I've been waiting for Bank of America to sign off in the 2nd position on a strong offer from Litton so we can close another short sale. The numbers are there -- BAC will receive just a little more than the 5% of 1st lienholder's net, which is right in line with the stated guidelines. But the negotiator called me this week to tell me that they can't allow the title to change hands to an LLC.

Uhh, what?

They want the authorized signer for the LLC to actually be the named buyer, along with the LLC.

Look, I've seen the improvements in BAC's short-sale machine and I've even stuck up for them a few times when clueless agents rant. And I get the fact that there are a lot of short sale "gurus" pitching their assinine programs for A-B-C purchases of short sales, which by the way are not illegal! But come on ...

So we're going to amend the contract and change the buyer name so that we can close this deal.

This short-sale game is ever-changing, and you can't rely today on what worked yesterday. You have to stay on top of things and be flexible, for the sake of your client.

Photo courtesy of m_bartosch
(Brian Bean is a real estate broker and ambassador for Helping A Million Homeowners, a nationwide organization that is committed to helping alleviate the financial stress that so many homeowners face today. He can be reached directly at Brian@BigDreamInc.com.)

Brian Bean Real Estate Professional www.DreamBigRealEstate.com
www.IEShortSalePros.com
www.HelpingAMillionHomeowners.com



I've been specially trained to negotiate short sales with an emphasis on deficiency waivers.

"If one advances confidently in the direction of his dreams, and endeavors to live the life which he has imagined, he will meet with a success unexpected in common hours."

Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula

Whenever there are people are distress, the vultures start to circle.

Homeowners facing foreclosure, and looking desperately for help, are easy prey for unscrupulous foreclosure "experts" who care only about profiting from the misfortune of others. These homeowners with notices of default on a mortgage are targets for fraud, deception, harassment, and unfair dealings. Scammers may charge high fees or even secure payment by a deed of trust on the home in foreclosure, and then do nothing at all. Consequently, homeowners end up losing their homes and their equity.

California updated its foreclosure consultant law in 2008 to restrict the practice of charging upfront fees to assist a homeowner in pre-foreclosure. The law requires that a foreclosure consultant have a written contract with the homeowner and in many cases be bonded and registered with the California Department of Justice (as of 2009). Real estate licensees are usually exempt from the foreclosure consultant law, unless they are acquiring an interest in the property or loaning their own money and securing it by the property.

With the explosion of short sales in California, it's probably a good time to revisit the rules of negotiating.

So, how do you know if your business practices are regulated by the consultant law? Here is a summary of the guidelines:

Properties covered include:

• The owner occupies the property as a principal residence.
• The property is one to four family dwelling units.
• There is an outstanding notice of default recorded against the property.

The activities of a foreclosure consultant cover a broad range:

• Stopping or postponing the foreclosure sale.
• Obtaining a forbearance from a lender.
• Saving the owner's residence from foreclosure.
• Helping the owner obtain a loan or advance of funds.
• Avoiding or ameliorating the impairment of the owner's credit resulting from the notice of default or foreclosure sale.
• Assisting the owner in exercising the right to reinstate their loan.
• Obtaining an extension for the owner to reinstate his or her obligation.
• Obtaining a waiver of an acceleration clause contained in a mortgage loan secured by a residence in foreclosure.
• Assisting the owner in obtaining, from the lender or trustee under a power of sale, the remaining proceeds from the foreclosure sale of the owner's residence.
• Providing debt, budget, or financial counseling of any type.
• Giving any advice or explanation on curing a default, reinstating an obligation, fully satisfying an obligation, postponing a trustee's sale, or avoiding a trustee sale.
• Contacting creditors on the owner's behalf.
• Arranging or attempting to arrange for any delay or postponement of a foreclosure sale.
• Arranging or attempting to arrange for an extension for owner to cure a default and reinstate a loan.
• Receiving money to pay a creditor of any obligation secured by a lien on the residence in foreclosure.
• Advising on, or assisting in preparing, any document for filing with a bankruptcy court.
• Arranging or attempting to arrange for the payment by the lender or trustee under power of sale of the remaining proceeds of a foreclosure sale of the owner's residence, including instances where the owner transfers or assigns such right to the foreclosure consultant or the foreclosure consultant's designee.

So, pretty much anything to do with a short sale! The good news is, real estate licensees are generally exempt.

As long as Realtors avoid these four activities, they won't invoke the foreclosure consultant law:

• Direct Loan: Making a direct loan for a residence in foreclosure.
• Property Interest: Acquiring an interest in a residence in foreclosure.
• Advance Fee: Claiming or receiving any compensation before performing real estate services for a residence in foreclosure.
• Foreclosure Proceeds: Assisting an owner in obtaining the remaining proceeds if any from the foreclosure sale of an owner's residence.

Every Realtor and potential home seller should be aware of this law. Check out the summary here for specifics on the law:

http://ping.fm/2KUql

Agents, if you don't have experience and strong confidence to stand toe to toe with the banks, make sure you choose the right negotiator to help with you files. Your client's financial future depends on it. And so does your livelihood.

(Brian Bean is a real estate broker and ambassador for Helping A Million Homeowners, a nationwide organization that is committed to helping alleviate the financial stress that so many homeowners face today. He can be reached directly at Brian@BigDreamInc.com.)

Brian Bean Real Estate Professional
www.DreamBigRealEstate.com
www.IEShortSalePros.com
www.HelpingAMillionHomeowners.com



I've been specially trained to negotiate short sales with an emphasis on deficiency waivers.

"If one advances confidently in the direction of his dreams, and endeavors to live the life which he has imagined, he will meet with a success unexpected in common hours."

Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula

Foreclosure statistics released last week revealed some pretty hefty trends, with 1.65 million properties having experienced some sort of foreclosure filing in the first six months of 2010. But one fact was buried in the avalanche of numbers from online real estate tracker RealtyTrac:foreclosure short sale

We're on track for 3 million foreclosure filings this year.

So many homeowners upside-down on their mortgages, so many people one bad break away from missing a house payment. And so many unwitting victims one misinformed decision away from a deficiency judgment. If you faced the loss of your home, would you be prepared? Would you know the consequences of every alternative? Would you know where in the grass the snakes are hidden?

Loan mod or refi. Short sale or deed-in-lieu. Strategical foreclosure or head buried in the sand. All have risks. Laws vary by state, but one thing is universal: Deciding which solution fits best is only the first step in the long journey. Making sure you don't get body-slammed by a six-figure legal judgment is the ultimate destination.

I know, I know, it's important to have an expert in your corner. That's the common theme we preach. But not just any expert. There are many self-proclaimed "experts" who have little or no experience. Do you want them cutting their teeth on your situation, learning what not to do while working on your future?

According to RealtyTrac, California led the nation again in the first half of the year, with more than 20 percent of all foreclosure filings. Clearly, The Golden State is struggling. Let's talk about California, the good news and the bad news ... (We speak in generalities only here, because we are not attornies or CPAs. Seek the guidance of a licensed lawyer for specifics on your situation).

Good news: California is a "non-recourse" state. In general, foreclosing banks cannot go after a California homeowner for the difference between what was owed and what the bank netted after selling the home at auction, as long as the home was a principal residence and the mortgage was "purchase money." (If you have a home-equity line of credit, the rules are different, and it's a separate discussion altogether. Talk to your attorney about your situation.)

Bad news: Yes, that's correct: If you refinanced your California home, you may have surrendered your non-recourse status, even if you didn't take out a hundred grand and buy every toy in sight. Potential danger: Strategically walk away from your cash-out refi, and the bank may be able to chase you for years for the money they lost.

Good news: California is working on legislation right now (SB 1178) that would extended non-recourse status to non-cash-out refinances. But it is not yet law.

Bad news: Recourse and non-recourse apply to foreclosure. Bring the short-sale option into the equation, and the rules shift. In a short sale, legitimate non-recourse protections don't mean squat if your agent doesn't negotiate it into the agreement. You agree to whatever you agree to. And the banks routinely insert language to "reserve their rights to pursue the homeowner for a deficiency judgment," with four years to go after you. If you sign it, you're at risk.

Good news: Even in California, on a recourse loan, the banks usually can't sue you for a deficiency unless they foreclose using the longer and more expensive "judicial foreclosure" process. Few banks take that route, though they are starting to analyze it as a valid option as strategic foreclosures become more prevalent. But with that in mind, even distressed homeowners with recourse loans can successfully obtain short-sale approvals with no threat of deficiency judgments, as long as their agent has a clue and some cojones.

More Good News: In a short sale, homeowner protections against deficiency judgments have more to do with the agent negotiating the deal and less to do with the type of mortgage in place. That means the homeowner has the power, to choose the right solution, to seek out the most experienced representative, and to participate in their own rescue.

Yes, the homeowner has the power, and they must wield it wisely. More importantly, they must actually wield it. That means taking the time to educate themselves, ask good questions and take responsibility for achieving their goal.

To the distressed homeowner, don't rely on answers from just one source. Talk to three agents who specialize in this expertise. Not your boss, not your neighbor, and certainly not your broke Uncle Bob. Your financial future depends on it.
(Brian Bean is a real estate broker and ambassador for Helping A Million Homeowners, a nationwide organization that is committed to helping alleviate the financial stress that so many homeowners face today. He can be reached directly at Brian@BigDreamInc.com.)

Brian Bean
Real Estate Professional
www.DreamBigRealEstate.com
www.IEShortSalePros.com
www.HelpingAMillionHomeowners.com














I've been specially trained to negotiate short sales with an emphasis on deficiency waivers.

"If one advances confidently in the direction of his dreams, and endeavors to live the life which he has imagined, he will meet with a success unexpected in common hours."

Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula

California again led the nation in foreclosure notices issued in the first six months of 2010, according to the Irvine-based online resource RealtyTrac, and Riverside and San Bernardino counties ranked in the top three areas statewide. But the foreclosure rate was down 15 percent from the previous six months and down nearly 13 percent from the first six months of 2009.

A total of 340,740 California properties received a foreclosure filing -- default notices, auction sale notices and bank repossessions -- in the first half of 2010, accounting for 1 in 5 of the total property filings nationwide. More than 1.6 million U.S. properties received foreclosure filings from January to June, a 5 percent decrease from the previous six months but an 8 percent increase from the same period in 2009, RealtyTrac reported.

"The second quarter was a tale of two trends," James J. Saccacio, chief executive officer of RealtyTrac, said in a press release from the company. "The pace of properties entering foreclosure slowed as lenders pre-empted or delayed foreclosure proceedings on delinquent properties with more aggressive short-sale and loan-modification initiatives. Meanwhile the pace of properties completing the foreclosure process through bank repossession quickened as lenders cleared out a backlog of distressed inventory delayed by foreclosure prevention efforts in 2009.

"The midyear numbers put us on pace to exceed 3 million properties with foreclosure filings by the end of the year, and more than 1 million bank repossessions," Saccacio continued. "The roller-coaster pattern of foreclosure activity over the past 12 months demonstrates that while the foreclosure problem is being managed on the surface, a massive number of distressed properties and underwater loans continues to sit just below the surface, threatening the fragile stability of the housing market."

Translation: Look out! It could get really crazy.

Riverside County tallied 7,260 filings or 1 in every 109 housing units. San Bernardino had 5413 foreclosures, 1 of every 126 units. Only Los Angeles County had more filings: 13,417, 1 in every 254 units.

The Southwestern states continued to fuel the foreclosure rate trend, with nearly 6 percent of all Nevada housing units (one in 17) received at least one foreclosure filing in the first half of 2010, giving Nevada the nation's highest foreclosure rate during the six-month period despite decreasing foreclosure activity.

Arizona had the second-highest state foreclosure rate, with 3.36 percent of its housing units (one in 30) receiving a foreclosure filing, and Florida registered the nation's third-highest state foreclosure rate, with 3.15 percent of its housing units (one in 32) receiving a foreclosure filing during the six months.

California was next at 2.54 percent, followed by Utah (1.91 percent), Georgia (1.79 percent), Michigan (1.73 percent), Idaho (1.68 percent), Illinois (1.61 percent), and Colorado (1.40 percent).

So what do these numbers indicate? Are we leveling out at the bottom or is this just slowed activity by the banks, which have a ton of non-performing assets on the books? Prices in Southern California actually have increased the past two months, year over year, but was that a result of the decrease in inventory, the tax-credit-increntive surge and low interest rates?

We're smack-dab in the middle of real estate season here, and homes under $250,000 are still garnering multiple offers in the first 10 days. But homes in the $350,000 range have slowed a bit (strictly anecdotal evidence here, based on my observations).

It's too soon to tell where we go in the last half of the year. But one thing can't be disputed. Foreclosures and short sales will continue to dominate the real estate market for the next 3-5 years, possibly longer.

(Brian Bean is a real estate broker and ambassador for Helping A Million Homeowners, a nationwide organization that is committed to helping alleviate the financial stress that so many homeowners face today. He can be reached directly at Brian@BigDreamInc.com.)

Brian Bean
Real Estate Professional
www.DreamBigRealEstate.com
www.IEShortSalePros.com
www.HelpingAMillionHomeowners.com

I've been specially trained to negotiate short sales with an emphasis on deficiency waivers.

"If one advances confidently in the direction of his dreams, and endeavors to live the life which he has imagined, he will meet with a success unexpected in common hours."

- Henry David Thoreau

Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula

Every time someone hires us to help them with a short sale on their home, we take them through a healthy stack of paperwork. It's an ever-growing list of contracts, disclosures and information-gathering forms.

One of the most important documents is a disclosure advising sellers to seek the guidance of an attorney and tax professional -- because we aren't either of those. Yes, it's an important document because it covers my behind. But it's more important because the seller really does need the professional guidance.

Why? Because the ramifications of a short sale could be wide-ranging and far-reaching. Depending on the financials, loan terms and amounts involved, distressed home sellers face crippling legal judgments and high-dollar tax bills. This stuff is just too important to leave to chance and a chatty short sale "expert."

As a Realtor, I can't talk to you about the specifics of your situation. I can only speak in generalities.

I can't tell you what will happen to you if the bank decides to come after you for a deficiency judgment. I can only tell you about what happened to other clients.

I don't know whether you qualify for insolvency after your bank sends you a 1099. I can only point you to the websites that detail the law.

But I can refer you to some knowledgeable experts who WILL answer those questions for you. And I do just that for all my clients. But guess what. About 1 in 10 clients actually seeks the advice of counsel. With potentially massive ramifications looming, the vast majority of sellers make conscious decisions to not talk to a licensed professional. At least, that's the anecdotal experience we've had.

What must we do to impress upon home sellers the necessity to better protect themselves? Do we need to build an hour's worth of attorney fees into the deal and set up the appointment ourselves? Do we need to partner up with a CPA and negotiate referrals for free consultation for our clients? How about a little hypnosis and/or brain-washing?

Whatever it takes, I'm on board. Distressed homeowners are often single-mindedly focused on their lack of money; it's an all-encompassing, exhausting issue that overshadows everything in their lives. And $200 for one hour with a lawyer can seem too steep a price when you're wondering whether you should pay the cable bill or buy groceries for your kids. But clearly, the long-term gain outweighs the short-term pain.

For the real estate industry, that light at the end of the tunnel isn't an exit -- it's a train coming. Opportunistic shysters (not all attornies, just a few ambulance chasers) are already approaching home sellers asking to see their real estate files. The avalanche of lawsuits could dwarf the "California Mold Rush."

It's going to be ugly for agents who haven't put their clients' best interests ahead of their own. Almost as ugly as it will be for the sellers who didn't run that approval letter by their attorney.

(Brian Bean is a real estate broker and ambassador for Helping A Million Homeowners, a nationwide organization that is committed to helping alleviate the financial stress that so many homeowners face today. He can be reached directly at Brian@BigDreamInc.com.)

Brian Bean Real Estate Professional
www.DreamBigRealEstate.com
www.IEShortSalePros.com
www.HelpingAMillionHomeowners.com



I've been specially trained to negotiate short sales with an emphasis on deficiency waivers.

"If one advances confidently in the direction of his dreams, and endeavors to live the life which he has imagined, he will meet with a success unexpected in common hours."

Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula

I had a workshop last week for about a dozen agents in our area who wanted to know how we are having so much success closing short sales. I ran down what we do and why and how they can do the same thing. (For personal reasons, I'm on a mission to educate as many agents as possible so that we can all help as many distressed homeowners as possible.)

I was amazed at the response. Nearly the half the room later approached us about helping to mitigate their files.

Agents are in a vacuum right now. There is so much information out there, but so much of it is incorrect, outdated or untested. It's conflicting and confusing as all get-out. But short sales are going to be here for awhile -- 3-5 years at least. So where do people turn for guidance and education? Where do they get quality help?

Short sale "experts" fill our inboxes with come-ons and solicitations. They dangle designations as if The Letters somehow juxtaposed will be the code to unlock the door to the Holy Grail of Short Sale Knowledge. Many perhaps have never personally negotiated a deal. Meanwhile, self-education, either through trial and error or finding a short sale sensei, can seem overwhelming. A lot of agents simply avoid working short sales because it's just too much to learn. Others boldly scoop up the business for the sake of business, with unconscious incompetence -- not knowing what they don't know about the pitfalls for their clients and themselves.

So whom do you listen to? I've been up and down the road, taken online classes and 2-day seminars, paid $49 and $1,500. In that journey, I have devleoped a few guidelines, and I gladly share them with you:

1. Listen to many and filter the results: There are so many self-proclaimed experts, it's difficult to discern who is correct. The biggest mistake people make is thinking there is one right answer, one sure way. The fact is, we can pick up golden nuggets from many to perfect our business.
2. Vet your sources: Do you know how many transactions your "expert" has actually closed? Have they closed any, or are they simply regurgitating theory? I want information that has been tested and adjusted for reality. So I ask: "How many files have you personally closed in the past 12 months?" (BTW, I don't care if you did short sales in the '90s. This is an ever-changing niche that bears little resemblance to that period in real estate. I want to know what's working right now.)
3. The Tools: There are many online tools to help you track your transactions. They are pretty much the same. Don't let style override substance. A nice gooey interface may look cool, but insider knowledge is the engine driving the bus. Is your short sale a better deal for the bank than a foreclosure would net? You need to know The Numbers. If you have that information, you have the power. Seek out the systems that can help you make these calculations.
4. Designations: Don't get mired in the Alphabet Soup. Despite what you might hear, there is not one designation that will guarantee you top-down listings or move your file off the bottom of the loss mitigator's pile. That's marketing, not reality. The fact is, the banks don't have the power here; this is nothing like REOs. The banks know they have waaaaay too much liability to force homeowners to use specific agents. If you are the listing agent, the bank will work with you.
5. Learned Knowledge, Activity Knowledge: You can't learn everything you need to learn to be effective in an online course or a 3-month class. This is an ongoing, ever-changing process. Strategies that were effective last year fall on deaf ears today. The things that work today will be ineffective by Christmas. What you read and hear, no matter how accurate or spot-on it may be, still goes through your filter. You have to take the information and put it to use in the real world, and then make the adjustments necessary to fit your delivery, your personality.

Hope that helps agents focus in on some of the key issues. We're all under siege right now and it's difficult to hear through all the voices. The quickest way to silence the pretenders is to ask good questions.


(Brian Bean is a real estate broker and ambassador for Helping A Million Homeowners, a nationwide organization that is committed to helping alleviate the financial stress that so many homeowners face today. He can be reached directly at Brian@BigDreamInc.com.)

Brian Bean Real Estate Professional
www.DreamBigRealEstate.com
www.IEShortSalePros.com
www.HelpingAMillionHomeowners.com



I've been specially trained to negotiate short sales with an emphasis on deficiency waivers.

"If one advances confidently in the direction of his dreams, and endeavors to live the life which he has imagined, he will meet with a success unexpected in common hours."

Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula

When I was a kid, the Fourth of July was my favorite holiday. Not Christmas, though the family showered us with brightly wrapped presents. Not Thanksgiving, when we got together with all our cousins and had an excuse to gorge and play football in the side yard all day.

Yes, the Fourth of July still holds magic for me. Great memories, with emotions fully attached. Firecrackers -- illegal as heck but you can still get them on "The Rez." Sunny days at the Toutle River with the family. Cruising with my buds in the Dad's '64 Impala with the broken passenger seat. Warm nights at the lake, sitting on blankets and watching the big fireworks show.

The fact that it lands smack-dad in the middle of summer plays a role, I think. Despite growing up in Washington State (the wet side), the sun always seemed to find a way that day. Maybe it really didn't, but I just can't remember a rained-out Fourth. MY timing is probably a bigger factor. I grew up in the '70s. Things were simpler then -- you could be a kid without many of the natural fears that parents face today, and there were fewer distractions. My Mom, single and raising two boys on her own, worked during the day (Thank You, Mom!). In the summer, when school was out for a glorious three whole months, we were essentially on our own. We had more independence. How fitting to celebrate that fact with thunderous explosions and brilliant displays.

I remember making my own bottle rockets, when bottle rockets were fairly new inventions and very much illegal. Pinwheels and "punks" fashioned in just the right manner launch to the sky. Not much of a show, but dangerous as all get-out, and pretty frickin' cool for a 14-year-old.

In school, they drilled into us the commonly held, saccharine version of American history. Red, white and blue and proud of it! Even now, I'm still OK with that content, though I know reality to be much more complicated and violent. (Hey, we were kids, not doctoral students.) But they armed us with pride for who were were, who we are and who we could become. And that was much more important.

Because in this great country, as screwed up and politically polarized as we are, as financially devastated as we are, as laissez-faire as we have become, anyone can still go from zero to hero in a lifetime. Even through the hurt and pain that many people endure today, Americans still have the ability to bootstrap themselves out of it. They still can have hope, not sugar-coated fantasy, but real hope backed by the conviction that a plan and deliberate action can propel them to success. And that's a mentality that comes from living in the United States.

And that's why we celebrate ... in the loud and brash way we do.

Back home, this year's Biblical rains have taken a break and it's expected to be sunny and 69 degrees today. (Like there was ever a question?) People are setting up their craft-fair tents at the lake. The beer garden will be open for business in front of the Monticello Hotel. My family already has made their trip to The Rez and have their spot picked out at the river.

Today, as I sit here in my Palm Springs home with my Tanzanian peaberry coffee, clicking away on my Vaio laptop as my email ring-a-dings and my Blackberry buzzy-buzzes, the memories flood back, and I smile. And I get a little sad, too, maybe. Time has marched on and life has gotten much more complicated. I'm two states removed from most of my family. My mortgage is upside-down and some of my friends have lost their homes. But I'm optimistic for today, and especially for tomorrow.

Because I live in this country. And because tonight, there will be fireworks.

Brian Bean
Real Estate Broker
http://www.scott-brian.com/
http://www.orangecrestriversidehomes.com/

Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula

President Obama on Friday signed into law the three-month extension of a federal tax credit for home buyers.

Congress passed standalone extension bills on Tuesday and Wednesday in late-night wrangling to help home buyers in escrow on short sales and other transactions that routinely take longer than 2 months to close. Buyers who have had signed purchase agreements since at least April 30 are now cleared to close and collect up to $8,000 in tax credits.

Now, let's get these deals closed. It's doubtful that we can expect another extension. Lawmakers, and the public in general, will not have a lot of compassion for anyone still floundering with a transaction after 5 months. Even though many of us have seen deals take much longer. The truth is, it should not take that long if we are negotiating correctly and following the internal compliance timelines set by the banks.

If you have no idea what what those standards are, or if your short sales always run several months, find out. Or refer your client to someone who does and take a referral fee. That's our fiduciary duty.

Brian Bean
Real Estate Broker
http://www.scott-brian.com/
http://www.orangecrestriversidehomes.com/

Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula

OK, so we're less than 48 hours away from the federal-tax-credit deadline, and about 180,000 home buyers who have been in escrow for nearly two months are on the verge of watching that tax credit slip through their fingers. Why? Because, surprise, it might actually take more than 60 days to close a transaction.

The House and Senate have each passed their own versions of an extension for those who are teetering. But they can't seem to get their acts together and do what they were elected to do: LEAD.

Nearly one-tenth of those buyers are in my state. Two of my buyers are among the throng. I worry for them.

Here's a quote from National Association of Realtors President Vicki Cox Golder, taken from Realtor Magazine:

"We are strongly urging the Senate and the House to act quickly to pass this legislation and ease the minds and pocketbooks of these home buyers. These are not buyers who just entered into the market. These are buyers who previously met all the qualifications for the tax credit, but find themselves at the mercy of a workflow jam with lenders or other delays such as lapses in the National Flood Insurance Program, Rural Housing Service, and new home construction, and might not be able to complete the purchase of their homes by the current deadline. It would be a tragedy for them not to be able to complete the purchase in time to claim the credit.”

Rock 'n' Roll, Vicki!

I'm not sure I would personally classify it as a "tragedy" (Hey, it's $8,000; but hey, it's only $8,000), but it sure does suck, dude!

Is it OK to expect some cooperation and good faith on the part of our elected officials? Or is polarization and ineptitude the rule of the day on Capitol Hill? Hey, Barbara and Dianne! Hey Ken Calvert and Jerry Lewis! Hey Mary Bono! Get off your behinds and start working together. We're sick of party-line votes. We're tired of your excuses. We're looking for someone to step up.

(Brian Bean is a real estate broker and ambassador for Helping A Million Homeowners, a nationwide organization that is committed to helping alleviate the financial stress that so many homeowners face today. He can be reached directly at Brian@BigDreamInc.com.)

Brian Bean
Real Estate Broker
http://www.scott-brian.com/
http://www.orangecrestriversidehomes.com/
http://www.IEShortSalePros.com
http://www.HelpingAMillionHomeowners.com

Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula

This whole loan-modification thing is getting out of hand.

Are we really so easy to manipulate, or are desperate people just clutching at anything to keep from falling?

So many homeowners on the verge of losing their homes will do anything, listen to anyone, take any advice, as long as it's authoritative and the answer satisfies their wants. Why? Because even a flicker of hope can renew the enthusiasm of a condemned man. Problem is, loan mods, for the masses, are a Band-Aid on cancer.

But the voice of reason is drowned out by the shouts for rescue.

I'm all for hope, but it has be accompanied by action and a dose of reality. Homeowners in distress hope for miraculous results -- a loan mod that reduces the amount they owe and cuts the interest rate to below-market levels. Reality is, if you don't have a job, do you really think the bank is going to let you keep the house? Urban myths perpetuate the misplaced optimism. ("My uncle's accountant's niece found a non-profit that is 'getting good results' on loan mods.") And so, merrily they go, off to slaughter.

Sure, a precious few who fit the narrow guidelines and have their flawlessly completed applications fall on the right person's desk on the right day will reap rewards. It's happened to a little over 300,000 people. But the vast majority of applicants who are granted 3-month or 6-month trial modifications will never see permanent loan mods. Many shouldn't even be put through the trial programs. When their debt-to-income ratio with the trial payment is well above 50 percent? When they're unemployed? When they're drowning in unsecured debt and can barely afford to keep food on the table the lights on? I've talked to people who got the go-ahead for trial modifications with payments at nearly 90 percent of their take-home pay. That's frickin' ridiculous.

Less than 1 in 4 people who make it through trial payment programs actually get a permanent mod. And then 75% of those end up defaulting again within a year. Why? Because changing someone's payment doesn't change their habits. And the banks know it. But they can keep on collecting payments from those desperate souls who cling to the dream that they will be among the lucky few. And those homeowners will keep right on paying, even go farther into debt or worse to keep up their end of the bargain. Only to be crushed by a one-page letter summarily denying their application and requiring them to make up the back payments.

Here's the kicker: While these mod programs are running their course, so is the foreclosure. And so many times, riding shotgun with the modification denial is a notice of trustee sale. At that point, it's game over. Too late to attempt the other options, which were more likely to succeed, given the time. Options that were the most pragmatic, given the facts.

People who could have done a short sale, for instance, instead lose their home to a foreclosure, preventing them from buying another home for 5-7 years -- at the bottom of the market -- and gutting them emotionally. The banks actually lose more money than they would have had the property been liquidated in a short sale. The neighbors on the block suffer from a blighted home and further-reduced property values.

And everyone wonders what went wrong?

The voices are wrong. We have to make better decisions, based on facts and experience and the guidance of those with proven success. Not on the Pollyanna-ish opinions of those who don't have a stake in the decision. Don't buy in to the misguided claims of lawmakers who just want to keep their jobs. Don't listen to scamming companies who take an upfront payment to process your loan modification when your gut is telling you it isn't going to fly. Don't blindly follow the suggestions of your friends and neighbors. And don't let anyone keep you from doing what you know is the right thing in the long run. There's too much at risk.

We're adults and we have to start acting like it.

(Brian Bean is a real estate broker and ambassador for Helping A Million Homeowners, a nationwide organization that is committed to helping alleviate the financial stress that so many distressed homeowners face today. He can be reached directly at Brian@BigDreamInc.com.)

http://www.scott-brian.com/
http://www.orangecrestriversidehomes.com/
http://www.IEShortSalePros.com

Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula

Here's an interesting story from CNNMoney.com. Not a big surprise when you look a little closer. Lawmakers, in an effort to get re-elected, push for solutions that treat the symptom, not the disease. In this case, poor money habits fueled by disinformation spread by banks and credit-card companies have lulled society into thinking that debt is good, that credit scores are more important than equity. And when people get in too deep, instead of working on the real issue, lawmakers pass kneejerk multibillion-dollar bailouts for everyone (except, of course, those suffering in silence and making their payments).

Bulletin! Loan mods don't work. They are Band-Aids on cancer. Banks don't want to do them. Urban myths perpetuate misguided hope and third-party legend: "A guy I know told me about their Uncle who found a non-profit that is 'getting good results' on mods." Less than 1 in 4 people who make it through trial payment programs actually get a permanent mod. And then 75% of those end up defaulting again.

Because changing someone's payment doesn't change their habits. Let's work on the real issue, and in the meantime, we need to clear out this distressed housing inventory.

By Les Christie, staff writer
CNNMoney.com

NEW YORK -- Most borrowers who have had their mortgages modified through a government-sponsored program will redefault within 12 months, according to a report released last week.

Between 65% and 75% of loans that are modified through the Home Affordable Modification Program but not backed by the federal government are likely to go bad, according to the report released by Fitch Ratings, a N.Y.-based credit-rating agency.

The main reason these borrowers continue to struggle is that HAMP does nothing to solve the rest of their debt problems, the report added.

"Many of these borrowers still have very heavy levels of other debt," said Diane Pendley, a Fitch managing director, "auto loans, credit cards and other expenses. The HAMP modifications reduce housing expenses down to 31% of income but do not touch these other obligations."

On average, HAMP-modified borrowers, according to Pendley, have 64% of their monthly pretax income spent before they even buy a quart of milk. If even a small emergency arises -- an unexpected car repair, a medical bill or a loss of overtime income -- they're in trouble.

"We're talking borrowers who don't have cash reserves," said Pendley. "If they did, they wouldn't be in this position in the first place. It doesn't take much for them to get in the same situation again"

Jay Brinkmann, the chief economist for the Mortgage Bankers Association, finds nothing at all surprising about the Fitch finding. "Over the course of studying this over several years," he said, "we find re-default rates from 40% to 60% on modified mortgages. You have borrower behavior that keeps coming back."

When that happens, lenders are much more likely now to recommend that borrowers opt for foreclosure alternatives instead of modifying loans a second time.

Currently, according to the Fitch report, about half of prime borrowers who lose their homes now do so through foreclosure.

The other 50% go through short sales, in which they sell their homes for less than what they owe the bank, or deed-in-lieu, a transaction where the bank takes back the property directly and forgives the outstanding balance.

The servicers have been encouraged to rev up their short sale engines by the Treasury Department, which runs HAMP and its sister program, Home Affordable Foreclosure Alternatives (HAFA), which provides cash incentives to the parties who agree to short sales.

Now, when borrowers re-default on HAMP mods or other bank workouts, banks are much more likely to offer help to execute a short sale or deed-in-lieu.

"HAFA gave the servicers an indication that this is where they should take these [re-defaulting loans]," said Pendley. "The banks are now assisting borrowers; they're being much more proactive, like helping them find real estate brokers for short sales."

The benefit of these transactions for borrowers is that it lets them move on more quickly with their lives. They can get out from under the unaffordable mortgage payments, find a cheaper rental, start to, perhaps, save a little cash and start to rebuild their credit scores.

Brian Bean
Real Estate Broker
http://www.scott-brian.com/
http://www.orangecrestriversidehomes.com/

Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula

Here's an update on the federal tax credit, in which buyers who opened escrow on their purchase by April 30 were required to close on or before June 30. Looks like we may be closer to an extension ...

Inman News

The Senate has amended a bill to give homebuyers who were under contract on a home purchase by April 30 an additional three months to close the deal and claim the federal homebuyer tax credit.

Extending the deadline for closing from June 30 to Sept. 30 would allow lenders more time to clear a backlog of 180,000 homebuyers nationwide, said amendment sponsor Sen. Harry Reid, D-Nev.

The amendment to HR 4213, the "American Jobs and Closing Tax Loopholes Act of 2010" -- which primarily extends unemployment insurance benefits -- was approved in a 60-37 vote Wednesday. The vote was mostly along party lines, with only four Republicans in favor and one Democrat opposed.

"While I am disappointed that more Republicans did not support this common-sense measure to strengthen the economy and reduce the deficit, I am committed to ensuring that more Nevadans and Americans can become homeowners and that this amendment becomes law," Reid said in a statement.

The House passed an earlier version of the bill in December, and the Senate approved its own version in March. The Senate is currently working on resolving differences between the two bills.

The National Association of Realtors supports the amendment, saying Realtors have reported that as many as one-third of qualified applicants have been told by lenders that their loans will not close before June 30 because of the sheer volume of loan applications in the pipeline.

The amendment does not extend the deadline for homebuyers to qualify for the tax credit, NAR said in urging lawmakers to approve it, but simply extends the deadline for closing transactions already in contract.

"Since these applications were already in the pipeline and figured into the program's cost, the extension of the closing deadline should not incur any further government costs," NAR President Vicki Cox Golder said in a statement.

There has been some speculation that some homebuyers will attempt to submit fraudulent claims for the tax credit by backdating documents showing they were under contract by April 30, and that extending the deadline for closing would expose the government to more fraudulent claims.

Brian Bean
Real Estate Broker
http://www.scott-brian.com/
http://www.orangecrestriversidehomes.com/

Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula

Great news out of Sacto this week! What many people don't realize is that the banks can -- and will -- try to pursue a deficiency against a homeowner ... if the homeowner signs off on it during a short sale. In California, it's a four-year statute of limitations. Think you won't be back on your feet in four years? The banks think you will, and they are licking their chops! Don't make any assumptions. Ask your agent for evidence that they have gotten bank approvals for their clients that do not reserve the bank's right to pursue a deficiency. And get advice from your attorney before you sign off on ANY short-sale approval letter.

Measure protecting consumers from overreaching lenders now goes to Assembly

California Association of Realtors

LOS ANGELES (June 3) – The California Senate this morning approved SB 1178 (D-Corbett) by a 30 to 4 vote, extending anti-deficiency protection for consumers who have refinanced their original mortgage loans and now are facing foreclosure. The California Association of Realtors (CAR) is the sponsor of the consumer protection legislation.

“Currently, if a homeowner defaults on a mortgage used to purchase his or her home -- known as a 'purchase-money mortgage' -- the homeowner's liability on the mortgage is limited to the property itself,” said CAR President Steve Goddard. “Unfortunately, the original law did not extend the purchase money protection to loans that refinance the original purchase debt, even if the refinance only was to obtain a lower interest rate. SB 1178 corrects this inequity and extends the same protections to consumers who refinance their home loans.

“Today’s vote was a victory for homeowners in California,” he said. “SB 1178 now moves to the Assembly for approval. CAR is calling on our elected representatives to swiftly pass this much-needed legislation and send it to Gov. Schwarzenegger for signature.”

Leading the way…® in California real estate for more than 100 years, the California Association of Realtors (www.car.org) is one of the largest state trade organizations in the United States with nearly 160,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

Brian Bean
Real Estate Broker
http://www.scott-brian.com/
http://www.orangecrestriversidehomes.com/

Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula

The near-record low mortgage rates seen during the past few weeks may not be around much longer.

Signs of improving economic conditions could lead Federal Reserve Chair Ben Bernanke to raise key interest rates, driving up mortgage rates, says Stephen Stanley, chief economist at Pierpont Securities LLC.

The evidence includes more consumers are paying their bills on time. Past-due accounts at American Express declined 34 percent compared with a year ago, and Target Corp. reported its lowest delinquency rate in two years during the second quarter.

In another sign of economic improvement, fewer banks reported tightening lending standards this month, one reason consumer borrowing rose for the second time in three months.

“If lending standards start to stabilize, that’ll be another reason to remove the emergency measures, including the zero rate,” says Jay Bryson, a senior global economist at Wells Fargo Securities LLC in Charlotte, N.C., who formerly worked at the Fed in Washington.

Source: Bloomberg, Bob Willis and Anthony Feld (05/28/2010)

Brian Bean
Real Estate Broker
http://www.scott-brian.com/
http://www.orangecrestriversidehomes.com/

Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula

Daily Real Estate News

More than 16 percent of homeowners say their houses increased in value during the past year, the highest percentage in nearly two years, according to a Thomson Reuters/University of Michigan survey.

While 75 percent of homeowners viewed current home-buying conditions as good, citing attractive prices and low mortgage rates, about 89 percent thought market conditions for selling a home were poor. While still an overwhelmingly negative number, it was still better than the results of the May 2009 survey when almost 100 percent of homeowners panned the climate for sales.

Some 43 percent of home owners said their home decreased in value during the past year. Nevertheless, homeowners believe their homes will ultimately rise in value, with the average annual anticipated gain over the next five years at 2.1 percent.

Source: Reuters News, Julie Haviv (05/21/2010)

Brian Bean
Real Estate Broker
http://www.scott-brian.com/
http://www.orangecrestriversidehomes.com/

Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula

Daily Real Estate News

The confidence of U.S. home owners in the value of their homes increased in the first quarter, online home site Zillow says based on a survey it conducted.

About 50 percent of home owners surveyed by the Web site think their home's value declined in the past year, according to Zillow.com’s first quarter survey of home owner confidence. In contrast, Zillow thinks that 65 percent of U.S. homes actually declined in value based on its own calculations of value.

To the extent home owners are overconfident about the value of their home, Zillow says, they could feel encouraged to put their home on the market. If a lot of them did so and their home values aren't as high as they think they are, it could have the effect of pushing down prices, says Zillow’s Chief Economist Stan Humphries.

In its survey, Zillow found that 7 percent of home owners – or 5.3 million homes if the survey results were applied to all home owners – would be “very likely” to put their homes on the market in the next 12 months if they believed the market was improving. An additional 8 percent in the Zillow survey said they would be likely to list their homes, while another 14 percent would be somewhat likely.

Source: Zillow.com (05/20/2010)

Brian Bean
Real Estate Broker
http://www.scott-brian.com/
http://www.orangecrestriversidehomes.com/

Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula

Daily Real Estate News

When you compare the real estate downturn to the real estate market in the 1980s, Blumberg Capital Partners, which provides real estate investment management, finds similarities that lead the company to think now is an optimal time to buy.

Its analysts point out that the recession of the 1980s lasted 16 months, running from July 1981 to November 1982. Unemployment peaked in November 1982 at 10.8 percent. From that point it took 38 months for the economy to recover fully and for unemployment to fall below 7 percent. It was another 10 months before unemployment was consistently below 7 percent.

Philip Blumberg, CEO of Blumberg Capital Partners, said in a note to investors that the real estate cycle is still three or four years from an optimal selling period, so now is the time for investors to buy.

Source: Blumberg Capital Partners (05/19/2010)

Brian Bean
Real Estate Broker
http://www.scott-brian.com/
http://www.orangecrestriversidehomes.com/

Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula

Daily Real Estate News

Housing prices are expected to increase 12.4 percent between 2010 and the end of 2014, predicts MacroMarkets, which surveyed more than 100 analysts and market strategists.

Those interviewed didn’t all see the housing market in the same light. Joseph LaVorgna, a economist at Deutsche Bank predicts that home prices will rise 37 percent by the end of 2014.

On the most bearish end, both Anthony Sanders, professor of real estate finance at George Mason University, and investment adviser Gary Shilling, president of A.Gary Shilling & Co., expect prices will decline 18 percent.

Source: The Wall Street Journal, James R. Hagerty (05/19/2010)

Scott Chappell and Brian Bean
Real Estate Brokers
http://www.scott-brian.com/
http://www.orangecrestriversidehomes.com/

Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula

Daily Real Estate News

Nearly half the homes sold in March – 48.2 percent – were purchased by first-time buyers, according to a survey of more than 1,500 real estate practitioners by Campbell/Inside Mortgage Finance.

"Many observers had felt that the pool of first time home buyers had been depleted last fall," Thomas Popik, research director for Campbell Surveys, said in a statement. "Instead, the normal spring-summer buying season is combining with the tax credit to produce blow-out results for first-time home buyers."

First-time buyers must have a signed contract on or before April 30, 2010, to qualify for the $8,000 federal tax credit. Qualifying escrows must close on or before June 30, 2010.

Mortgage applications to buy homes increased 10.1 percent last week on a seasonally adjusted basis compared with the previous week, according to the Mortgage Bankers Association weekly survey.

On an unadjusted basis, the purchase index increased 11 percent compared with the previous week, but was down 5.2 percent from the same week a year ago.

“Purchase applications continued to increase coming out of the Easter holiday, as we approach the end of the home buyer tax credit, and are up modestly over last month.” said Michael Fratantoni, MBA’s vice president of research and economics.

Declining Treasury rates pushed loan rates down from the previous week:
30-year fixed-rate mortgages decreased to 5.04 percent from 5.17 percent. 15-year fixed-rate mortgages decreased to 4.34 percent from 4.45 percent. 1-year ARMs decreased to 6.95 percent from 7.02 percent.

Source: Reuters News Service and Mortgage Bankers Association (04/21/2010)

Scott Chappell and Brian Bean
Real Estate Brokers
http://www.scott-brian.com/
http://www.orangecrestriversidehomes.com/

Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula

Closing your escrow in May? Better make it early, experts say

California Association of Realtors

The $100 million allocated for California's first-time homebuyer tax credits may be depleted in about 10 to 20 days or sooner, according to C.A.R.'s Economics team. California's Franchise Tax Board (FTB) plans to begin accepting applications on May 1, 2010 for tax credits up to $10,000 for first-time homebuyers and for homes that have never been previously occupied. However, the total tax credit allocation for all taxpayers is $100 million for first-time homebuyers and $100 million for new homes, both on a first-come, first-served basis.

C.A.R.'s forecast of 10 to 20 days to deplete the $100 million allocation for first-time home buyers is based on estimated May sales figures and other parameters. It does not take into account the possibility that buyers scheduled to close escrow in April may delay closing until May to take advantage of the tax credit. If a shift in closings from April to May occurs, the first-time homebuyer tax credits may be depleted even more quickly than indicated above.

Applications for the California tax credit must be faxed to the FTB after escrow closes. The FTB will update its website when the 2010 application form and other information become available.

Realtors are reminded not to give their clients any tax or legal advice, such as the availability of funds under the California tax credit program. Agents should encourage their clients to seek specific advice from an accountant, attorney, or other professional as they deem appropriate.

For more information, please refer to C.A.R.'s Homebuyer Tax Credit Chart 2010.

Scott Chappell and Brian Bean
Real Estate Brokers
http://www.scott-brian.com/
http://www.orangecrestriversidehomes.com/

Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula