Media: News Releases > Fannie Mae Implementing New Loan-to-Value Ceiling for Home Affordable Refinance Program

If you need to refinance [an arm] and your loan is worth more than the current home value - this is Fannie's Fix:


<cite>Media: News Releases > Fannie Mae Implementing New Loan-to-Value Ceiling for Home Affordable Refinance Program</cite>: "

News Release July 1, 2009 Fannie Mae Implementing New Loan-to-Value Ceiling for Home Affordable Refinance Program;Loans Eligible for Delivery September 1WASHINGTON, DC -- Fannie Mae (FNM/NYSE) announced today that the company is providing information to servicers regarding changes to the Home Affordable Refinance Program (HARP) that permits refinancing of existing Fannie Mae loans with loan-to-value (LTV) ratios up to 125 percent. The loans will be eligible for delivery on or after September 1, 2009.

"

It's Official: If you've been waiting for the bottom...you missed it!

The numbers have been looking up for about the last 60-90 days: inventory is dropping off, sales volume is up and the closings are up.

Industry Barometer Shows Gains in Home Prices for Second Straight Month

Prices of single-family residential homes rose for the second consecutive month in June, Standard & Poor’s reported Tuesday. Quarter-over-quarter gains were also evident during the second quarter of the year, for the first time since 2006.

Yes the new lending guidelines are a hassle, no there's no 100% no doc loans but, the huge sucking sound that was our equity disappearing alongside 200+ banks and lending institutions, has eased.

The opportunity is there but you can't win if you don't enter the race.

market conditions, real estate, short sale, REO, cash flow, houses

Is an $8K credit worth $250K fine PLUS 3 years in jail?

Don't "accidentally" claim the first time buyers credit. The IRS doesn't take lightly to "accidents".

WASHINGTON — The Internal Revenue Service today announced its first successful prosecution related to fraud involving the first-time homebuyer credit and warned taxpayers to beware of this type of scheme.

On Thursday July 23, 2009, a Jacksonville, Fla.-tax preparer, James Otto Price III, pled guilty to falsely claiming the first-time homebuyer credit on a client’s federal tax return. Price faces the possibility of up to three years in jail, a fine of as much as $250,000, or both.

To date, the IRS has executed seven search warrants and currently has 24 open criminal investigations in pursuit of potential instances of fraud involving the credit. The agency has a number of sophisticated computer screening tools to quickly identify returns that may contain fraudulent claims for the first-time homebuyer credit.

“We will vigorously pursue anyone who falsely tries to claim this or any other tax credit or deduction,” said Eileen Mayer, Chief, IRS Criminal Investigation. “The penalties for tax fraud are steep. Taxpayers should be wary of anyone who promises to get them a big refund.”

Whether a taxpayer prepares his or her own return or uses the services of a paid preparer, it is the taxpayer who is ultimately responsible for the accuracy of the return. Fraudulent returns may result not only in the required payment of back taxes but also in penalties and interest.

First-Time Homebuyer Credit

Oakland, California, passes landmark marijuana tax - CNN.com

So California:

<cite>Oakland, California, passes landmark marijuana tax - CNN.com</cite>: "

Decrease font Decrease fontEnlarge font Enlarge fontOAKLAND, California (CNN) -- Oakland's bid to become the first U.S. city to tax proceeds on medical marijuana passed Tuesday by a landslide vote.About 80 percent of people voting in the Oakland election approved the new medical marijuana tax.About 80 percent of people voting in the Oakland election approved the new medical marijuana tax.About 80 percent of voters chose to impose the tax on Oakland's medical marijuana facilities, according to the Alameda County Registrar of Voters.Some celebrated the news at Oaksterdam University by hand-rolling large marijuana cigarettes or stuffing cannabis into pipes. The school trains students for work in the medical marijuana industry.'It is important because the city of Oakland is facing a massive deficit like many jurisdictions in California,' said Steve DeAngelo, a leader of one of the city's cannabis clubs. 'And we decided to step up to the plate and make a contribution to the city in a time of need.'DeAngelo, one of the people who led the effort to get the tax approved, said his business will now have to pay more than $350,000 from the new tax next year. Video Watch report from CNN's Dan Simon �

"

Starbucks Returns to Store Expansion

Making plans as the market strengthens

<cite>Starbucks Returns to Store Expansion</cite>: "

SEATTLE-After closing hundreds of units in the last year, Starbucks Corp. is ready to expand again in 2010, executives said at the company's third-quarter conference call.The company now expects to open approximately 55 net new licensed stores in the United States and approximately 310 net new licensed stores internationally this year. Plans for 2010 are still being made, noted Troy Alstead, executive vice president and chief financial officer, and growth will largely be concentrated internationally. In addition, the company is testing a new store design in Seattle, Paris and Tokyo, and has opened a new concept, 15th Avenue Coffee and Tea, which removes the Starbucks logo and sells beer and wine as well, in Seattle.

"

Don't Gamble with your exchange funds!

Folks that were using LandAM as their exchangor when LandAm filed for bankruptcy, LOST their exchange funds!

This keeps happening! A few years ago some of the exchange companies went under and the people with their funds in an exchange lost those funds.

Don't let this happen to you:


You may have heard that LandAmerica Financial Group, Inc. and its subsidiary LandAmerica 1031 Exchange Services (LES) filed for bankruptcy protection in November, 2008. As a result, investors who had exchange accounts with LES were unable to access their funds.

Recently, the bankruptcy court issued two rulings which found that the exchange funds held by LES in either a commingled account or a separate sub-account did not belong to the individual Exchangors, but must instead be included in the bankruptcy estate. As a result, these exchange deposits became part of the general pool of money that is available to pay all the creditors of LES.

So what went wrong for the LES clients? How is First American Exchange Company different?

Most importantly, there was a provision in the LES exchange agreement where the clients explicitly gave up all right, title and interest in the exchange funds to LES. Such language is not contained in any of the exchange documents used by First American Exchange Company.

LES held some funds in a master account with sub-accounts used to identify each client's funds. The majority of the funds were held, commingled, in the LES operating account. At First American Exchange we never commingle client funds, nor do we use a master/sub-account structure. We set up an individual account for each client at an FDIC insured bank, identified with our client's name and tax identification number. Our clients receive all the interest earned on the account as reported on the 1099 issued directly by the bank. Funds are released only after receiving a written direction from our client.

LES invested a large portion of exchange funds in auction rate securities, which had become illiquid. First American does not invest exchange funds in securities. Client funds are only placed in fully liquid demand deposit accounts in highly rated banks. Deposits are monitored on a daily basis by our corporate treasury department.

Finally, the court held that state law determines whether exchange funds are a part of the bankruptcy estate, and in this case the court looked to Virginia law. First American's exchange agreement is governed by California law, which provides that exchange funds held by a Qualified Intermediary are not subject to attachment by the intermediary's creditors. This law helps protect exchange funds from outside claims.

If you're thinking refi - you'd better think fast!

Did we chat about this?

Mortgage rates rise to 7-month high - San Jose Mercury News

WASHINGTON — Rates for 30-year home loans jumped to the highest level in seven months this week, leading to a slowdown in refinancing activity, Freddie Mac said today.

The average rate for a 30-year fixed mortgage was 5.59 percent this week, up from 5.29 percent last week, Freddie Mac said. The last time the average 30-year fixed rate mortgage was higher was the week ended Nov. 26 of last year, when it averaged 5.97 percent.



Now's the time - If you've got an adjustable, 5 year fixed, or anything other than a regular old 30 year fixed, now's the time to get movin on that refi. Lock it in sooner than later.

Health Alert: Your home may be making you sick

New car smell is toxic - as are many of the building materials in homes.

If your home is new or if you've done upgrades, think about testing the interior levels of formaldehyde.

I have one owner that just replaced baseboards and interior doors to "cute up" his house. It looks great but the interior levels of formaldehyde are now above the safe limits - like a WAY above.

The good news is that opening the doors and windows helps to lower the levels significantly. I don't know how quickly the gas fills the house but, with summer coming and many folks switching over to A/C, this may mean your interior levels could spike sharply.

Also, if your kids have behavioral problems - think about their environment. Kids are more susceptible to black mold, radiation [sometimes found in granite], formaldehyde[injected into wood products], etc.

If you are thinking about a short sale you need to read this!

It's been my understanding that the IRS has "waived" the "gain" of a short sale - it was just for a short time period, etc so read up on the details at irs.gov.

In all my short sales, I've only had one bank negotiate a deficiency judgment but read on:

A Short Sale May Not Mean You're Home Free - WSJ.com

Financially troubled borrowers may think that foreclosure or a short sale of their home means their mortgage woes are over.

Not necessarily.

Some homeowners are finding that when they sell their homes for less than the outstanding mortgages -- a so-called short sale -- their mortgage companies are going after them for some or all of the difference. Mortgage companies are also sometimes taking legal action to recover unpaid amounts after a foreclosure is completed.

Bernanke agrees - the market is looking up!

Bernanke says U.S. recovery ahead, housing near bottom

WASHINGTON (Reuters) – Federal Reserve Chairman Ben Bernanke told Congress on Tuesday the three-year U.S. housing bust may be near a bottom and that he expected the recession to end this year barring a relapse of the financial crisis.

I am glad this didn't pass - but the margin is pretty thin...

I believe in business people determining business details - not judges.

In real estate we find judges that are making a civil judgment on real estate matters and don't realize the laws in place. My fear is that if we give too much power to bankruptcy judges the money supply will decline - raising rates and making it more difficult for borrowers.


'Cramdown' Crammed Down in Senate -- For Now - BusinessWeek

'Cramdown' Crammed Down in Senate -- For Now

Posted by: Theo Francis on April 30

In a vote of 45-51, the Senate rejected legislative language that would have given judges the right to modify mortgages in bankruptcy, including by reducing principal, lowering interest rates or extending a loan’s term.

Just don’t expect it to vanish entirely.

DALLAS SCAM

Just heard about this through our neighborhood watch:

SCAM about repairmen alleging they saw animals entering houses through holes in chimney,shingles, etc. They gain access to your house or get on your roof and you
wind up with a large repair bill...probably for doing nothing. Please alert
your neighbors to this scam.

Just a pretty facade for a failing bank

I know I get sucked in by a name; Mr Big [I know, I know - he finally came through in the movie] The Titanic, Jumbo Shrimp. Here's another name that was just a pretty facade: Beverly Hills Bank.

DSNews.Com Default Servicing In Print and Online - Formerly REO Magazine

No acquiring institution could be secured for First Bank of Beverly Hills in Calabasas, California. The FDIC has approved the payout of the bank's insured deposits. First Bank of Beverly Hills had total deposits of $1 billion, of which the FDIC estimates $179,000 were uninsured. The bank also had total assets of $1.5 billion. The FDIC said the failure of First Bank of Beverly Hills will cost the agency approximately $394 million. The last bank to be closed in California was Merced's County Bank on February 6, 2009.

I LOVE this stuff - How the heck did they do that!!??

How do folks come up with this stuff??!! If Ray Tate was smart enough to come up with this fraud, why couldn't have been smart enough to have made more money doing it??!!



Couple returns home to find someone else living in it - San Jose Mercury News

Couple returns home to find someone else living in it
By Kurtis Alexander, Santa Cruz Sentinel
Posted: 04/26/2009 08:18:49 PM PDT
Updated: 04/26/2009 10:04:31 PM PDT

Two years ago Tom Decker and his wife, Maria McArthur, bought an old home on a wooded lane in the Santa Cruz Mountains they thought held promise of becoming the perfect retirement getaway.

The East Bay couple knew the house, acquired for a modest $50,000, came with its share of problems, like a slipping hillside in the back and other government-required fixes. While Decker says he was prepared to tackle the repairs, the two could not have been ready for what they now say stands between them and their dream home.

A week ago, after many long weekends spent driving from their primary residence in Pleasanton to improve the new property, the couple returned to the Ben Lomond house and discovered someone else had moved into the home.

The cars in the driveway weren't theirs, their belongings had been stacked in the garage and their keys no longer fit the locks, they said. And worse yet, upon arriving at the property on Hubbard Gulch Road, the couple says, a man emerged from the front door.

"We said, 'This is our home,' and he said, 'This is my home,' " Decker said. "We were dumbfounded."

More Turn Around Talk

You know, I said it first but John agrees with me :-)

Biz break: Cisco CEO foresees economic turnaround in 8 or 9 months, optimistic about stimulus plans - San Jose Mercury News

Biz break: Cisco CEO foresees economic turnaround in 8 or 9 months, optimistic about stimulus plans

Compiled by the Mercury News
Posted: 04/24/2009 01:50:43 PM PDT

This too shall pass: Cisco Systems CEO John Chambers said today he believes the global economy will begin to recover in December or January.

That view is based on the performance of the stock market and his personal experience, Chambers told reporters at a news conference in Mexico City. The remarks have no bearing on Cisco's financial results, he said.

DFW - 10th in the world

Tenth in the world - that's awesome! Now how do we make Texans have a more "robust talent base"? What's that mean? Smarter?


DFW ranks 10th in global competitiveness - Dallas Business Journal:

Monday, April 27, 2009, 3:00pm CDT
DFW ranks 10th in global competitiveness
Dallas Business Journal - by Bill Hethcock Staff writer

Fueled by a strong business climate, the Dallas-Fort Worth area ranked 10th in global competitiveness among 21 international metropolitan regions, according to a report presented at a global summit on Monday.

Dallas-Fort Worth’s low costs of doing business and low business taxes were the region’s strongest assets, whereas creating a more robust talent base is the region’s biggest challenge, according to the findings of “Global DFW,” a report presented at the  CoreNet Global Summit being held at the Hilton Anatole in Dallas.

The Rich Get RIcher...For a While

This last year i have been valuing property for the banks. The properties I look at are close to foreclosure or working a loan mod or short sale. When the economic instability began, I was valuing crappy litttle houses in scary neighborhoods. Lately, I have been valuing big gorgeous homes built within the last 5 years or in the older established "money" neighborhoods.

This anecdotal evidence seems to concur with the reports that this next wave is good folks that lost their jobs with the economic downturn or finally ran out of money as they went through their savings and credit cards and retirement accounts.


Despite downturn, 2008 was record year for sales of high-end homes - San Jose Mercury News

Nonetheless, in Santa Clara County more homes sold for $5 million or more than at any time since the dot-com-nirvana year of 2000. And in San Mateo County — home to luxury-home strongholds like Atherton and Woodside — it was a record-breaking year for sales of super-expensive castles.

Only in the final quarter of 2008 did the recession finally bite into the top end of the market, sending sales plummeting. While the super-rich weathered the early days of the credit crisis far better than most, experts say, fall's stock market crash drastically impaired their ability to snap up multimillion-dollar manses.


The tides have now turned and this market segment has dried on the vine.

The San Francisco Bay Area Seems to Be Out Of The Heat!

PMI does this report every year. Dallas continues to be stable while the SF Bay seems to be stabilizing this year.

PMI Predicts Widespread Home Price Depreciation Through 2010
Carrie Bay | 04.02.09

PMI Mortgage Insurance Co., a California-based provider of residential mortgage insurance and credit enhancement products to expand homeownership, released its first quarter 2009 Economic and Real Estate Trends Report and U.S. Market Risk Index on Wednesday. The report projects that the U.S. recession will continue to depress housing prices nationally through the end of 2010.

According to PMI's study, as many as 374 of the nation’s 381 metropolitan statistical areas (MSAs) - or 98 percent - are now facing increased risk of lower home prices by the end of 2010. However, PMI noted that 212 of the nation’s MSAs still have a minimal-to-low risk of depressed prices in two years.

The PMI report also indicates that 21 of the nation’s 50 largest MSAs are now in the highest risk category – a position that represents the highest probability of lower home values by the end of 2010, relative to the end of 2008. Over the past several quarters, PMI said its analysts have seen risk rising fastest in large urban centers, while local housing markets of smaller MSAs have faired relatively better in both current and projected price performance.

PMI’s U.S. Market Risk Index ranks the nation’s 50 largest MSAs according to the likelihood that home prices will be lower in two years. The Risk Index uses economic, housing, and mortgage market factors (home price appreciation, employment, affordability, excess housing supply, interest rates, and foreclosure activity) to determine these probabilities.

Using this methodology, PMI said the 10 riskiest MSAs, not surprisingly, were primarily in Florida and California. They are (with No. 1 in the list below being the most at-risk for home price depreciation):

1. Miami-Miami Beach-Kendall, FL
2. Riverside-San Bernardino-Ontario, CA
3. Ft. Lauderdale-Pompano Beach-Deerfield Beach, FL
4. Los Angeles-Long Beach-Glendale, CA
5. Las Vegas-Paradise, NV
6. Tampa-St. Petersburg-Clearwater, FL
7. Orlando-Kissimmee, FL
8. Santa Ana-Anaheim-Irvine, CA
9. Jacksonville, FL
10. Phoenix-Mesa-Scottsdale, AZ

The 10 most stable MSAs in terms of price depreciation (with No. 1 being the most stable) are:

1. Pittsburgh, PA
2. Cleveland-Elyria-Mentor, OH
3. Columbus, OH
4. Dallas-Plano-Irving, TX
5. Fort Worth-Arlington, TX
6. Houston-Sugar Land-Baytown, TX
7. Memphis, TN-MS-AR
8. San Antonio, TX
9. Charlotte-Gastonia-Concord, NC-SC
10. Indianapolis-Carmel, IN

David Berson, PMI’s chief economist and strategist, explained, “As the recession deepened during the fourth quarter of 2008, increasing rates of unemployment and foreclosures continued to place downward pressure on house price appreciation. Combined with upward movements in excess housing supply in many parts of the country, these deteriorating conditions are increasing risk of house price declines in the next two years.”

PMI's report also noted that affordability has improved in many MSAs – as housing prices continued to decline and mortgage rates fell. For all 381 MSAs, the weighted average Affordability Index reading was 120.6 in the fourth quarter of 2008, compared to a third quarter reading of 114.5. (An Affordability Index score exceeding 100 indicates that homes have become more affordable; a score below 100 means they are less affordable.)

PMI pointed out that affordability jumped significantly in the 106 MSAs ranked in the two highest risk categories. Average affordability for these two groups improved from 99.6 to 107.4 – a greater rate of improvement than the rest of the nation.

To view PMI's Economic and Real Estate Trends (ERET) report for Q1 2009, as well as the company's market data for all 381 U.S. MSAs, click here.

Renter Notifications of Default

I love this! Not sure if all tenants would spend the money to check on their landlord but, in certain areas - it's gotta be a killer.

RealtyTrac Launches Renter Alerts

Carrie Bay | 04.01.09

On Wednesday, online foreclosure marketplace RealtyTrac announced the launch of RealtyTrac Renter Alerts. The new monitoring service gives tenants advance notice if their landlord defaults on the mortgage and the property they are renting is about to be foreclosed and repossessed by the lender.

Rick Sharga, SVP of the Irvine, California-based company, explained, “Unexpected evictions are becoming an all-too familiar scenario for good tenants who pay their rent on time. Some landlords aren’t paying their mortgages — even while their tenants are paying their rent faithfully — causing the tenants to be evicted without warning. Our new renter alerts give tenants a good early warning system to avoid this unpleasant and unfair scenario.”

Two Reasons I am Optimistic about the Economic Stimulus Package

After hearing about the different housing programs in the media, I really didn't think I'd see much change. It 's been two years of "we're gonna fix it" and frankly, I am a bit more than cynical. All the media hoopla hasn't amounted to much.

I was pleasantly surprised this week when I ran across it the first time, I was shocked. And the second time....I actually got a little optimistic about the economy!

First off, here's a blurb to get you up to speed:

HOUSING RESCUE PROGRAM DETAILS RELEASED

WASHINGTON (RISMedia, New York Times, Associated Press) – President Obama earlier this week unveiled details of his home loan aid plan designed to help millions of Americans who are at risk of losing their homes.

Administration officials say the Homeowner Affordability and Stability Plan could help nearly nine million households restructure or refinance their mortgages to avoid foreclosure.

The plan includes a $75 billion homeowner stability initiative that targets at-risk homeowners, many of whom have adjustable-rate mortgages that have increased house payments to as much as 50 percent of their monthly incomes.

This initiative offers cash incentives to lenders and borrowers for working out loan modification agreements that result in lower monthly mortgage payments and allow homeowners to keep their homes. Any bank that receives federal money under the Treasury Department’s $700 billion financial rescue program will be required to take part.

Another component of the plan is intended to help as many as five million responsible homeowners who took out conforming loans owned or guaranteed by Fannie Mae or Freddie Mac to refinance through those institutions.

To finance that effort, the Treasury is providing the two companies with up to $200 billion in capital on top of $200 billion that it had already pledged to them.

“This is not going to save every person’s home,” said White House spokesman Robert Gibbs. “The plan is not intended to . . . augment somebody’s loan for a house that they couldn’t afford under any economic situation, good or bad.”

According to the latest data from the Mortgage Bankers Association, nearly 12 percent of homeowners — a record 5.4 million — were at least one month late or in foreclosure at the end of last year.
***************************


The first thing I heard was over a nice pinot at Crush on Friday night. One of my running buddies works at GMAC. She's been tasked with understanding the guidelines so GMAC can help their clients fit within the programs. With $1,000 incentive per successful loan mod, there is a lot of money at stake!

Secondly, I work with a company that contacts borrowers that are in default. I am the one that knocks on their door and asks if there is a way to work things out. We have strict guidelines, ie; we are considered debt collectors, etc. Friday, I got three new assignments. They are all potential loan mods. They are for people that have ALREADY LOST THEIR HOMES! Our goal is to re-instate them! WOW!

I am not a big Obama fan. The debt we are going into makes me worry. However, I am in the trenches, or front steps, with people that are stressed to the edge with worry over losing their houses. Without a place to call home, it's a scary world out there.

After 45 years of living full on red. I might just be getting a little purple tinge on some of my rough edges.

My Texas friends will just shrug it off; "She's from California, after all"

Last Minute Dallas Deals!!

Auction Baby!

There are 150 properties going on the block this weekend! I was disappointed last week when I went to the auction unprepared BUT, I just got a second chance!

150 properties fell out for whatever reason - which means less people, less competition and, if last week was any indication, some AWESOME deals.

If you've been thinking Dallas, this is the weekend. Shoot me an email or call me at 214-257-0193 and we'll go together!

Loan Mod Info - If you are having trouble making payments - You gotta read this!

Real Time Economics : Treasury Loan-Modification Guidelines

Treasury Loan-Modification Guidelines

The following is a summary of the guidelines for modifications of eligible mortgages provided by the Treasury. See full guidelines here.

Fact Sheet

Making Home Affordable will offer assistance to as many as 7 to 9 million homeowners, making their mortgages more affordable and helping to prevent the destructive impact of foreclosures on families, communities and the national economy.

The Home Affordable Refinance program will be available to 4 to 5 million homeowners who have a solid payment history on an existing mortgage owned by Fannie Mae or Freddie Mac. Normally, these borrowers would be unable to refinance because their homes have lost value, pushing their current loan-to-value ratios above 80%. Under the Home Affordable Refinance program, many of them will now be eligible to refinance their loan to take advantage of today’s lower mortgage rates or to refinance an adjustable-rate mortgage into a more stable mortgage, such as a 30-year fixed rate loan.

Awesome Auction Opportunities!

I am not usually a big fan of auctions but, I understand the rationale. Advertise like crazy, create excitement and then sell everything while the frenzy has people thinking competitively vs intelligently.

I am normally the one doing the foot work. I am there to hold the house open for the week prior and answering all the same questions over and over and over as throngs of people parade through.

This time I was not holding the homes open, this time a friend's client called because he wanted to go.

I've been to a ton of auctions; IRS, RTC, DEA. They all have their quirks and quirky people that attend.

There were probably 2000+ people at this auction in Dallas. Just like the typical auction, the vast majority of people came with pennies in their pocket hoping for a steal on that perfect home. Then there were the serious investors, the ones that had seen 10+ properties and had maximum bids determined on all of them. Thirdly, there were the folks that had one specific property in mind and if they could buy it at a deal, they were ready. And finally, there were the lookie-loos, they were just wondering what all the fuss was about.

There were some deals that went a little high for me but there were plenty that went well below. My favorite home was one beautiful house by Preston Center that was worth $600-$650K that went for $250K! WOW!

I should have brought more money!

Coulda Woulda Shoulda! Now I'm sounding like my clients :-)

PS If you want info on future auctions just shoot me an email - 'cause I'll be there!

Forebearance - an Option to Foreclosure or even Loan Modification

While working on a loan modification, sometimes the terms just can not be worked out. Maybe the Borrower doesn't have pay stubs or doesn't show enough income to qualify for a fully amortized loan.

In Forebearance, the underlying note remains unchanged but the bank and the Borrower both agree to modified terms to get the Borrower back on track. This is a temporary stop gap approach to the foreclosure issue.

Forebearance keeps the Borrower in their home and it keeps the loan in the Bank's "performing assets" file.

NOD Filings Dropped in January

January brought an unexpected, across the board drop, in the total Notices of Default, Notices of Trustee Sale, and sales at auction in California, not only from the prior month, but year-over-year as well, according to a report released by ForeclosureRadar on Thursday.

Housing and default activity in California is often used by analysts and experts as a barometer for measuring the state of the overall housing market, and ForeclosureRadar tracks every foreclosure in the Golden State, providing daily auction updates on foreclosure property sales.

Based on ForeclosureRadar's data, California's Notices of Default decreased 11.8 percent over Notices recorded for December and are down 10.6 percent from January 2008. Due to the fact that January had two fewer recording days then December the average daily decrease was 3 percent.

3% decrease in Default filings in December. Isn't it funny how everything needs to be "headline grabbing"!

In the interest of looking good, Fannie and Freddie had publicized how they were taking the holidays off. Homeowners got a reprive so they could enjoy the holidays.

If that's so, why are these numbers so high? A 3% drop doesn't sound like a lot when I put it into that context.

Secondly, I just heard a statistic that approximately 3% of mortgages are in default.
If that number is true - which it came from an awesome economist that I LOVE - then I am really tired of hearing about all the doom and gloom.

This too shall pass. There is opportunity in every market. Kill your TV! :-)

Mixed Emotions

TEXAS BORROWERS RECEIVE RESTITUTION


DALLAS (Dallas Morning News) – As part of the largest predatory-lending lawsuit in history, Countrywide will use $8.4 billion to modify mortgage terms for 400,000 borrowers in Texas and ten other states who received unaffordable loans from the lender.

The settlement has reserved $7.5 million for Texas to distribute restitution payments worth $2,300 to help borrowers who already lost their homes or are near foreclosure — 120 days or more delinquent on payments.

About 3,260 Texans are eligible for restitution, according to a spokesman with the Texas Attorney General's office.

Under the settlement, borrowers could get the $2,300 payment if their first loan payment was due between Jan. 1, 2004, and Dec. 31, 2007, and they made six or fewer payments before losing their home.

For borrowers who can't afford to refinance their mortgage and have to leave their home through a foreclosure sale, the settlement provides relocation assistance of $2,000 per borrower.


My first impression is that we are a bunch of big irresponsible babies. We can't drive with coffee in our laps. We can't take responsibility for our MEGA consumption and ruin of the earth. Now we also can't be expected to actually read what we're signing. Who are these people that bought houses that they could only afford for 6 months?

I honestly don't know the extent of this lawsuit. I haven't read what the complaint was. I haven't done any research. All I know is that a few people that overextended without considering the consequences have now made getting a loan so hard that it's considered a heroic event!

I'm blaming it on all the Jocks in high school. The ones that would do anything to bed a cheerleader :-)

Are TICs Real Estate Product or Securities

There's been debate - for years - about who can sell a TIC.

TIC stands for Tenants in Common and has been used as a way to hold title on real estate. This fractional ownership has been used in the last 8 +/- years for small investors to be able to pool their money and buy large class A buildings that the little guy could never get into before.

Realtors thought this type of sale was real estate and stock brokers though this type of sale was securities.

On January 14, 2009, the SEC published its response to a request for a no action letter. The request, which was submitted to the SEC in 2006, described two TIC structures (using a master lease or a property management agreement) that are commonly used by sponsors who take the position that they do not need to comply with the securities laws. The letter urged the SEC to rule that such transactions should not be considered securities under Section 2(a)(1) of the Securities Act of 1933. In its response, the SEC said that it disagreed with that view and could not assure the taxpayers requesting the opinion that a sponsor adopting these structures would not be subject to an enforcement action by the SEC.

This recent statement confirms the SEC's view that TICs should be marketed and sold as securities. It is likely that some sponsors who sell TICs as real estate will stop doing so out of concern about being the subject of an enforcement action; however, some sponsors will probably continue to sell TICs as real estate.

What do you think?

Landlord Scams

Just met another prospective tenant that has to move because her landlord is being foreclosed on. She just moved in, gave a hefty deposit and now has to move.

It seems there are a lot of desperate people out there! I wrote about the scams on Craigslist where people posed as property owners and rented out homes that were in default. These "posers" took people's money and disappeared.

I don't know what to do to stop this theft. All I know how to do is to warn you of it's occurence.

If you need help checking on a property - and whether it's in default or researching who the owner is - just shoot me an email.

I am here to help.

R

Coming from Zillow...

It's no secret that Zillow values are "approximations". I was looking at a home today that Zillow valued at over double it's worth in today's market.

That being said, what do you think about this headline:

DALLAS (Dallas Morning News) – Almost 16 percent of homeowners in the Dallas–Fort Worth area are "underwater," according to a new report from Zillow Inc.

That’s about 1 percent less than the nationwide number of homeowners who owe more than their homes are worth, the Internet real estate company found.

In addition, DFW homeowners lost almost $4 billion in home value last year.

Overall home values in the area fell by less than 2 percent last year, compared with an almost 12 percent drop nationwide.

The End is Near - or so say Economists

Everyone is looking for the "perfect" time to buy; when real estate is at an all time low and rates are even lower. The problem is, we realize the low 90-180 days after the fact.

I submit that the worst year we had in terms of sales volume was 2007. Since then the number of sales per month or day has been increasing steadily.

I know that in my property values, I saw an increase in 2008 over 2007 but that is not true in all areas. Now here are two economists that also believe the end is near:


DSNews.Com Default Servicing In Print and Online - Formerly REO Magazine

The country's recession is the longest and deepest in 60 years, but it will rebound in 2009, according to two economists at the Comerica Bank Economic Forecast Conference in Santa Clara, California.

Comerica Bank's chief economist Dana Johnson told approximately 600 Silicon Valley business leaders, “We should see at least a 6 percent increase in gross domestic product in the third quarter. I don't think it's at all a stretch to say that once the economy picks up steam, it will be really impressive.”

Another economist at the conference, Stanford University's John B. Shoven, agreed, but said he believes the rebound will happen in the fourth quarter of 2009.

He added as soon as investors realize the economy will strengthen in 2010, “the stock market could start to rally in the second quarter,” several months ahead of the recovery.

They both credited the economic stimulus actions taken by the U.S. Government from preventing disaster.

Johnson said, “We came within an eyelash of a catastrophic failure of our financial system.”

The economists said while President Barack Obama has surrounded himself with a strong team of economic advisors, the government won't be able to do much to prevent the unemployment rate increasing to 9 percent by mid-year.

However, Johnson said, “The federal fiscal stimulus headed our way beginning this spring...will do an enormous amount to get this economy going.”

Are the TARP Funds helping?

Everyone wants the pain in the economy to lessen - and I think things have eased somewhat. Rates are awesome! Below 5% but, it's still very difficult to get a loan done. Underwriting guidelines are tough. Properties have declined so much that there isn't any equity and PMI money is limited if available at all.

The first round did ease things a bit. I am hoping we see a little more light with this second release.


Second Batch of TARP Funds Released
Austin Kilgore | 01.16.09

The U.S. Senate has voted to allow the release of the second batch of $350 billion in Troubled Asset Relief Program funds.

The vote wasn't necessary for the Treasury department to have access to the money, but it does block any attempt by the House of Representatives to stop the release of the money, because the legislation that created the program requires both houses of Congress to vote against releasing the money.

The vote is also the first legislative win for President-elect Barack Obama, who had lobbied Congress to not block access to the money.

The vote comes a day after senators voted against a resolution that would have prevented the release of TARP funds.

“I know this wasn’t an easy vote because of the frustration so many of us share about how the first half of this plan was implemented,” Obama said in a statement after the vote.

Obama has committed to setting limits on executive salaries for companies that receive TARP funds, as well as provide loans to small businesses and help stem the foreclosure crisis.

Congressional critics of the program said the government didn't do enough to keep track of the funds and hold the banks accountable for how they spent it.

Louisiana Republican David Vitter, who introduced the Senate resolution to block the release, criticized the “complete lack of accountability in the TARP program.”

“If we don’t pass this resolution of disapproval, nothing will change in the TARP program,” he said, according to a Bloomberg report.

On the other side of Congress, House Democrats are focusing their energies on getting Obama's $825 billion economic stimulus package to Obama's desk.

The plan includes an income tax break for Americans who make less than $200,000 a year, and billions for state Medicaid spending and education, both on the school district and public college levels.

Reader Email Regarding Investment Property

Got this inquiry about income property and thought you'd like my response:

Hey Miguel,

That's so great that you're from San Jose. I grew up in San Jose and have an office in Campbell and in Dallas. One segment of my business is cash flow houses in Dallas.

My clients have done really well in Dallas. We have typical returns in the 12-14% range - and that's just on cash flow. We aren't hoping that the properties double in value - because they don't here.

Austin has been a good market, their cap rates are a bit lower because they are betting on appreciation, but the key for an out of state investor is your property manager. I just had a client the other day that had paid their property manager $8,000 to rehab a rental and he couldn't figure out why the property was sitting vacant. Turns out the work was never done.

I also have an acquaintance from the gym that bought new duplexes in Forth Worth. It was cheap - $250K - and the projections looked really pretty. Turns out they bought in a sea of new duplexes. Remember vacant rental property is NOT an asset, it's a LIABILITY. In the end the property sat vacant for EVER, they finally rented it well below their payments and they are stuck in it. Last time I talked to her she was considering walking away.

I have a million stories like this - unfortunately.

So, Miguel, three things. 1) You need 25%+ down for non owner occupied money; ie; income property. 2) Crunch the numbers. As a rule of thumb, your $125K rental should rent for $1250 in order to cover your payments, taxes, property management and return. You may still have repairs to do on top of that. 3) You have to manage your property manager. They are your employee which means that you'll need to "stop in" every once in a while.

Investing in real estate is not PASSIVE income. It's work and it's your money.

Ok, off my professor box! Good luck to you.

Lastly, if you want professional representation and management in Dallas, I am always here to help.

Rebekah
408-378-5569
DallasForeclosureFinder.com
SanJoseForeclosureFinder.com
RebekahOwen.com

Real Estate Pain

Was I talking about this yesterday??!!

 I said I thought it was the 'loss of wealth" that made people kill themselves when the markets are off. This morning, as I walked with my dog,Rebel, I realized that that was probably a bit too shallow. Today I am thinking it's the people we've affected, or maybe the uncertainty, that makes life seem too difficult to continue.

I'm not the expert on this, I just notice a pattern. I have done the same thing. I plan things to be a certain way, I do my projections, budgets and everything I can to take the risk out of the equation. My due diligence is meticulous. I move forward and the market changes. Everything falls apart and I think I should have known better. I've been through this before.

The way I think about myself now, at the bottom of the crest, is different than when I was at the top.

I like the top better.

I remember the last time the bottom fell out for me. I went from 6 figure mortgage broker to homeless waitress within a year. It took me 4 years to pull out of that one. When I did I had a college degree and an MBA and a husband.

Maybe it's my experience riding the roller coaster that helps me not jump out. We may be at the bottom now but I remember how to keep my head up and look for the next top.

Some days I am better at this than others.

Today I am saying a prayer for a man that won't see the next top and for the family that is feeling a horrendous loss.

CHICAGO, Illinois (CNN) -- One of Chicago's most well-known real estate moguls appears to have shot himself to death, police said.
Steven Good was found dead of an apparent self-inflicted gunshot Monday, police said.

Steven Good was found dead of an apparent self-inflicted gunshot Monday, police said.

The body of Steven L. Good was found in his Jaguar on Monday. The car was spotted in a parking lot of a wildlife preserve in Kane County, Illinois, just outside Chicago, authorities said.

No note was found, and police say they do not know how long the 52-year-old had been in the vehicle.

Good was the chairman and chief executive officer of Sheldon Good & Co., a major U.S. real estate auction company.

Real Estate Is My Life

My Yahoo!

(CNN) -- German billionaire Adolf Merckle, one of the richest men in the world, committed suicide Monday after his business empire got into trouble in the wake of the international financial crisis, Merckle's family said Tuesday in a statement.

Merckle, 74, was hit by a train in the southwestern town of Ulm, police said.

His family said the economic crisis had "broken" Merckle.

He was number 94 on the Forbes list of the world's richest people. He had fallen from number 44 on the Forbes 2007 rich list as his fortune declined from $12.8 billion to $9.2 billion in 2008.



And so it begins - He only had 9 Billion so his self worth was so low that his only option was to kill himself.

In real estate we have that little saying " real estate is my life" - these people take that literally.

Whenever the market tanks we see these things. We've been seeing it in real estate for the last year - the top producers killing themselves as the market declines.

This last year has been a re-setting of value. The folks that don't re-invent themselves, or are over extended, are hurting right now. The hummers, the big houses, the multiple investment properties - they are all gone now.

The market comes and goes, as do the properties and vehicles, please don't let the cycles of today become a "permanent" mistake.

This too shall pass.

Loan Mod Updates

It was only a few weeks ago that I read the statistics showing that the majority of borrowers that were given modified loan terms in order to keep the owner in the home were delinquent within 12 months of the modification!

I really thought that was the end of loan mods. I mean, if they don't work then why spend so much time and energy on them. After all, it's not really the loan terms that are the problems, it's that the borrowers were ill equipped to be home owners.

Perhaps they use some sort of "new logic", kinda like "new math" down at Fannie Mae because here's the latest article today from the LA Times:

More lenders allow “early workout” loan alterations

Borrowers with loans owned by Fannie Mae no longer have to be behind in payments in order to qualify for a loan modification. Borrowers facing financial difficulty, such as losing a source of income, now can apply for an “early workout” loan alteration. Under Fannie Mae’s program, borrowers who qualify will enter into a trial period of reduced payments, usually for four months. If the reduced payments are made on time each month during the trial period, the modified mortgage terms may become permanent.

I'm thinking I would do a better job with that bailout money...