Monday, December 28, 2009

Foreclosure Scam Warning

Would-be homebuyers find themselves in ownership limbo | Real Estate | PE.com | Southern California News | News for Inland Southern California: "Recording Deeds

However, 10 deeds were recorded in Riverside County between July 24 and Oct. 8 that purport to transfer ownership of houses to 'Sovereign Solomon Brothers Archbishop Corp. Sole.' The houses were in the cities of Corona, Murrieta and Palm Springs and in the unincorporated communities of Romoland and Victoria Grove.

As of Nov. 3, RealtyTrac, an online foreclosure research firm, found that six of those houses had been repossessed by banks and the legal owner of a seventh house was an individual in default.

King Solomon II did not answer a letter asking for an interview that was sent to the mailing address of Sovereign Solomon Brothers at 160 W. Foothill Parkway, a mail box center in Corona. He also could not be reached at a house in Fallbrook that is described in court records as the home of Terry Lee Herron, also known as King Solomon II, a 42-year-old with a previous felony conviction for auto theft who was charged earlier this year for illegal possession of a firearm.

The Fallbrook house was posted with the same kind of signs saying 'spiritual sanctuary' and 'no trespass' that can be found on other houses deeded over to Sovereign Solomon Brothers.

By filing deeds that cloud title to a house, someone can get free shelter and 'hold a house ransom' by demanding cash from banks that want to avoid the delay and expense of an eviction process, which can take 60 days or longer, said Pete Nyiri, owner of Top Producers Realty & REO, which specializes in selling bank repossessed houses."

Sunday, December 27, 2009

Upside Down Homeowner stats

"Roughly one in every seven mortgages either was past due or in foreclosure by the end of the third quarter—the highest delinquency rate in the 37-year history of the Mortgage Bankers Association’s National Delinquency Survey. Two factors are expected to drive delinquencies even higher next year: Underwater homeowners and unemployment. Nearly one in four homeowners currently owes more on their mortgage than their home currently is worth, and additional job losses could mean more borrowers will be unable to meet their mortgage obligations."

from the California Association of Realtors weekly email

Debtor's Dilemma: Pay the Mortgage or Walk Away - WSJ.com

Walk Away warning. Banks may decide to pursue the deficiency in some states.
By the way this wall street journal article is a bit misleading. Lenders are frequently able to sue for the deficiency on second loans in CA. for more info on California anti deficiency laws and Walk Away plans.

Debtor's Dilemma: Pay the Mortgage or Walk Away - WSJ.com: "Banks warn they may get tough with strategic defaulters by pursuing legal claims on a borrower's other assets. 'We will try to reduce people's payments if they have a hardship,' says Thomas Kelly, a spokesman for J.P. Morgan Chase & Co. 'But we have a financial responsibility to get people to pay what they owe if they can afford it.'

Steven Olson, a loan officer and roof installer in Roseville, Minn., defaulted in 2007 on a plot of land in Florida he had bought as an investment. 'I thought I could move on with my life,' he says. But the lender, RBC Bank, a subsidiary of Royal Bank of Canada, sued him, seeking to make him pay more than $400,000 to the bank to cover its losses on the loan. Mr. Olson has hired a Florida lawyer, Roy Oppenheim, to resist the claim. An RBC spokesman declined to comment."

Saturday, December 26, 2009

REALTOR® Magazine -Foreclosures - Buyer Cautions

These foreclosure warnings, function as a buyer checklist.

REALTOR® Magazine-Daily News-Foreclosures: Ten Reasons for Buyer Caution: "Daily Real Estate News | December 17, 2009 | Share
Foreclosures: Ten Reasons for Buyer Caution
Foreclosed homes aren’t always the best deal in town – even if they do come with a price tag that appears to be lower than some other homes in the neighborhood.

Here are 10 reasons why that is true, offered by Vince Mastronardi, president of On-Site Specialty Cleaning & Restoration in suburban Detroit.

No heat in the winter. When a home has been left unheated, buyers run a risk of damaged pipes.
Not removed but ripped. Thieves and even angry former owners can do a lot of damage when they depart with fixtures and key systems like heaters and air conditioners.
Peeling, bubbling, and discoloration. Water incursion isn’t always obvious, but these are signs.
Mold. Where there is water there is mold. Look inside cabinets, behind drawers, and around built-ins."

Buying foreclosures in San Diego

Wednesday, December 23, 2009

REALTOR® Magazine-Daily News-Forbes Names Cities With Biggest Price Drops

REALTOR® Magazine-Daily News-Forbes Names Cities With Biggest Price Drops: "Daily Real Estate News | December 22, 2009 | Share
Forbes Names Cities With Biggest Price Drops
Cities that experienced housing recessions were affected as much by local economic factors as they were by national ones, according to a study by Local Market Monitor for Forbesmagazine.

Cities that have lost the most value are concentrated in the Midwest where unemployment has taken its toll, and in parts of California, Florida, and Nevada where the rising cost of housing encouraged home buyers to gamble on their ability to afford housing long term.

On average, housing markets on the West Coast lost the most value – 21.6 percent since their peak. Florida lost 31 percent. The Northeast lost an average of 8.6 percent, and the Midwest on average lost only 5.6 percent.

Here are the top five cities in each region that lost the most value:"

Friday, December 18, 2009

Morgan Stanley - walkaway or loan workout

REALTOR® Magazine-Daily News-More Home Owners Walk Away
For instance, on Thursday, financial services firm Morgan Stanley announced that it is turning five San Francisco office buildings back over to its lender two years after it purchased them when the market was at its priciest. The buildings are estimated to be worth about half of what Morgan Stanley paid.

“This isn’t a default or foreclosure situation,” spokeswoman Alyson Barnes told Bloomberg News. “We are going to give them the properties to get out of the loan obligation.”

Morgan Stanley is apparently current on the loan, so this is what is known as a “strategic default.”

Some might ask: If strategic defaults are OK for banks, why aren’t they OK for ordinary homeowners?

---
Is this a commercial walkaway? or a negotiated loan workout?
Commercial short sale?  may have worked. 

Commercial short sales and commercial loan workouts



Senior lienholders to release deficiency as part of Obama Short sale program

If lenders sign on to this program and a homeowners loan is the type covered, the lenders is to forgive the deficiency on senior loans.
(this does not change anything about seconds - so you still have to watch out for collection efforts from seconds after short sales


Obama's standardized short-sale plan could help troubled homeowners -- latimes.com
NATION'S HOUSING
Obama's standardized short-sale plan could help troubled homeowners
By Kenneth R. Harney

December 13, 2009

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Reporting from Washington - If you're in trouble on your mortgage and can't get a loan modification, check out the Obama administration's standardized short-sale plan that's scheduled to roll out in the next several months.

The program, outlined Dec. 1 by the Treasury Department, is an attempt to streamline what has traditionally been a contentious, time-consuming process by requiring lenders and others to use nationally uniform documents, timelines and financial incentives.

A short sale involves a lender or investor agreeing to collect less than the balance owed on a mortgage debt out of the proceeds of a negotiated sale of the property. Often a short sale is the last alternative to foreclosure available to distressed homeowners and banks. Say you've lost your job and fallen behind on mortgage payments. With little or no income, you can't qualify for a modification program.

In this situation -- grim as it is -- your best move may be to see whether your lender will accept a short sale. Though the idea sounds straightforward, in practice it is not. First, the bank needs to be convinced that a short sale would yield it more money at the bottom line than a foreclosure would.

This usually means you need to bring in a real estate agent who knows the ropes and can pull together the key information needed by the bank: recent comparables on closed sales, local market trends and the likely selling price of your house.

You'll also need a buyer for the house -- one who'll pay a price acceptable to the bank and has financing to close the deal. If you happen to have a second mortgage or home equity credit line on the property, you'll also need to negotiate how much that lender will receive from the sale proceeds.

That can be tricky. In depressed real estate markets, the second-lien lender may be holding a note that's worthless in a foreclosure because plummeting property values have wiped out the collateral. Yet that same bank is in a pivotal position: It has the legal power to block the short sale by refusing to sign on to the deal.

Equally troublesome in short sales is the fact that banks, mortgage servicers and bond investors often have conflicting requirements for documentation and financial yields that can complicate and drag out the haggling for months.

Enter the Obama administration's new streamlining plan. Besides requiring lenders and servicers to use uniform documentation, pre-approved short-sale terms and accelerated turnaround times, the plan provides financial incentives for key players:

* Homeowners who successfully complete a short sale under the program receive $1,500 to defray relocation costs.

* Mortgage servicers can receive $1,000 per case.

* Investors get $1,000.

* Second-lien holders receive up to $3,000 from the sale proceeds.

Even real estate agents get something: The rules prohibit banks from forcing them to cut their commissions from the listing agreement as part of the final deal.

Sounds like a formula for encouraging a lot more short sales, right? The jury will be out on that for months, and most major lenders are still studying the fine print of the Obama program. But early reactions from big banks appear to be positive.

Dave Sunlin, a senior vice president for Bank of America Corp., said: "We're very pleased. We welcome any effort to reach standardization for all parties" involved in short sales.

Faith Schwartz, executive director of Hope Now -- a Washington-based group representing the country's largest banks, mortgage servicers, bond investors and consumer counseling organizations -- said the plan should bring "uniformity and standards" to a process usually characterized by "mayhem" among the negotiating parties.


for more on short sales and getting released from a deficiency.


Commercial Walkaways and commercial short sales

REALTOR® Magazine-Daily News-More Home Owners Walk Away
For instance, on Thursday, financial services firm Morgan Stanley announced that it is turning five San Francisco office buildings back over to its lender two years after it purchased them when the market was at its priciest. The buildings are estimated to be worth about half of what Morgan Stanley paid.

“This isn’t a default or foreclosure situation,” spokeswoman Alyson Barnes told Bloomberg News. “We are going to give them the properties to get out of the loan obligation.”

Morgan Stanley is apparently current on the loan, so this is what is known as a “strategic default.”

Some might ask: If strategic defaults are OK for banks, why aren’t they OK for ordinary homeowners?




-----
Is this a walkaway or a negotiated loan workout?
One might wonder why they did not go with a short sale? 

for more on commercial short sales and commercial loan workouts


Thursday, December 17, 2009

Senior lienholders to release deficiency as part of Obama Short sale program

If lenders sign on to this program and a homeowners loan is the type covered, the lenders is to forgive the deficiency on senior loans.
(this does not change anything about seconds - so you still have to watch out for collection efforts from seconds after short sales


Obama's standardized short-sale plan could help troubled homeowners -- latimes.com
NATION'S HOUSING
Obama's standardized short-sale plan could help troubled homeowners
By Kenneth R. Harney

December 13, 2009

* EmailE-mail
* printPrint
*
Share
* increase text size decrease text size Text Size


Reporting from Washington - If you're in trouble on your mortgage and can't get a loan modification, check out the Obama administration's standardized short-sale plan that's scheduled to roll out in the next several months.

The program, outlined Dec. 1 by the Treasury Department, is an attempt to streamline what has traditionally been a contentious, time-consuming process by requiring lenders and others to use nationally uniform documents, timelines and financial incentives.

A short sale involves a lender or investor agreeing to collect less than the balance owed on a mortgage debt out of the proceeds of a negotiated sale of the property. Often a short sale is the last alternative to foreclosure available to distressed homeowners and banks. Say you've lost your job and fallen behind on mortgage payments. With little or no income, you can't qualify for a modification program.

In this situation -- grim as it is -- your best move may be to see whether your lender will accept a short sale. Though the idea sounds straightforward, in practice it is not. First, the bank needs to be convinced that a short sale would yield it more money at the bottom line than a foreclosure would.

This usually means you need to bring in a real estate agent who knows the ropes and can pull together the key information needed by the bank: recent comparables on closed sales, local market trends and the likely selling price of your house.

You'll also need a buyer for the house -- one who'll pay a price acceptable to the bank and has financing to close the deal. If you happen to have a second mortgage or home equity credit line on the property, you'll also need to negotiate how much that lender will receive from the sale proceeds.

That can be tricky. In depressed real estate markets, the second-lien lender may be holding a note that's worthless in a foreclosure because plummeting property values have wiped out the collateral. Yet that same bank is in a pivotal position: It has the legal power to block the short sale by refusing to sign on to the deal.

Equally troublesome in short sales is the fact that banks, mortgage servicers and bond investors often have conflicting requirements for documentation and financial yields that can complicate and drag out the haggling for months.

Enter the Obama administration's new streamlining plan. Besides requiring lenders and servicers to use uniform documentation, pre-approved short-sale terms and accelerated turnaround times, the plan provides financial incentives for key players:

* Homeowners who successfully complete a short sale under the program receive $1,500 to defray relocation costs.

* Mortgage servicers can receive $1,000 per case.

* Investors get $1,000.

* Second-lien holders receive up to $3,000 from the sale proceeds.

Even real estate agents get something: The rules prohibit banks from forcing them to cut their commissions from the listing agreement as part of the final deal.

Sounds like a formula for encouraging a lot more short sales, right? The jury will be out on that for months, and most major lenders are still studying the fine print of the Obama program. But early reactions from big banks appear to be positive.

Dave Sunlin, a senior vice president for Bank of America Corp., said: "We're very pleased. We welcome any effort to reach standardization for all parties" involved in short sales.

Faith Schwartz, executive director of Hope Now -- a Washington-based group representing the country's largest banks, mortgage servicers, bond investors and consumer counseling organizations -- said the plan should bring "uniformity and standards" to a process usually characterized by "mayhem" among the negotiating parties.


for more on short sales and getting released from a deficiency.


Tuesday, December 8, 2009

Commerical Real Estate has declining fundamentals - short sales and loan workouts

Economist's Commentary: December 8, 2009
However, commercial real estate did not find its footing in the constantly shifting terrain of weak fundamentals and timid transaction activity. Demand for commercial properties continued on a downward path, adding pressure on prices and rents. Moreover, credit conditions continued to tighten as banks moved to strengthen their balance sheets. As a result, vacancy rates have been rising and the volume of distressed properties has grown. Nonetheless, it is worth noting that the pace of decline in fundamentals is slowing, and sales transactions are posting positive growth.

Commercial short sales and loan workouts


commerical Real Estate - looming disaster

Economist's Commentary: December 8, 2009: "However, commercial real estate did not find its footing in the constantly shifting terrain of weak fundamentals and timid transaction activity. Demand for commercial properties continued on a downward path, adding pressure on prices and rents. Moreover, credit conditions continued to tighten as banks moved to strengthen their balance sheets. As a result, vacancy rates have been rising and the volume of distressed properties has grown. Nonetheless, it is worth noting that the pace of decline in fundamentals is slowing, and sales transactions are posting positive growth."

commercial short sales and loan workouts

Thursday, December 3, 2009

Foreclosures set to rise in 2010 - prices may fall

U.S. housing market meltdown not over yet: Zandi | Reuters
"The housing crash is not over," he said.

The U.S. housing market has suffered the worst downturn since the Great Depression, and its impact has rippled through the recession-hit economy as well as the rest of the world.

A setback for the hard-hit housing market could portend problems for the U.S. economy.

Home prices, as measured by the Standard & Poor's/Case-Shiller U.S. National Home Price Index, will trough in the third quarter of 2010 after declining 38 percent, Zandi said.




san diego foreclosure info

U.S. housing market meltdown not over yet: Zandi | Reuters

U.S. housing market meltdown not over yet: Zandi | Reuters: "'The housing crash is not over,' he said.

The U.S. housing market has suffered the worst downturn since the Great Depression, and its impact has rippled through the recession-hit economy as well as the rest of the world.

A setback for the hard-hit housing market could portend problems for the U.S. economy.

Home prices, as measured by the Standard & Poor's/Case-Shiller U.S. National Home Price Index, will trough in the third quarter of 2010 after declining 38 percent, Zandi said."

Treasury sets guidance to simplify short sales | Reuters

Treasury sets guidance to simplify short sales | Reuters: "The U.S. Treasury on Monday set long-awaited guidance on a plan for mortgage companies to speed 'short sales' of homes and other loan modification alternatives to stem a rising tide of foreclosures."

san diego short sale attorney

Monday, November 30, 2009

Who’s Hurting the Most? - Economix Blog - NYTimes.com

Who’s Hurting the Most? - Economix Blog - NYTimes.com: "First let’s take a look at jobless rates by age:
DESCRIPTIONSource: Bureau of Labor Statistics

While older workers may worry about their coming retirement, younger workers are actually having the most difficulty finding jobs. The unemployment rate for teenagers, which reached 27.6 percent in October, has set a record in each of the last three months.

On to education. As implied above, greater educational attainment is associated with a lower unemployment rate:
DESCRIPTIONSource: Bureau of Labor Statistics

Men are also doing much worse than women in the labor market, largely because men are disproportionately employed in industries that are more sensitive to the business cycle:"

This may explain why we see so many people out at the malls and restaurants in North County.

Sunday, November 29, 2009

Should you pay your Property Taxes

Whether you should pay your property taxes is a tough question to answer on net.
1. call your tax assessor find out if you have an unusual bond which might make your county tax collector foreclose in and expedited manner.

Typically you can get a few years behind before the government in California will foreclose.

Remember property taxes are not personal debts, they are debts of the property. So in generally in California you will not be personally responsible for the property taxes.

Not paying the property taxes will make the short sale harder to close. Make sure your Realtor and Escrow officer are aware of the circumstances and see if this is going to effect the lender net. If the lenders net is effected, it may cause problems.

Generally someone is going to have to pay those taxes before the buyer takes title to the property. The lender may pay the property taxes, you may pay them, the buyer may pay them or perhaps one of the Realtors will pay them to close the deal.

If you do plan to pay them, you might want to pay them at the closing table instead of directly to the county tax collector. Why? Because the National Association of Realtors found that that most short sales fail to close. So unless you Realtor has a lengthy track record of closing short sales you should have back up strategies.

Whether you will be responsible to your lender for costs after a foreclosure is a much longer answer.

In short, talk to your tax office and then determine how much you really need to do that short sale. Paying the taxes makes the short sale more likely to happen. Your Realtor should be able to give you specifics.
Web Reference: http://UpsideDownRealEstate.com"

short sales and property taxes
Carlsbad short sale

Saturday, November 28, 2009

As baby boomers retire, home markets will hurt - USATODAY.com

Interesting article which predicts the prices will start falling when the baby boomers reach a certain age.


As baby boomers retire, home markets will hurt - USATODAY.com: "There are already more sellers than buyers in six states: Connecticut, New York (excluding Manhattan), North Dakota, Pennsylvania, West Virginia and Hawaii. The trend first hits areas with cold weather and traffic congestion, which tend to drive retirees away.

Boomers were 'an incoming tide for four decades. Now the tide's turned, and it's going to make it much harder for housing markets to rise,' said Dowell Myers, professor of policy, planning and development at the University of Southern California and co-author of the study. The trend has long been anticipated, but Myers is the first to analyze buying and selling, state by state."

San Diego Short Sales

Carlsbad housing prices

Thursday, November 26, 2009

California Housing Market Turns Corner, Realtors Say (Update2) - Bloomberg.com

California Housing Market Turns Corner, Realtors Say (Update2) - Bloomberg.com: "Single-family home prices in California rose for the eighth consecutive month in October. The median cost of an existing, detached house gained 0.3 percent from the previous month to $297,500. Prices dropped about 3.2 percent from a year earlier, compared with annual declines of 7.3 percent in September and 17 percent in August.

“California has hit and passed the bottom of this real estate cycle,” Leslie Appleton-Young, vice president and chief economist of the Los Angeles-based Realtors group, said in a statement today."

Why is so easy for the press to find Realtor representatives willing to make fools of themselves. First we had the national association of Realtor economist embarrassing Realtors on the way down, now they are starting to make predictions about turning the corner.

Why not just say that market may be putting in a base right now. Whether the market recovers on there will depend in part on jobs and the availability of cheap money currently provided by the fed who is buying approximately 85% of the home loans being made.


short sale realtors and attorneys

carlsbad real estate

Thursday, November 5, 2009

How to Negotiate a short sale with a lender

You have to ask yourself a question at the beginning of the short sale.

I am willing to negotiate on the banks terms. Or, am I going to take a more aggressive negotiating posture from the begining.

More aggressive -

1. RESPA request.
2. Forensic Loan Analysis
3. Litigation prep
4. Hiring a lawyer and making legal demands
5. Compelling the lender to negotiate in good faith.

Less aggressive but perhaps just as effective

1. Choosing your workout option such as a short sale
and working with a Real Estate Broker who has closed dozens of short sales and working with a lawyer who can protect your interests.

Then if you are not able to reach terms you find acceptable, then stepping up to a more aggressive position.

How to negotiate a short sale.

Tuesday, September 29, 2009

Loan Modification attorneys who have alleged failed to perform services

News Releases


STATE BAR TAKES ACTION TO AID HOMEOWNERS IN FORECLOSURE CRISIS

MEDIA CONTACT: Diane Curtis 415-538-2028 diane.curtis@calbar.ca.gov

San Francisco, September 18, 2009 — The State Bar of California, alarmed by the number of lawyers preying on vulnerable homeowners, today identified 16 attorneys who are under investigation for misconduct related to loan modification.

“In my 21 years in attorney discipline, I have not seen a crisis of this magnitude. It is truly unprecedented,” said Interim Chief Trial Counsel Russell Weiner, who is waiving investigation confidentiality in favor of public protection. The waiver, allowed by law, is used only occasionally, but Weiner said the seriousness of the problem demanded a strong reaction by the bar in order to protect consumers. This is the first time the names of more than a few lawyers being investigated have been made public.

“The number of attorneys using their law licenses to essentially take money from unwary but trusting consumers is astounding,” Weiner added. “There are literally thousands of victims who have lost money they could not afford to lose. Under the circumstances, the need for public information and protection is paramount.”

Those attorneys being named by the State Bar have allegedly taken fees for promised services and then failed to perform those services, communicate with their clients or return the unearned fees, Weiner said. Some attorneys misrepresented the services they could provide. “It appears these attorneys may have significantly harmed their clients who were already facing great financial pressure and the possible loss of their homes.”

About one-quarter – almost 800 cases – of the active investigations in the Office of Chief Trial Counsel (OTC) are related to foreclosure complaints. The office has experienced a 58 percent increase in active investigations over 2008 due in large part to the huge increase in complaints against attorneys offering loan modification services. “Our office is aggressively investigating these cases and is working proactively with law enforcement,” said Weiner.

In March of 2009, the State Bar created a special team of investigators and lawyers to handle the growing number of complaints received about attorneys offering loan modification services. OTC found that many of the offending attorneys are associated with firms that use telemarketers or phone banks to sign up clients without regard to the facts of the individual case or whether or not the client can be helped, Weiner said.
In many cases, the attorneys work with untrained non-attorney staff engaging in the unlawful practice of law by offering legal advice to prospective clients. OTC also is investigating the non-attorney staff for possible referral to law enforcement.

In recent months, OTC has obtained the resignation of three attorneys who were offering loan modification services. Those attorneys chose to give up their licenses to practice law rather than face disciplinary charges and possible disbarment. In addition, OTC lawyers are preparing to put some attorneys on inactive status pending the filing of formal disciplinary charges

Weiner warned consumers to take special caution when seeking legal representation related to loan modification. “Consumers should not be comforted by advertisements that claim the attorney is a member of the State Bar of California,” he said, noting that all attorneys practicing in California on a regular basis are members. “Such membership does not mean the attorney has any special knowledge, experience or expertise in the area of loan modification. In fact, it appears that many of the attorneys offering these services have little or no prior experience in the area of loan modification.”

The following attorneys have received a significant number of complaints related to the loan modification services they were hired to perform. They are entitled to a full and fair hearing on any charges that may be filed in the future. No discipline may be imposed unless and until the State Bar proves allegations of misconduct by clear and convincing evidence.

▪ David Arase, Bar No. 233705, Arase Law Firm and National Housing Assistance

▪ Stephen Burns, Bar No. 113371, Legal Group Network

▪ Robert Buscho, Bar No. 122556, United Law Group

▪ Nicholas Chavarela, Bar No. 251632, Rodis Law Group and America’s Law Group

▪ Steven Feldman, Bar No. 103676, Feldman Law Center

▪ Eric Johnson, Bar No. 224065, Avantgarde Group

▪ Paul Lucas, Bar No. 163076, Lucas Law Center

▪ Brandon Moreno, Bar No. 233750, U. S. Foreclosure

▪ Jeffrey Nemerofsky, Bar No. 213014, U.S. Advocacy Law Group and U.S. Financial Products

▪ Gregory Paiva, Bar No. 207218, Law Offices of Gregory Paiva

▪ Adrian Pomery, Bar No. 249664, U.S. Foreclosure

▪ Ronald Rodis, Bar No. 181873, Rodis Law Group and America’s Law Group

▪ Mark Shoemaker, Bar No. 134828, Advocates for Fair Lending

▪ Marc Tow, Bar No. 78429, Marc Tow and Associates

▪ Michael Yellin, Bar No. 255050, A Fresh Start Loan Modification

▪ Sean Rutledge, Bar No. 255938, United Law Group

California loan modification information


Friday, September 25, 2009

Most expensive houses - La Jolla wins?

same-4-bedroom-house-wildly-different-prices.html: Personal Finance News from Yahoo! Finance: "La Jolla, on the other hand, is the most expensive; a comparable house there goes for a cool $2.125 million. That's more than $2 million disparity is up from 2004, when the spread between the most expensive and most affordable towns was $1.5 million."

I would like to know if that comp in La Jolla had a white water ocean view, but it is a amazing to see that La Jolla is more expensive that Greenwich. I have read Greenwich does have pretty good inventory right now.

Friday, September 11, 2009

Home prices looking forward

Home Price Increases Depends on Foreclosure Sales - Developments - WSJ
Where will home prices head this fall? It depends, in large part, on how many more foreclosures are made available for sale, as a new study by LPS Applied Analytics, a real-estate research firm, makes clear.

LPS looked at the link between sales of bank-owned foreclosures (known as REO, for real-estate owned) and the rate of home price declines. In Michigan, for example, REO accounted for 64% of sales in the first half of 2009. Home prices declined by 47% over that time, though the decline falls to just 26% when excluding REO properties.


Buying a home - what size will your down payment be?

Mortgages - A Down Payment Anomaly - NYTimes.com
HOME buyers are often advised to come up with at least a 20 percent down payment, or face the likely additional expense of private mortgage insurance. But this year, at least, that counsel would not have saved them as much money as in the past.
Skip to next paragraph
More Mortgage Columns

Rules put in place in late 2008 by Fannie Mae and similar rules adopted by Freddie Mac are less favorable to borrowers who put down 20 percent to 25 percent, considered to be the industry minimum. (Fannie and Freddie are the government-controlled companies that establish the underwriting standards for most of the nation’s loans.)

For most people, it turns out, smaller down payments result in lower interest rates. Whether that benefits borrowers in the long term, though, is open to debate.


What happens to the recovery if the FHA runs out of money?

FHA loans have driven this market recovery. 

REALTOR® Magazine-Daily News-Will Taxpayers Have to Bail Out FHA?
Will Taxpayers Have to Bail Out FHA?
The Federal Housing Administration stepped up to guarantee low-downpayment mortgages for riskier buyers after the mortgage market crashed. Now with many of them in default, the FHA’s losses have mounted, and it’s possible that its reserves will fall below the 2 percent level required by law. If that happens, taxpayers may have to bail out FHA.

Some housing analysts say that this will lead to tighter restrictions on FHA mortgages.

"It absolutely changes the political dynamic once you have to ask taxpayers" for money, says Lisa Marquis Jackson, vice president for John Burns Real Estate Consulting.

The 10 states with the most FHA-insured mortgages are:

1. Texas
2. California
3. Florida
4. Georgia
5. Ohio
6. Illinois
7. Pennsylvania
8. Michigan
9. Virginia
10. North Carolina


Source: The Wall Street Journal, Nick Timiraos (09/05/2009)


Friday, August 28, 2009

REALTOR® Magazine-Daily News-Option ARMs Put Recovery at Risk

REALTOR® Magazine-Daily News-Option ARMs Put Recovery at Risk: "“Everyone’s been focused on subprime, but we’re more concerned about this,” says Todd Jadlos, managing director of LPS Applied Analytics, which analyzes data for the financial industry. “By the time subprime defaults had increased 200 percent, in June and July of 2007, option ARMs had gone up 400 percent. People just didn’t notice because the overall numbers weren’t as high.”"

Saturday, August 8, 2009

REALTOR® Magazine-Daily News-Foreclosure Bargains Are Disappearing

REALTOR® Magazine-Daily News-Foreclosure Bargains Are Disappearing: "Foreclosure Bargains Are Disappearing
Buyers of foreclosure have to be quick these days. Some houses go under contract fewer than 90 minutes after they are put on the market, says Brad Geisen, founder of Foreclosure.com.

'For every listing that comes out, we have 10 buyers,' says Cesar Dias, an associate with Approved Real Estate Group in Stockton, Calif.

Dias had 15 minutes of fame after introducing foreclosure sales tours last year. Now the tours are defunct because there are not enough homes to show.

'We had a lot of inventory last summer. Now we're down to 1,500 listings — from more than 5,000,' Dias says.

In Florida, real-estate investment companies, buying in bulk and paying cash, face competition"

foreclosure info

REALTOR® Magazine-Daily News-Pending Home Sales Continue to Climb

REALTOR® Magazine-Daily News-Pending Home Sales Continue to Climb: "Daily Real Estate News | August 4, 2009 | Share
Pending Home Sales Continue to Climb
Pending home sales are up for the fifth consecutive month, the first time in six years for such a streak, according to NAR.

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in June, rose 3.6 percent to 94.6 from an upwardly revised reading of 91.3 in May. The index is 6.7 percent above June 2008 when it was 88.7. The last time there were five consecutive monthly gains was in July 2003.

Lawrence Yun, NAR chief economist, says a combination of positive market factors is fueling the gains.

“Historically low mortgage interest rates, affordable home prices, and large selection are encouraging buyers who’ve been on the sidelines,' he says. 'Activity has been consistently much stronger for lower priced homes. Because it may take as long as two months to close on a home after signing a contract, first-time buyers must act fairly soon to take advantage of the $8,000 tax credit because they must close on the sale by November 30.”"

REALTOR® Magazine-Daily News-6 Reasons Why Some Homes Sell

REALTOR® Magazine-Daily News-6 Reasons Why Some Homes Sell: "* Lousy pictures on the Web.
* Priced too high for the neighborhood.
* Blah interior; ho-hum landscaping.
* Little online marketing and hard-to-find MLS listings.
* Low commissions. Practitioners make sure their customers see properties that offer a payoff.
* Miserable maintenance, including ceiling stains, leaky faucets, and ancient furnaces."

orange county short sale info

Thursday, August 6, 2009

Selling short can be scary - Sacramento Business, Housing Market News | Sacramento Bee

Home Front: Selling short can be scary - Sacramento Business, Housing Market News | Sacramento Bee: "A second concern

People trying to do short sales also are worrying about reports that some lenders are selling second mortgages – typically the down payment loan – to collection agencies. They fear that in three or four years those agencies will be on the phone seeking payment.

Hainsworth confirmed it's happening. Elk Grove bankruptcy attorney Jonathan Stein said the owner of a 'second' has up to four years after the default date to collect. He said it's critical that your real estate agent negotiates a solution to the second.

Stein fears some people will rebuild credit scores after the hit of a short sale only to file bankruptcy when confronted later by a collection agency."

For more info about proper short sale negotiation

Sunday, August 2, 2009

Foreclosure and short sale issues - posted on another thread

Real Estate Blog - Stall Your Foreclosure........Guaranteed!!!
sorry to burst the bubble of those who somehow (I'm sure none of you active agents sold anyone a home that has gone down in value) don't seem to want to take ANY responsibility for this downturn, but

FIRST...those of you who keep saying you are dealing with a bank...duh...what banks...these are loan pool servicers who have licensed the names of banks and shot off into partnerships which, as a REMIC, these servicer/lenders ARE NOT allowed to own the loans that they are telling you to submit short sale/loan mod documents...part of the issue is that the world has changed and most real estate professionals have no idea what a cusip is, a bloomberg loan pool number is, or even that there is something known as the trust indenture act of 1939...time to get into the 21st century and understand that just because it said the word MORTGAGE loan on it does not mean that it was or remained that way...

SECOND...to make ugly profits and deprive borrowers of the real low interest rates being passed thru on these financing instruments(start using the right terms), the depositers/sponsers would use the splitting up process available in a REMIC loan pool tranche, to synthsize the pass thru elements, and earn 30 - 250% on the upper non AAA rated tranches...how did they do that with a loan paying only 5% ??? Because by getting a ratings agency(s&P or moody's) to rate the majority of the paper in the pool structure AAA(70-80% of the loans), then they would resell the pass thru instruments to YOUR money market accounts...and how much have money market accounts been paying in the last 5 years ??? Pretty darn low rates...they would keep and repackage the rest of the finacial stream...for those of you who actual know how to use an HP-12c, make sure you are sitting down when you do the math...

THIRD...that was not enough profits...they then turned around and sold derivatives on the different parts of the tranches...the best way to describe what a derivative is(for those who can think beyond the first day of real estate agent school)it's like an option to purchase a home...but what if someone sold multiple options on the same home ??(for those who say you can't, as long as it is disclosed and the price point of the other options are built in and disclosed it can be done)...but what if that was not enough greed on the loan pool investor side...what if you then realized that no one was watching and you started trading naked option positions, justifying it by saying you can always buy them back later...THAT is why the system froze up on August 7, 2007, when BNP Paribas REFUSED to pay out on derivative positions it had taken fees on to insure some positions tied to American Home Mortgage which had folded the day before...and if you want to get a better understanding of what I just said and why it matters google this [delphi +derivatives +bankruptcy ] and it will bring you to some reports that described that in the delphi bankruptcy(which is still not over), there were about 2 billion in actual bonds outstanding but there were over 30 BILLION in derivative contracts with each party thinking they had bought the prime position...

FOURTH...just because SOMEONE shows up claiming you OWE SOMEONE money, does not mean the actual person who you owe money to is trying to collect...most FLORIDa foreclosures are being filed by and in the names of entities that do not show up as the owner of the debt in the county records and is not properly registered to do business in the State of Florida...and in some cases, are actually NOT passing thru the payments to the loan pool investors(billions of dollars in lawsuits currently on this issue)

SOOOOO.....stop thinking we are back in the days of George Bailey..those banking days are over...Since everyone wants to have 24 hour access to their money, every day is a bank run day...to insure there are no regular daily crashes, financial instruments were homogenized since the last S&L crisis, when REMIC's were created by the tax code in 1986...this was to allow financial institutions to trade in financial instruments to the central banking system to allow them to borrow funds overnight when more depositors yanked out money from their atm than was sitting on the cash side of the financials of the lender...what developed at the turn of the century was that by reducing the FEDERAL DEFICIT, Clinton actual hurt the banking system by removing US Treasuries from the pool of available capital...and THE ENTIRE WORLD needs US taxpayer backed FEDERAL DEFICIT CERTIFICATES commonly known as TREASURIES since there is not and has NEVER been enough GOLD to back up the worlds financial systems...AND then add in the crazy BASEL 2 rules designed to offset the lost decade of japanese banking but has turned into a mess that led overseas financial institutions to BEG WALL STREET to find some or create some AAA rated instruments so that they could keep growing...so what is some lonely wall street exec to do when someone is throwing money at them and insisting that SOMETHING be done....??? can you say NINJALOAN ???


Thursday, July 23, 2009

Stumbling block to economic recovery: Rising jobless rate accelerating foreclosure crisis - San Jose Mercury News

Stumbling block to economic recovery: Rising jobless rate accelerating foreclosure crisis - San Jose Mercury News: "Stumbling block to economic recovery: Rising jobless rate accelerating foreclosure crisis

By Alan Zibel and Tammy Webber

Associated Press
Posted: 07/16/2009 01:00:46 PM PDT

WASHINGTON — Relentlessly rising unemployment is triggering more home foreclosures, threatening the Obama administration's efforts to end the housing crisis and diminishing hopes the economy will rebound with vigor.

In past recessions, the housing industry helped get the economy back on track. Home builders ramped up production, expecting buyers to take advantage of lower prices and jump into the market. But not this time."

No recovery in California until 2011, forecast says - Los Angeles Times

No recovery in California until 2011, forecast says - Los Angeles Times: "Unemployment in California and Los Angeles County will increase well into 2010, continuing to exceed the highest levels since at least the end of World War II, according to a local economist whose projections for the Southland economy are among the most negative to date.

Continued sluggishness in key industries such as construction, retail, international trade and hospitality will keep the state from a full recovery until 2011, said the report, released by the Kyser Center for Economic Research at the Los Angeles County Economic Development Corp."

Monday, July 20, 2009

Loan Modification programs may work for unemployed

REALTOR® Magazine-Daily News-Unemployed Might Get Anti-Foreclosure Help: "The Obama administration is reportedly considering a program that would give loan forbearance to the unemployed. The aim of the program is to provide help without distorting the housing market.

The program would augment the federal loan modification program, giving unemployed workers more time and financial leeway to qualify for a new loan.

So far the loan modification program hasn’t been very successful for a variety of reasons, including the declining equity many troubled borrowers have in their homes and rising unemployment figures that make lenders unwilling to participate."

I will believe this one when I see it. So far almost all these initiatives have been good for the lenders and not the borrowers. This one might be useful for the temporarily unemployed.

I suspect it will still have some sort of taxpayer payout to the lenders.

loan modification programs

State Bar Cracking Down on Loan Modification scam

News Releases from California state bar on loan modification scams
The State Bar will continue to take every step to see to it that any attorney who engages loan modification fraud will no longer be permitted to practice law, and will cooperate with prosecutors in their pursuit of such criminal conduct.

Please note the state bar went after a lawyer who formed a partnership with a non lawyer.


If you are working with an "attorney backed" loan modification firm you are probably working with a lawyer conducting business in an unethical manner or an outright scam. 

If you wish to work with an attorney make sure you hire a law firm. Speak with the attorney and ask if he is representing you.  If he says, make sure his retainer says so.  Don't hire a loan modification firm with attorneys on staff.  That is almost definitely a "bullshit" operation. 

 




Loan modification info

Friday, July 17, 2009

Upscale home sales lag

Upscale home sales lag as jumbo loans are hard to get - USATODAY.com
More than four months after the Obama administration launched its housing rescue plan, scores of lenders are focused on rewriting mortgage loans to make them more affordable.

But one demographic is being largely ignored: homeowners with higher-price loans.

They don't qualify for mortgage modifications under the Obama plan. They can't get today's low interest rates if they try to refinance. And with newly cautious lenders warier about who they lend to, just try to sell a home that costs $730,000 or more these days. In many cases, finding a buyer who can get financing takes far longer than for lower-price homes, because banks want as much as 30% down and six months of mortgage payments in reserve.

CHART: Troubled jumbo home loans in 370 metro areas


Thursday, July 16, 2009

Foreclosure and Short Sales - Tax in California

Foreclosure and Short Sales: "If a lender forecloses on my principal residence or agrees to a short sale, will I owe tax on the deficiency?

Generally, when there is either a foreclosure or a short sale a taxpayer will receive either (in some cases the lender may issue both) a federal Form 1099-A, Acquisition or Abandonment of Secured Property, or Form 1099-C, Cancellation of Debt, that provide the amount of debt cancelled, information to compute gain or loss, and whether the taxpayer is personally liable for the debt.

If you borrow money from a commercial or private lender and the lender later cancels or forgives the debt, you may have to include the canceled amount in income for tax purposes, depending on the circumstances. In a short sale, the lender agrees to accept less than full payment, and cancels the unpaid amount.

The most common situations when a foreclosure or a short sale does not result in cancellation of debt (COD) income involve a non-recourse loan. A non-recourse loan means the lender’s only remedy in case of default is to repossess the property the lender cannot pursue you personally in case of default. A purchase money loan (that is, a loan taken to “purchase” your home) is generally considered to be a non-recourse loan in California. Refinances, second mortgages, and “cash out” loans are generally recourse loans.

Although forgiveness of a non-recourse loan resulting from either a foreclosure or a short sale does not result in COD income, it may result in other tax consequences, like a reportable gain from the disposition. Even if the debt discharged is non-recourse, a taxpayer may have a gain to the extent the balance of the mortgage forgiven exceeds their adjusted basis of the property.

The gain, if any, from the foreclosure or short sale may or may not be taxable, depending on whether IRC section 121 applies and the amount of the gain. IRC section 121 only applies to principal residences, and limits the amount of gain that can be excluded from income.

If the loan is a recourse loan, then depending on the facts, you may have COD income, and potentially a reportable gain, in which case you would want to determine if one of the provisions in IRC section 108 would apply, allowing the COD income from the discharge of indebtedness to be excluded.

For 2007 and 2008, California conformed, with modifications to IRC section 108 (a)(1) (E) that allows a limited amount of COD income resulting from the foreclosure or short sale of a qualified principal residence to be excluded. However, this exclusion is currently not allowable for any foreclosure or short sale that occurs on or after January 1, 2009. (Note: There is pending legislation that would extend the California exclusion, SB 97 and AB 111.) One of the provisions available in IRC section 108 that might apply is the insolvency rule, which would apply if a taxpayer has COD income and is insolvent (total liabilities exceed total assets); in that case, the exclusion only applies up to the amount of insolvency, (to the extent, liabilities exceed assets).

More information regarding foreclosures and short sales is available at irs.gov. In particular, you may want to refer to the IRS webpage titled “Home Foreclosures and Cancellations”

If your reporting position is audited by California, you should be prepared to provide documentation and an analysis of your facts in support of your position."

Monday, July 13, 2009

What happens after a foreclosure

How to gain leverage against your lender after a foreclosure sale.

http://www.trulia.com/voices/Foreclosure/My_house_in_SD_was_just_sold_at_auction_My_loan-144574-p_1-recent?answerId=468739&thisanswer=1#left_content

While answering this post. I realized that not only can the california foreclosure consultant act be used potentially undue a foreclosure sale, the same logic could be used for challenging your credit report or a collection on the deficiency after a short sale.

Making Home Affordable - Look Up Your Loan

check to see if you have a fannie mae or freedie mac loan

this information may be useful to short sale specialists and homeowners.


Making Home Affordable - Look Up Your Loan

realtor short sale specialists

Short Sales: The Basics for REALTORS from the National Association of Realtors

Short Sales: The Basics for REALTORS from the National Association of Realtors: "What is a short sale?

A short sale is a transaction in which the lender, or lenders, agree to accept less than the mortgage amount owed by the current homeowner. In some cases, the difference is forgiven by the lender, and in others the homeowner must make arrangements with the lender to settle the remainder of the debt.

Why is the number of short sales rising?

Due to the recent economic crisis, including rising unemployment, and drops in home prices in communities across the nation, the number of short sales is increasing. Since a short sale generally costs the lender less than a foreclosure, it can be a viable way for a lender to minimize its losses.

A short sale can also be the best option for a homeowners who are “upside down” on mortgages because a short sale may not hurt their credit history as much as a foreclosure. As a result, homeowners may qualify for another mortgage sooner once they get back on their feet financially."

short sales in orange county and san diego

Thursday, July 2, 2009

Homeowners tend to walk away and accept foreclosure after a 15% in their home value

REALTOR® Magazine-Daily News-More Owners Walk Away When Underwater
More Owners Walk Away When Underwater
A study of the Massachusetts housing market by researchers from Northwestern University and the University of Chicago concludes that a home owner’s propensity to default increases the further their loan goes under water.

The study found that home owners begin to walk away after declines of 15 percent or more. More than 17 percent of households would default, even if they can afford to pay their mortgage, when the equity shortfall reaches 50 percent of the value of the house.

for more information on walk away plans and walkaway strategy


Wednesday, July 1, 2009

Wage Deflation in Our Midst | The Big Picture

If there is wage deflation then it will be interesting to if san diego real estate prices can stablize and recover for current levels.

As wages decrease the pool of qualified buyers is likely to shrink.



Wage Deflation in Our Midst | The Big Picture: "A survey conducted by YouGov for the Economist magazine found that 5% of respondents had taken a furlough this year and 15% had accepted a pay cut (see The Recession and Pay: The Quiet Americans on page 33 of this week’s edition).

As wages deflate, workers are looking for ways to supplement their shrinking income base, for example, by moonlighting. Indeed, a poll undertaken by CareerBuilder.com and cited in the USA Today found that one in every ten Americans took on an extra job over the last year; another one in five said they intend to do so in the coming year. These numbers are double for the 45 to 54 year olds who now see early retirement, once around the corner, as an elusive concept."

California Real Estate short sales and price trends

May sales and price report
Existing, single-family home sales increased 35.2 percent in May to a seasonally adjusted rate of
556,590 on an annualized basis.

· The statewide median price of an existing single-family home increased 4.2 percent in May to
$267,570, compared with April 2009.




Inventory on homes priced under 400,000 is very low.
In San Diego many of the lower priced homes are short sales and most of the short sales already have offers.

Thursday, June 25, 2009

Lenders get immunity from foreclosure prevention act

7 lenders get immunity from state foreclosure prevention act - Sacramento Business, Housing Market News | Sacramento Bee
Bank of America Home Loans, CitiMortgage and Carrington Mortgage Services are among the first seven lenders and loan servicers granted immunity from the state's foreclosure prevention act launched this week in California.

The new law makes lenders prove to the state that they have a comprehensive loan-modification program that helps borrowers stay in their homes. Those that can't prove it to the state's satisfaction must wait an extra 90 days before foreclosing on borrowers.

More institutions that received quick exemptions from 90-day delays: EMC Mortgage, Select Portfolio Servicing and Kondaur Capital Corp., the state Department of Corporations reported on its Web site. The law, which took effect Monday, prompted 41 applications this week from lenders and loan servicers aiming to prove their modification programs meet the state's test. Many more are expected next week.

For more information on San Diego Short Sales




for more on foreclosures and short sales

Thursday, June 11, 2009

Forelcosure crisis spreads to prime mortgages

Foreclosure crisis spreads from subprime to prime mortgages - USATODAY.com
The pace of prime borrowers going into foreclosure is accelerating, especially in states with mounting unemployment or property values that saw a big run-up during the housing boom.

It's a marked shift from earlier this year, when foreclosures were driven by defaults on subprime loans. And it has major implications — ravaging the credit scores of borrowers who once had unblemished records and dragging down property values in more affluent neighborhoods.

It also threatens to undermine the housing recovery.

"It's definitely a concern," says Brian Bethune at IHS Global Insight. "(Unemployment) is a major driver of foreclosures, and it will frustrate the housing recovery process."

In the first quarter, almost half of the overall increase in the start of foreclosures was due to the increase in prime, fixed-rate loans, according to the Mortgage Bankers Association (MBA). At the end of the fourth quarter, 2.4% of prime mortgages were seriously delinquent, more than double the 1.1% at the end of March 2008, according to a report by the Office of the Comptroller of the Currency and the Office of Thrift Supervision.

"In the beginning, the higher-end (homes) were a bit isolated," says Kevin Marshall, president of Clear Capital, a provider of real estate asset valuation. "But in the last several months, we're seeing a significant erosion in the higher-end homes. It's reached into the prime loans."

California, Florida, Arizona and Nevada represent 56% of the increase in foreclosure starts, including half of the increase in prime fixed-rate foreclosure starts, according to the MBA.

Town in San Diego in Top 10 for mortgage fraud

In June of 2009 Fannie published a pdf which provides statistics related to mortgage fraud. Escondido which is in San Diego was in the top 10 for mortgage fraud.


https://www.efanniemae.com/utility/legal/pdf/fraudstats/fraudupdate0609.pdf

Mortgage Fraud update form Fannie

Mortgage Fraud Updates & Resources
Fannie Mae is committed to preventing mortgage fraud whether perpetrated by a borrower, a lender, or another person or institution. We offer a variety of resources to help you detect and prevent mortgage fraud. If you have any suggestions or questions, please contact the Mortgage Fraud Program or your Customer Account Manager.

Short Sales may lead to deficiency collections

A Short Sale May Not Mean You're Home Free - WSJ.com
A spokesman for J.P. Morgan Chase & Co., which acquired Washington Mutual last year, says it's the company's policy not to comment on individual cases. Speaking generally, he says, "a short sale may resolve the first mortgage, but the second mortgage ... would be a separate negotiation with the lender or servicer."

Some experts say that mortgage companies may pursue leftover debt, or "deficiencies," in greater numbers as the housing market settles. Lenders are "doing everything possible to work with their borrowers and trying to bring stability back to the lending and real-estate market," says Marc Ben-Ezra, an attorney in Ft. Lauderdale, Fla., who represents mortgage companies in foreclosures. "However, the ability to get a deficiency judgment is a valuable right that I think lenders will pursue aggressively in the future as the market stabilizes."


Bank of America and now even HSBC are pursuing sellers for the defiicency

A Short Sale May Not Mean You're Home Free - WSJ.com
HSBC Finance, part of the North America unit of HSBC Holdings PLC, has implemented a one-year moratorium on the collection of deficiency balances for short sales and foreclosures that occur after April 1, "given the current economic environment," a company spokeswoman says.

Other mortgage servicers say their actions are often dictated by their contracts with investors or mortgage insurers. Bank of America Corp., for example, will "attempt to seek a promissory note whenever it is feasible" in a short sale "in the interest of protecting investors and shareholders from the losses," a spokeswoman says. In the case of a foreclosure, the investor or insurer "is generally the one who pursues the deficiency, but we do ourselves on some-bank-owned assets," she says.

Not every troubled borrower is hit with such a claim. Often, mortgage companies don't go after borrowers for unpaid amounts either because state laws prohibit or limit such actions or the cost outweighs the potential return. Borrowers subject to a deficiency may also elect to file for bankruptcy in an effort to have the debt discharged.

How a borrower is treated can depend on mortgage company policy, the size of the unpaid debt, whether the borrower has a job or other assets, or whether the home was bought as an investment. "If there isn't a financial hardship ... that's where the investor or mortgage insurer will go after the homeowner for more," says David Knight, a senior vice president at Wells Fargo & Co.'s home-mortgage unit.

A PMI Group Inc. spokesman says the mortgage insurer "primarily target[s] borrowers who are not experiencing hardship -- but those who simply elected to walk away from the property due to its decline in value."


Mortgage Fraud Updates & Resources
Fannie Mae is committed to preventing mortgage fraud whether perpetrated by a borrower, a lender, or another person or institution. We offer a variety of resources to help you detect and prevent mortgage fraud. If you have any suggestions or questions, please contact the Mortgage Fraud Program or your Customer Account Manager.

Wednesday, June 3, 2009

Attorney General says Foreclosure Consultants must register

Note the California Association of Realtors states that Realtors are acting as foreclosure consultants when they contact the lender on behalf of upside down homeowners.

Note 2: California Attorneys are not Foreclosure consultants when they render service as part of their Attorney practice. 

 


Consumers - Foreclosure Consultant Registration - California Dept. of Justice - Office of the Attorney General
After July 1, 2009, with certain limited exceptions, it is illegal to operate as a mortgage foreclosure consultant in California unless the foreclosure consultant has obtained from the Department of Justice a Certificate of Registration as a Mortgage Foreclosure Consultant. In order to obtain the Certificate of Registration required by California Civil Code section 2945.45, a foreclosure consultant must complete the application and provide all required documents to the Department of Justice.

If you are a foreclosure consultant, to be certain that you obtain your Certificate of Registration by July 1, you should submit your application no later than June 15, 2009. Be certain to submit with your application, a copy of the contract you will use with clients and all of the other documents required by the application form. You should send this information along with your check for the $850 filing fee made payable to the “California Attorney General’s Office” to:

Foreclosure Consultant Registration Program California Attorney General's Office Consumer Law Section 300 South Spring Street, Suite 1702 Los Angeles, CA 90013

Before a Certificate of Registration can be obtained, it will be necessary for you to obtain a bond in the amount of $100,000, and to file a copy of the bond with the Secretary of State. The Certificate of Registration will not be issued until the Secretary of State acknowledges that the bond has been properly filed. Please contact the Secretary of State to obtain the necessary bond forms at the address below:

Secretary of State Special Filings Unit 1500 11th Street Sacramento, CA 95814

You can also contact the Secretary of State’s Office via the web at: http://www.sos.ca.gov/business/sf/

If you would rather make a $100,000 deposit in lieu of obtaining the bond, you should contact us at the above address for the Attorney General’s Office and we will provide you with the form.

Your application will not be processed until the completed application form, all required documents, and the $850 fee have been received, and the Secretary of State has acknowledged receipt of the bond, or you have made the necessary $100,000 deposit in lieu of the bond.

After a Certificate of Registration is issued to you, you must inform us each time there is a material change in any of the information or documents you supplied with your initial application. Failure to do so can result in the revocation of your Certificate of Registration.

You can obtain a copy of the application form PDF logo [PDF 304 kb / 5 pg] to register as a Mortgage Foreclosure Consultant, and can read a copy of the law to learn important information about additional requirements of the Mortgage Foreclosure Consultant Law. PDF logo [PDF 94 kb / 12 pg]

Tuesday, May 26, 2009

Pre-foreclosure investor buyouts

What is a pre-foreclosure investor buyout?
Investors purport to be able to negotiate wholesale deals with your lenders.
They convince your Realtor to let them do all the work and let the Realtor make 6% on the flip when the buyer takes over the property.
They claim it is a great deal for everyone because they are skilled negotiators.

The reality for San Diego Real Estate homeowners is quite different.

Lenders know that the market in San Diego is quite strong.
Recently and asset manager told me they are netting 100-102 percent of appraised value for Foreclosures and 92-96% for short sales.
He was asked about stories of investors buying properties "wholesale" he said not around here. The banks keeps stats, why would they take a big discount from appraised value when they do not have to?

Additionally - why should investors lock in more potential tax liability or deficiency liability.

Before you list your property with a Realtor who says he works with investors. Get all the facts and create a workout plan. Right now the buyer are out looking. Selling to an investor could be at best a big waste of time and at worst a large financial mistake.

If your property is for sale in a market which is still slow, there may be a reason to work with an investor. But before you take a deal from and investor, speak with a lawyer.

Monday, May 25, 2009

Credit After Foreclosure, Bankruptcy, or Short Sale

Credit After Foreclosure, Bankruptcy, or Short Sale: "Member Legal Services
Tel 213.739.8200
Fax 213.480.7724
May 12, 2009

Copyright© 2009, CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) Permission is granted to C.A.R. members only to reprint and use this material for non-commercial purposes provided credit is given to the C.A.R. Legal Department. Other reproduction or use is strictly prohibited withoutthe express written permission of the C.A.R. Legal Department. All rights reserved.

One of the concerns a consumer has after experiencing a bankruptcy, foreclosure, or short sale (referred to as a 'preforeclosure sale' by Fannie Mae) is the ability to obtain credit to purchase another home. Fannie Mae has updated its credit guidelines. This legal article summarizes those guidelines.

Q 1. How long is the time period after a foreclosure before a consumer can be eligible to obtain credit to purchase a home?

A Five years from the date the foreclosure sale was completed.

Additional requirements that apply after 5 years and up to 7 years following the completion date are as follows:

. The purchase of a principal residence is permitted with a minimum 10 percent down payment and minimum representataive credit score of 680.

. Purchase of a second home or investment property is not permitted.

. Limited cash-out refinances are permitted for all occupancy types pursuant to the eligibility requirements in effect at that time.

. Cash-out refinances are not permitted for any occupancy type.

(Source: FNMA Announcement 08-16, 6-25-08 )

Q 2. Why do the additional requirements for foreclosures in Question 1 only apply from 5 to 7 years following the foreclosure completion date?

A According to Fannie Mae policy in Part X, Section 103 of the Selling Guide, Fannie Mae requires only a 7-year history to be reviewed for all credit and public record information. The 7-year timeframe also aligns with the information provided by the borrower on the loan application relative to disclosure of a past foreclosure action. (Source: FNMA Selling Guide, 4-1-09. )

Q 3. Does a shorter time period apply if the borrower has 'extenuating circumstances' that led to the foreclosure?

A Yes. Three years from the date the foreclosure sale was completed. The same additional requirements apply as listed in Question 1 except the minimum credit score of 680 is not required. (Source: FNMA Announcement 08-16, 6-25-08. )

Q 4. What are'extenuating circumstances' ?

A Fannie Mae describes 'extenuating circumstances' as follows:

Extenuating circumstances are nonrecurring events that are beyond the borrower's control that result in a sudden, significant, and prolonged reduction in income or a catastrophic increase in financial obligations.

If a borrower claims that derogatory information is the result of extenuating circumstances, the lender must substantiate the borrower's claim. Examples of documentation that can be used to support extenuating circumstances include documents that confirm the event (such as a copy of a divorce decree, medical bills, notice of job layoff, job severance papers, etc.) and documents that illustrate factors that contributed to the borrower's inability to resolve the problems that resulted from the event (such as a copy of insurance papers or claim settlements, listing agreements, lease agreements, tax returns (covering the periods prior to, during, and after a loss of employment), etc.).

The lender must obtain a letter from the borrower explaining the relevance of the documentation. The letter must support the claims of extenuating circumstances, confirm the nature of the event that led to the bankruptcy or foreclosure-related action, and illustrate the borrower had no reasonable options other than to default on their financial obligations.

(Source: FNMA Selling Guide, 4-1-09 at 391. )

Q 5. How long is the time period after a deed-in-lieu of foreclosure before a consumer can be eligible to obtain credit to purchase a property?

A Four years from the date the deed-in-lieu was executed.

Additional requirements that apply after 4 years and up to 7 years following the completion date are as follows:

. Borrower may purchase a property secured by a principal residence, second home, or investment property with the greater of 10 percent minimum down payment ro the minimum down payment required for the transaction.

. Limited-cash-out and cash-out refinance transactions secured by a principal residence, second home, or investment property are permitted pursuant to the eligibility requirements in effect at that time.

(Source: FNMA Announcement 08-16, 6-25-08. )

Q 6. Does a shorter time period apply if the borrower has 'extenuating circumstances' that led to the deed-in-lieu of foreclosure?

A Yes. Two years from the date the deed-in-lieu was executed. The same additional requirements apply as listed in Question 4 after 2 years up to 7 years. (Source: FNMA Announcement 08-16, 6-25-08. )

See Question 4 for the definition of 'extenuating circumstances.'

Q 7. How long is the time period after a 'preforeclosure sale' before a consumer can be eligible to obtain credit to purchase a property?

A Two years from the completion date. No exceptions are permitted to the 2-year period due to extenuating circumstances. (Source: FNMA Announcement 08-16, 6-25-08. )

Q 8. What is a 'preforeclosure sale' mentioned in Question 6 and is that the same as a short sale?

A 'A preforeclosure sale involves the sale of the property by the borrower to a third party for less than the amount owed to satify the delinquent mortgage, as agreed to by the lender, investor, and mortgage insurer' (Source: FNMA Announcement 08-16, 6-25-08 ).

Although the terms preforeclosure sale and short sale have been used interchangeably, there is a significant difference for purposes of obtaining credit. For Fannie Mae purposes, a preforeclosure assumes that the borrower has been delinquent in paying his or her mortgage and the lender agrees to accept a lesser amount to avoid the time and expense of a foreclousre action. A short-sale, however, can also refer to situations in which the lender of the mortgage agrees to a payoff of a lesser amount than is actually owed, even on a current mortgage, to faciiate the sale of teh property to a third party. (Source: FNMA Announcement 08-16 Q&A, 8-13-08. )

Q 9. Does a shorter time period apply if the borrower has 'extenuating circumstances' that led to the preforeclosure (short) sale?

A No. There are no exceptions to the 2-year time period. (Source: FNMA Announcement 08-16, 6-25-08. )

Q 10. If a borrower sold his or her property as a short sale but was never delinquent on that mortgage and is now attempting to purchase a new primary residence, will Fannie Mae purchase the loan?

A The loan will be eligible for delivery to Fannie Mae provided that the borrower's previous mortgage history complies with Fannie Mae's excessive prior mortgage delinquency policy--that is the borrower does not have one or more 60-, 90-, 120-, or 150-day delinquencies reported within the 12 months prior to the credit report date--and the borrower has not entered into any agreement with the short sale lender to repay any amounts assoicated with the short sale, including a deficiency judgment. (Source: FNMA Announcement 08-16 Q&A, 8-13-08 ; FNMA Selling Guide, Part X, Chapter 3, Section 302.09. .)

Q 11. Are preforeclosure (short) sales and deed-in-lieu of foreclosure actions identified on a credit report?

A Preforeclosure sales may be reported as 'paid in full' with a 'settled for less than owed' remarks code, and the mortgage tradeline would indicate any recent delinquency. A deed-in-lieu may be reported by a remarks code indicating a deed-in-lieu. (Source: FNMA Announcement 08-16 Q&A, 8-13-08. )

Q 12. How long is the time period after a bankruptcy (all except Chapter 13) before a consumer can be eligible to obtain credit to purchase a property?

A Four years from the discharge or dismissal date of the bankruptcy action (Source: FNMA Announcement 08-16, 6-25-08 ).

Q 13. How long is the time period after a Chapter 13 bankruptcy before a consumer can be eligible to obtain credit to purchase a property?

A Two years from the discharge date and four years from the dismissal date (Source: FNMA Announcement 08-16, 6-25-08 ).

Q 14. Does a shorter time period apply if the borrower has 'extenuating circumstances' that led to the bankruptcy (all actions)?

A Yes. Two years from the discharge or dismissal; however, no exceptions are permitted to the 2-year time period after a Chapter 13 discharge (Source: FNMA Announcement 08-16, 6-25-08 ).

See Question 4 for the definition of 'extenuating circumstances.'

Q 15. How long is the time period after multiple bankruptcy filings before a consumer can be eligible to obtain credit to purchase a property?

A Five years from the most recent dismissal or discharge date for borrowers with more than one bankrutcy filing within the past 7 years (Source: FNMA Announcement 08-16, 6-25-08 ).

Q 16. Does a shorter time period apply if the borrower has 'extenuating circumstances' that led to the multiple bankruptcies?

A Yes. Three years from the most recent discharge or dismissal date. The most recent bankruptcy filing must have been the result of extenuating circumstances. (Source: FNMA Announcement 08-16, 6-25-08. )

See Question 4 for the definition of 'extenuating circumstances.'

Q 17. What is the difference between a Chapter 13 bankruptcy and a Chapter 7 bankruptcy?

A Chapter 13 permits a borrower with a regular income to propose a plan to repay some or all of his or her obligations over a period of up to five years. A borrower who files a Chapter 7 is permitted to retain exempt assets and receive a discharge of the borrower's debts. Chapter 7 is a relatively quick liquidation process that is generally completed within 120 days. Chapter 7 cases are rarely dismissed. (Source: FNMA Announcement 08-16 Q&A, 8-13-08. )

Q 18. What is the difference between a Chapter 13 dismissal and a Chapter 13 discharge?

A A borrower who files a Chapter 13 can dismiss the case at any time (voluntary dismissal) or the case may be dismissed by the court based on the borrower's failure to comply with the requirements of the Bankruptcy Code or to make the required payments. If the borrower who files a Chapter 13 case makes all of the payments required by the plan, the borrower receives a discharge at the end of the plan. A borrower who doesn't make all the payment required by the plan may still receive a discharge if the court finds, among other things, that the borrower made a certain amount of the payments and the borrower's failure to make all of the payments was due to circumstances beyond the borrower's control. (Source: FNMA Announcement 08-16 Q&A, 8-13-08. )

Q 19. What are the requirements to re-establish a credit history?

A After a bankruptcy or foreclosure-related action, a credit history must meet the following rquirements to be considered re-established:

. It must meet the requirements for elapsed time (as discussed in this article.

. It must reflect that all accounts are current as of the date of the mortgage application.

. it must include a minimum of four credit references. At least one of the references must be a traditional credit reference, and one of the references must be housing-related.

A housing-related reference must cover the period following the bankruptcy discharge or dismissal, foreclosure, or deed-in-lieu, and can be in the form of mortgage payments or rental payments.

If rental payments wre not reported to the crdit repositories, the lender must obtain copies of bank statements, money orders, or cnacled checks for the most recent 12-mnth period as a supplement to the rent verification.

. It must reflect three of the four credit references, including rental housing references, as active in the 24 months preceding the date of the mortgage application.

. It must include no more than two installment or revolving debt payments 30 days past due in the last 24 months.

. It must include no installment or revolving debt payments 60 or more days past due since the discharge or dismissal of the bankruptcy or the completion of the foreclosure-related action.

. It must include no housing debt payments past due since the discharge or dismissal of the bankruptcy or the completion of the foreclosure-related action.

. It must include no new public records since the discharge or dismissal of the bankruptcy or the completion of the foreclousre-related action. Public records include bankruptcies, foreclousres, deeds-in-lieu, preforeclosure sales, unpaid jdugments or collections, garnishments, liens, etc.

(Source: FNMA Selling Guide, 4-1-09 at 392. )

Q 20. Where can I get more information?

A This article is just one of the many legal publications and services offered by C.A.R. to its members. For a complete listing of C.A.R.'s legal products and services, please visit C.A.R. Online at www.car.org.
Readers who require specific advice should consult an attorney. C.A.R. members requiring legal assistance may contact C.A.R.'s Member Legal Hotline at 213.739.8282, Monday through Friday, 9:00 A.M. to 6:00 P.M. C.A.R. members who are broker-owners, office managers or Designated REALTORS® may contact the Member Legal Hotline at 213.739.8350 to receive expedited service. Members may also fax or e-mail inquiries to the Member Legal Hotline at 213.480.7724 or legal_hotline@car.org. Written correspondence should be addressed to:

CALIFORNIA ASSOCIATION OF REALTORS®
Member Legal Services
525 South VirgilAvenue
Los Angeles, California 90020"

Friday, May 22, 2009

New Federal Law Affecting Distressed Properties

From the California Association of Realtors -

LONGER STAY FOR TENANTS OF FORECLOSED HOMES: Effective immediately, an REO lender or buyer who acquires title through a foreclosure sale must give at least a 90-day notice to terminate a bona fide tenant as defined. A 90-day notice to terminate is sufficient for a month-to-month tenant or if a new owner will occupy the property as a primary residence at the end of the 90 days. Otherwise, a tenant with a one year or other fixed-term lease with a remaining lease term exceeding 90 days can stay in the premises until the remaining lease term ends. This new 90-day notice requirement applies to foreclosures of a federally-related mortgage loan or residential real property, except for properties under rent control, rent-subsidized programs (such as Section 8), or other state laws that provide additional protections for tenants. This law expires on December 31, 2012"

It will be interesting to see how this effects san diego real estate. This could keep foreclosure off the market for close to one year. I could see homeowners using this as leverage in short sale negotiations.

san diego short sales

Thursday, May 7, 2009

California Association of Realtors on Short Sales

Gmail - Market Matters Weekly Advisory - jmcconnin@gmail.com
MAKING SENSE OF THE STORY FOR CONSUMERS



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A lender tactic gaining popularity is for the holders of mortgages or home-equity loans to require borrowers in short sales to sign a promissory note -- a written promise to pay back a loan or debt.

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HSBC Finance has implemented a one-year moratorium on the collection of deficiency balances for short sales and foreclosures that occur after April 1, due to the “current economic environment,” according to an official with the company.

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Not all borrowers who sell their homes through a short sale or lose their homes to foreclosure will receive a deficiency claim. Often, mortgage companies don’t try to collect unpaid amounts either because state laws prohibit or limit such actions or the cost outweighs the potential return. California has anti-deficiency rules that prohibit lenders from pursuing borrowers after foreclosure, but California does not have anti-deficiency rules for a short sale.

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The borrower’s situation often is the determining factor in whether the lender tries to collect the unpaid debt or not. The borrower’s employment status, assets, whether the home was purchased as an investment, and the amount of debt owed are taken into consideration.

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It is important that sellers are informed of the lenders requirements, read the fine print, and ask questions when selling their home via a short sale. According to one real estate attorney who represents financially troubled homeowners, every short sale she has worked with has had a promissory note or terms giving the lender the right to collect a deficiency. Often, the terms are buried in the sale contract, according to the attorney.

Short Sales


Bank of America and now even HSBC are pursing sellers for the defiicency

A Short Sale May Not Mean You're Home Free - WSJ.com
HSBC Finance, part of the North America unit of HSBC Holdings PLC, has implemented a one-year moratorium on the collection of deficiency balances for short sales and foreclosures that occur after April 1, "given the current economic environment," a company spokeswoman says.

Other mortgage servicers say their actions are often dictated by their contracts with investors or mortgage insurers. Bank of America Corp., for example, will "attempt to seek a promissory note whenever it is feasible" in a short sale "in the interest of protecting investors and shareholders from the losses," a spokeswoman says. In the case of a foreclosure, the investor or insurer "is generally the one who pursues the deficiency, but we do ourselves on some-bank-owned assets," she says.

Not every troubled borrower is hit with such a claim. Often, mortgage companies don't go after borrowers for unpaid amounts either because state laws prohibit or limit such actions or the cost outweighs the potential return. Borrowers subject to a deficiency may also elect to file for bankruptcy in an effort to have the debt discharged.

How a borrower is treated can depend on mortgage company policy, the size of the unpaid debt, whether the borrower has a job or other assets, or whether the home was bought as an investment. "If there isn't a financial hardship ... that's where the investor or mortgage insurer will go after the homeowner for more," says David Knight, a senior vice president at Wells Fargo & Co.'s home-mortgage unit.

A PMI Group Inc. spokesman says the mortgage insurer "primarily target[s] borrowers who are not experiencing hardship -- but those who simply elected to walk away from the property due to its decline in value."


Short Sales may lead to deficiency collections

A Short Sale May Not Mean You're Home Free - WSJ.com
A spokesman for J.P. Morgan Chase & Co., which acquired Washington Mutual last year, says it's the company's policy not to comment on individual cases. Speaking generally, he says, "a short sale may resolve the first mortgage, but the second mortgage ... would be a separate negotiation with the lender or servicer."

Some experts say that mortgage companies may pursue leftover debt, or "deficiencies," in greater numbers as the housing market settles. Lenders are "doing everything possible to work with their borrowers and trying to bring stability back to the lending and real-estate market," says Marc Ben-Ezra, an attorney in Ft. Lauderdale, Fla., who represents mortgage companies in foreclosures. "However, the ability to get a deficiency judgment is a valuable right that I think lenders will pursue aggressively in the future as the market stabilizes."




Short sales and deficiency judgments

Wednesday, May 6, 2009

Jumbo Loans creating trouble for Luxury Home Markets

Rich Default on Luxury Homes Like Subprime Victims (Update1) - Bloomberg.com
Jumbo loans are larger than what government-controlled Fannie Mae and Freddie Mac will buy or guarantee, currently $417,000 in most areas. Jumbo lending slowed in the fourth quarter to $11 billion, or 4 percent of the mortgage market, the lowest quarterly figure since Inside Mortgage Finance, a Bethesda, Maryland-based trade publication, started tracking the data in 1990.

Subprime loans were made available to borrowers who never proved they could make monthly payments on time. The loans accounted for more than 20 percent of the U.S. mortgage market in 2005, up from less than 8 percent in 2003, according to Inside Mortgage Finance.

Subprime Implosion

Defaults by subprime borrowers began rising in 2007. Since then, financial institutions that had bet on earning cash flow from home loans packaged into securities have announced credit- market losses and writedowns of almost $1.4 trillion, data compiled by Bloomberg show.

Among all homeowners, 21.8 percent were underwater in the first quarter, Seattle-based real estate data service Zillow.com said in a report today. At the end of the fourth quarter, 17.6 percent of homeowners owed more than their original mortgage, while 14.3 percent had negative equity three months earlier.




for more info on short sales of luxury homes

Friday, May 1, 2009

Obama's Mortgage Cram down bill is defeated

REALTOR® Magazine-Daily News-Senate Defeats Mortgage Cramdown Bill
Senate Defeats Mortgage Cramdown Bill
The proposed law allowing bankruptcy judges to modify mortgages, known as the cramdown bill, was voted down Thursday by the U.S. Senate.

The financial industry opposed the bill, arguing that the change would drive up interest rates and make the market less stable. Some senators also were concerned that their constituents who pay their bills on time would resent this measure.

Minority Leader Mitch McConnell, who led the opposition, says the vote "ensures that homeowners who pay their bills and follow the rules won't see an interest-rate hike at the whim of a bankruptcy judge."

The reform was a key part of President Obama’s foreclosure prevention plan, leaving some to question ultimate likelihood of its success.

"It won't render the loan modification program useless, but it removed an important ingredient that would have helped realign everybody's interests," says Barry Zigas, director of housing policy for the Consumer Federation of America.