Wednesday, July 27, 2011

Cash for Clunkers, Bulldozer's for Foreclosures

Here late at night thought I'd catch up on some reading. Came across a very interesting way to get rid of some of the backlog of foreclosed upon homes.

Some banks, in many states, are actually donating some of the bank owned homes. Then paying to DEMOLISH them. Give the land to the community and, of course, get a tax write-off. They say it will barely make a dent in the inventory. But, it makes some good sense. If the home is that uninhabitable, and would cost an astounding amount of money to make it salable, the costs out-weigh the benefits, right? I'd say so. And, in the long run, every little bit of inventory that we can dispose of, whether by REO sale or again, a faster (by molasses standards) recovery.

Bank of America is the leader, with Wells Fargo, Citigroup and Chase considering going along this road as well. Not a ton of homes, a few thousand only. 

I certainly don't think the values here in Southern California have dropped enough to warrant a bulldozer driving down Valencia Blvd, but I do know there are certain areas in our country where this 'Cash for Clunkers' type of demo would benefit very well.

Sunday, July 24, 2011

Class Action Lawsuits For Auto Freeze of a HELOC?

A couple of years ago the banks started freezing Home Equity Line of Credit (HELOC) loans. They saw the values going down and just either froze them or reduced how much the homeowner could then borrow. A great article in the LA Times, that I read this morning, suggests that it would be challenging for any homeowners in the midst of remodeling their home to lose what they thought they had, without a complete valuation by appraisal, to pay the contractors, suppliers, etc. And, therefor the lawyers are considering filing lawsuits....and, quite possibly, that there will be enough claimants for a class action suit.

Yes, I agree that would be a huge challenge if you were in the middle of a remodel. However, I also would suggest that many homeowners that had HELOC's were used as a 2nd when they purchased their home in the height. They may have paid down some of that HELOC already and the banks certainly wouldn't want them using any more of it since they are most definitely upside down. Freeze.

I also would think that many homeowners had opened a HELOC in the presumption of doing work on their house, paying for college, buying a new car. That type of thing. And, many of those homeowners that may not have contracted yet, chose to pull the money out....indicating they were going to use it for remodeling and putting equity back into the home.....when, as the market fell......they may have chosen just to keep that cash. Freeze them too.

Full article here:

Now, mind you, I've got clients that are attorneys and I do believe they should fight for people that have been wronged. The good ones do. But, I do feel, all too often, we see legal situations where one party was really protecting themselves and another thinks there is a way to make a quick big buck. And, those attorneys? Me no likey.

If you think your value was high enough to keep your HELOC at the level it was, then fight for it, of course. If you are just going along with the 'bandwagon'? Think again. We've got enough troubles with the financial institutions now, don't we?

Thursday, July 21, 2011

Zillow's Gone Public - Makes Big Bucks!

Most buyers start looking on the web when they are considering a home purchase. There are so many websites available that it makes the house hunt a little bit more cozy in the beginning.

Zillow, not one of my favorites, has just released itself public. Just been sold public. Just had it's IPO, Initial Public Offering. And, it kicked butt! Article link below:

Zillow has been around for a while. Picks it's data from public sites and compiles it for generating a lead on a sale or a price value for an existing home. It's got everything you would want....but, it's not always accurate. wasn't always super accurate either, but it's better now. Zillow will get better as well.

So, great that something related to housing has made some nice big cash. Maybe they will be able to hire some more people and cut the jobless rate at bit?????

Sunday, July 17, 2011

Does Your Agent Know The Neighborhood?

I write about current happenings in the news, updated laws, sales stats. That kind of info. To keep my friends, family, clients, etc. informed.

The other day I heard a story about a home buyer that didn't find out until signing loan docs in escrow that there was a Mello-Roos on the home he was purchasing. I was shocked and asked who his agent was? They should have known was my comment. I think they should have known, I did as soon as he told me what track they were buying in.

I know the agent, they are a 'once in a while' agent. Which won't know about the areas that have and don't have and may extra property tax.  And, that can be a killer.

I really thought the buyer just hadn't read his paperwork, his disclosures. Then I was told it was an REO, well they are exempt from certain disclosures. But, even if an NHD report wasn't ordered....I'd have warned my client before we decided to look at the property.

One of my peeps is peeking at properties on a free web-site that I have them set up on. Listingbook. She sends me notes, I send her notes. One she asks if we can see......I say "You know there is a Mello-Roos there of about 4000/year?" She says, uh oh, let's skip that one. Another client, really wants that neighborhood, mello-roos or not, so we adjust the price point we can go to accordingly.

You may want to do business with a friend, or a relative of a friend. Keep in mind, the home buying process is one of the biggest purchases of your life time. Do you want a Realtor that knows what they are doing? Or do you want to do a favor for a friend.

Just sayin'.....

Saturday, July 16, 2011


Another major win for homeowners attempting to complete Short-Sales was just put into law! This popped up in my e-mails this morning. Amid all the junk e-mail was terrific news from the California Association of Realtors....again!!!


In a major victory for REALTORS®, Governor Brown signed into law today a C.A.R.-sponsored bill, Senate Bill 458, prohibiting a deficiency after a short sale for one-to-four residential units, regardless of whether the lender is a senior or junior lien holder.  Effective immediately for transactions closing escrow from this day forward, both senior and junior lien holders cannot require a borrower to owe or pay for a deficiency in a short sale.  This law also prohibits any deficiency judgment to be requested or rendered for senior or junior liens after a short sale of one-to-four residential units.  Any purported waiver of this rule shall be void and against public policy.

Although a lender cannot require a borrower to pay any additional compensation in exchange for a short sale approval, the new law does not prohibit a borrower from voluntarily offering a monetary contribution to a lender in hopes of obtaining a short sale.  A lender is also permitted under the new law to negotiate for a contribution from someone other than the borrower, such as other lenders, agents, relatives, and the like.

Exceptions to the new law include a lender seeking damages for a borrower’s fraud or waste; a borrower that is a corporation, LLC, limited partnership, or political subdivision of the state; a lien secured by a bond as specified; a public utility lien; and additional rules apply if a note is cross-collateralized by more than one property.

This law is fully set forth as Senate Bill 458 (Corbett) at


Wednesday, July 13, 2011

Bank Of America Equator Program Now Willing To Accept The Buyer in Back-Up Position

Thanks to the California Association of Realtors (C.A.R.) for continuing to help agents and banks work the market as effectively as possible!

We get a C.A.R. Newsline on a regular basis and it helps to keep us current on Real Estate. This evening I had the glorious opportunity to read the quickie below:


Short Sale Soundoff: BofA to accept back-up offers on short sale listings

Bank of America announced this week it will accept back-up offers on short sales and will allow the back-up offer to take over if the first buyer does not complete the transaction, without requiring the process to start again.
Under this new guidance, agents will no longer have to initiate a new short sale in Equator if the original buyer walks away from the transaction.  Instead, the agent can continue with the original transaction in Equator and work with the same short sale specialist.  The file will remain open and the paperwork that has been submitted will remain active.  However, the buyer’s qualification and the offer price will need to be reviewed again if a back-up offer is used.

This new process applies only if there’s an available back-up offer when the original buyer does not follow through with the transaction.  If a back-up offer is not ready to be submitted, the short sale will be declined.  In that case, agents should return to marketing the property and initiate a new short sale in Equator once another offer is received.

In December, C.A.R. leadership met with representatives of Bank of America and asked the lender to accept back-up offers without starting the process over again.  C.A.R. also has raised this issue with Fannie Mae, Freddie Mac, and Wells Fargo, and hopes they will follow Bank of America’s lead with this process.


Oh, this is good. Not having to start the process from scratch will help move Short-Sales through the system much more quickly!

Monday, July 11, 2011

Keep Paying Your Mortgage That Has PMI and You May Get A Principle Reduction!

'Wow oh wow' is all I can say!

So the PMI, Private Mortgage Insurer, is trying another way to keep underwater homeowners in their homes and give them some principle reduction as a reward. We heard a bit about the big banks considering that a while back but I've yet to see any actually start doing it.

The entire Housing Wire article is here:

The homeowner will have to stay current for a 3 to 5 year period to start seeing the forgiveness but the Responsible Homeowner Reward program will work for some that can keep paying yet are considering defaulting since the value has declined so significantly. 

Avoiding foreclosure, name of the game. The less we have in foreclosure, the more homeowners we can keep in their homes, the better for our housing recovery.

Makes me almost with I had PMI on my loan.....

Wednesday, July 6, 2011

Cash Buyers Can Borrow Against Their Home After COE!

This is great news from Fannie Mae! We see plenty of people buying homes for all cash, now they can re-finance, looks like up to 70% LTV to pull money back out of the property and continue to purchase more properties (as in an investor). Or have their safety net back in place (owner occupied)!

It was a wise decision to allow this. Investors that have cash for one, can re-fi and buy another....and so on and so on.

Great news for the inventory. Great news to the banks that are holding 'shadow' inventory too! As long as there are ways to plow through this inventory of foreclosed homes, we can push them through the pipeline faster and recover faster.

Read the whole article:

Let's face it, we keep saying 'Cash is King!'. If you have cash and it's a competitive market, you'll generally beat out the other buyers. Everyone wants as fast a close as possible and cash can allow that. But, once you spent your's gone! Now, you can pull money out again and have gotten the property and have cash back in the bank!

Sunday, July 3, 2011

I Get A Birthday Card, Not A Kick-Back!

It's Sunday, getting ready for the gym. Trying to avoid the heat today by getting out of Valencia. Before I forget, Happy Independence Day tomorrow!

Today I picked up an article about RESPA. Someone is filing a class action lawsuit as they believe Realtors have been taking kick-backs from Home Warranty companies. Sheesh. Maybe, probably, hope not though!

Back in the day we'd have parties, get movie tickets, free drinks.

But those days have changed. I enjoyed the parties and occasional free movie but certainly didn't refer an affiliate because of that.

I actually had a loan broker say he'd let me sell his house if I gave him referrals. I told him, and this was probably 6 years ago, that I'd sell his house but only refer to him if I was confident he would do a stellar job!

I refer to a particular Home Warranty company because the rep has proven herself again and again. She has gone above and beyond for my clients on many occasions. I recommend a title company because the rep has been able to get things done when she is supposed to. Clear things that need to be cleared. Investigate as required. I prefer one escrow officer as she definitely asks 'How High?' when I need her to jump. Always, without question. My favorite mortgage broker? I can call him/e-mail/text any time and he responds pretty quickly....usually! LOL. But, never has he let me down, and really, I mean never.

And all of these affiliates are on the 'Witz' team because they perform to my expectations and beyond. They provide the exemplary service that I demand and expect for my clients.

I'm a bit OCD and so therefore I have to surround myself with a really good group.

And, what do I get from them for the constant referrals? A birthday card, maybe a little Halloween candy (that they give everybody!) and the knowledge that my clients are being well cared for.