Anne Marie Reyes Blog

Mortgage Rates Climb, But Rates Remain Very Affordable Sun, Feb 8, 2009

Mon, 09 Feb 2009 09:03:00 -0800

McLEAN, VA -- Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 5.25 percent with an average 0.8 point for the week ending February 5, 2009, up from last week when it averaged 5.10 percent. Last year at this time, the 30-year FRM averaged 5.67 percent.

The 15-year FRM this week averaged 4.92 percent with an average 0.8 point, up from last week when it averaged 4.80 percent. A year ago at this time, the 15-year FRM averaged 5.15 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.26 percent this week, with an average 0.6 point, down slightly from last week when it averaged 5.27 percent. A year ago, the 5-year ARM averaged 5.21 percent.

One-year Treasury-indexed ARMs averaged 4.92 percent this week with an average 0.5 point, up from last week when it averaged 4.90 percent. At this time last year, the 1-year ARM averaged 5.03 percent.

“Interest rates for fixed-rate mortgages rose this week amid economic reports that were somewhat better than consensus forecasts had anticipated,” said Frank Nothaft, Freddie Mac vice president and chief economist. “The economy slowed by 3.8 percent in the fourth quarter of 2008, less than the market consensus, with inflationary pressures held at bay. Meanwhile, personal incomes fell by only half as much as some market forecasters predicted.

Low mortgage rates and falling house prices have made housing the most affordable in 19 years. The National Association of Realtor's monthly affordability index rose to an all-time record high in December 2008 since records began in January 1971. As a result, pending existing home sales rose 6.3 percent in December 2008 and were up 2.1 percent from the previous December." Today's Local Market Conditions Report

Washington Report: Bankruptcy Legislation by Kenneth R. Harney - Sun, Feb 8, 2009

Mon, 09 Feb 2009 08:51:00 -0800

Capitol Hill has been dominated by time-consuming debates over bailouts and stimulus packages. But one controversial subject that could directly affect hundreds of thousands of home owners appears to be on a fast track to passage.

That's the so-called "cramdown" legislation designed to keep financially-distressed owners out of foreclosure. Cramdown means a court can tell a lender: Your borrower may owe you $200,000 on the house, but the property is only worth $100,000 in today's real estate market, so that's all you're owed from here on in.

Take it or leave it. You can't foreclose.

Bills in both the House and Senate would allow bankruptcy court judges to cut - or cramdown - the loan balances owed by home owners, plus reduce the interest rate and monthly payments to affordable levels.

To qualify, borrowers will need to file for Chapter 13 bankruptcy, agree to a court-supervised household expenditures plan for up to five years, and make at least partial repayments on debts to their creditors.

Democrats in both houses of Congress have been pushing this for two years as a way to stem the sharply rising numbers of foreclosures. But until last November's election, they didn't have the votes in the Senate to pass it or the President who'd sign it into law.

Now they do, and the legislation could pass before the end of February.

Not surprisingly, banks and mortgage lenders hotly oppose the whole idea -- and warn that they'll have to raise interest rates on all future borrowers if they can't foreclose to recover what they loaned out.

But proponents of the legislation argue that all other personal assets, except a primary home mortgage, already are subject to bankruptcy court-imposed modifications under Chapter 13.

Even second homes are eligible for cramdowns in bankruptcy proceedings, they say, so why not include primary homes if it will help lower the number of foreclosures?

Though the final version of the legislation still must be negotiated between House and Senate, it's likely it will come with three key features:

First, only mortgages closed prior to the date of enactment will be covered.

Second, all delinquent borrowers will need to contact their lenders and inform them of their intention to file for bankruptcy. That will allow lenders to put together their best offer -- including a reduction of the amount owed and the interest rate -- before the borrower actually files.

And finally, if there is an increase in the value of the house during the five year bankruptcy period, the lender will be owed some portion of it. Today's Local Market Conditions Report

Another tool to escape foreclosures by: Kenneth Harney Sunday, February 8, 2009

Sun, 08 Feb 2009 09:29:00 -0800

(02-08) 04:00 PST Washington --

Proponents call it the crucial missing tool needed to get us out of the national foreclosure morass.

Critics say it could be disastrous - pushing up interest rates on all future mortgages, even for people with excellent credit, and creating huge losses for ailing banks.

Wherever you come down on the griddle-hot issue of home mortgage cramdowns, the reality is this: Congress is poised to pass legislation empowering Bankruptcy Court judges to reduce the loan balances of potentially large numbers of financially distressed homeowners to affordable levels, and to lower their interest rates and monthly payments. President Obama has promised to sign the legislation as soon as it hits his desk.

Cramdown may be an unpleasant sounding word, but for decades it has been part of the bankruptcy lexicon for most types of debt. If you file for Chapter 13 bankruptcy - a court-supervised, multiyear workout plan designed to provide at least partial repayments to your creditors - judges can reduce what you owe on credit cards, auto, boat and student loans and even second-home mortgages. But under current law they cannot cut the mortgage debt you owe on your principal residence.

Get quick recovery

That, in turn, allows lenders to foreclose on delinquent homeowners to force quick recovery of what they're owed - part of the reason foreclosures are so numerous. According to the mortgage industry data firm RealtyTrac, lenders filed for foreclosure on 2.3 million homes last year, up 81 percent from 2007 and 225 percent higher than the filing rate in 2006.

For two years, Democrat leaders in the House and Senate have been pushing for a change in the bankruptcy law to include principal residence loans on the list of debts that can be "judicially modified" - crammed down - by the courts. They argued that banks and mortgage companies too often have been unwilling to offer delinquent borrowers serious modifications on loans because they have the option to pull the plug and foreclose.

Lending industry groups successfully blocked those bills by appealing to Republican allies, especially in the Senate. But in the aftermath of the November elections, Democratic majorities are now large enough to virtually guarantee passage of cramdown legislation, maybe as early as this month.

Although final details will depend on conference negotiations between the House and Senate, it's likely the legislation will provide that:

-- Only mortgages closed before the date of enactment will be eligible for cramdown protection. In other words, the focus will be on helping current owners, rather than future borrowers who become delinquent.

-- To be eligible, owners will need to inform their lender or loan servicer in advance of their intention to file for bankruptcy protection. That's intended to get the lender's immediate attention and prompt its best offer on a modification of their loan terms, including principal reduction.

-- Should the value of the borrower's home increase, any appreciation would be shared with the lender under a pre-set formula.

Although banking groups predict that huge numbers of delinquent homeowners will opt for bankruptcy to avoid foreclosure, some consumer advocates say those fears are overblown.

"This is not going to be a cakewalk" for owners seeking protection of the courts, said David Berenbaum, executive vice president of the National Community Reinvestment Coalition. Owners will need to hire a lawyer and petition for Chapter 13 bankruptcy. Then they'll be required to follow a detailed Bankruptcy Court-ordered household spending plan, monitored by a trustee, for a period of years. Finally, their credit scores and ability to borrow will be severely affected for seven to 10 years.

"This should only be a last resort" for homeowners, said Berenbaum, not anybody's first choice.

A bleak outlook

Although resigned to the probability that some form of mortgage cramdown will be enacted, financial industry leaders continue to warn of dire consequences. Allowing "judges to unilaterally change mortgage contracts will increase costs for all future borrowers in the form of higher rates, greater fees and larger down payment requirements," said Steve O'Connor, senior vice president of government affairs for the Mortgage Bankers Association.

Cramdown advocates answer that lenders are blowing smoke about rate increases, and that there is no statistical evidence that rates increase when consumers get the right to file for bankruptcy protection on a particular type of debt.

The best possible scenario coming out this whole controversy: that lenders and delinquent borrowers begin talking about serious modifications far earlier in the process than they've done so far. That way fewer people have to file for bankruptcy, fewer lenders get crammed down, and fewer people lose their houses.

E-mail the writer at kenharney@earthlink.net.

This article appeared on page N - 16 of the San Francisco Chronicle

Investor Report: Bad Bank Program by Kenneth R. Harney - Thu, Feb 5, 2009

Sun, 08 Feb 2009 09:22:00 -0800

It won't make today's tough underwriting and heavy equity requirements disappear overnight, but active real estate investors should keep their eyes on the Treasury's plans to create what's called a “bad bank” or toxic asset purchase program.

What's a “bad bank”? The one under consideration at Treasury would buy frozen mortgage assets off the books of large and small commercial banks. That in turn would give them the capital they need to lend to all sort of borrowers, including real estate investors.

Most investors -- whether active in rental residential or commercial properties -- have the same frustration right now: Banks simply aren't lending. If they are, the underwriting requirements and terms are deal-breakers.

Even banks that have received buckets of bailout money from the federal government aren't lending on real estate. Part of the reason, the banks say, is that their portfolios are clogged with mortgage-backed securities that nobody wants and that are difficult to value.

They can't raise new capital for new lending without getting rid of these assets. And that's where the “bad bank” idea comes in.

Under one Treasury plan, the FDIC would create an institution -- similar in some ways to the Resolution Trust Corporation that helped with the S&L crisis in the early 1990s -- that would buy these assets and eventually resell them when market conditions improve.

How tough has the credit squeeze on residential and commercial income investment real estate gotten lately?

Last week the Federal Reserve Board released its latest quarterly survey of lending executives and found that 80 percent of ALL banks had ratcheted down their lending standards on investment real estate during the prior three months -- forcing investors to put down far larger equity money up front and pay higher fees.

Those tougher restrictions can be seen throughout the real estate sector. For example, many larger wholesale lenders now require minimum 40 percent and 50 percent downpayment cash -- plus credit scores above 740 - just to qualify for the best terms on a small rental property purchase.

If you can't afford that sort of heavy equity up front, be prepared to get whiplashed with high rates, “delivery fees” and other penalties, because the hard reality is: The banks don't want to lend, or don't have the capital to lend, for real estate.

Sure, Fannie and Freddie and FHA are funding home buyers and refinancers, but the real squeeze is on investors.

Will a “bad bank” or new RTC loosen up the pipeline, as the Treasury claims? That's hard to say, but we'll keep you posted on what develops in the weeks ahead. Today's Local Market Conditions Report

Don't assume default means foreclosure by Ilyce Glink Fri, Feb 6, 2009

Sun, 08 Feb 2009 09:21:00 -0800

Applying security deposit to rent won't fly with landlord

Q: We paid our landlord a security deposit when we moved in four years ago and currently live in our house on a month-to-month lease.

Our landlord is losing the house and is in default with his lender -- it's public information that we accessed online. My wife told our landlord that since we would not be getting our deposit back from him, he should use the deposit as our last month's rent and we would be leaving at the end of the month. We tried to contact the mortgage company about possibly staying in the house until they sold it, but they would not even talk to us.

My landlord came over today and asked us if we were moving out or paying rent for another month. We told him that we had agreed on him keeping the deposit and that should have us covered until we do move at the end of the month.

He said that he was going to file a five-day eviction notice with the courts tomorrow. We are planning on going down to fight it because he is not following what we agreed to with the deposit.

At what point does the landlord lose his right to the house and the right to demand payment from us?

A: As a tenant, you're between a rock and a hard place. Your landlord remains your landlord and is entitled to collect rent from you. He continues to own the property, has all the rights any owner of property would have, and can continue to collect rent until the bank has foreclosed on the property or the bank has filed suit against the owner and the court has given the lender the right to manage the property.

But you're right to be concerned that the landlord will end up losing the property and won't have the money to return your security deposit. That's a legitimate worry.

The landlord also has a legitimate concern in having you pay your rent and return the home to him without damage. As you're planning on moving out of the home by the end of the month (which is only a couple of weeks away), your landlord may give you a five-day notice and can even file to evict you. But if he does file, you'll already be out of the home.

The landlord has rights under the lease and could sue you for the failure to pay rent, but if you leave the home in good shape, the landlord may decide to let it go. After all, he has bigger fish to fry at the moment.

One thought you should consider, if you obtained information about the foreclosure of the home on the Web, you might not have learned everything about the case and your landlord's true financial position.

Your landlord may have failed to pay the loan back in time, but has perhaps been able to refinance the home with another lender. If he is successful in refinancing, he'd continue to expect rent from you. You've made an assumption that your landlord is in financial difficulty on the basis of the filing of the foreclosure case against him.

Given the current economic environment, your assumption that the owner is in trouble might be correct. But in some cities, there are rules a landlord must follow to protect a tenant. For example, in some places, a landlord is required to place the security deposit for a lease in an escrow account. The funds in that escrow account can't be commingled with other money, and the funds must be accounted for and paid back to the tenant within a certain number of days after the tenant moves out of the home.

If you live in a city or state with certain tenant protections, you might have shortchanged your landlord the rent that he was entitled to and your security deposit should have been protected and returned to you after you moved out of the home. On the other hand, if you live in a city or state without those tenant protections, your security deposit might have been at risk, leaving you with the unpleasant and time-intensive task of suing your landlord.

Finally, if your landlord never agreed to apply the security deposit as your last month's rent, you probably had no right under the lease to stop paying your rent. Your landlord is probably entitled to enforce the terms of the lease up until the time that his ownership right in the property is terminated.

***

Senate Approves Homebuyer Tax Credit Washington, D.C. (Feb. 5, 2009) By WebCPA staff

Thu, 05 Feb 2009 18:26:00 -0800

The Senate has unanimously approved a $15,000 tax credit for individuals who purchase a home in the next year.

The tax credit was added as an amendment to the economic stimulus package now under debate. Senate Republicans are pushing for more tax cuts to be added to the package. The Senate approved the housing credit, which was introduced by Johnny Isakson, R-Ga., on Wednesday.

Isakson’s amendment would provide a direct tax credit of $15,000, or 10 percent of the purchase price, whichever is less, to any homebuyer. Purchases must be made within one year of the legislation’s enactment, and the tax credit would not have to be repaid.

“It is time to fix America’s problem, not throw money at the symptoms,” said Isakson (pictured) in a statement. “It is time to fix housing first. It is rare that we have a road map to success in times of difficulty, but this country has once before realized a housing crisis every bit as bad as the one we have today and economic troubles every bit as dangerous.”

Isakson, a former real estate agent, pointed out that in the mid-1970s, America faced a similar housing crisis when a period of easy credit and loose underwriting flooded the market with new construction. Congress responded by passing a $2,000 tax credit for anyone purchasing a new home for their principal residence. Isakson said that home values quickly stabilized, housing inventory dropped and the market recovered.

His amendment would allow taxpayers to claim the credit on their 2008 income tax returns. It also seeks to prevent misuse by only allowing purchases of a principal residence and by recapturing the credit if the home is sold within two years of purchase. The amendment would sunset the current $7,500 housing tax credit on the date of enactment.

On Tuesday, the Senate approved another amendment that provides a tax incentive for car buyers. The amendment, introduced by Barbara Mikulski, D-Md., makes interest payments on car loans and state sales or excise tax deductible for new cars purchased between Nov. 12, 2008 and Dec. 31, 2009.

“President Obama said the goal for the economic recovery program is to create jobs and save jobs,” said Mikulski in a statement. “That’s exactly what my amendment does. It’s targeted at saving American jobs and helping families buy the cars they need to get to work and take their kids to school.”

However, Obama indicated Wednesday that he does not want the stimulus bill to become overly tilted toward tax cuts, despite the demands of Republicans to reduce the spending component.

“I’ve heard criticisms of this plan that echo the very same failed theories that helped lead us into this crisis, the notion that tax cuts alone will solve all our problems, that we can ignore the fundamental challenges like energy independence and the high cost of health care and still expect our economy and our country to thrive,” he said, according to The New York Times. “I reject that theory and so did the American people when they went to the polls in November and voted resoundingly for change. So I urge members of Congress to act without delay.”

The Senate may vote as soon as Thursday night on the bill, but if it is approved, it will need to be reconciled with the House version.

Republicans are pushing for a much less expensive version with more tax cuts, including halving the 10 percent tax rate on married couples with incomes up to $16,700, and cutting the rate from 15 to 10 percent on couples earning between $16,700 and $67,900.

Senate Democrats pushed back against many of the amendments offered by Republicans on Wednesday evening, prompting Senate Minority Leader Mitch McConnell, R-Ky., to complain Thursday that Democrats were ignoring President Obama’s call for Congress to “trim out things that are not relevant to putting people back to work right now.”

“This week, Republicans have tried to improve this bill in a number of ways,” said McConnell. “One goal was to cut out the waste and bring down the total cost. So far, Democrats have rejected those efforts.”

Housing industry welcomes homebuyer tax credit By ALAN ZIBEL – 7 hours ago

Thu, 05 Feb 2009 13:58:00 -0800

For Gail Robinson, a real estate agent in Connecticut who has seen her business limp along since the stock market plummeted last year, it was the best news in ages.

With Congress considering a new tax credit intended to turn around the battered housing market, she hopes lawmakers have found the long-awaited silver bullet. She was busy Thursday sending out about 200 e-mails to potential clients about federal plans to give buyers a subsidy of up to $15,000 for all home purchases.

"My whole firm is excited about it," Robinson said. "It could bring in a whole new set of buyers."

The new credit, approved by the Senate Wednesday night, works like this: Buyers would get 10 percent of the purchase price of any home, up to $15,000, applied to their tax bill.

Consumers would be allowed to spread out the credit over two years, making it possible for those who pay less than $15,000 in taxes to benefit. Anyone who buys a home within a year of the bill's signature would qualify. To deter speculators, buyers must occupy the house as their main residence for at least two years.

But the tax incentive is likely to be more helpful to buyers in less expensive markets, said Christopher Thornberg, a principal with Beacon Economics in Los Angeles. "Unfortunately, in the places that are most hard-hit, like California, it's going to have less of an impact," he said.

Sen. Johnny Isakson, a Georgia Republican and former real estate agent, introduced the new tax credit that's estimated to cost the government nearly $19 billion as part of President Barack Obama's economic stimulus package. It's modeled after a similar measure in the mid-1970s.

A tax break passed last summer provides a $7,500 credit to first-time homebuyers. But that must be repaid over 15 years, and the impact on home sales has been negligible.

Homebuilders and Realtors argue that dramatic steps are needed to boost the shellshocked housing market. While sales of existing homes rose unexpectedly in December, prices are still falling rapidly. The nationwide median sales price plunged to $175,400 in December, down 15.3 percent from $207,000 a year ago, and the lowest since May 2003. Sales of new homes, meanwhile, fell in December to the slowest pace on records dating to 1963.

Lawmakers, at least in the Senate, appear to be falling in line, even as moderates from both political parties worked Thursday to trim as much as $100 billion from the stimulus legislation and clear the way for its passage as soon as Friday.

With the economy showing fresh signs of weakness Thursday, Obama said: "The time for talk is over. The time for action is now."

But lawmakers faced criticism about aiding homebuyers — and not renters or those made homeless — as the recession worsens.

Sheila Crowley, president of the National Low Income Housing Coalition, questioned the decision to subsidize home purchases when housing prices still remain out of the reach for much of the working class.

"Why would we do something like this now?" Crowley said. "Really, only well-off people are in a position to buy a house."

Buyers will still face tight lending standards, and mortgage rates have climbed since hitting a record low of 4.96 percent last month. The average rate on a 30-year fixed mortgage rose to 5.25 percent this week from 5.1 percent last week, mortgage finance company Freddie Mac said Thursday.

Still, the mood was ebullient at the National Association of Realtors' headquarters in Washington.

"I'm thrilled. It's almost like you asked for the stars and you hit the moon," Charles McMillan, a Texas-based Realtor and the group's president, told reporters. "This is going to be great for the American homebuyer."

Jerry Howard, chief executive of the National Association of Home Builders, which lobbied hard for the tax credit, said it "will put the floor on the downward spiral" in home prices.

Real estate lobbyists are still pressing the government to spend billions to temporarily subsidize lower mortgage rates. They were looking optimistically to Treasury Secretary Timothy Geithner's planned announcement Monday of a new effort to prop up the banking industry and prevent foreclosures.

Mark Zandi, chief economist with Moody's Economy.com, said the homebuyers' tax credit will help reduce a giant pileup of unsold homes that is wreaking havoc on the financial system and broader economy. Since the credit is temporary, it also should help break "the psychology pervading the housing market that it is best to wait to buy a home because its price will soon be lower," Zandi wrote in an e-mail.

By itself, the tax credit won't help prod reluctant buyers off the fence, said real estate broker James Joseph of Whittier, Calif., but it could prove to be the tipping point if combined with other incentives like government subsidies for lower mortgage rates.

"It's one more coin on the scale," he said. "Every bit helps."

Robinson was hoping the potential tax credit could boost attendance this weekend at an open house she's holding at a renovated property with an ocean view. She says it's a steal at $285,000.

Associated Press Writers Daniel Wagner and David Espo in Washington, and Alex Veiga in Los Angeles contributed to this report.

Senate approves $15,000 tax credit for homebuyers By DAVID ESPO – 1 day ago

Thu, 05 Feb 2009 13:54:00 -0800

WASHINGTON (AP) — The Senate voted Wednesday night to give a tax break of up to $15,000 to homebuyers in hopes of revitalizing the housing industry, a victory for Republicans eager to leave their mark on a mammoth economic stimulus bill at the heart of President Barack Obama's recovery plan. The tax break was adopted without dissent, and came on a day in which Obama pushed back pointedly against Republican critics of the legislation even as he reached across party lines to consider scaling back spending.

"Let's not make the perfect the enemy of the essential," Obama said as Senate Republicans stepped up their criticism of the bill's spending and pressed for additional tax cuts and relief for homeowners. He warned that failure to act quickly "will turn crisis into a catastrophe and guarantee a longer recession."

Democratic leaders have pledged to have legislation ready for Obama's signature by the end of next week, and they concede privately they will have to accept some spending reductions along the way.

Sen. Johnny Isakson, R-Ga., who advanced the homebuyers tax break, said it was intended to help revive the housing industry, which has virtually collapsed in the wake of a credit crisis that began last fall.

The proposal would allow a tax credit of 10 percent of the value of new or existing residences, up to a $15,000 limit. Current law provides for a $7,500 tax break for the purchase of new homes only.

Isakson's office said the proposal would cost the government an estimated $19 billion.

Democrats readily agreed to the proposal, although it may be changed or even deleted as the stimulus measure makes its way through Congress over the next 10 days or so.

"This bill needs to be cut down," Republican Mitch McConnell of Kentucky said on the Senate floor. He cited $524 million for a State Department program that he said envisions creating 388 jobs. "That comes to $1.35 million per job," he added.

Republicans readied numerous attempts to reduce the cost of the $900 billion measure, which includes tax cuts and new spending designed to ignite recovery from the worst economic crisis since the Great Depression.

But after days of absorbing rhetorical attacks, Obama and Senate Democrats mounted a counteroffensive against Republicans who say tax cuts alone can cure the economy.

Obama said the criticisms he has heard "echo the very same failed economic theories that led us into this crisis in the first place, the notion that tax cuts alone will solve all our problems."

"I reject those theories and so did the American people when they went to the polls in November and voted resoundingly for change," said the president, who was elected with an Electoral College landslide last fall and enjoys high public approval ratings at the outset of his term.

Obama did not mention any Republicans by name, and most have signaled their support for varying amounts of new spending.

Even so, the president repeated his retort word for word in late afternoon, yet softened the partisan impact of his comments by meeting at the White House with senators often willing to cross party lines.

His first visitor was Sen. Olympia Snowe, R-Maine, a moderate GOP lawmaker. Later he met with Sens. Susan Collins, R-Maine, and Ben Nelson, D-Neb.

"I gave him a list of provisions" for possible deletion from the bill, Collins told reporters outside the White House. Among them were $8 billion to upgrade facilities and information technology at the State Department and funds for combatting a possible outbreak of pandemic flu and promoting cyber-security. The latter two items, she said, are "near and dear to her," but belong in routine legislation and not an economic stimulus measure.

Collins and Nelson have been working on a list of possible spending cuts totaling roughly $50 billion, although they have yet to make details public.

The House approved its own version of the stimulus bill last week on a party line vote, but the political environment in the Senate is far different.

Democrats hold a comfortable 58-41 majority. But because the legislation would increase the federal deficit, any lawmaker can insist that 60 votes be required to add to its cost.

While the 60-vote threshold can impose a check on Democrats, it can also illuminate the cross-pressures at work on Republicans.

A Democratic attempt on Tuesday to add $25 billion for public works projects failed when it gained only 58 votes, two short of the total needed. But a few hours later, a proposed $11 billion tax break for new car buyers attracted 72 votes, including several from Republicans.

Associated Press writers Jennifer Loven and Andrew Taylor contributed to this story.

New Fannie Mae Owner-Occupancy Requirements Will Help to Boost Investor Sales by Bob Hunt - Wed, Feb 4, 2009

Wed, 04 Feb 2009 17:20:00 -0800

On December 16, 2008, Fannie Mae released announcement 08-34 to lenders around the country. This document contains good news for investors, agents of investors, and lenders who are trying to reduce their REO ("real estate owned") inventory. The good news consists of a loosening of Fannie Mae's owner-occupancy ratio requirements for loans made to investor purchasers of condominiums. Actually, the announcement characterizes itself as a "clarification" of the policy. Whatever.

As it stands, "Fannie Mae requires that established condominium projects consisting of attached units have an owner-occupancy ratio of at least 51 percent… if the mortgage loan being delivered is secured by an investment property." The owner-occupancy ratio is not at issue in cases of "established projects where borrowers will occupy the unit or use the unit as a second home…"

Suppose that a 100-unit condominium project has 45 units that are rentals. Its owner-occupancy ratio is 55 percent; thus an investor could obtain a purchase loan which might then be sold to Fannie Mae.

But suppose, now, that, of the 55 owner-occupied units, eight are lost to foreclosure. (This would not be an unheard of percentage – of the total 100 units – in many parts of the country today.) These eight become REO inventory and are listed for sale. What is the owner-occupancy ratio now? Most of us, I think, would say that the REO properties are not owner-occupied; hence the ratio of owner-occupied units would be reduced to 47 percent. Apparently, many lenders around the country have thought the same way. Based on that understanding, the project would not be eligible for investor financing acceptable to Fannie Mae. In general, that would simply be another way of saying that no investor financing would be available.

As many have noted, a turn of events such as this can easily become the beginning of a downward spiral for the condominium project. For, while it is true that the ratio only applies in the case of investor buyers, there simply are not that many potential owner-occupants who are both motivated and qualified. Even with dramatic price drops, most of the potential buyers are investors. But, giving the understanding about the ratio, they are not eligible for financing. Hence, many of the units are left vacant, and the HOA (condominium association) may find itself short of dues income. (Yes, the foreclosing lender is responsible for paying dues in a timely manner; but they are not always forthcoming.) As more "for sale" signs sprout, the lower unit values drop.

Fannie Mae's December 16th change – "clarification" – is "to include REO units that are for sale (not rented) as owner-occupied units in the owner-occupancy ratio." This means that there will be more sales of these units; and that will be good for everybody.

During the past couple of years, more than a few would-be investor buyers have been unable to purchase condominium units because of the owner-occupancy ratio requirement. Agents who worked with those people should give them a call. There are more opportunities today than there were a few weeks ago. Today's Local Market Conditions Report

HOA Rule Tone & Texture by Richard Thompson - Tue, Feb 3, 2009

Wed, 04 Feb 2009 14:39:00 -0800

Homeowner associations (HOAs) are the fastest growing form of home ownership in America. In metropolitan markets, they can account for over 2/3rds of all new home construction. As more buyers choose this form of housing, condos and planned communities are becoming a dominant force to be reckoned with. HOAs are quasi-governments that collect mandatory fees to pay for services and enforce architectural standards and rules in the same way that any government can. Like other forms of government, if you choose to live there, opting out of fees and controls is not an option. When you buy into an HOA, you automatically agree to be subject to its authority.

Since homeowner associations in their current form have only been around since the 1960s, they continue to evolve as lifestyles change and their strengths and weaknesses are better understood. The concept of "carefree living" promoted by early developers was largely hype intended to help close sales. As time and experience bore out, HOAs require a lot of care and attention for them to work right. Due to the dynamics of neighbors ruling over neighbors and members being owners, not renters, the challenges are more complex than other forms of property management. In commercial and rental property, for example, a lease or rental agreement can be terminated for non-compliance. Not so in an HOA. Private property rights have a profound impact on how homeowner associations must be run.

Homeowner associations have the unique ability to customize how their business is done. This allows one HOA to do business very differently than virtually every other HOA if the board and members choose to. While most don't, there are often policies, procedures, rules and regulations that vary somewhat from one HOA to another. These differences can range from minor nuances in parking and pet regulations to major policies on architectural design restrictions. And like other forms of government, what was the policy two years ago may not be the policy today if the board or members vote to change it. Caveat emptor. Buyer beware.

Regardless of the tone and texture of rules and policies, there are some fundamental principles which all HOAs should follow when enacting and enforcing them. Some of these principles are common sense and others deal with the unique "neighbor" aspect of HOAs:

1. All rules need to be written. In days before the written word, laws were passed on by oral tradition. Since clans were closely knit, this system worked pretty well. But with modern fractured families living global lives, writing has a distinct advantage for keeping newcomers informed. Funny thing is, many HOAs have unwritten rules that offenders don't discover until they break them. Judges, however, don't like the idea of unwritten rules and often smite HOAs that have them. So all rules should be written in clear language.

2. All rules should be available for inspection. Written records are usually controlled by those that keep the records, the board or manager. With the advent of email and the internet, humankind has been set free of the paper prison. HOAs can now make rules, policies, information and records available 24/7 by way of a self-help website. Prospective buyers can also access this information to ensure there is nothing that would create a problem after closing the sale (like, the buyer has an RV and RV parking is not allowed.).

3. All rules should be consistently enforced. If a rule is important, it should apply to everyone, including the board and friends of the board.

4. All rules should be necessary. In a world gone mad with regulation, having a whole new set to adhere to at home is an unnecessary aggravation. If there is a city ordinance to control wandering or defecating pets, the HOA doesn't need the same rule. Only add the rules the HOA really needs.

5. Never try to out rule scofflaws. Scofflaws love it when the board enacts rules to control them. They thrive on confrontation and rules are the line in the sand over which they must step. Fortunately, scofflaws are rare. If confronted by one, the board should address their special needs by other means which may include compromise.

6. Rules can be compromised. Since all humans are unique, one size does not fit all. The board may have its rules challenged in a way that is headed to a judge's ruling that the board may not like. Since the board is elected to govern, the board has the power to compromise. If faced with the prospect of an expensive court battle or compromise, it is often in the best interest of the HOA to opt for the latter. Courtrooms are nasty places that often only further inflame disputes.

7. Run new rules up the flagpole. HOA boards can get myopic about the need for rules. Problems that loom large to a board may be of little importance to the majority of members. The board can make much ado about nothing. Or worse, the board can fan the flames of rebellion by enacting an unpopular rule. (Is that tar I smell?). There is no rule that is so urgent that couldn't wait for a 30 day member review and comment. Proposed rules circulated to the members generally gain buy-in and compliance, rather than defiance. 8. Provide for a right of appeal. It's very American to have an excuse. And extenuating circumstances may actually be legitimate. Appeals are not only fair, but expected. The board should never engage in a game of "Gotcha". Look for ways to catch someone doing good.

At the end of the day, HOA rule breakers are neighbors. So the tone and texture of HOA rules needs to take this into consideration to avoid ongoing skirmishes between warring neighbors. Rather than plan for battle, groom the rules to help neighbors be better neighbors.

For more innovative homeowner association management strategies, see www.Regenesis.net. Today's Local Market Conditions Report

International Experts Encourage the Building Community to 'Go Active' by Peter L. Mosca - Tue, Feb 3, 2009

Wed, 04 Feb 2009 14:27:00 -0800

Researchers, engineers, architects and experts from the international building sector recently gathered in Copenhagen for the first international Active Housing roundtable discussion. The group focused on the concerns associated with climate changes, energy consumption and indoor living conditions. The event, hosted by VELUX, highlights the challenges of how to combine energy design and liveability factor considerations in new and existing housing stock, or 'Active Housing.'

"The overall aim of doing this is to create a catalyst effect for formulating a visionary response for innovative measures and solutions that tackle current challenges in the construction and building industry in one solution," said Michael K. Rasmussen, VELUX CMO, in his introduction to the Round Table Forum Meeting.

During the day, the participants were divided into seven groups focusing on defining content and values for the two overall 'Active Housing' terms, energy design and liveability factor. The most repeated points about liveability factors focused on the human behavior, incentives to act responsibly, as well as the need for scalable and flexible design solutions that can change during the life span of the building and its users.

"The energy design of tomorrow could be one of the greatest breakthroughs since modernism," the discussion group concluded. "We are searching for the good life -- health, fresh air and lots of daylight -- just as we did in the 1920's, but this could actually become a new era."

Themes concerning energy design included the need to re-brand sustainability with less focus on technical issues and more emphasis on creating a positive, appealing and rewarding story about being environmentally consciousness for users and experts. Another theme focused on the need to develop a means of measuring and benchmarking liveability.

Increasingly liveability is gaining traction in technology and advancements for the home and the persons living within it. Home Automation, Inc. (HAI), for example, a manufacturer of integrated automation and security products, offers a new suite of wireless energy management products designed for ZigBee&Reg;, a technology well suited to a wide range of energy management and efficiency, building automation, industrial, medical, and home automation applications.

One product, the Omnistat2 Wireless 7-day programmable communicating thermostat, is for conventional single stage heat/cool, heat pump, two speed heat pump, two stage conventional, and zone control systems. It can be controlled both locally and remotely and is designed to precisely control the temperature and humidity within the home. Using advanced digital technology it actually "learns" a home's heating and cooling patterns and adjusts control to maximize both the HVAC system's efficiency and the occupants' comfort.

In addition, HAI is a Gold Key sponsor of The Louisiana House - Home and Landscape Resource Center, better known as LaHouse, a family-type home designed to showcase innovations in home construction for Louisiana's sub-tropical climate and provide a model for the public to learn about technological advances in home building. HAI is the sole home control partner.

"HAI is always looking for ways to work with educational institutions that are helping to get the message out about how technology can make your home more energy efficient and the LaHouse is an excellent partner to work with in this endeavor," said Thomas Pickral, Jr., HAI Director of Business Development. "The LaHouse is a rare opportunity for the building industry and the public to see technology that is available today to make their home more sustainable."

"Both consumers and professionals can see first-hand and learn about many solutions - from ways to protect their homes from hurricanes, floods, mold and termites to the employment of highly energy efficient and healthy building, air conditioning and lighting systems to interiors that combine beauty, comfort and convenience with eco-friendly benefits," said Claudette Reichel, LSU AgCenter housing specialist.

[Note: Summaries from the Active Housing roundtable discussions, keynote speaker presentations and short video interviews of the keynote speakers can be found online at www.activehousing.net. VELUX which has manufacturing companies in 10 countries and sales companies in just under 40 countries, creates better living environments with a wide range of roof windows and skylights, along with solutions for flat roofs.] Today's Local Market Conditions Report

Recent attempt to sell hurts refi by Ilyce Glink Fri, Jan 30, 2009

Sun, 01 Feb 2009 14:10:00 -0800

Red flag to lenders a sign of the times

Q: Can you tell me about a rule that you are not allowed to refinance a home if it was on the real estate market less than six months ago? I was told by my lender that because my house was on the market last September (it didn't sell and I took it off that month) I would be unable to refinance until it was off for six months. What is the reasoning for this rule?

A: If you are applying to refinance your primary residence, the lender's underwriting guidelines provide that the loan will be given to you only if you use the home as your primary residence.

If you have listed the home for sale, the lender has knowledge of your intent to cease using the home as your primary residence and does not want to take the chance that you'll obtain the loan and then decide to sell or rent the home.

The lender wants to give you the loan only if you will continue to use the property as your primary residence. Also, it's expensive to underwrite and process the loan, and lenders don't want to go through the expense of giving you the loan and then have you pay it off a short time later.

If six months have gone by after a home has been taken off the market, the lender then can view the prior listing for sale as too far in the past to affect the lender's underwriting decision. So, the lender can proceed to refinance the home and once again ask you whether you use the home as your primary residence and ask that you confirm that you will continue to use the home as your primary residence after the closing.

Given the state of the real estate and financial markets, lenders are being extra careful in evaluating each loan. In past years, some lenders might have decided that a listing of a home close to the application time would not affect the application process, but in today's market more lenders would view that as a negative.

But you may find that "six months" is not a rule with every lender. Some lenders may be willing to refinance your home if the home has been off the market a shorter period of time.

You should probably call around and talk to at least one other mortgage lender, one mortgage broker and your credit union (if you are a member of one), and find out what their guidelines are for your situation. You might also want to investigate an FHA loan.

If you find out that another lender is willing to assist you in refinancing your property, you might decide to go with that lender and plan to stay in the home for a while.

Q: We submitted an offer on a bank-owned foreclosure on a Monday. That day, we were told that the bank requires us to fill out a mortgage application with their mortgage division in order for them to consider our offer. We were also informed that two other parties were interested in the house.

We complied with the request and they received our offer on Tuesday. On Wednesday, we were told the bank was going to give a counteroffer to the best-qualified party only. Then Thursday, we were presented an offer from the bank and we gave a counteroffer. Later that day we were told that our offer had been rejected and they were going to open the bidding and all interested parties were to submit their best price.

We increased our offer and had our agent submit it. Later we were informed that someone else had given them full price but had to include the closing cost in the loan. Right now the house is still pending 30 days later. Have any laws been broken or any ethics violated?

A: You should know that negotiating for a house can be tricky in the best of times. In these times, where so many homes are owned by lenders, the information you get may not always be accurate and you should always remain vigilant.

If a seller lies to you in the course of negotiating the purchase of a home, that seller may be committing a fraud. If a real estate agent lies to you while negotiating the purchase of a home, that agent at best is violating the ethical rules of the real estate profession and is, at worst, committing a fraud.

Having said that, the description in your letter does not seem to indicate that you were lied to or even that anybody in the transaction violated any ethical rules.

Other people may have been interested in the home at the time you were looking at the home. In some cases those other interested buyers could have seen the home in person or could have been shopping for foreclosed homes in bulk and negotiating directly with the lender.

If the home is still available and is not under contract, it's possible that the deal to sell the home to another buyer may have fallen through or may have never even reached contract.

If you are pre-approved by a lender, have a high credit score, and have 20 percent to put down towards the purchase of a home, you should be the ideal buyer for any seller.

But just because you don't end up with a home during the negotiation process does not mean that the seller or the agents involved did anything wrong.

***

Truth about home fixture warranties by Paul Bianchina Fri, Jan 30, 2009

Sun, 01 Feb 2009 13:40:00 -0800

Some are vague about what's covered, what's not

Warranties are something we see on a myriad of home improvement products, from roofing and siding to faucets and electrical outlets. They're intended to give the consumer some specific legal recourse should the product fail to perform properly, as well as some general psychological peace of mind.

But how valuable are warranties? Do they cover what you think they do, and can you rely on them to really protect your financial investment in the event of a problem? The truth is: probably not as much as you'd hoped.

READ, READ, READ

The first thing you need to do with any warranty is to request and read a copy of it before you make your purchase. Some warranties are very simple and straightforward, and others are lengthy, convoluted and fraught with legalese. Nevertheless, you need to read it to the best of your ability.

One of the first things you will notice about virtually any warranty is that it is tied to very specific steps that must be followed by the person installing the product, whether it's you or someone you hire. Failure to follow the steps exactly will typically result in the warranty being void, and this is a common pitfall that many homeowners -- indeed, many contractors -- fail to take seriously enough.

A careful examination of the warranties offered by many building material manufacturers will turn up language that states, in one form or another, that the warranty applies only to structures on which the product has been installed, finished and maintained in accordance with the manufacturer's specific instructions, and that deviation from those installation, finishing and maintenance instructions will render the warranty null and void.

Some of the things you need to be very aware of that can void a warranty include:

Inadequate protection during storage, which includes how the product is protected from ground moisture, dirt and dust, weather, impact, and other specifics. Improper spacing. This would apply to products such as siding or shingles, where you have left gaps that are consistently too large or too small. Improper fastening, which includes the gauge, length and style of the fasteners you use, the depth of their penetration into the wood, the spacing between the fasteners, and even the amount of air pressure used with air-driven fasteners. Finishing. In the case of siding and some other materials, it must be finished (painted, stained or otherwise protected from the elements) within a certain time frame, using approved materials and approved application methods. Maintenance. Many products also tell you what steps you need to take to maintain them properly, and failure to follow those steps can also void the warranty.

WHAT DO WARRANTIES COVER?

What a specific warranty covers varies from manufacturer to manufacturer, and can even vary within the product lines offered by the same manufacturer. Some of the more important things to be aware of are:

What is the term of the warranty? Some warranties last only 30 or 60 days, while others are for the expected life of the product, which might be 50 years or more. Is there depreciation? Longer-term warranties, such as those on roofing, are typically depreciated based on the product's expected life span. For example, if you have a composition shingle with a 30-year warranty and it fails after 15 years on the roof, it's common that the replacement value will be depreciated by 50 percent. Does it cover labor? Many warranties will cover the cost of the product itself, but not the cost of the labor to remove and dispose of the failed material and install the replacement. Some will cover removal but not replacement, or vice versa. What steps are required? If that new faucet fails as soon as you install it, can you take it back to the store for an immediate replacement, or does the manufacturer insist that it be sent back to their facility for possible repair?

With any warranty, do your homework. Obtain and read a copy, and if you have questions about it you need to discuss it with your dealer or your contractor. If they are vague or unsure about answering your questions, ask for the phone number of the manufacturer, and call them directly.

Remodeling and repair questions? E-mail Paul at paulbianchina@inman.com .

***

100 Stable Housing Markets by Broderick Perkins - Wed, Jan 28, 2009

Thu, 29 Jan 2009 13:27:00 -0800

Chances are, these towns don't ring a bell, but perhaps they should.

They are among a list of 100 metro areas across the nation that have housing markets worth serious consideration.

Over the past year, housing dollars spent in these towns have faced little if any risk, according to San Juan Capistrano, CA-based HomeSmartReports.com , a number-crunching company that examines property values and housing market risks.

They are locales where both buyers and investors can cash in.

"My lament over the last several years is that people have not paid any attention to risk-related factors in real estate. The market was going up and it was 'The market will take care of everything.' That was the mind set. On the flip side now, we don't want to look at all the bad news. Well, let's point to areas that are more stable where people can think of moving to or investing in," says HomeSmartReports co-founder, Mike Ela.

Recent studies have shown migration patterns and rural locations can point to buying and investment opportunities, but HomeSmartReports examined risk factors -- foreclosure activity, property flipping, sales volatility, property history, site issues -- that can positively or negatively affect values in an area.

"There are some areas of the country that are reasonably stable and where risk factors are minimal. Over the long haul, stable areas tend to fare better from a value standpoint," Ela says.

Ela says even markets where home prices have fallen, but economic strength remains, reveal a greater potential for sound real estate investments.

Using a Collateral Risk Measure (CRM), based on a scale of 0-100, where zero is very stable and 100 extremely risky, here are the Top 20 towns scoring 1.12 or lower. Compare them with the nation's riskiest market, Detroit-Livonia-Dearborn, MI and its CRM of 46.26.

Hinesville-Fort Stewart, GA; Manchester-Nashua, NH; Lebanon, PA; Bridgeport-Stamford-Norwalk, CT; Abilene, TX; Odessa, TX; Burlington-South Burlington, VT; Cambridge-Newton-Framingham, MA; Bismarck, ND; Farmington, NM; Hartford-West Hartford-E Hartford, CT; Norwich-New London, CT; Portland-South Portland-Biddeford, ME; Grand Forks, ND-MN; Essex County, MA; Fond du Lac, WI; New Haven-Milford, CT; Jackson, MI; Jacksonville, NC; and Barnstable Town, MA.

Ela plans to soon post the complete list of 100 low-risk towns on HomeSmartReports.

Using the factors mentioned, HomeSmartReports also provides a Market Risk Score, graded from "A" to "F," based on local market factors, to rate areas around a property. Plug in your ZIP Code and get your region's grade.

Here's a descriptions of each grade.

A - Low Market Risk Conditions exist. Sales trends are consistent and market activity is normal.

B - Some Market Risk Conditions exist. Foreclosure activity exists combined with market price appreciation which may not be consistent with a low risk market.

C - Moderate Market Risk Conditions exist. Foreclosure activity and market price appreciation appear higher than normal. More research recommended.

D - Medium to High Market Risk Conditions exist. Foreclosure activity is abnormally high. Market price appreciation is higher than normal.

F - High Market Risk Conditions exist. Very high foreclosure activity exists in the area. Very high market price appreciation exists which is not normal in a high foreclosure market. Flipping activity is present, and fraud rings may exist in the area. We strongly recommend that you seek the advice of a real estate professional. Today's Local Market Conditions Report

Today's Mortgage Rates - January 25, 2009

Mon, 26 Jan 2009 16:35:00 -0800

News provided by Quicken Loans

Today is Sunday, January 25, 2009. Here are today's typical mortgage rates from Quicken Loans, based on financial markets that closed Friday, January 23, 2009.

Mortgage rates remain low from the close of the financial markets Friday. Several things go into determining what mortgage rate you'll qualify for, but here are some general rates for Sunday, January 25, 2009 (as of 11:30 am) that can get you started. Below the rates you'll see a short explanation of the assumptions we make to give you these rates. The assumptions may not apply to everyone and are merely a way for us to offer rates based on an average person's situation.

Remember, many factors affect the mortgage rate you may qualify for, including credit score, income, debt, and home value.

Mortgage rates on a typical $240,000 home loan (for a $300,000 home with a 20% down payment) from Quicken Loans for January 25, 2009 as of 11:30 am EST are as follows:

30-Year Fixed Monthly Mortgage Payment (includes taxes and insurance) - $1,528 Mortgage Rate - 4.875% APR - 5.055% Points - 1.625 30-Year VA Loan Monthly Mortgage Payment (includes taxes and insurance) - $1,638 Mortgage Rate - 5.50% APR - 5.64% Points - 1.125 FHA Express Monthly Mortgage Payment (includes taxes and insurance) - $1,743 Mortgage Rate - 5.50% APR - 5.628% Points - 1 15-Year Fixed Monthly Mortgage Payment (includes taxes and insurance) - $2,064 Mortgage Rate - 4.25% APR - 4.615% Points - 2

For these rates, we make a few assumptions, including: Mortgage rates could change daily. Actual payments will vary based on your individual situation and current rates. Some products may not be available in all states. Lending services may not be available in all areas. Some restrictions may apply. Based on the purchase/refinance of a primary residence. We assumed (unless otherwise noted) that: closing costs are paid out of pocket; this is your primary residence and is a single family home; debt-to-income ratio is less than 30%; and credit score is over 720. The lock period for your rate is 45 days. If LTV > 80% PMI will be added to your monthly mortgage payment.

Please remember that we don't have all your information that we might need to give you an actual mortgage rate that you can qualify for and lock. Therefore, the rate and payment results you see from this calculator may not reflect your actual situation. Quicken Loans offers over a hundred loan products. You may still qualify for a loan even if your situation doesn't match our assumptions.

Those are our rates for this Sunday. If you like what you see, get in touch with us at {PHONE}. Or check back tommorrow for more mortgage rates from Quicken Loans.

Enjoy the rest of your weekend. If you live in the north, it's a cold day but a great chance to enjoy the outdoors. Maybe try some skiing or ice skating? That's where your friendly mortgage news editor will be spending his day today!

Top Five Myths About Loan Modification

Mon, 26 Jan 2009 16:27:00 -0800

DETROIT--(BUSINESS WIRE)-- Ralph R. Roberts, consumer advocate and spokesperson for Federal Loan Modification Law Center, today released a list dispelling the top five myths about loan modification. Intended to better educate homeowners facing the prospect of losing their home in foreclosure, the following list demystifies the most common misconceptions surrounding the loan modification process.

MYTH #1: My bank wants me out of my house. My bank wants my home. Banks and other lending institutions do not want to foreclose. They earn more money if you can make your payments. When they foreclose, they not only lose your monthly payments, but they also have the expense of foreclosing (attorney fees), rehabbing the home, and then selling it (agent commissions). In today's market, there's a good chance they'll have to sell the home at a loss. This is all good news for you - it means the bank is highly motivated to make a deal with you.

MYTH #2: My credit score is bad so I won't qualify. Unlike the option of refinancing out of trouble, which requires you to apply for a new loan, loan modification simply adjusts the terms and perhaps reduces the balance of a loan you already have. Your credit score is much less of a factor in determining whether you qualify for a loan modification. In addition, a successful loan modification can actually improve your credit score over time, especially if it prevents you from ending up in foreclosure or bankruptcy.

MYTH #3: I am not late on my mortgage payments so I won't qualify. I have to miss a payment to be eligible. Early on, this was true. In fact, some early eligibility requirements stated that you had to be 61 days delinquent in order to qualify. In other words, you would have had to have missed two full payments. The truth is that the eligibility requirements are constantly changing and differ among lenders. Many lenders are now working out loan modifications with borrowers who are up to date on their payments. It's difficult to determine whether you qualify until you actually discuss your situation with the lender or with an attorney who is knowledgeable and experienced in loan modifications.

MYTH #4: I would be better off walking away or declaring bankruptcy than modifying my loan. Walking away from the home and filing for bankruptcy are certainly two options, but they are rarely the best options when you are facing foreclosure. If you simply walk away, the lender is unlikely to pursue legal action against you, but in some jurisdictions, the lender can pursue a deficiency judgment against you to collect the difference between what the lender receives for your home at auction and what you currently owe on the balance of the mortgage. Filing for bankruptcy may be better than just walking away, but it can leave a blemish on your credit history that makes it difficult to borrow money in the future. A successful loan modification is almost always a more prudent choice.

MYTH #5: It's too late. I have already received a foreclosure notice. As long as you still reside in the home - that is, you didn't voluntarily abandon it, and the home hasn't been sold at a foreclosure auction - you may still have time to work out a loan modification with your lender. The sooner you take action, the more options you have available and the more time you have to pursue the best option, but you can still negotiate late into the process. By contacting the lender or, better yet, having your attorney contact the lender on your behalf, you demonstrate a good faith effort to work out a solution and can often buy yourself extra time to negotiate a loan modification. Today's Local Market Conditions Report

by: Ralph Roberts - Sun, Jan.25, 2009

Loan Update from Tony Guaraldi of Intero Mortgage

Mon, 26 Jan 2009 15:50:00 -0800

Rates are up quite a bit this week as Fannie/Freddie mortgage securities traded lower six days in a row, which lead to higher rates each day. Things are abnormal these days with mortgage rates. Typically rates are influenced most heavily by inflation and demand for bonds. Lately it's been different. Here's why.

The lenders spent most of 2008 either going out of business, merging with other banks, or laying off employees to cut costs as business came to a grinding halt. All of a sudden the US Treasury starts buying mortgage securities from Fannie & Freddie at a low 4% coupon, and this action dropped interest rates in the beginning of December. The lenders were instantly slammed with new refinance business, and now are at the point where they can not keep up with work load. So when you have too many loans in your pipeline the best way to slow down the flow of new loans coming in the door is to raise your interest rates! But people are still applying! Raise them again! Let's take some profits while we're at it, we can use it!
The second phenomenon in this environment is the lenders are changing the way they price zero point loans. They are strongly encouraging borrowers to pay points to get lower rates by increasing the spread between zero point rates and 1.0 point rates. You will see this on the rate sheet for conforming loans. The reason for this is a buyer/borrower is more likely to keep the loan for a longer period of time if they pay the points to get the loan and have a lower rate. The bank loses money if the borrower keeps the loan for only a few months. To encourage the behavior they desire, they are pricing the 1.0 point rates much better than zero point rates. This is of course the opposite of what the client thinks they need, so it's our job to educate them on the benefit of paying points and show them the large amount money they will save by investing in lower monthly payments. This is a generalization on the market right now, but there are exceptions to this rule.

The third thing holding back the jumbo/conforming rates from dropping further is the rule created with the 2009 Jumbo/Conforming loans. A given bank is not allowed to have more than 10% of all of its conforming loans be jumbo/conforming. That means that 90% of all their loans must be below 417k and only 10% and go up to 625k. Well there is such a huge demand for jumbo/conforming loans that the lenders maxed out of it in a couple weeks. So most of them have greatly increased the rates on jumbo/conforming to stop the new submissions from coming in. This will hopefully normalize soon as the bundling and selling cycle starts over, and jumbo/conforming will come back down again.

In order to minimize this risk for rate volatility, with Intero Mortgage we are signing up new lenders constantly. This is a big advantage of being a broker, and not just any broker. A broker with some good volume and professional loan officers who submit clean files and act with integrity. The lenders are starting to really realize that not all brokers are good to partner with, and they are being very picky about who they will do business with. This way we have a better chance of having a lender that is not "full" already and can be competitive for rates and turn times.

That's all for today. Give us a call this weekend if you need anything. We'll be around! Have a good one!

Tony Guaraldi
Mortgage Consultant

Washington Report: Expectations for Housing

Mon, 26 Jan 2009 09:29:00 -0800

With a new President and new Congress running Washington, what can we expect in terms of housing and mortgage-related moves early in the new term?

Last week we talked about what's coming in the big $825 billion economic stimulus package, including an improved, $7,500 home purchase tax credit. So let's turn to some of the other top items on the immediate agenda.

Number one: Foreclosure relief. In comments on CNBC, Barney Frank, the House Financial Services committee chairman, predicted that Congress and President Obama would devote as much as $100 billion of bailout money to help financially-stressed home owners out of foreclosure.

Under one option, the government plans to encourage lenders to reduce delinquent borrowers' principal balances and payments in exchange for a federal guarantee that they'll incur no additional losses, even if the borrowers default again.

Another approach will be mass modifications not only of delinquent loans but for non-delinquent borrowers heading for payment problems because of job loss or income declines.

A second high priority: Passing legislation allowing bankruptcy judges to step in to prevent foreclosures by unilaterally reducing the monthly payments, interest rates and principal balance for owners who file for bankruptcy.

A third item that's likely to be passed quickly: A return to last year's higher mortgage limits for high-cost areas around the country. That would be welcome news to borrowers, Realtors and builders in California and along the East Coast, where Fannie Mae, Freddie Mac and FHA limits could return to as high as $729,750 -- up from the current $625,500.

Several other items on the agenda that you can expect to see during the early months of the new Congress: Passage of long-stalled anti-predatory lending legislation that would toughen penalties for lenders or brokers who put home buyers into mortgages they couldn't afford.

A key part of the bill creates a suitability test for new mortgages. Loan originators would have be able to document how the terms of a new mortgage serve the best interests of the borrowers.

A little farther down the road: The Obama administration is expected to consider reforms for the federal financial regulatory agencies, and to figure out what to do with Fannie Mae and Freddie Mac, which are both now in federal conservatorship.

The banking regulators have been widely criticized for being too passive during the excesses of the housing boom years. Rather than reining in banks with large subprime and Alt-A production and exposure - Indy Mac and WaMu among others -- they did little to intervene and avoid what turned out to be multi-billion dollar losses. Today's Local Market Conditions Report

by Kenneth R. Harney - Sun, Jan 25, 2009

MEASURE B - Bringing Bart to South Bay

Mon, 29 Sep 2008 04:39:00 -0700

In case you missed it, please see below the editorial endorsement by the San Jose Mercury News from this morning, supporting Measure B to bring BART to Santa Clara County, connect with Caltrain commuter rail service and San Jose International Airport, and finally build a rapid rail system that circles the entire Bay Area.

As the Mercury notes, Measure B could hardly come at a better time. The challenges with the national economy underscore the fact that Measure B - building the BART extension - will create thousands of well-paying local jobs that put people to work, on a transportation improvement that will help tens of thousands of us get to work.

**************************************************************************************************************

Editorial: Vote yes on Measure B to put BART on track to San Jose
Mercury News Editorial
Article Launched: 09/27/2008 08:00:00 PM PDT

Eight years ago this fall, 71 percent of Santa Clara County voters approved a tax to bring BART from Fremont through downtown San Jose to the Santa Clara Caltrain station. Finally, the largest city in the Bay Area and the urban core of Silicon Valley would be on the region's best commuter line, and high-speed transit would ring the bay.

That was before Sept. 11, 2001, and the dot-com crash. Since then, costs have gone up, and like the overall economy, revenue from the 2000 half-cent sales tax has lagged behind projections. The measure was supposed to provide the local share of both construction and operating costs, but now it will cover only construction.

Measure B on this fall's ballot is a one-eighth-cent sales tax to fill the gap in operating money, about $42 million a year. It's a reasonable price to pay for the dividend this line will pay to the region for generations to come. We strongly support it.

Bringing BART to San Jose is if anything more important now, as we struggle to achieve energy independence and to build communities where people don't have to drive everywhere. And make no mistake: Measure B is only about BART. It is very narrowly drawn. It will not be collected until every dollar needed to construct the line is firmly committed, and it cannot be spent on anything but operating the BART line.

While BART has had setbacks, much has gone as hoped. The Valley Transportation Authority already has spent $460 million buying the right of way and on pre-engineering studies. Just last week, the state completed its commitment of $760 million toward the $6.1 billion project. It's money well spent.
Measure B will help secure the final piece of the construction puzzle: $750 million in federal dollars. The Federal Transit Administration will not recommend this allocation until it's confident VTA can operate the line. This is believed to be the final barrier - but if for some reason the federal money still isn't forthcoming, the Measure B tax will never be collected.

Opponents of this project have four main arguments: BART is old technology, the 2000 sales tax money should be spent on other things, the route is wrong, and you just can't trust VTA.

Yes, BART's old technology. It's proven, terrific technology, a fast, reliable system with a high fare-box return. That's why it's so popular. The 2000 tax measure never would have passed with that margin, if at all, for other projects.
On the route, some argue it should go to North San Jose instead of downtown. But the point isn't just to get East Bay commuters to existing jobs. It's a strategy to connect the region's major cities, universities, airports and other institutions, as well as job centers, and to focus new development in places like downtown San Jose, where high-density construction is welcome. Shifting that development to now-suburban areas would suck the life out of a downtown just starting to show real vitality.

As to VTA - it's not perfect. But the new general manager, Michael Burns, has improved its management and revitalized the all-important bus system. Ridership is growing. A state audit this year basically affirmed that the agency is on the right track.

On fiscal responsibility, one of our bellwethers is San Jose Mayor Chuck Reed, as practical and parsimonious a politician as you'll find. Since BART was the passion of his predecessor and political nemesis, Ron Gonzales, he has no personal stake in this.

Reed isn't just supporting Measure B. He's co-chairing the campaign. He believes BART is critically important to San Jose now, but perhaps more important, that it's one of those things you just have to do for future generations.

We agree. Measure B is a referendum on that belief. Vote yes.

FHA Guidelines

Mon, 22 Sep 2008 12:24:00 -0700

FHA

Most of the aspects are the same as calHFA but underwriting standards are more lenient, esp. when it comes to borrower's debt to income ratios
As. of Oct. 1, 96.5% financing, 3.5% down payment required
borrower pais PMI
at least 30 day close, 45 day is better
Interest rates in mid mid 5- mid 6s for conforming loan amounts and to mid 6s to 7s for agency jumbo

CAL HFA Guidelines (1st Time Buyer Program)

Mon, 22 Sep 2008 12:23:00 -0700

1) calHFA

97% financing and up 3% down payment assistance, so essentially 100% financing.
Please do not misunderstand the term down payment assistance, this amount in financed as well, it is not a gift.
As with all loans above 80% loan to value, borrower pays PMI
File is underwritten twice once by lender and once by government entity because it is a government loan.
Recommended that file be pre- approved, esp. if requesting down payment assistance, before offer is extended because of turn times- at least 45 day close and sometimes longer
Underwriting and approval process have tighten guidelines- esp. regarding debt to income ratios
Interest rates in mid 6s to 7s depending on loan amount and other specifics of the scenario

FHA New Down Payment Minimum

Thu, 11 Sep 2008 07:00:00 -0700

As you all read the new HR 3221 bill, a new down payment requirement was sent out for FHA. As we all know that bill will take effect October 1, 2008, however, per FHA, the 3.5% minimum down payment will take effect on and after January 1, 2009. So Until, Dec.31 2008 - 3% is still the minimum down payment that we can use for FHA.

Freddie / Fannie Bailout- Analysis

Wed, 10 Sep 2008 15:32:00 -0700

Below is an excerpt from an article in the Wall Street Journal, analyzing the winners and losers of the Fannie/Freddie bailout:

Homeowners: The national mortgage default rate is a whopping 9%, but the rescue plan should bring some relief, as the government can exercise more control than private-sector companies can. Interest rates will likely come down, and, as Jim Cramer said this weekend, “The government can cut the mortgage payments, and it can extend the terms, say to 45 years. It can take any hit to keep you in your home, and the paper is still insured.” Of course, homeowners are also taxpayers and eventually could end up footing the bill anyway.

Hank Paulson: Paulson was a reluctant combatant in the Fannie and Freddie “holy wars” but he canvassed the big thinkers on the subject, tapped outside advice from Morgan Stanley and pushed for a solution quickly.

Short-sellers: Nationalization is likely a victory for many short-sellers who bet against the ability of Fannie and Freddie to rebound from their troubles. Fannie and Freddie shares, already down roughly 90% since October, probably won’t be pretty to look at Monday. But their success won’t be morally complicated: The blame for Fannie’s and Freddie’s troubles fall squarely on their odd structure and the housing crisis, Paulson said in his statement.

Pimco’s Bill Gross: The co-chief investment officer of the bond giant Gross bet that his Fannie and Freddie bonds would be saved by Federal intervention, and he was right. He tripled his bet on mortgages in May so that they comprised as much as 61% of his fund. Then he boldly plumped for Treasury to use its own balance sheet in a bailout, preferably buying Fannie’s and Freddie’s preferred shares. Gross wasn’t above talking smack: He provocatively ended his last investor letter with the taunt, “Booyah Hank?”–poking at Paulson’s insistence that shareholders suffer “moral hazard.” Anyone “aspiring for a perfect 800 on the Wall Street policy exam would conclude that the tab will be less if paid up front, than if swept under a rug of moral umbrage intent on seeking retribution for any and all of those responsible,” Gross nudged.

Republicans: The Bush administration gets kudos for avoiding the economic meltdown that likely would have resulted from further Fannie-Freddie troubles, at least for now. That could boost the candidacy of John McCain, or at least dull any Democratic attacks on things economic. Fannie and Freddie have long been generally supported by Congressional Democrats and generally loathed by Republicans, who wanted the two giants to shrink to a more-manageable level. In conservatorship, Fannie and Freddie are temporarily making “big government” even bigger. But, as McCain economic adviser Doug Holtz-Eakin said today, “the long-term reforms are to scale down Fannie and Freddie so their size is no longer a threat. And then privatize them.”

Stockholders: Common and preferred shares will remain listed but those juicy dividends are gone. Still, it isn’t the total wipeout many expected. Many banks and financial institutions, including J.P. Morgan Chase, had poured money into Fannie’s and Freddie’s preferred shares. The threat of the banks’ holdings becoming worthless raised the threat of a broad banking crisis. But Treasury will buy some of the preferred shares, and banishing the dividends will save Fannie and Freddie $2 billion a year.

Lobbyists: The mortgage giants wove a mantle of invincibility with their $170 million lobbying bills in the past decade. They spent $3.5 million on lobbying just in this year’s first quarter, spreading their largesse among 42 outside lobbying firms. Treasury has turned off the Fannie-Freddie lobbying spigot. Sen. Barack Obama pointedly said in a statement about Fannie and Freddie today, “any action we take must be focused not on the whims of lobbyists and special interests worried about their bonuses and hourly fees.”

Congress: Congress has been publicly censured for Fannie’s and Freddie’s troubles–even by its own members. Sen. McCain has long derided the political strength of Fannie and Freddie as an example of “crony capitalism.” Obama said, “Washington ignored the warning signs in the housing and financial markets.” Cramer railed in a column this weekend, “We are at this extreme because our policymakers have simply been lazy, wrong, intransigent and foolish. If this were the private sector, all of these people would be candidates to be fired.”

Management: Paulson didn’t blame management, diplomatically saying “I attribute the need for today’s action primarily to the inherent conflict and flawed business model embedded in the GSE structure, and to the ongoing housing correction. GSE managements and their Boards are responsible for neither.” He added that he hoped most of the employees would stay on. Still Fannie CEO Daniel Mudd and Freddie CEO Richard F. Syron will be succeeded by former TIAA-CREF Chairman Herbert M. Allison and Carlyle Group senior adviser David M. Moffett, respectively. Regime change isn’t exactly a ringing federal endorsement.

Value investors: Long-term managers with big stakes in Fannie and Freddie included David Dreman of DWS Dreman Concentrated Value, Richard Pzena of John Hancock Classic Value, and John Thompson of Thompson Plumb Growth as well as beleaguered Bill Miller of Legg Mason Capital Management. Miller was so confident that Freddie would rebound that he took his stake up to 12%, making him its largest shareholder. Fannie and Freddie stock will stay listed, but it’s a bold bet to believe that it will recover enough to make a significant profit.

-Source, Joyce Conlin, Loan Source

Wireless Telephone Laws FAQs

Fri, 13 Jun 2008 16:42:00 -0700

Two new laws dealing with the use of wireless telephones while driving go into effect July 1, 2008. Below is a list of Frequently Asked Questions concerning these new laws.

Q: When do the new wireless telephone laws take effect?
A: The new laws take effect July 1, 2008.

Q: What is the difference between the two laws?
A: The first prohibits all drivers from using a handheld wireless telephone while operating a motor vehicle, (Vehicle Code (VC) §23123). Motorists 18 and over may use a "hands-free device." Drivers under the age of 18 may NOT use a wireless telephone or hands-free device while operating a motor vehicle (VC §23124).

Q: What if I need to use my telephone during an emergency, and I do not have a "hands-free" device?
A: The law allows a driver to use a wireless telephone to make emergency calls to a law enforcement agency, a medical provider, the fire department, or other emergency services agency.

Q: What are the fines(s) if I'm convicted?
A: The base fine for the FIRST offense is $20 and $50 for subsequent convictions. With the addition of penalty assessments, the fines can be more than triple the base fine amount.

Q: Will I receive a point on my driver license if I'm convicted for a violation of the wireless telephone law?
A: No. The violation is a reportable offense, however, DMV will not assign a violation point.

Q: Will the conviction appear on my driving record?
A: Yes, but the violation point will not be added.

Q: Will there be a grace period when motorists will only get a warning?
A: No. The law becomes effective July 1, 2008. Whether a citation is issued is always at the discretion of the officer based upon his or her determination of the most appropriate remedy for the situation.

Q: Are passengers affected by this law?
A: No. This law only applies to the person driving a motor vehicle.

Q: Do these laws apply to out-of-state drivers whose home states do not have such laws?
A: Yes.

Q: Can I be pulled over by a law enforcement officer for using my handheld wireless telephone?
A: Yes. A law enforcement officer can pull you over just for this infraction.

Q: What if my phone has a push-to-talk feature, can I use that?
A: No. The law does provide an exception for those operating a commercial motor truck or truck tractor (excluding pickups), implements of husbandry, farm vehicle or tow truck, to use a two-way radio operated by a "push-to-talk" feature. However, a push-to-talk feature attached to a hands-free ear piece or other hands-free device is acceptable.

Q: What other exceptions are there?
A: Operators of an authorized emergency vehicle during the course of employment are exempt, as are those motorists operating a vehicle on private property.

_____
DRIVERS 18 AND OVER

Drivers 18 and over will be allowed to use a "hands-free" device to talk on their wireless telephone while driving. The following FAQs apply to those motorists 18 and over.

Q: Does the new "hands-free" law prohibit you from dialing a wireless telephone while driving or just talking on it?
A: The new law does not prohibit dialing, but drivers are strongly urged not to dial while driving.

Q: Will it be legal to use a Bluetooth or other earpiece?
A: Yes, however you cannot have BOTH ears covered.

Q: Does the new "hands-free" law allow you to use the speaker phone function of your wireless telephone while driving?
A: Yes.

Q: Does the new "hands-free" law allow drivers 18 and over to text message while driving?
A: The law does not specifically prohibit that, but an officer can pull over and issue a citation to a driver of any age if, in the officer's opinion, the driver was distracted and not operating the vehicle safely. Sending text messages while driving is unsafe at any speed and is strongly discouraged.

_____
DRIVERS UNDER 18

Q: Am I allowed to use my wireless telephone "hands-free?"
A: No. Drivers under the age of 18 may not use a wireless telephone, pager, laptop or any other electronic communication or mobile services device to speak or text while driving in any manner, even "hands-free." EXCEPTION: Permitted in emergency situations to call police, fire or medical authorities (VC §23124).

Q: Why is the law stricter for provisional drivers?
A: Statistics show that teen drivers are more likely than older drivers to be involved in crashes because they lack driving experience and tend to take greater risks. Teen drivers are vulnerable to driving distractions such as talking with passengers, eating or drinking, and talking or texting on wireless devices, which increase the chance of getting involved in serious vehicle crashes.

Q: Can my parents give me permission to allow me to use my wireless telephone while driving?
A: No. The only exception is an emergency situation that requires you to call a law enforcement agency, a health care provider, the fire department or other emergency agency entity.

Q: Does the law apply to me if I'm an emancipated minor?
A: Yes. The restriction applies to all licensed drivers who are under the age of 18.

Q: If I have my parent(s) or someone age 25 years or older in the car with me, may I use my wireless telephone while driving?
A: No. You may only use your wireless telephone in an emergency situation.

Q: Will the restriction appear on my provisional license?
A: No.

Q: May I use the hands-free feature while driving if my car has the feature built in?
A: No. The law prohibits anyone under the age of 18 from using any type of wireless device while driving, except in an emergency situation.

Q: Can a law enforcement officer stop me for using my "hands-free" device while driving?
A: For drivers under the age of 18, this is considered a SECONDARY violation meaning that a law enforcement officer may cite you for using a "hands-free" wireless device if you were pulled over for another violation. However, the prohibition against using a handheld wireless device while driving is a PRIMARY violation for which a law enforcement officer can pull you over.

The two laws were the result of SB 1613 and SB 33, authored by Senator Joe Simitian and signed into law by Gov. Arnold Schwarzenegger in September 2006

No Further Interest Rate Cuts ??

Fri, 06 Jun 2008 01:57:00 -0700

Bernanke says rate "well positioned," watching dollar

Federal Reserve Chairman Ben Bernanke Tuesday signaled he is finished cutting interest rates for now and has turned his attention to concerns about inflation in the world's foreign exchange markets in the wake of the U.S. dollar's 16 percent decline against the Euro over the past year. Speaking to the International Monetary Conference, Bernanke stated that, "For now, policy seems well positioned to promote moderate growth and price stability over time. We will, of course, be watching the evolving situation closely and are prepared to act as needed to meet our dual mandate."

MAKING SENSE OF THE STORY FOR CONSUMERS

Observers called Bernanke's statement a "strong defense of the dollar" and a sign that the Fed believes a weaker U.S. dollar would be detrimental. Declines over the past year against the Euro and more recent oil price surges have increased fears of inflation. These fears are one reason the Fed is not expected to pare interest rates further at least through October.
Bernanke called financial market conditions "strained" and reiterated that U.S. consumers face challenges from declining home prices and stricter mortgage and other lending standards, a weaker job market and higher energy costs. He added that economic growth will remain limited until home prices and the housing market show clearer signs of stabilization.

**Resource: Bloomberg.com

Myth about Taxes ??

Fri, 06 Jun 2008 01:53:00 -0700

Lose homes, pay more tax ???

Investors in second or multiple homes stand to be among the biggest losers from the housing downturn. That's because proposed mortgage bailout programs don't address second homes and investment properties. Many owners of multiple properties don't realize that investments they thought would help them build long-term wealth may in fact leave them in bankruptcy and facing a sizeable tax debt.

MAKING SENSE OF THE STORY FOR CONSUMERS

Homeowners who borrowed against the value of their second home, or who financed the purchase of their second home and subsequent homes by pledging their primary home or other properties as security, may be liable for taxes on the difference in value should they sell any of their properties for a price less than the value owed on the mortgage.
Under the Mortgage Forgiveness Debt Relief Act, a homeowner doesn't have to pay taxes on forgiven debt if the collateral behind the mortgage is owner-occupied. That provision doesn't apply to a growing number of homeowners renting out their second home or investment property. Of some 7.5 million vacation homes, only about 10 percent are considered owner-occupied, according to the NATIONAL ASSOCIATION of REALTORS® (NAR). Many of these homeowners borrowed against the ever-increasing (or so it seemed) value of these properties to finance improvements or to buy other properties.
There may be a way out for some, one bankruptcy lawyer counsels: Get a lender to agree that foreclosure "fully satisfies all obligations under the loan." That might protect the seller from having to pay taxes on the forgiven debt - although one attorney said, "I sure don't want to be the one litigating it" in court.

To read the full story, please click here:

http://www.nytimes.com/2008/05/30/business/30tax.html?th&emc=th

**disclosure: speak with your CPA/Tax Accountant for your case scenario, Agent holds no liability for this article

Higher Loan Limits Are Needed for FHA, Freddie Mac & Fannie Mae

Tue, 03 Jun 2008 04:45:00 -0700

Higher Loan Limits Are Needed for FHA, Freddie Mac & Fannie Mae

The House of Representatives has done its part by passing reform proposals for FHA, Freddie Mac & Fannie Mae that make the increased loan limits included in the economic stimulus legislation permanent. This is particularly important for states, like California, that have a high cost market. Evidence shows that the increased FHA/GSE loan limits are providing a much needed infusion of stability, liquidity and security into the market. If the Senate doesn't insist on higher limits, the burgeoning recovery will be thrust into an unnecessary period of additional turmoil.

Don't let the Senate stop progress through inaction. Tell Senators Boxer and Feinstein that realistic and permanent loan limits help all areas of the country and are needed now.

Send a letter to the following decision maker(s):
Barbara Boxer and Dianne Feinstein

Below is the sample letter (please feel free to cut and copy):

Subject: Make Higher Loan Limits Permanent for FHA, Freddie Mac & Fannie Mae

Dear ???,

As your constituent, I urge you, as a Member of the Senate, to support making permanent the FHA, Fannie Mae and Freddie Mac loan limits in the bipartisan Economic Stimulus Act, signed by President Bush last February. The legislation raised the maximum loan limits in high cost areas to $729,750 but it expires on December 31, 2008. The limits help homeowners in 240 counties in 26 states and can help get our national economy back on track.

The House -passed housing stimulus bill, H.R. 3221, makes the $729,750 limits permanent. Senate bills cap the limits at $550,440. Our 1.2 million members applaud the progress the Senate has achieved, but strongly believe that the final bill must include the House bill's loan limits.

The national mortgage market meltdown dramatically raised the cost and reduced the availability of mortgages in my market. Higher limits are helping to revitalize local housing markets, providing safe, fair and affordable mortgages for our state's homeowners. The limits are also helping to stabilize our entire economy. Higher limits simply reflect market realities in high cost areas. A lower limit unfairly penalizes citizens based simply on geography.

Drastically reducing the temporary limits at year's end to the Senate cap of $550,440 will push our fragile housing and credit markets back into turmoil. We need permanent limits of $729,750 to stabilize our housing markets and help citizens of every state -- not just residents of high cost areas. Please support making the $729,750 loan limits permanent.

Sincerely,

Anne Reyes

Tips for Lowering Homeowner's Insurance Costs

Tue, 27 May 2008 16:59:00 -0700

Tips for Lowering Homeowner's Insurance Costs

Many homeowners may be knowledgeable about home security but they may not realize that homeowners insurance is required when purchasing a new home. To help you educate clients about the importance of insurance, and the steps that can be taken to keep it cost effective, REALTOR® Magazine Online has developed a handout entitled "Tips for Lowering Homeowner's Insurance Costs". Feel free to share this useful guide by printing it directly from the site or downloading and customizing it with your information.

YES on Prop 98

Tue, 27 May 2008 15:10:00 -0700

Ignore the Myths - Get the Facts!

REALTORS® Should Vote YES on Proposition 98 and

Vote NO on Proposition 99

C.A.R. is urging REALTORS® to vote YES on Proposition 98 and vote NO on Proposition 99 when they vote in the upcoming June primary. Proposition 98 will limit the ability of local governments to use eminent domain to seize private property and give it to OTHER private entities.

In recent weeks Proposition 98's opponents have circulated a great deal of misinformation. To set the record straight, C.A.R. wants you to know the truth about 98:

Myth 1: Opponents claim that tenants currently in rent controlled units will be summarily evicted.

Fact: Tenants currently in rent controlled units cannot be summarily evicted. Prop 98 only lifts rent controls AFTER a tenant: (1) vacates the unit voluntarily or (2) has been removed for a just cause, which is defined by local rent control ordinances.

Myth 2: Critics of reform claim that Prop 98 threatens the construction of state water projects.

Fact: Prop 98 will NOT limit the construction of state water projects. This view has been rejected by independent legal authorities such as the Institute for Justice, the organization that litigated the Kelo case, as well as a prominent water attorney that represents numerous California water agencies. Experts have affirmed Prop 98's intent to protect government's use of eminent domain for legitimate public use - state water projects are OBVIOUSLY a legitimate public use. Additionally, the state Legislative Analyst's Office did not cite any impact on water projects in their report to the Attorney General's office.

Myth 3: Opponents claim that Prop 98 prevents local governments from using eminent domain to obtain property for PUBLIC purposes, like schools, libraries, etc.

Fact: Prop 98 ONLY prevents eminent domain from being used to seize private property to give to other PRIVATE entities. The state Legislative Analyst's Office says this: "Under the measure, government could continue to take property for facilities that it would own and use, such as new schools, roads, parks, and public facilities."

For more information go to http://takeaction.realtoractioncenter.com/ct/BdX0WCK1vS4D/

Best SALSA !!!

Wed, 14 May 2008 01:24:00 -0700

Every Sunday you will see Gloria under her bright red awning selling her wonderful and tasty salsa. Please visit her at Farmer's Market (Santana Row, San Jose) and get a taste of her salsa and jalapeno cheeses.

Bank of America (DO NOT USE-Samir Chaudry)

Wed, 14 May 2008 01:19:00 -0700

Please avoid Loan Consultant Samir Chaudry when you do your next Loan transaction (purchase or refinance). When I work with a Loan Agent I would like them to keep me in the loop at all times. Samir lacks the customer service and the follow through capability that we need for these sensitive transactions, especially when we are dealing with an emotional purchase of buying a home. Save yourself some headache and avoid his mistakes when processing your loan.