where to find some of the best deals during the long, cold slow months. That's where we come in.

Don't miss out on the great deals you can find in the fall and winter just because they're more difficult to come by. Fill out one of our Creative Homeowner Solution Requests and we'll get on the job. We know where to find great deals, and can help you get the financing you need to buy the home you've always wanted. Take advantage of the slower months to get your dream home - today.

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California Law Regarding Deficiency Recourse for Short Sale and Foreclosure

Last January the California Legislature passed SB931 which barred first lenders that consent to short sales from having any deficiency recourse against the borrowers. However, they quickly learned that it is junior lenders (seconds, HELOCS, etc.) that control the success of short sales. So on July 15th, the Legislature passed SB458 imposing the same recourse bar on junior lenders plus they barred any lender from requiring a money contribution from the sellers. These law changes created and then amended California Code of Civil Procedure Section 580e.

The conclusion at this point is that there is still a lot of uncertainty in the market, particularly amongst lenders trying to understand and respond to SB458. However, here are the main benefits emerging:

1. SB458 forces junior lenders to evaluate right now whether or not they could collect from a borrower if they waited for the first lender to foreclose and then sued as a sold-out junior lienholder. Prior to SB458, the junior lender could get some money in the short sale while holding out for recourse on the balance. They could then wait this out for several years and hope the borrower gets solvent. Not any more. Clearly this makes the borrower’s hardship application and particularly their net worth statement even more important in the decision making process.

2. SB458 appears to have brought an additional liability protection for borrowers who agreed to a prior short sale with deficiency recourse. The first Paragraph of the new short sale law begins: “No deficiency shall be owed or collected, and no deficiency judgment shall be requested or rendered…..” Nothing in SB458 states that it only applies to short sales after July 15th.

No doubt there will be a lot more debate and analysis and litigation concerning SB458 and its impacts. As with any law, it will be subject to judicial review in the courts and further change, expansion, and clarification by the Legislature. But for now, CCP580e is the law of the State of California.

The information presented in this Article is not to be taken as legal advice. Every person’s situation is different. If you have specific questions about dealing with upside down loans or real estate, be sure to contact a real estate attorney in your State.

Please Click Here if you have additional questions and if we can assist in Selling your home.

Home Affordable Refinance Program Extended

The FHA has decided to once again extend the Home Affordable Refinance Program (aka HARP.) Perhaps now is the time to look into whether or not this is an option for you. It is a program created to help the millions of Americans who have had trouble refinancing due to decreased home values. When it is successful, it has similarities to a loan modification, but you actually get new mortgage with new terms (lower interest and lower monthly payments.)


HARP may be an option if:

• You are current on your mortgage payments (no 30 day late payments over the past year)
• Your home is worth less than what you paid for it.
• Your first mortgage is not greater than 125% of your home's current market value.
• Your loan is owned by Fannie Mae or Freddie Mac.

The best way to find out if you qualify for a Home Affordable Refinance Program loan, is to contact a HARP lender. Not every lender is equipped to assist you. Here is a way to check and see if you quality for a HARP loan through a trusted HARP mortgage lender. Simply complete this mini-application online.

Getting a Home After a Bankruptcy or Foreclosure

While the rules have changed drastically with regard to mortgage lending, it is still possible to get a home after a bankruptcy or foreclosure. The three keys to this are:

1. Credit Restoration. Goes without saying.

2. Documentation of what caused you to have the bankruptcy or foreclosure.

3. A new positive house payment history. Before you get a mortgage, the best thing to do is find a home with creative financing to re-establish yourself. Save all of your cancelled checks as this will be your new "alternative" credit.

A few great creative financing options are:

1. Owner Financing. If the owner has equity, and a heart, you might land a deal here. The best about this is that you will likely have equity when you go to refinance, and a refinance loan is scrutinized less than a purchase loan.

2. Renting With the Option to Buy. You will likely pay slightly above market rent with a rent credit going towards your down payment. Ideal for those who need to save towards a down payment.

3. Lease-Purchase. Similar to a rent with option, in a lease-purchase, you normally establish the price up front, and you become responsible for the property as if you owned it. The key to success here is having enough time to get your credit cleared up to get approved for a traditional mortgage at the end of the lease term.

These deals exist, especially now that there are so many sellers trying to unload investment properties. Just make sure you do your homework so you know you are dealing with the owner and not a "contract owner" as this could cause you more trouble than it's worth - including the loss of your money and the house.


If you need assistance in understanding any of the above strategies of buying a home, than please CLICK HERE to contact us.