McCord Realty Services

Procedures for Foreclosure in California have recently changed for some specific situations. Realtors and Home Owners need to be aware of these changes, and exactly in which situations they apply.

For example;

 The major change applies to home loans made between 2003 and 2007 inclusive. In these circumstances the Foreclosure Timeline is extended by at least 30 days at the front end to ensure that Lenders contact the home owner and make reasonable efforts to resolve any problem, before filing the actual Notice of Default (NOD) which starts the foreclosure clock running. In addition the Notice of Sale (NOS) period has been extended from 21 to 90 days.

The following link will take you to the California Association of Realtors web site where a full and clear summary of this topic can be found. http://www.car.org/legal/2008articles/foreclosure-timeline/

This information is courtesy of the C.A.R. Legal Department. All rights reserved.

This is the text of a remarkable lecture given by Nobel Lauteate James Tobin in 1984. He was discusing whether a more simple Economic System would provide most if not all  that is needed in a modern society.

“I suspect we are throwing more and more of our resources, including the cream of our youth, into financial activities remote from the production of goods and services, into activities that generate high private rewards disproportionate to their social productivity. I suspect that the immense power of the computer is being harnessed to this “paper economy”, not to do the same transactions more economically but to balloon the quantity and variety of financial exchanges…I fear that, as Keynes saw even in his day, the advantages of the liquidity and negotiability of financial instruments come at the cost of facilitating nth degree speculation which is short-sighted an inefficient.”

It seems to me that this gentleman saw the current situation developing 25 years ago.

Let’s not lose sight of the fact that it is taxpayers and savers who pay the price for the recurring financial crises, not the whiz kids who benefitted most generously from its complexity.

 This is a great example of intelligent action by a government agency not know for it’s compassionate nature.

Also evidence of the benefits of being a Realtor and having the support of the California Association of Realtors. 

IRS TO EXPEDITE TAX LIEN RELIEF FOR HOMEOWNERS
The Internal Revenue Service (IRS) recently announced it will expedite its process of providing relief from federal tax liens for distressed homeowners. With over one million current federal tax liens against real and personal property, the IRS announcement should help REALTORS® and their clients resolve federal tax lien issues in their sale and loan transactions.

As background, a homeowner seeking to sell or refinance a property must generally pay off an existing federal tax lien. However, during the current economic downturn, many homeowners don’t have the cash or equity to do so. Hence, for a refinance, the homeowner may request that the IRS makes its tax lien subordinate or secondary to the lien of the refinancing lender. For a sale, the homeowner may, under certain circumstances, request that the IRS discharge its claim. The IRS’s processing time for subordination or discharge requests has been about 30 days. The IRS is currently working to expedite that time frame to help distressed homeowners. For IRS instructions on requesting relief from federal tax liens, go to the IRS Publication 783 for discharges and Publication 784 for subordinations at www.irs.gov.

C.A.R. provides REALTORS® with many legal articles covering a wide range of topics of interest. Some of the new or newly revised legal articles available at http://qa.car.org are as follows:

Buyers question. Should I concentrate on Short Sale Listings or Bank Owned (REO) ones?

I’ll advise we look at ALL listing but if we see 2 similar ones then based on the following I’ll suggest going for the REO. 

Reasons are:
1. The Bank has major financial reasons for wanting the property off its books so will respond quickly and realisticly. Note: If you would like to understand these financial reasons drop me an e-mail and I’ll give you the details.

2. The REO listing and sales price will almost always set a new low for similar homes in similar condition in the same neighborhood.

3.This is not so for Short Sales where the price has NOT been agreed to by the major party, the Lender holding the mortgage. Even if the current owner signs your low price offer, the Lender is no going to do so unless it reflects the fair market value of the property i.e. the price at which an REO would be sold. Typically they will take between 2 and 3 months to actually respond with their decision. During that time you are in limbo.

4. Once the price has been agreed to the Bank will close within a week if you can.
5. Despite false rumours Banks will re-negotiate if major problems come to light through your inspections.
6. Approximately 25% of all Short Sale contracts in my area ever close!
I rest my case.
Bill

Anyone else handling calls about these great new 4.5% mortgages?

The lowly minion from the Treasury/Federal Reserve who put this proposal out there should be hung drawn, quartered, and then tortured. As a way to get buyers to pospone any buying decisions it was perfect.

It was totally irresponsible to suggest such a plan without any indications of who might qualify, when it would come into force, and what limitations would apply, not to mention the fact that niether the Fed or Treasury has any direct role in setting mortgage interest rates.

If such a program should ever come to pass it would have to be for a carefully targetted group of people, and under limited circumstances. For example a government subsidized mortgage for 1st time buyers earning no more than $60,000. Might help with some of the Central Valley markets but would have no impact in Silicon Valley.

Fortunately this kind of program is already available using many existing State and City 1st time buyer programs programs.    

Remember when the “Subprime” Mortgage panic started, the major problem was the pending “resets” on 2/28 and 3/27 year temporary fixed rate loans which were going to increase out of site?

Most of these were tied to a LIBOR or PRIME RATE index, both of which are way down to levels which will make the resets pretty minor. As a result few borrowers are going to be driven out of their homes by the reset. In addition, future 6 month or annual increases will be in accordance with their periodic cap maximums, not the one time reset amount.

In adition, the rate of negative amortization on the good Option Arm loans, those with 125% (World Savings) or even 115% (WAMU) recast triggers, has now slowed greatly to where the minimum payment option is still a major benefit. 

The Sun still shines through the media driven gloom and doom if you keep focussed on the truth rather than the perception. 

I’ve just seen yet another “expurt” (spelling deliberate) on CSNBC explaing how we should track the 10 year Treasury Note in order to see what is happening to mortgage interest rates.

WRONG. 

Mortgage interest rates are a direct result of prices on Mortgage Backed Securities. Fannie Mae’s 30-year 6.0 % is currently a good reflection of the market for these.

Just to illustrate this fact consider that between Wed and Thu mornings this week the 10 yr Note  went up by 285 basis points while Mortgage Bonds rose by 12 basis points. Motgage interest rates were virtually unchanged. 1 basis point is 1/000th of 1%

If your Loan Broker is using the price change in the 10 year Note to advise your clients on when to lock their loan, he might as well be reading the tea leaves in his morning cuppa. as a result your client is receiving financial advice from an unqualified person. Over the life of a Mortgage this can be very expensive advice. If you are the person who recommended the Loan Broker you may well lose a client and any referrals in the future.

To understand why this misconception survives you have to consider that most of the pundits who fill our airwave are involved in the Secondary Market where individual mortgage go to be collaterized. During the weeks between your loan closing and the Lender getting it packaged ready for re-sale its value can be reduced by market forces. To protect against that possibility the Lender will hedge by buying options on the 10 year Note. For these pundits the 10 year Note is very important. For us down here in the retail world it is totally irrelevant and should be ignored for our putposes.

Thanks to the San Francisco Chronicle for a great source of facts for all Bay Area Real Estate Markets down to the zip code. Check it out at http://www.sfgate.com/webdb/sqfthomeprices/

The last 2 weeks have seen a very positive change in the market conditions in Silicon Valley.

I’ve previously discussed how market turnarounds can be predicted with some accuracy.

The 1st sign of a turnaround was the improving ratio between Active and Pending listtings. This started improving about 3 months ago and has been a little better every week since then. This is historically the first sign of a market change.

About the same time we started to see more visitors at Open House’s. They were not waving cheque books but increased traffic is anothe significant indicator.

Next, starting about 4 weeks ago, came a surge in web site visitors clicking through for more informstion, and a similar increase in viewings of virtual tours.

Now all of a sudden, listings which had not seen a Realtor with clients in weeks are getting multiple showings every week.

As far as I’m concerned all the signs point to a return of buyers to what is become percieved as a great opportunity to catch a bus that they thought had passed by forever.

With much lower prices, good interest rates, and a huge increase in First Time Buyer loans, we have a good setting for a return to sanity.

I do need to stress that i’m only talking about my market place which is Silicon Valley.

Do you know anyone who works in the education industry and would like to buy a home?

Do you think they would like a normal 80% first mortgage and a 17% 2nd mortgage with no payment requirement?

CalSTRS is an privately run program designed to provide super financing for home buyers who work in any capacity in our education system. This means everyone from Principal to Janitor in any Public School, Community College, or University. 

This link will provide you with a great way to help deserving possible buyers who often cannot afford a traditional mortgage. 

http://www.californiateachersandemployeeshomeloanprograms.com/web-classes/