Real Estate Updates from The Clarke Team

REMINDER: Carbon Monoxide Detectors Required In All Single Family Dwellings by July 1

2011-06-18T09:00:00.000-07:00

From the SAMCAR Relay Newsletter of 6/10/11:

Carbon Monoxide Detectors must be installed, consistent with new construction standards or according to the approved instructions for the detectors, in all existing single-family dwelling units no later than July 1, 2011. All other dwelling units (such as apartments) must have proper carbon monoxide detectors no later than January 1, 2013.

The new regulation also creates disclosure requirements with respect to carbon monoxide detectors. Currently, sellers of residential properties must provide the buyer with a Transfer Disclosure Statement (TDS). The TDS requires the seller to answer a variety of inquiries as to features of the property. The statute amended the TDS such that, effective January 1, 2011, the seller will have to verify whether or not the property contains one or more carbon monoxide detectors.

Background: on May 7, 2010, California Governor Arnold Schwarzenegger signed into law Senate Bill 183 (Lowenthal), a bill that requires the placement of carbon monoxide detectors in all California dwelling units. The bill also requires that the presence or absence of these devices must be disclosed when residential real estate is transferred.

This law deals with existing housing. (New construction standards are set by other state agencies.) It covers every "dwelling unit intended for human occupancy" which means single-family housing, factory-built homes, condominiums, motels, hotels, dormitories, and dwelling units in "multiple-unit dwelling unit buildings" (apartment houses). It applies to every dwelling unit that has "a fossil fuel burning heater or appliance, fireplace, or an attached garage".

"Fossil fuel" means "coal, kerosene, oil, wood, fuel gases, and other petroleum or hydrocarbon products, which emit carbon monoxide as a byproduct of combustion."

The requirements are that such dwelling units will have to have installed a "carbon monoxide device" that is designed to detect carbon monoxide and produce a "distinct, audible alarm." The device may be battery-powered, a plug in, or hard-wired with a battery backup. The carbon monoxide detector may be combined with a smoke detector, but, if it is, it must emit "an alarm or voice warning in a manner that clearly differentiates between a carbon monoxide alarm warning and a smoke detector warning.

"NOTE: Even if the answer is "no" on the TDS, that data will not invalidate the sale or transfer of the property. Thus, while the lack of such a carbon monoxide detector may fail to meet current safety standards; a transfer of the property may still take place.

Hey Case Schiller - It's not the end of the real estate world!

2011-06-11T09:00:00.000-07:00

This is a very insightful article from Jim Gillespie, the Coldwell Banker CEO. It's so true for the Bay Area because real estate trends are LOCAL and can't be averaged mathematically into a NATIONAL hodge-podge. Contact us with any questions - we are here to help!

So many of us giggled nervously as we thankfully avoided the end of the world a couple of weeks ago. But judging by the continued “end of the world” type coverage the Case-Schiller housing study got this week, maybe we are nearing the end.

Yes. I am joking, but I am amazed at the attention this report gets. It covers 20 markets, yes only 20, and that is just one of its many flaws. Yet many consider it “the be-all-and-end-all” economic indicator that defines our entire national housing picture. As we know, all real estate is local, and it is unfortunate that the reporting on a 20-city “national” index can have such a jarring impact on otherwise rational people.

Look at some of the headlines the other day:
“Home prices at lowest point since 2006 bust”
“Home values continue downward churn”
“No relief in sight’ for falling home prices”

And even in paradise – Maui- the front page headline in the paper screamed “Crash Spreads.” And Maui isn’t one of the 20 markets. In fact the nearest market covered is San Diego, a mere 2500 miles away!

Shawn Daly, an agent with Coldwell Banker Residential Brokerage in Evanston, Illinois, had to calm down two skittish buyers this week.

One, who is currently working in Iraq, had initially placed on offer of $450,000 on a lakefront Chicago condo. The sellers countered with a price of $525,000. But after seeing Case-Schiller inspired headlines on the web, Shawn’s client emailed him to ask that he lower his offering price by $50,000. Shawn explained that the sellers did not agree with his first offer so if he went lower he wouldn’t get the home. The buyer calmed down and agreed.

Shawn correctly pointed that the Case-Schiller Home Price Indices are meaningless to individual buyers who are looking at specific houses, on specific streets, in specific neighborhoods.

Then yesterday, Shawn met another client for a tour of potential homes. They hardly said hello without telling Shawn they were more nervous than ever after seeing the report on the news.

You have a right to be nervous, but I can’t say this enough. Now is the smartest time in my 36 years in real estate to buy a home if you have the lifestyle reason, financial stability and viability to do so.

And it’s all about “Triple I…P”. Inventory, Interest rates, Incentives and Pricing. Start with inventory, because most communities have seen a rise in the amount of homes on the market, you have more choices. Interest rates for mortgages remain at near-historic lows and have actually trended down over the last 7 weeks, with Freddie Mac reporting 30-year fixed rates now averaging 4.55%. Incentives are the tax advantages to home ownership. And of course, there are prices. Prices are down from mid-decade highs, but in many, many markets are showing stability, slight declines or even increases. Home affordability remains near record levels and the price-to-value proposition in most markets is extremely compelling.

If you are interested in buying a home, you owe it to yourself to contact a real estate agent in the community you are interested in. Look at homes, do a rent vs. buy analysis, explore what is available in your price range.

Don’t just take my word for it. Do your homework.

You might just be surprised that the end of the world isn’t here yet … at least until next month’s report.

Trulia crime stats are out today!

2011-06-08T13:21:00.000-07:00

Trulia's crime statistics beta product is out today for 50 cities. San Francisco is the only Bay Area city included so far. It's interesting - here's the link: http://www.trulia.com/crime/

Buyers Beware! $729,500 max loan limit going away this summer!

2011-06-06T17:58:00.000-07:00

This information is from Stefani Hartsell with Princeton Capital. She does a great job staying on top of all the news we need to help our clients. If you are thinking of buying in this price range, now would be a good time. Need help - contact us.

I’ve had a few requests to review the changing max temporary high balance conforming loan limit…

Right now the max conforming loan amount in the Bay Area is $729,750. Current legislation has this expiring on 9/30 and it will roll back to $625,500. But what does that date mean?

It is important to understand how the legislation is written. The 9/30 date is the last day that Fannie Mae or Freddie Mac can buy loans up to $729,750. Fannie Mae and Freddie Mac do not lend directly to the public. Lenders do and then they package their loans and sell them to Fannie Mae or Freddie Mac. Currently more than 9 out of 10 of all new mortgages are sold to Fannie Mae or Freddie Mac.

So, Lenders will need to cut-off their lending earlier than 9/30 so that they can package up their loans and get Fannie Mae or Freddie Mac to purchase them prior to the cut-off date. If the loan is not accepted by 9/30, then the Lender gets to keep it for 30 years.

That’s a lot of risk. Last time the temp high balance limit ended, Lenders started cutting off the higher limit 4-6 weeks ahead of the cut-off date. Also, as fewer and fewer lenders were willing to fund those loans, the rates became less and less attractive due to the loss of competition.

No one has made any announcements yet, but the prudent buyer would close well ahead of those dates.

Stefani Hartsell
Senior Loan Consultant
NMLS #281600
(650) 207‐5005 cell
www.princetoncap.com/stefanihartsell

Protect Your Home While You Travel

2011-05-31T12:22:00.000-07:00

Planning your next getaway? Unfortunately, an empty house can be a tempting target for would-be burglars. Follow a few simple precautionary measures to secure your home, whether you’re leaving for weeks or just a weekend.

Make your home look lived in - Install automatic timer switches on lights, radios, and the TV. They’re inexpensive and many include variable timing schedules to create the appearance of activity in the house. Take extra steps to make your home seem occupied by turning off the ringer for your phone and parking a car in the driveway.

Alert the neighbors - Ask your neighbors to keep an eye on the house and leave them an emergency phone number. You might also consider hiring them to mow the lawn, water the plants, and put the trash cans out.

Stop all deliveries - Make sure things don’t pile up on the porch while you’re gone. Newspapers, mail, packages, and door flyers are all tell-tale signs that you’re away.

Secure your doors and windows - Use high-quality deadbolt locks on your doors, additional blocking devices on sliding glass doors, and sash locks on your windows. These can be easily retrofitted.

Install an alarm system - Deter would-be intruders with an alarm system and stickers on the exterior of your home. Many systems offer monthly monitoring for added protection. However, make sure everyone in the home knows how to properly use the system to avoid false alarms.

Remove valuables and keys - Leave your house key with a trusted friend (not hidden outside your home), and take valuables to a bank safe deposit box.

Spending a little time to protect your home before you go on vacation is well worth the effort. You’ll reduce your chances of being targeted and ensure a happy homecoming.

Enjoy your trip!

Millbrae requires sewer lateral test before close effective 4.22.11

2011-05-24T09:00:00.000-07:00

Just like Burlingame and Hillsborough, Millbrae now requires a sewer lateral inspection when a home is sold. The inspection must be done and reviewed by the City before close of escrow.

The inspection should cost between $250 and $300. If issues are found during inspection or during the City's review of the inspection video, repairs must be made.

The biggest gotcha is this - if the property is found to have a shared sewer lateral, it's the property owner's responsibility to separate the sewer into separate sewer laterals for each parcel. Typically, these costs are split 50/50. It's the selling owner who has to negotiate this split.

Yikes.

San Carlos Real Estate Stats for January-April, 2011

2011-05-21T09:00:00.000-07:00

Realtors Take to Capitol Hill to Fight For Homeowners

2011-05-17T14:40:00.000-07:00

This article is from Rick Turley, the President of the SF Bay Region of Coldwell Banker, our boss.

Bay Area home buyers, sellers and real estate agents better get familiar with a few acronyms – MID, QRM and GSE – because they’re likely to hear a lot about them in the months ahead. These are the equivalent of WMD to the housing market. And what happens to them could have a very real impact on local home values and the health of our market.

As a Director at NAR, I represent Coldwell Banker in a committee consisting of leaders of large brokerage firms across the country, assembled to give guidance and feedback to the NAR executive team. The NAR legislative meetings held last week in Washington DC, also offers the opportunity each year for Realtors to meet with Congressional leaders on Capitol Hill. Along with hundreds of other NAR committee members from all 50 states, including some of our very own Bay Area CB Realtors, we called upon our respective elected officials to discuss our fragile housing recovery. Congressional leaders are looking at anything and everything during this time of historic national debt, and they need to understand the devastating impact that some proposed changes in housing policy could have on our local market.

Lawmakers are considering a variety of policy revisions, including reducing or even eliminating the mortgage interest deduction (MID); tightening Qualified Residential Mortgage (QRM) rules for borrowers, and eliminating Government Sponsored Enterprises (GSE) Fannie Mae and Freddie Mac, which are critical to keeping mortgage money readily available.

We met with Senator Diane Feinstein, and Representatives Speier, Honda, and Eshoo about the importance of maintaining the mortgage interest deduction, especially here in the Bay Area. The deduction is something all of us take for granted as we file our annual tax returns. It’s one of the foundations of homeownership in this country and helps bring housing within reach of millions of Americans.

If lawmakers lower the maximum loan amount to $500,000 – one of the plans under consideration – it may not have a big impact in places like the Midwest or South, where homes typically sell for $200,000 to $300,000. But it would have a huge impact for high-priced markets like ours in the Bay Area.

Members of Congress don’t consider the high cost of living in areas like ours when they propose changes like this. Most assume $800,000 will buy a mansion for the wealthy. But those of us who live here understand that it may just get you a modest starter home. I doubt that first-time buyers in many Bay Area cities who are using both of the couple’s income to qualify for a $750,000 to $800,000 home feel very wealthy.

“Tax incentives for home ownership have been a part of our tax system for decades and are deeply woven into our economic fabric,” a local Realtor Association president told lawmakers. “Reducing or eliminating the MID is a de facto tax increase on home owners, who already pay 80 to 90 percent of U.S. federal income tax.”

Changes to QRM rules would require significantly higher down payments for both homebuyers as well as those trying to refinance their mortgage. Buyers would face a minimum of 20 percent down, while those refinancing mortgages would be required to have 25-30 percent equity in their properties in order to get a loan.

We understand Congress’ interest in trying to reduce the default rate among borrowers, but this isn’t the answer. As the Mortgage Bankers Association pointed out in a white paper, high down payment and equity requirements will not have a meaningful impact on default rates. But they will require millions of consumers, who are at low risk of default, to either put off buying a home or pay unnecessarily higher interest rates.

Finally, a number of bills making their way through Congress have provisions that would significantly reduce or eliminate Freddie Mac and Fannie Mae within the next few years. Since both GSEs purchase mortgage loans and repackage pooled loans that are sold on the secondary market, this could have a significant impact on the availability of home loan financing.

Realtors urged lawmakers to tread very carefully in reforming Fannie and Freddie. Without a secondary market, mortgage interest rates would be unnecessarily higher and outright unaffordable for many Bay Area buyers. While GSE reform is necessary, the federal government must have a continued key role in the secondary mortgage market to ensure capital and liquidity in the market.

This is not the time for Congress to consider radical housing policy changes. Just as we are seeing a gradual recovery in the housing market, any one of these legislative changes could halt the progress we’ve made. All three could be catastrophic. I urge you to join me in contacting your local representatives in Congress to urge them to take these facts into consideration as they look at any changes to our nation’s housing policy.

That’s it for now. Have a good week!
Rick

Rick Turley
President, San Francisco Bay Area
Coldwell Banker Residential Brokerage

Financing Vacation Homes

2011-05-08T09:22:00.000-07:00

It's not as easy as it was in 2005 to finance a vacation home purchase - but still possible. This New York Times article provides all the details:

http://www.nytimes.com/2011/05/01/realestate/01mortgages.html?_r=1&ref=realestate

Interested in purchasing a vacation home? We can help.

Judy Clarke
The Clarke Team
Bay Area Real Estate
650-489-5399
sold@clarketeam.com

Great News - onerous 1099 landlord reporting law repealed!

2011-04-30T09:28:00.000-07:00

Congress repealed a law in early April that would have required ALL landlords (even those who rent out a room in their home) to file a 1099 for any services paid to vendors over $600 starting next year.

Whew! That will save lots of time and money. Thank goodness for the National Association of Realtors!

Here's a link to a detailed article:
http://speakingofrealestate.blogs.realtor.org/2011/04/08/600-1099-landlord-reporting-law-repealed/

2011-04-23T09:57:00.000-07:00

Here are some interesting ideas for remodeling if you can't afford to move up to a new home at this time:

Homeowners unable to purchase a new home – either due to stricter loan guidelines or because they are underwater on their current mortgage -- may want to consider remodeling certain areas of their home to make it more suitable to their current lifestyle. Currently, homeowners can find bargains for items such as kitchen cabinets, granite in the bathroom, and landscaping services.

The costs for custom cabinets are down approximately 20- to 30-percent, due to lower material costs and cabinetmaker discounts. Some cabinet manufacturers are responding to the fall in demand by reducing or eliminating surcharges for custom-size cabinets, decorative finishes, and higher-end wood types.

In the bathroom, homeowners can find discounts of up to 50 percent on granite, due to inventory backlogs and new foreign competition, and on porcelain sinks, due to a surge in Chinese imports.

Experts say homeowners are continuing to focus upgrades less on recouping their investment and more on the enjoyment factor, which is one reason there has been a surge in outdoor living spaces. Costs of installation are down 20 percent or more amid a construction labor glut and consumers are finding it easier to negotiate prices with landscapers.

Interesting alternative to refinancing to remove spouse from loan

2011-04-20T09:53:00.000-07:00

Here's a link to an interesting article from the N.Y. Times. It offers an alternative solution to refinancing to remove a spouse's name from the mortgage after a divorce. May not work for everyone, but definitely something to consider:

http://www.nytimes.com/2011/04/10/realestate/10mortgages-refinancing-divorce.html?_r=2&ref=realestate

Prompt Decision for Qualification for Short Sale Act of 2011

2011-04-17T09:23:00.000-07:00

Here's an article from the National Association of Realtors website which brings a little hope to the heart of Realtors and troubled homeowners alike. Caution - talk to an attorney and a CPA before deciding which path to take if you cannot make your mortage payments.

Washington, April 13, 2011

A new bill to improve the process for approving short sales may soon bring relief to distressed home owners who are unable to keep their homes and hope to avoid foreclosure. The bill, introduced in the U.S. House yesterday and strongly supported by the National Association of Realtors®, would impose a deadline of 45 days on lenders to respond to short sale requests.

The legislation, the “Prompt Decision for Qualification for Short Sale Act of 2011,” was offered in Congress by U.S. Reps. Tom Rooney (R-Fla.) and Robert Andrews (D-N.J.).

“The current short sale process can be time-consuming and inefficient, and many would-be buyers end up walking away from a sale that could have saved a home owner from foreclosure,” said NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I.

“Realtors® and consumers continue to raise issues about delays in the short sale process, because lenders are unable to decide whether to approve a short sale. After many months of delays, and with no response from lenders, potential buyers are losing patience and cancelling their contracts, often resulting in the property entering foreclosure. A short sale minimizes the negative impact on sellers and generally costs the lender less than a foreclosure,” said Phipps.

NAR has been actively pushing the lending industry to improve the process for approving short sales, which represent about 13 percent of recent home sales according to NAR data. Phipps praised Reps. Rooney and Andrews for their efforts on the bill and urged Congress to pass the bill quickly.

“As the leading advocate for home ownership and housing issues, Realtors® want to help more home owners avoid foreclosure by facilitating a short sale when a family is absolutely unable to keep their home; however, that can only happen if lenders and servicers approve short sale offers in a reasonable amount of time,” said Phipps. “Streamlining short sales transactions will reduce the amount of time it takes to sell the property, improve the likelihood that the transaction will close and reduce the overall number of foreclosures. This benefits sellers, lenders, buyers and the entire community.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

New Year’s Resolution: Remodel the Bathroom?

2011-04-02T13:00:00.000-07:00

From the House Values Home Essentials Newsletter of January, 2011: It’s no secret that bathrooms are a popular room to remodel—because of outdated features, different decorating taste from the previous owners or simply normal wear and tear on a very functional room of your home. If the New Year has you thinking about remodeling a bathroom, here are a few things to consider:

Timely or Timeless Style - Before you remodel, picture what it will look like in a couple years when you sell your home. Will you still enjoy that trendy sink? Make sure future buyers will, too. Otherwise they’ll factor in the cost of their own remodel when making an offer.

Costs—Good News - Right now many contractors are eager for work, and prices are lower for their materials and labor, so now may be an ideal time to make your bathroom more livable.

Resale Value - You may have heard during the housing boom that bath remodels add value to your home. These days you can recoup about 64% of the costs of a minor bathroom remodel, according to Remodeling magazine’s “2010-11 Cost vs. Value Report.” If your bathroom is especially in need of updates, you may recapture more.

Too Much? Think Small - If you’re not ready for a full remodel, then a fresh coat of paint, new towels and a pretty framed print can do wonders to update your bathroom—and give you a new look for 2011.

Remember: you and your family are the ones using your bathroom on a daily basis, so think about whether it makes you feel good when you brush your teeth every morning.

If you’d like more information about how a remodel can affect the value of your home, please don’t hesitate to call or email.

A B Trust rules are changing for 2011

2011-03-29T12:29:00.000-07:00

The new laws signed in December, 2010 for tax relief and job creation contain many tid-bits for estate planning. Now each individual has a $5 million combined exemption for estate and gifts. There is also a new tax rate of 35% which applies to both. A married couple is allowed "portability" or the chance to share their $5 million each for a possible total exemption of $10 million. Whew - my head is spinning already! So glad I have a great estate tax attorney who can help me understand all these changes. Need a referral? Contact me and I would be happy to provide. Judy Clarke The Clarke Team Bay Area Real Estate 650-489-5399 sold@clarketeam.com

Understanding the tax treatment of cancelled mortgage debt

2011-03-18T18:08:00.001-07:00

I read an excellent article today on the tax treatment of cancelled mortgage debt by an excellent Real Estate writer, Kenneth R. Harney.

In a nutshell, if debt is forgiven due to a short sale, foreclosure or loan modification, the lender sends the borrower a 1099C at the end of the year. If the debt was forgiven on your principal residence and you have only used the funds to purchase, build or improve your home, it's probably not taxable income. It would be taxable if you refinanced and pulled out money to buy a Tesla. Check out IRS Form 982 and Publication 4681 for more technical details.

The link to this great article is: http://articles.latimes.com/2011/mar/13/business/la-fi-harney-20110313

Enjoy! I have a great real estate attorney and C.P.A. to refer if you need more help. Just let me know.

Judy Clarke
The Clarke Team
Bay Area Real Estate
650-489-5399
sold@clarketeam.com

Clarification on Carbon Monoxide Detector Requirements

2011-03-15T12:00:00.000-07:00

The Carbon Monoxide Poisoning Preventation Act of 2010 (Cal. Health & Safety Code Section 13260 et seq.) was signed into law in 2010. Existing single family dwellings are required to install carbon monoxide detectors on or before July 1, 2011. All other dwellings are required to install on or before January 1, 2013. Landlords must install these detectors for existing leased properties as well!

The detectors must be on the approved list of the State Fire Marshall. http://osfm.fire.ca.gov/licensinglistings/licenselisting_bml_searchcotest.php
Select 5276 Carbon Monoxide Alarms from the Category drop down box.

The detailed requirements are very complex - please see question and answers provided by the California Association of Realtors below.

California Association of Realtors
Carbon Monoxide Detectors
Dec. 1, 2010

Q 1. What is carbon monoxide?
A Carbon monoxide is a gas produced whenever any fuel, such as gas, oil, kerosene, wood, or charcoal, is burned. A person cannot see or smell carbon monoxide. However, at high levels carbon monoxide can kill a person in minutes.
In addition, there are well-documented chronic health effects of acute carbon monoxide poisoning from exposure to carbon monoxide, such as lethargy, headaches, concentration problems, amnesia, psychosis, Parkinson’s disease, memory impairment, and personality alterations. (Cal. Health & Safety Code § 13261.)

Q 2. Is there a new California law dealing with the issue of carbon monoxide poisoning?
A Yes. The Carbon Monoxide Poisoning Prevention Act of 2010 (Cal. Health & Safety Code §§ 13260 et seq.) was signed into law this year. It requires carbon monoxide detectors to be installed in every “dwelling unit intended for human occupancy.” The California legislature also modified both the TDS (for residential one-to-four unit real property) and MHTDS (for manufactured homes and mobile homes) to include a reference to carbon monoxide detector devices. See below for more details.

Q 3. What is a carbon monoxide detector?
A It is a relatively inexpensive device similar to a smoke detector that signals detection of carbon monoxide in the air. Under the law, a carbon monoxide device is “designed to detect carbon monoxide and produce a distinct audible alarm.” It can be battery powered, a plug-in device with battery backup, or a device installed as recommended by Standard 720 of the National Fire Protection Association that is either wired into the alternating current power line of the dwelling unit with a secondary battery backup or connected to a system via a panel. If the carbon monoxide device is combined with a smoke detector, it must emit an alarm or voice warning in a manner that clearly differentiates between a carbon monoxide alarm warning and a smoke detector warning.
The carbon monoxide device must have been tested and certified pursuant to the requirements of the American National standards Institute (ANSI) and Underwriters Laboratories Inc. (UL) as set forth in either ANSI/UL 2034 or ANSI/UL 2075, or successor standards, by a nationally recognized testing laboratory listed in the directory of approved testing laboratories established by the Building Materials Listing Program of the Fire Engineering Division of the Office of the State Fire Marshal of the Department of Forestry and Fire Protection. (Cal. Health & Safety Code § 13262.)

Q 4. How does a homeowner comply with this law?
A Every owner of a “dwelling unit intended for human occupancy” must install an approved carbon monoxide device in each existing dwelling unit having a fossil fuel burning heater or appliance, fireplace, or an attached garage.
The applicable time periods are as follows:
(1) For all existing single-family dwelling units on or before July 1, 2011.
(2) For all other existing dwelling units on or before Jan. 1, 2013.
(Cal. Health & Safety Code § 17926(a).)

Q 5. How many devices and where do I place them in the home?
A This new law requires the owner “to install the devices in a manner consistent with building standards applicable to new construction for the relevant type of occupancy or with the manufacturer’s instructions, if it is technically feasible to do so” (Cal. Health & Safety Code § 17926 (b)). The following language comes packaged with carbon monoxide (CO) detectors:
For minimum security, a CO Alarm should be centrally located outside of each separate
sleeping area in the immediate vicinity of the bedrooms. The Alarm should be located at least 6 inches (152mm) from all exterior walls and at least 3 feet (0.9 meters) from supply or return vents. Building standards applicable to new construction are as follows (overview summary only):
• Section R315 et seq. of the 2010 edition California Residential Code (CRC) [effective Jan. 1, 2011] (applicable to new one-to-two family dwellings and townhouses not more than 3 stories and also where work requiring a permit for alterations, repairs or additions exceeding one thousand dollars in existing dwellings units):
Installed outside of each separate sleeping area in the immediate vicinity of the bedroom
(s) in dwelling units and on every level including basements within which fuel-fired
appliances are installed and in dwelling units that have attached garages.
• Section 420 et seq of the 2010 edition California Building Code (CBC) [effective Jan. 1, 2011] (applicable to other new dwelling units and also where a permit is required for alterations, repairs or additions exceeding $1,000 in existing dwelling units):
Installed outside of each separate sleeping area in the immediate vicinity of the bedroom
(s) in dwelling units and on every level including basements within which fuel-fired the American National standards Institute (ANSI) and Underwriters Laboratories Inc. (UL) as set forth in either ANSI/UL 2034 or ANSI/UL 2075, or successor standards, by a nationally recognized testing laboratory listed in the directory of approved testing laboratories established by the Building Materials Listing Program of the Fire Engineering Division of the Office of the State Fire Marshal of the Department of Forestry and Fire Protection. (Cal. Health & Safety Code § 13262.)

Q 4. How does a homeowner comply with this law?
A Every owner of a “dwelling unit intended for human occupancy” must install an approved carbon monoxide device in each existing dwelling unit having a fossil fuel burning heater or appliance, fireplace, or an attached garage. The applicable time periods are as follows:
(1) For all existing single-family dwelling units on or before July 1, 2011.
(2) For all other existing dwelling units on or before Jan. 1, 2013. (Cal. Health & Safety Code § 17926(a).)

Q 5. How many devices and where do I place them in the home?
A This new law requires the owner “to install the devices in a manner consistent with building standards applicable to new construction for the relevant type of occupancy or with the manufacturer’s instructions, if it is technically feasible to do so” (Cal. Health & Safety Code § 17926 (b)).

The following language comes packaged with carbon monoxide (CO) detectors:
For minimum security, a CO Alarm should be centrally located outside of each separate
sleeping area in the immediate vicinity of the bedrooms. The Alarm should be located at least 6 inches (152mm) from all exterior walls and at least 3 feet (0.9 meters) from supply or return vents. Building standards applicable to new construction are as follows (overview summary only):

• Section R315 et seq. of the 2010 edition California Residential Code (CRC) [effective Jan. 1, 2011] (applicable to new one-to-two family dwellings and townhouses not more than 3 stories and also where work requiring a permit for alterations, repairs or additions exceeding one thousand dollars in existing dwellings units):
Installed outside of each separate sleeping area in the immediate vicinity of the bedroom
(s) in dwelling units and on every level including basements within which fuel-fired
appliances are installed and in dwelling units that have attached garages.

• Section 420 et seq of the 2010 edition California Building Code (CBC) [effective Jan. 1, 2011] (applicable to other new dwelling units and also where a permit is required for alterations, repairs or additions exceeding $1,000 in existing dwelling units):
Installed outside of each separate sleeping area in the immediate vicinity of the bedroom
(s) in dwelling units and on every level including basements within which fuel-fired appliances are installed and in dwelling units that have attached garages.

Q 6. Are there any penalties for noncompliance with this law regarding installation of carbon monoxide detector devices?
A Yes. A violation is an infraction punishable by a maximum fine of $200 for each offense. However, a property owner must receive a 30-day notice to correct first. If an owner who receives such a notice fails to correct the problem within the 30-day period, then the owner may be assessed the fine. (Cal. Health & Safety Code § 17926(c).)

Q 7. Can a buyer of a “dwelling unit intended for human occupancy” rescind the sale if the dwelling doesn’t have the necessary carbon monoxide detectors?
A No. However, the buyer may be entitled to an award of actual damages not to exceed $100 plus court costs and attorney’s fees. (Cal. Health & Safety Code § 17926(d).) Note the following language in the TDS and MHTDS:
Installation of a listed appliance, device, or amenity is not a precondition of sale or transfer of the dwelling. The carbon monoxide device, garage door opener, or child-resistant pool barrier may not be in compliance with the safety standards relating to, respectively, carbon monoxide device standards of Chapter 8 (commencing with Section 13260) of Part 2 of Division 12 of, automatic reversing device standards of Chapter 12.5 (commencing with Section 19890) of Part 3 of Division 13 of, or the pool safety standards of Article 2.5 (commencing with Section 115920) of Chapter 5 of Part 10 of Division 104 of, the Health and Safety Code. Window security bars may not have quick-release mechanisms in compliance with the 1995 edition of the California Building Standards Code.

Q 8. Does a seller have any special carbon monoxide disclosure obligations?
A No. The only disclosure obligations are satisfied when providing a buyer with the TDS or the MHTDS. If the seller is exempt from giving a TDS, the law doesn’t require any specific disclosures regarding carbon monoxide detector devices. (See Cal. Civ. Code §§ 1102.6, 1102.6d.) The Homeowners’ Guide to Environmental Hazards also will include information regarding carbon monoxide.

Q 9. May local municipalities require more stringent standards for carbon monoxide detectors?
A Yes (Cal. Health & Safety Code § 17926(e)).

Q 10. Do landlords have any special obligations regarding carbon monoxide detectors?
A Yes. All landlords of dwelling units must install carbon monoxide detectors as indicated in Question 4. The law gives a landlord authority to enter the dwelling unit for the purpose of installing, repairing, testing, and maintaining carbon monoxide devices “pursuant to the authority and requirements of Section 1954 of the Civil Code [entry by landlord].” The carbon monoxide device must be operable at the time that a tenant takes possession. However, the tenant has the responsibility of notifying the owner or owner’s agent if the tenant becomes aware of an inoperable or deficient carbon monoxide device. The landlord is not in violation of the law for a deficient or inoperable carbon monoxide device if he or she has not received notice of the problem from the tenant.
(Cal. Health & Safety Code § 17926.1.)

Q 11. If the California Building Standards Commission adopts or updates building standards relating to carbon monoxide devices in the future, is the owner required to install the newer device?
A It depends. Yes, when the owner makes an application for a permit for alterations, repairs, or additions to that dwelling unit with the cost exceeding $1,000. (Cal. Health & Safety Code § 17926.2 (b).)

California Association of REALTORS®
Member Legal Services
525 South Virgil Ave.
Los Angeles, CA 90020
The information contained herein is believed accurate as of Dec. 1, 2010. It is intended to provide general answers to general questions and is not intended as a substitute for individual legal advice. Advice in specific situations may differ depending upon a wide variety of factors. Therefore, readers with specific legal questions should seek the advice of an attorney. Written by Sonia M. Younglove, Esq. Copyright© 2010 CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.). Permission is granted to C.A.R. members only to reprint and use this material for non-commercial purposes provided credit is given to the C.A.R.Legal Department. Other reproduction or use is strictly prohibited without the express written permission of the C.A.R. Legal Department. All rights reserved.
Terms and Conditions Privacy Policy Permission to Reprint Site Map Copyright © 2011 CALIFORNIA ASSOCIATION OF REALTORS®

Judy Clarke
The Clarke Team
Bay Area Real Estate
650-489-5399
sold@clarketeam.com

Five signs that say “buy”

2011-03-14T15:29:00.000-07:00

From The Wall Street Journal Weekend Investor, February 26, 2011

Home buyers sitting on the fence wondering if now is the right time to buy should consider five factors when making this decision: Jobs, recent sales activity, construction, mortgage availability, and anecdotal evidence. Each of these issues can help consumers make the best choice for their situation and financial circumstance.

Jobs: Although many areas of the country were deeply impacted by the recession, some areas were less affected by job loss. If employment stability is a concern, prospective buyers should review job-growth data from the U.S. Bureau of Labor Statistics at http://www2.realtoractioncenter.com/site/R?i=OY4Sr8R-aTMAv3xZ7tqPOw... The data provided by the Bureau is approximately one month old and shows the direction of the local economy.

Recent Sales Activity: Housing inventory and sales volume should be taken into consideration while house hunting. A large inventory of homes with few actual transactions can be a negative indicator. On the other hand, if inventory is falling and transactions are rising, that is a good sign. In January, the CALIFORNIA ASSOCIATION OF REALTORS®’ Unsold Inventory Index stood at 6.7 months, up from 5 months in December 2010, but down from 5.7 months in January 2010. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.

Construction: Staying up-to-date on the number of building permits issued for local builders is useful for gauging builder sentiment and the future of housing activity. The California Building Industry Association recently announced that California homebuilders pulled 2,920 total housing permits in January, registering a 5-percent decline compared with a year ago and a 56-percent decline compared with December. However, the Construction Industry Research Board is projecting 62,000 total permits will be pulled in 2011, an increase of 38 percent compared with 2010’s total of 44,893 permits.

Mortgage Availability: Home buyers hoping to be approved for a mortgage should monitor local lending patterns. Following the financial crisis, most national banks tightened lending standards; however, some local banks haven’t been impacted as much as large lenders and are more willing to lend, even for higher-priced homes.

Anecdotal Evidence: Although buyers can access home listings online, one of the best ways to monitor the local housing market is to work with a REALTOR® and gather intelligence using their expertise and guidance.

Home buyers sitting on the fence wondering if now is the right time to buy should consider five factors when making this decision: Jobs, recent sales activity, construction, mortgage availability, and anecdotal evidence. Each of these issues can help consumers make the best choice for their situation and financial circumstance.

Jobs: Although many areas of the country were deeply impacted by the recession, some areas were less affected by job loss. If employment stability is a concern, prospective buyers should review job-growth data from the U.S. Bureau of Labor Statistics at http://www2.realtoractioncenter.com/site/R?i=OY4Sr8R-aTMAv3xZ7tqPOw... The data provided by the Bureau is approximately one month old and shows the direction of the local economy.

Recent Sales Activity: Housing inventory and sales volume should be taken into consideration while house hunting. A large inventory of homes with few actual transactions can be a negative indicator. On the other hand, if inventory is falling and transactions are rising, that is a good sign. In January, the CALIFORNIA ASSOCIATION OF REALTORS®’ Unsold Inventory Index stood at 6.7 months, up from 5 months in December 2010, but down from 5.7 months in January 2010. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.

Construction: Staying up-to-date on the number of building permits issued for local builders is useful for gauging builder sentiment and the future of housing activity. The California Building Industry Association recently announced that California homebuilders pulled 2,920 total housing permits in January, registering a 5-percent decline compared with a year ago and a 56-percent decline compared with December. However, the Construction Industry Research Board is projecting 62,000 total permits will be pulled in 2011, an increase of 38 percent compared with 2010’s total of 44,893 permits.

Mortgage Availability: Home buyers hoping to be approved for a mortgage should monitor local lending patterns. Following the financial crisis, most national banks tightened lending standards; however, some local banks haven’t been impacted as much as large lenders and are more willing to lend, even for higher-priced homes.

Anecdotal Evidence: Although buyers can access home listings online, one of the best ways to monitor the local housing market is to work with a REALTOR® and gather intelligence using their expertise and guidance.

Judy Clarke
The Clarke Team
650-489-5399
sold@clarketeam.com

Reality Check on Interest Rates

2011-03-05T10:00:00.000-08:00

Experian will report on rental payments

2011-03-02T13:00:00.000-08:00

This is great news for renters - especially those renters trying to rebuild their credit history after losing a home to foreclosure! Experian recently purchased Rent Bureau, hence the change. Ask your landlord to report your rent payments to help get your credit score back to where it should be. Don't give up - you can purchase a home again with time and patience.

From the Experian Website:

Dear Experian,

Can an apartment put your rent on your credit report as an installment payment like they do with a car payment?
- YES

Dear YES, You can’t report your own rent payments, but that doesn’t mean your rent payments can’t help you build a credit history.

Experian recently acquired Rent Bureau, one of that nation’s largest rent payment reporting companies and has begun including rent payment in Experian consumer credit reports.

In the past, only negative rent payment history would appear in your credit report, for example evictions or civil judgments for unpaid rent. That meant poor rent payment history could hurt your credit report, but positive rent payment couldn’t help.

Adding positive rent payment history enables you to build a new or stronger credit history simply by paying your rent or lease on time. Experian believes that consumers who have little or no credit history, or who are trying to recover from a difficult financial situation, will benefit greatly.

It can be difficult for people with no credit history to qualify for traditional credit lines. Incorporating rent payments in the credit report will give lenders additional information upon which to base a decision, opening the door to credit for many who would otherwise be unable to qualify without a cosigner.

Thanks for asking.
- The "Ask Experian" team

Market Watch - 02.11.11 - SF Peninsula

2011-02-27T14:32:00.000-08:00

From my boss, Rick Turley of CB:

SF Peninsula — The spring buyers are out and ready to buy when they can locate the right inventory, our Burlingame managers report. We are routinely seeing multiple offers on well-priced homes under $1 mill. Open house activity has increased with as many as 100 people through one open house. Buyers are more positive and sellers more flexible on price.

Across the hills in Half Moon Bay, there seems to be two extremes in the market – the very low end selling quickly or the upper end second home, all cash, selling quickly.

Our Menlo Park offices report that they are definitely seeing a stronger high-end market in that community. Buyers are not afraid to spend $2.5 million for a house anymore. The inventory is slowly increasing, our Redwood City office says. Buyers are taking their time before making a decision. Agents are working with both buyers and sellers for longer periods of time. Overall attitude seems to be positive.

The Palo Alto market is extremely tight in inventory. The $2.5 million price range is strong and getting multiple offers. One example: a Palo Alto listing at $2,195,000 had 118 groups through open house, 14 packets are out, offers on Wednesday.

Our San Mateo offices say open houses are still very well attended, although many buyers still on the fence.

Finally in Woodside, our local manager says sales activity and inventory have dipped. Still a lot of interest, but no action.

Housing’s Role in the Road to Recovery

2011-02-22T18:07:00.000-08:00

By Brian Summerfield, Online Editor, REALTOR® Magazine

The National Association of REALTORS® took out a full-page ad in this past Sunday’s edition of the Washington Post to get across a simple but important message: Housing creates jobs, which America needs for a genuine, complete recovery. Indeed, much of the positive economic news that’s come out recently — even in real estate — has been tempered by the enduring high levels of unemployment. Although those figures have improved incrementally over the past couple of months, the unemployment rate is still more than 9 percent, well above historic norms, and when people who have stopped looking for jobs are factored in, it’s much higher.

The aim of NAR’s ad was to advise policymakers and Congress, in advance of the release of President Obama’s Fiscal Year 2012 budget today, that certain changes to the mortgage interest deduction or government involvement in the secondary mortgage market — however well-intended — could have disastrous consequences for the economy. Conversely, by supporting policies that foster home ownership and purchases, they can help create the necessary conditions for a turnaround.

(Note: There is a provision in the 2012 budget that would limit the value of all itemized deductions, including the mortgage interest deduction, to 28 percent for taxpayers in higher brackets — households earning more than $250,000. The proposal is similar to a provision included in last year’s budget proposal, which was rejected by Congress.)

In fact, according to NAR, for every two new houses sold, a job is created. This argument rests on measuring gross domestic product (GDP) as the sum of all income. NAR estimates that each existing-home sale at the median price creates $30,792 because of commissions, fees, moving expenses, furniture, and a “multiplier effect” due to reinvestment of capital from a home sale into the economy. For a new-home sale, nearly $28,000 more is added to that because of spending on materials and labor for construction.

So, let’s say you add two new-home sales together. That adds $117,058 to the economy. Now, divide U.S. GDP by the number of payroll workers, and you get approximately $113,000. (NAR acknowledges this is an overestimation of salary income since income can be earned from profits, rents, and other sources, but does provide a ceiling to earnings per worker.) In other words, these two transactions pump enough money into the economy to pay another worker. And if you substitute average earnings — about $57,000 — for the GDP-divided-by-payroll-workers formula, that jumps up to two jobs.

Now, this is all theoretical, but there’s no denying that just a few transactions can have a significant economic impact on localities — with respect to people’s livelihoods, home values, and viability of communities. The housing sector won’t be the only thing to restore the vitality of American economy, but it will play an important part.

Learn more about why home ownership matters for economic recovery.

California home sales, median price rise in December

2011-02-05T11:17:00.000-08:00

From the California Association of Realtors February Newsline:

California home sales rose in December, posting their highest level since May, according to data from C.A.R. The statewide median price increased from November, but was down from a year ago.

“December’s sales increase reflects buyers taking advantage of rock bottom interest rates and improved affordability since the first half of the year, when prices were higher,” said C.A.R. President Beth L. Peerce. “Most of December’s sales opened escrow in October and November. Rates hit their absolute lowest in October but began edging higher in November, prompting buyers to get off the fence,” she said.

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 520,680 in December. December’s sales were up 5.9 percent from November’s revised pace of 491,590 but were down 6.8 percent from the revised 558,840 sales pace recorded in December 2009.

Following three consecutive monthly declines, the median price of an existing, single-family detached home sold in California increased 1.7 percent from a revised $296,690 in November but was down 1.6 percent from the revised $306,860 median price recorded for the same period a year ago.

“While sales rose in December, the sales pace in the second half of the year was lower than the first half as the housing market weaned itself off home buyer tax credits,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “For 2010 as a whole, sales reached 494,900 homes sold, down 9.5 percent from the 546,860 homes sold in 2009. However, the statewide median price increased 10.2 percent to reach $302,900 for the year, up from the $275,000 recorded in 2009,” she said.

Here are other highlights of C.A.R.’s resale housing report for December 2010:
A greater than usual drop in listings combined with the sales increase caused C.A.R.’s Unsold Inventory Index to decline more than one month. The Unsold Inventory Index for existing, single-family detached homes was 5.0 months in December, down from 6.2 months in November. The index was 3.8 months in December 2009. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.
Thirty-year fixed-mortgage interest rates averaged 4.71 percent during December 2010, compared with 4.93 percent in December 2009, according to Freddie Mac. Adjustable-mortgage interest rates averaged 3.31 percent in December 2010, compared with 4.31 percent in December 2009.

The median number of days it took to sell a single-family home was 57.5 days in December 2010, compared with 35.1 days for the same period a year ago.

Regional MLS sales and price information are contained in the tables that accompany this press release. Regional sales data are not adjusted to account for seasonal factors that can influence home sales. The MLS median price and sales data for detached homes are generated from a survey of more than 90 associations of REALTORS® throughout the state. MLS median price and sales data for condominiums are based on a survey of more than 60 associations. The median price for both detached homes and condominiums represents closed escrow sales.

In a separate report covering more localized statistics generated by C.A.R. and DataQuick Information Systems, 97 of the 329 cities and communities reporting showed an increase in their respective median home prices from a year ago. DataQuick statistics are based on county records data rather than MLS information. DataQuick Information Systems is a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. (The lists are generated for incorporated cities with a minimum of 30 recorded sales in the month.)

Note: Large changes in local median home prices typically indicate both local home price appreciation, and often, large shifts in the composition of housing market activity. Some of the variations in median home prices for November may be exaggerated due to compositional changes in housing demand. The DataQuick tables listing median home prices in California cities and counties are accessible through C.A.R. online at http://www.car.org/marketdata/historicalprices/2010medianprices/dec2010/.

Statewide, the 10 cities with the highest median home prices in California during December 2010 were: Beverly Hills, $2,180,000; Los Altos, $1,300,000; Calabasas, $1,175,000; Laguna Beach, $1,105,000; Manhattan Beach, $1,085,500; Newport Beach, $1,000,000; Santa Monica, $921,000; Cupertino, $904,500; Rancho Palos Verdes, $849,000; Los Gatos, $840,000.

Statewide, the cities with the greatest median home price increases in December 2010 compared with the same period a year ago were: Beverly Hills, 54.3 percent; Calabasas, 39.1 percent; Poway, 25.5 percent; Ridgecrest, 23.3 percent; San Juan Capistrano, 19.2 percent; Compton, 17.5 percent; Laguna Hills, 15.7 percent; Santa Cruz, 14.1 percent; Gilroy, 14.1 percent; La Habra, 13.2 percent.

FBI investigates courthouse auction bids

2011-01-28T17:17:00.000-08:00

The FBI is investigating whether some real estate speculators are illegally rigging bids for foreclosure auctions. Bid-rigging violates the Sherman Antitrust Act and can carry a maximum penalty of 10 years in prison and a $1 million fine. The maximum fine can be increased to twice the violator’s gain or twice the victim’s loss.

The FBI has been conducting interviews and executing search warrants throughout the San Francisco Bay Area to investigate whether some auction participants allegedly pay others to refrain from bidding on certain properties to keep their prices lows.

The FBI encourages anyone with knowledge of anti-competitive practices at foreclosure auctions to call its tip line at (415) 553-7400.

CalHFA mortgage aid program for jobless begins

2011-01-21T12:34:00.000-08:00

CalHFA mortgage aid program for jobless begins - follow the link to an article written on January 9, 2011 by Kathleen Pender of the SF Chronicle:

http://articles.sfgate.com/2011-01-09/business/27018642_1_servicers-mortgage-aid-calhfa

Carbon Monoxide Detectors

2011-01-14T10:30:00.000-08:00

The new California law regulating the installation of carbon monoxide detectors is very confusing. The following question and answer style article was written by the California Association of Realtors Legal Department. I have removed most references to websites and phone numbers that require membership to access. We will post clarifications on this law as available.

C.A.R. Member Legal Services Dec. 1, 2010 Carbon Monoxide Detectors

Q 1. What is carbon monoxide?

A Carbon monoxide is a gas produced whenever any fuel, such as gas, oil, kerosene, wood, or charcoal, is burned. A person cannot see or smell carbon monoxide. However, at high levels carbon monoxide can kill a person in minutes.
In addition, there are well-documented chronic health effects of acute carbon monoxide poisoning from exposure to carbon monoxide, such as lethargy, headaches, concentration problems, amnesia, psychosis, Parkinson’s disease, memory impairment, and personality alterations. (Cal. Health & Safety Code § 13261.)

Q 2. Is there a new California law dealing with the issue of carbon monoxide poisoning?

A Yes. The Carbon Monoxide Poisoning Prevention Act of 2010 (Cal. Health & Safety Code §§ 13260 et seq.) was signed into law this year. It requires carbon monoxide detectors to be installed in every “dwelling unit intended for human occupancy.” The California legislature also modified both the TDS (for residential one-to-four unit real property) and MHTDS (for manufactured homes and mobilehomes) to include a reference to carbon monoxide detector devices. See below for more details.

Q 3. What is a carbon monoxide detector?

A It is a relatively inexpensive device similar to a smoke detector that signals detection of carbon monoxide in the air. Under the law, a carbon monoxide device is “designed to detect carbon monoxide and produce a distinct audible alarm.” It can be battery powered, a plug-in device with battery backup, or a device installed as recommended by Standard 720 of the National Fire Protection Association that is either wired into the alternating current power line of the dwelling unit with a secondary battery backup or connected to a system via a panel.

If the carbon monoxide device is combined with a smoke detector, it must emit an alarm or voice warning in a manner that clearly differentiates between a carbon monoxide alarm warning and a smoke detector warning.The carbon monoxide device must have been tested and certified pursuant to the requirements of the American National standards Institute (ANSI) and Underwriters Laboratories Inc. (UL) as set forth in either ANSI/UL 2034 or ANSI/UL 2075, or successor standards, by a nationally recognized testing laboratory listed in the directory of approved testing laboratories established by the Building Materials Listing Program of the Fire Engineering Division of the Office of the State Fire Marshal of the Department of Forestry and Fire Protection.(Cal. Health & Safety Code § 13262.)

Q 4. How does a homeowner comply with this law?

A Every owner of a “dwelling unit intended for human occupancy” must install an approved carbon monoxide device in each existing dwelling unit having a fossil fuel burning heater or appliance, fireplace, or an attached garage.The applicable time periods are as follows:
(1) For all existing single-family dwelling units on or before July 1, 2011.
(2) For all other existing dwelling units on or before Jan. 1, 2013.
(Cal. Health & Safety Code § 17926(a).)

Q 5. How many devices and where do I place them in the home?

A This new law requires the owner “to install the devices in a manner consistent with building standards applicable to new construction for the relevant type of occupancy or with the manufacturer’s instructions, if it is technically feasible to do so” (Cal. Health & Safety Code § 17926(b)).The following language comes packaged with carbon monoxide (CO) detectors:
For minimum security, a CO Alarm should be centrally located outside of each separate sleeping area in the immediate vicinity of the bedrooms. The Alarm should be located at least 6 inches (152mm) from all exterior walls and at least 3 feet (0.9 meters) from supply or return vents.
Building standards applicable to new construction are as follows (overview summary only):
• Section R315 et seq. of the 2010 edition California Residential Code (CRC) [effective Jan. 1, 2011] (applicable to new one-to-two family dwellings and townhouses not more than 3 stories and also where work requiring a permit for alterations, repairs or additions exceeding one thousand dollars in existing dwellings units):
Installed outside of each separate sleeping area in the immediate vicinity of the bedroom(s) in dwelling units and on every level including basements within which fuel-fired appliances are installed and in dwelling units that have attached garages.
• Section 420 et seq of the 2010 edition California Building Code (CBC) [effective Jan. 1, 2011] (applicable to other new dwelling units and also where a permit is required for alterations, repairs or additions exceeding $1,000 in existing dwelling units):
Installed outside of each separate sleeping area in the immediate vicinity of the bedroom(s) in dwelling units and on every level including basements within which fuel-fired appliances are installed and in dwelling units that have attached garages.

Q 6. Are there any penalties for noncompliance with this law regarding installation of carbon monoxide detector devices?

A Yes. A violation is an infraction punishable by a maximum fine of $200 for each offense. However, a property owner must receive a 30-day notice to correct first. If an owner who receives such a notice fails to correct the problem within the 30-day period, then the owner may be assessed the fine. (Cal. Health & Safety Code § 17926(c).)

Q 7. Can a buyer of a “dwelling unit intended for human occupancy” rescind the sale if the dwelling doesn’t have the necessary carbon monoxide detectors?

A No. However, the buyer may be entitled to an award of actual damages not to exceed $100 plus court costs and attorney’s fees. (Cal. Health & Safety Code § 17926(d).)Note the following language in the TDS and MHTDS:

Installation of a listed appliance, device, or amenity is not a precondition of sale or transfer of the dwelling. The carbon monoxide device, garage door opener, or child-resistant pool barrier may not be in compliance with the safety standards relating to, respectively, carbon monoxide device standards of Chapter 8 (commencing with Section 13260) of Part 2 of Division 12 of, automatic reversing device standards of Chapter 12.5 (commencing with Section 19890) of Part 3 of Division 13 of, or the pool safety standards of Article 2.5 (commencing with Section 115920) of Chapter 5 of Part 10 of Division 104 of, the Health and Safety Code. Window security bars may not have quick-release mechanisms in compliance with the 1995 edition of the California Building Standards Code.

Q 8. Does a seller have any special carbon monoxide disclosure obligations?

A No. The only disclosure obligations are satisfied when providing a buyer with the TDS or the MHTDS. If the seller is exempt from giving a TDS, the law doesn’t require any specific disclosures regarding carbon monoxide detector devices. (See Cal. Civ. Code §§ 1102.6, 1102.6d.)The Homeowners’ Guide to Environmental Hazards also will include information regarding carbon monoxide.

Q 9. May local municipalities require more stringent standards for carbon monoxide detectors?

A Yes (Cal. Health & Safety Code § 17926(e)).

Q 10. Do landlords have any special obligations regarding carbon monoxide detectors?

A Yes. All landlords of dwelling units must install carbon monoxide detectors as indicated in Question 4. The law gives a landlord authority to enter the dwelling unit for the purpose of installing, repairing, testing, and maintaining carbon monoxide devices “pursuant to the authority and requirements of Section 1954 of the Civil Code [entry by landlord].”The carbon monoxide device must be operable at the time that a tenant takes possession. However, the tenant has the responsibility of notifying the owner or owner’s agent if the tenant becomes aware of an inoperable or deficient carbon monoxide device. The landlord is not in violation of the law for a deficient or inoperable carbon monoxide device if he or she has not received notice of the problem from the tenant.(Cal. Health & Safety Code § 17926.1.)

Q 11. If the California Building Standards Commission adopts or updates building standards relating to carbon monoxide devices in the future, is the owner required to install the newer device?

A It depends. Yes, when the owner makes an application for a permit for alterations, repairs, or additions to that dwelling unit with the cost exceeding $1,000. (Cal. Health & Safety Code § 17926.2(b).)

Q 12. Where can I obtain additional information?

A This legal article is just one of the many legal publications and services offered by C.A.R. to its members. For a complete listing of C.A.R.'s legal products and services, please visit car.org.
Readers who require specific advice should consult an attorney.

Preserving Pipes

2010-12-26T11:27:00.000-08:00

During the winter season our attention turns to family and friends instead of worrying about tedious home maintenance chores like plumbing—and for good reason! Now is an ideal time to relax and enjoy your home.

Nevertheless, homeowners and renters alike tend to take their pipes for granted. Being prepared for problems makes them more manageable if they should occur—so here are a few basic tips for dealing with a pipe leak.

Ahead of Time - Know where your main water shutoff is. You may not need to use it—if the leak coming from a faucet knob, for example, you can simply shut off the water at the sink. But when in doubt, go to the main valve.

Do It Yourself… Maybe - If you know what’s causing the problem and can tell the difference between a slip joint and a saddle valve, feel free to fix it yourself. However, many plumbers make a good living off fixing botched home repair jobs—so feel free to get it done right the first time.

When It’s Cold - If you ever encounter a frozen pipe, you can often thaw it with a hair dryer. If you’re going on vacation when there’s a cold snap in the forecast, you can help prevent frozen pipes by opening cabinet doors below your sink to let your home’s warm air circulate. You may also try turning the faucet on to a slow drip to keep the water moving and prevent freezing.

It’s smart to take care of plumbing repairs well in advance of putting your home on the market. Buyers can have more confidence in the value of a well-maintained home—and many signs are pointing to acceleration in the real estate market in 2011.

Legal Help for San Bruno Pipeline Explosion Victims

2010-11-20T15:01:00.000-08:00

I (Judy Clarke) attended a Millbrae Chamber of Commerce board meeting on Monday night and wanted to pass on some information on obtaining legal help if you or someone you know was a victim of the San Bruno pipiline explosion.

Board member Amanda Riddle of Corey, Luzaich, Pliska, de Ghetaldi and Nastari let us know her firm is representing 18 families thus far who were victims.

They are not charging up front fees to meet and discuss how they can help. Please pass this information along to anyone who was involved in this disaster.

Corey, Luzaich, Pliska, de Ghetaldi and Nastari have always given back to the surrounding communities. This is another example of the good work they do.

Cashin Company is now Coldwell Banker

2010-11-15T15:29:00.000-08:00

Last week, we were invited to a meeting at the Menlo Park Country Club for a meeting and lunch on Thursday.

Skip Cashin spoke to us and announced the sale of Cashin Company Realtors to Coldwell Banker.

Rick Turley, President of Bay Area Coldwell Banker spoke to us next and announced his hope that everyone will give CB a chance in the transition.

When Kelly and I left the meeting, we were sure to shake Skip's hand and tell him thank you for everything. Cashin has been a wonderful place to work over the years.

We are considering this an exciting opportunity to continue to provide excellent customer service within the Coldwell Banker family.

Judy and Kelly

Homebuyer tax credit: 950,000 must repay

2010-10-23T09:00:00.000-07:00

NEW YORK (CNNMoney.com) -- Nearly half of all Americans who claimed the first-time homebuyer tax credit on their 2009 tax returns will have to repay the government.
According to a report from the Inspector General for Tax Administration, released to the public Thursday, about 950,000 of the nearly 1.8 million Americans who claimed the tax credit on their 2009 tax returns will have to return the money.

The confusion comes because homebuyers were eligible for two different credits, depending on when their homes were purchased.

Those who bought properties during 2008 were to deduct, dollar for dollar, up to 10% of the home's purchase price or $7,500, whichever was less. The catch: The money was a no-interest loan that had to be repaid within 15 years.

Had they waited to buy until 2009, they could have gotten a much sweeter deal. Congress extended the credit and made it a refund rather than a loan.

Now, the IRS is developing a strategy for separating the 2009 taxpayers who are required to repay the credit from those who are not.

A review by the Inspector General earlier this year found that the IRS could not easily distinguish between home purchases made in 2008 and 2009. That heightened concerns that some claims could be erroneous or even fraudulent, that buyers could, for example, claim their purchase came later than it actually occurred.

Thursday's release reported that 73,000 claims, more than 4% of the 1.8 million homebuyers who received the credit, had incorrect purchase dates recorded by the IRS.
Some of the inaccuracies counted against the taxpayers, Nearly 60,000 were listed as purchasing in 2008 (meaning they had to repay the credit) or had no purchase dates at all, rather than their correct 2009 purchase dates, which would free them of the obligation to pay it back.

It is also taking a look at all those deceased taxpayers who received credits.

The inspector general reported that 1,326 single people listed as dead by the Social Security Administration claimed more than $10 million in credits. The IRS threw out 528 of those 1,326 claims, saving $4 million.

NEW ENERGY SAVINGS BOOKLET NOW AVAILABLE

2010-10-16T09:00:00.000-07:00

The California Energy Commission has recently released a Home Energy Rating System (HERS) booklet to help homeowners determine the energy efficiency of their homes based on an HERS rating scale of 0 to 250, and identify energy-saving improvements. The HERS booklet is not a mandatory disclosure for any sales transaction, according to section 2079.10 of the California Civil Code. However, disclosure is highly recommended for all residential transactions, because it provides a valuable shield from liability for sellers and brokers. Delivery of the HERS booklet will be deemed to be adequate to inform the buyer about the existence of a statewide home energy rating program.

C.A.R. will be offering the HERS booklet as part of our Combined Hazards Booklet in both print and through ePUBS® for zipForm®. C.A.R.'s updated Combined Hazards Booklet should be available in print in early October, and through ePUBS® in November. In the meantime, the HERS booklet is available at the California Energy Commission's website at

http://www.energy.ca.gov/HERS/booklet.html,

which includes an acknowledgement of receipt for parties to sign.

FHA may slash upfront costs of some reverse mortgages

2010-10-09T09:00:00.000-07:00

The agency is finalizing plans to reduce the initial mortgage insurance premium on certain loans to 0.01% of a home's value from 2%. Homeowners, however, would be able to borrow less and have to pay more per month.

The Federal Housing Administration isn't talking publicly about it, but the agency may be getting ready to cut the upfront costs of reverse mortgages for some borrowers.

The agency also, however, may be reducing the amount seniors can borrow against their homes.

In a recent conference call with industry participants, FHA officials said they were finalizing plans to offer a home-equity conversion mortgage requiring almost no upfront mortgage insurance premium, according to the National Reverse Mortgage Lenders Assn. The FHA also may tinker with the traditional product in a way that increases the overall borrowing costs.

"HUD is looking at options to provide a lower-priced [home-equity conversion mortgage] option," said Lemar Wooley, a spokesman for the U.S. Housing and Urban Development Department. "We are still working out the details. Our basic plan is to make the product more attractive, while limiting FHA's exposure to risk."

Debate might give new life to mortgage cramdown legislation

2010-10-02T09:00:00.000-07:00

from the Los Angeles Times:

Reporting From Washington —

If there is a term that strikes fear in the hearts of residential lenders everywhere, it is "cramdown."

Lenders dread the judicial procedure that erases a portion of a borrower's mortgage because the house, which is the underlying security or collateral for the loan, is worth less than what is owed on it.

Actually, the word is a euphemism for forcing a ruling upon a creditor, as in "crammed down" the lender's throat.

The proper term is "bifurcation," meaning that in a bankruptcy proceeding the loan is split into a secured claim equal to the current appraised value of the property and an unsecured claim equal to the difference between the unpaid balance and the home's present value. Generally, the borrower is required to continue to pay on the secured portion, while the difference is treated like any other unsecured debt.

But whatever you call the concept, mortgage companies hate it even more than workouts or loan modifications.

At least they get to control the process in a typical loan mod. But with a cramdown, they are at the mercy of a judge who may more likely favor a down-and-out borrower over a big-time corporation.

That's the way lenders tend to look at cramdowns, anyway. Because borrowers would still be liable for an amount equal to what their places are now worth on the open market, the lenders would receive what they would have had the homes foreclosed — and maybe more. So what's the big deal?

A research paper from two economists at the Federal Reserve Bank of Cleveland contends that if what happened during the agricultural lending crisis of the 1980s is any indication, the actual negative effect of cramdowns is only minor.

Back then, farming was going full-bore and the average price of farmland nationally was rising rapidly. Then the bottom fell out, and many farmers who had borrowed heavily to acquire additional acreage found themselves owing more to their mortgage companies than their properties were worth.

The story sounds familiar. "Farm loan-underwriting standards eased, and a speculative lending boom ensued. Lenders began to rely less heavily on the ability of borrowers to service their debt from operating cash flows, and more on the continued appreciation of the underlying collateral — the farmland — for repayment," says the study by Thomas Fitzpatrick and James Thomson.
"But when demand for farm goods began to fall, farm real estate prices also fell precipitously. As farmers' cash flows decreased … many farmers saw their interest rates increase and found that they could not make payments and were underwater on their mortgages."

Like many troubled homeowners now, some financially strapped farmers in the early 1980s found themselves in danger of losing their primary residences with little prospect for relief under bankruptcy options available at the time. So Congress enacted legislation establishing Chapter 12 of the Bankruptcy Code, which allows judges to reduce — in what was then called a stripdown.— the debt that farmers owed on their homes.

But the effect was not nearly as dire as the banking community had told lawmakers it would be, the Cleveland Fed economists say. Chapter 12 "did not change the cost and availability of farm credit dramatically," they explain.

That's not what residential lenders are telling Congress these days whenever the discussion turns to allowing judges the authority to independently modify mortgages on all principal residences to their current value. (Mortgages on commercial properties, second homes and vacation homes already can be judicially modified.)

The Mortgage Bankers Assn., for example, says giving judges "free rein to rewrite loan contracts without economic restraint" would drive up the cost of financing for future borrowers by as much as 2 full percentage points.

Because lenders and mortgage investors would no longer be certain their loans would be truly secure, the MBA contends, they would be forced to require larger down payments and charge higher interest rates. "At a time when the mortgage market is experiencing a serious credit crunch, [cramdowns] will increase costs to consumers, further destabilize the mortgage market and hurt the overall economy," the MBA claims.

But economists Fitzpatrick and Thomson also note that "what was most interesting about Chapter 12 is that it worked without working." That is, rather than inducing a flood of bankruptcy filings, the simple prospect of a judge's unilaterally changing the terms of their loans led many farm lenders to institute loan modifications of their own volition.

Not so, counters John Blanchfield, senior vice president at the American Bankers Assn., who takes exception to many of Fitzpatrick and Thomson's findings.

Not only is the "attempt to use the Chapter 12 experience as a road map to solve the current mortgage crisis based on a limited and flawed retelling of history," wrote the director of the ABA Center for Agriculture and Rural Banking in a letter last month to the two economists; it was destructive to banks and harmed farmers "who needed credit after it was enacted."

What is perhaps most interesting about this debate is that Congress is not currently considering cramdown legislation. But maybe the discussion will bring the concept back to life. After all, the Obama administration backs bankruptcy reform, and major lender Citigroup and consumer groups have said they are on board.

Various bills are in the hopper, most notably a perennial one by Sen. Richard J. Durbin (D-Ill.), who chairs the Appropriation Committee's financial services and general government subcommittee, and the House last year passed cramdown legislation, 234 to 199.

The Senate, however, has shown little interest in the measure, and when the Wall Street reform bill offered cramdown language in the summer, the House soundly rejected it. But stay tuned. You never know when cramdowns will resurface again.

lsichelman@aol.com
Distributed by United Feature Syndicate.
Copyright © 2010, Los Angeles Times

California home sales drop in August compared with last year

2010-09-27T11:26:00.000-07:00

from The Sacramento Bee:

The median home price of an existing, single-family home in California rose 1.2 percent compared with July and 8.6 percent from a year ago, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported this week. Following two months of consecutive month-over-month declines, California home sales edged up 1.8 percent in August compared with July, but were down 14.9 percent compared with August 2009.

According to C.A.R. President Steve Goddard, home buyers who are waiting on the sidelines should consider the opportunities available in today’s market. Favorable home prices and interest rates at or near historic lows make housing affordability the best in recent years. Anyone who is in a position to buy a home should do so before either of these key factors rise.
The statewide median home price posted its 10th consecutive year-over-year gain in August, according to C.A.R.’s report. The median price of an existing, single-family detached home sold in California during August 2010 was $318,660, an 8.6 percent increase from the revised $293,400 median price recorded in August 2009. The August 2010 median price was up 1.2 percent compared with July’s $314,850 median price.

C.A.R. Chief Economist Leslie Appleton-Young says California’s housing market is transitioning from the conclusion of the federal home buyer tax credit and that home sales are strongest in the higher-price range. The strength in the upper-end market combined with inventory levels that are higher, but still lean by average, has led to home prices holding steady.

Home Values on Appraisal Sites Often Not Valid

2010-09-04T13:00:00.000-07:00

From the Sacramento Bee:

Appraisal sites on Net often fail to pin down accurate pricesOver the last five years, one of the newest developments in real estate is the ability for home buyers and sellers to search online for a home’s value. Popular Web sites such a Zillow.com, Cyberhomes.com, and Eppraisal.com offer free home estimates, but some consumers and real estate industry professionals say the values calculated often are inaccurate and misleading.

Online home appraisal Web sites assign home values without knowing the features or upgrades of a home or the neighborhood in which it is located. Some Web sites offer a price range of $20,000 - $40,000 more or less than the actual value of the home.

Since housing markets are local and not every home of a certain size is the same value, consumers can be misled into believing a home is worth more or less than the actual value. Working with a local REALTOR® can help minimize inaccuracies in home values. REALTORS® can provide local housing market data and show homeowners and buyers recent sales of comparable homes in the area, to help determine an accurate list or offer price.

While some agents report that Web estimates can educate clients and provide a reasonable assessment of market conditions and the home-buying process, working with a local REALTOR® is the best option.

Millbrae Art and Wine is next weekend!

2010-08-28T13:00:00.000-07:00

The 40th annual Millbrae Art & Wine Festival will be held on Saturday and Sunday, September 4th and 5th, 2010 in downtown Millbrae. This is a special anniversary for the festival which will mean an even bigger and better event for the tens of thousands of people who attend.

The Millbrae Art & Wine Festival is one of the oldest and best events in the Bay Area. More than 200 artists and craft vendors from all over the western United States exhibit at the festival. With nearly continuous entertainment on the festival's stages, Millbrae's downtown is transformed into a wonderful mix of art, food, music and rides.

For details about the 2009 event including information about the artists, musicians, food vendors and attractions please visit the Miramar Events web site by clicking here.

Attempts to Place Rent Board and Affordable Housing Measures on November Ballot Fail

2010-08-21T13:00:00.000-07:00

From the SF Realtor Advantage Online for August 3, 2010:

Two proposed measures that seemed destined to appear on the San Francisco municipal ballot in November, both of which were opposed by the San Francisco Association of REALTORS®, failed to receive the support necessary to make it.

The first was a Charter amendment proposed by Supervisor David Campos (formerly a deputy city attorney for the City and County of San Francisco, later, general counsel to the San Francisco Unified School District, and currently, a supervisor representing District 9) to change the composition of the city’s Rent Board to weight it in favor of tenants.

Currently, the mayor appoints the members of the Rent Board to serve four-year terms. The board consists of two tenants, two landlords and a neutral member who is neither a tenant nor a landlord and who owns no rental property. The members serve at the pleasure of the mayor.

Under Campos’ proposed Charter amendment, the Rent Board would consist of three tenants, two landlords and two neutral members. The Board of Supervisors would be authorized to appoint three members (one tenant, one landlord and one neutral), the mayor to appoint three members (one tenant, one landlord and one neutral) and the Board of Supervisors’ president and the mayor to jointly appoint one tenant member. The Rent Board would be added to the list of commissions whose members are subject to removal only for official misconduct.

The second was a Charter amendment proposed by Supervisor Chris Daly (representing District 6) to require the diversion of city funds to affordable housing projects in San Francisco.

Daly’s proposed Charter amendment, if approved by the voters, would have mandated that the city EVERY YEAR for 15 years spend 33 percent of every budget surplus on housing projects—NOT housing projects for typical San Francisco working class families but projects for a very narrow spectrum of the population.

The amendment’s mandate would take precedence over all other needs—regardless of how critically important those other needs might have been to those who live and work in San Francisco.

What will the new consumer protection bureau do?

2010-08-14T13:00:00.000-07:00

From the Los Angeles Times:

What the new consumer protection bureau will do for home buyers
Part of the financial reform bill signed into law by President Obama includes the creation of a Consumer Financial Protection Bureau, which will write new rules and monitor problems and abuses in areas such as residential real estate settlements, credit scores, “truth in lending,” and equal credit opportunity.

Before the Bureau can begin implementing new laws to assist consumers, the president must nominate a director for the Bureau and the Senate must confirm the nominee. While this may take time, mortgage industry leaders say some of the core changes promised by the legislation either already are in effect or should be soon.

Treasury Secretary Timothy F. Geithner has until Sept. 19 to designate a transfer date when key legal and regulator authorities shift from agencies such as the Federal Trade Commission and the Dept. of Housing and Urban Development (HUD), to the new consumer bureau. Once that takes place, the Bureau will begin implementing the new laws.

One of the earliest and most widely anticipated changes expected to take effect impact home appraisals. By law, the agency must create new interim rules on appraisal accuracy and independence to replace the Home Valuation Code of Conduct (HVCC) rules imposed by Fannie Mae and Freddie Mac in 2009. Many in the real estate industry, as well as home buyers and sellers, report HVCC standards led to low home valuations that, in some instances, derailed home sales transactions.

A national hotline system also will be developed that will allow aggrieved mortgage borrowers and others to issue complaints and alert the Bureau to unfair and deceptive practices.
Rules requiring mortgage loan officers to verify mortgage applicants possess the ability to repay the loans they’re seeking also is high on the list.

Nearly one quarter of homes reduced asking price in July

2010-08-07T09:00:00.000-07:00

A recent report found 24 percent of homes listed for sale nationwide experienced at least one price reduction as of July 1, representing a 9-percent increase compared with the previous month, according to Trulia.com. The average discount for price-reduced homes remained unchanged at 10 percent of the listing price.

Cities in the Western U.S. experienced some of the largest surges in price reduction compared with the previous month. Oakland increased 38 percent month-over-month and San Diego experienced price reductions of 25 percent. Honolulu experienced a 21 percent increase in reductions from the previous month and Las Vegas increased by 20 percent.

Foreclosure sales account for 31 percent of Q1 sales

2010-07-31T09:00:00.000-07:00

Sales of foreclosure properties accounted for 31 percent of all residential sales nationwide in the first quarter, according to a foreclosure sales report published by RealtyTrac®. The report also showed that the average sales price of properties that sold while in the foreclosure process was nearly 27 percent less than the average sales price of properties not in the foreclosure process.

A total of 144,503 bank-owned (REO) properties were sold to third parties in the first quarter, a decrease of 13 percent from the previous quarter and down 27 percent compared with the first quarter of 2009. REO sales accounted for 19 percent of all sales in the first quarter, up from nearly 16 percent in the previous quarter, but down from 21 percent of all sales in the first quarter of 2009. REOs sold for an average discount of 34 percent, up from an average discount of nearly 32 percent in both the previous quarter and the first quarter of 2009.

Foreclosure sales accounted for 51 percent of all sales in California in the first quarter, up slightly from 50 percent in the fourth quarter, but down from 70 percent of all sales in the first quarter of 2009, according to the report.

Home Buyers Will Have Extra Time to Close and Qualify for Federal Tax Credit

2010-07-24T09:21:00.000-07:00

Home buyers who were worried about closing their home purchases before the federal home buyers’ tax credit cutoff can relax now that Congress and the Obama administration have extended the deadline.

The action came when Congress voted to give home buyers an extra three months to close their purchases and qualify for the federal tax credit. President Obama signed the legislation into law.

The legislation gives home buyers until September 30 to complete their purchases and qualify for tax credits of up to $8,000 for first-time buyers and $6,500 for existing owners who move. Under the original terms of the tax credit legislation, buyers had until April 30 to sign a sale contract and until June 30 to close the sale.

The legislation only allows people who already have signed contracts to close at the later date and still qualify for the tax credit. It was estimated that about 180,000 buyers needed the tax credit extension because of reported holdups in the mortgage approval process.

According to the Treasury Department, nearly 3 million taxpayers claimed the tax credits through May 22 at a cost of more than $21 billion.

The newly purchased home must be used as a primary residence. Other restrictions apply.

Fast Facts

2010-07-22T13:05:00.000-07:00

Calif. median home price: May 2010: $324,430 (Source: C.A.R.)Calif. highest median home price by C.A.R. region May 2010: Santa Barbara So. Coast $905,000 (Source: C.A.R.)Calif. lowest median home price by C.A.R. region May 2010: High Desert $126,430 (Source: C.A.R.)

Calif. First-time Buyer Affordability Index - First quarter 2010: 66 percent (Source: C.A.R.)

Mortgage rates: Week ending 7/15/2010 30-yr. fixed: 4.57 Fees/points: 0.7% 15-yr. fixed: 4.06% Fees/points: 0.7% 1-yr. adjustable: 3.74% Fees/points: 0.7% (Source: Freddie Mac)

Rosen Consulting Group Forecasts Overall Positive Year for San Francisco Housing Market

2010-07-20T18:53:00.000-07:00

Rosen Consulting Group is an economic and real estate consulting firm providing clients with high-level strategic consulting services. Founded in 1990 by Dr. Kenneth T. Rosen, he and Arthur Margon are currently the firm’s partners and active managers. Rosen Consulting Group consists of 20 research professionals based in Berkeley, CA and New York.)

"We are confident that the housing market in San Francisco is in the early stages of recovery and expect a sustainable but modest rise in San Francisco home prices for the balance of 2010," says the most recent Market Focus report issued by the Rosen Consulting Group of Berkeley, California, and published by the San Francisco Association of REALTORS®.

Rising affordability levels, aided by already reduced housing prices and low mortgage rates are given credit for the growing demand for housing units in the city, particularly at the low and middle ends of the market.

The report says that the growing demand has had the effect of tightening market conditions in the city during the past 12 months and has caused prices to stabilize for more moderately priced homes, and for the luxury segment of the market to gain traction. These developments have contributed to home sales becoming more evenly distributed across price segments and for the median sales price to trend upward.

John Lee, president of the San Francisco Association of REALTORS®, agrees with the conclusions of the Rosen Consulting Group, saying that, "The overall underlying trend of the housing market in San Francisco should remain positive, resulting in price appreciation and a further tightening of market conditions into year-end 2010.

"The report states that the median single-family home sales price in San Francisco rose 4.6%, year-over-year, in June 2010 to $800,000 (Figure 1). And, while completed single-family home sales through the first half of 2010 showed a 24% increase for the same period in 2009, they showed a 14% decline in comparison to the last six months of 2009 (Figure 2).

Of the 219 completed single-family homes sales in June 2010, approximately 35% were homes priced at $700,000 or less in comparison to January 2009, when this proportion of the market accounted for more than 65% of all sales.

The number of single-family homes on the market, in comparison to the same period last year, remained unchanged. For-sale inventory stood at 707 homes in June, matching the number of homes for sale in June 2009. Coinciding with the steady level of for-sale inventory, at the current monthly contract sales rate, the months supply of single-family homes remained at 3.1 months, also unchanged from June 2009 (Figure 3).

Lee noted that, "Rising housing affordability resulting from attractive pricing and low mortgage rates has strengthened the demand for condominium units, particularly among first-time home buyers.

"The median condominium sales price in June 2010 increased 8.7% from June 2009 to $690,000. Completed sales totaled 230 units, an increase of more than 20% during this time.

Through the first half of 2010, condominium sales totaled 1,164 units, a 48% increase from total condominium sales during the same period in 2009. Despite the jump in sales in comparison to the trough of the market in the first half of 2009, condominium sales slipped 13% in comparison to total sales during the last six months of the year.

While cautioning that the eventual full recovery of San Francisco’s housing market is dependent on improvements to the job market, the Rosen Consulting Group forecasts an overall positive year: "While the elimination of government incentives, as well as stricter availability of credit will test the market during the second half of this year, the anticipated rebound in job creation into the end of this year and the resulting rise in demand combined with the pent-up demand for affordable, for-sale units in the market should result in an overall positive year for the San Francisco housing market."

Reform bill retools lending

2010-07-15T18:35:00.000-07:00

from the New York Times:
The Senate passed the financial regulation bill today, which will impact home buyers and lending guidelines. Chief among the changes impacting consumers is the creation a consumer bureau at the Federal Reserve and the requirement that lenders ensure a borrower is able to repay a home loan by verifying income, employment, and credit history.

Under the financial regulation bill, at least two categories of mortgages likely will see a dramatic decrease in their availability: interest-only loans and stated-income loans. Both loan types likely would fall short of the government’s definition of “qualified” mortgages and therefore be avoided by many in the lending community.

Many real estate analysts credit interest-only loans and stated-income loans as contributing factors to the decline of the housing market. With interest-only loans, borrowers pay none of the loan principal for a fixed period, typically 10 years, after which time they must make higher payments for the remaining 20 years of the loan. Unlike other loan products, stated-income loans do not require borrowers to verify their actual income. Only a few lenders continue to offer these loans, and typically only to borrowers with deep cash reserves and large down payments.

The bill also severely limits the industry practice known as “yield spread premiums,” which in many cases incentivized mortgage brokers and loan officers to sell higher-interest loans to borrowers. The reform bill will no longer allow commissions earned by mortgage brokers and loan officers to be linked to the interest rate, but rather the loan amount. Once the bill takes effect, the total commission and additional fees charged by lenders and others in the mortgage process will be limited to a maximum of 3 percent of the loan amount, not including the real estate commission.

Foreclosed homeowners could owe ‘tens thousands of dollars’ to lenders

2010-05-29T13:00:00.000-07:00

from the Los Angeles Business Journal

Facing the possibility of foreclosure, California homeowners may be hit with more than just losing their homes. Due to a loophole in state law, they also can be sued by their lender. To prevent this, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) is sponsoring Senate Bill 1178 by State Sen. Ellen Corbett (D-San Leandro), which will extend anti-deficiency protection for consumers who have refinanced their original mortgage loans and now are facing foreclosure.

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. 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.

Californians who refinance a property currently do not have protection if they default on a mortgage greater than the property’s value. Called a “deficiency” liability, under current California law, the lender can sue the former homeowner for the amount of the deficiency even after taking back the property.

Recent years of low interest rates and aggressive marketing campaigns by lenders have induced tens of thousands to refinance mortgages. Few homeowners realized that by refinancing their mortgage, they were forfeiting their protections and now are personally liable.

Click here for the entire article.

5 Reasons to Move in the Summer

2010-05-26T15:12:00.000-07:00

Home buying and selling activity is typically hottest during the summer months. Here are five top reasons you should take advantage of the season and make the move this summer.

1. More homes to choose from
More people choose to sell during the summer due to nicer weather and school schedules. With a larger number of homes on the market, you’re more likely to find a home that suits your lifestyle and budget. If you’re thinking of selling, you’ll find a greater number of potential buyers in the summer.

2. Easier on the kids
The variety of summer programs available makes it easier for your children to meet future schoolmates. Kids are also playing outside more, which gives them lots of opportunities to make friends in their own neighborhood. Not to mention they’ll be able to start in the beginning of the school year and avoid the obvious new-kid syndrome.

3. More daylight
This is a plus for both sides of a transaction—buying and selling. It’s more appealing to show your house in the daylight.

4. Flowers are in bloom
As long as you water regularly, your curb appeal will be maximized by the lush and fragrant summer-blooming flowers. This also gives buyers a good idea of the amount of maintenance to expect to keep your yard looking beautiful.

5. Garage sale season
This is the perfect time to get rid of clutter. Your house will appear more spacious to your potential buyers, plus you’ll have less stuff to haul to your new home. Invite your neighbors to participate and make it a block sale for better attendance.

If you’re planning on buying this summer, get an advantage over the competition by getting pre-approved now. Whether you’re buying your first home, or selling your current home and buying another, the summer is an ideal time to make YOUR move.

Fannie Mae extends seller assistance program

2010-05-22T13:00:00.000-07:00

Fannie Mae recently announced it is extending its seller assistance incentive on all Fannie Mae-owned HomePath properties. Buyers will receive 3.5 percent of the final sales price, to be used toward closing cost assistance or their choice of selected appliances. The offer is available to any owner-occupant who closes on the purchase of a property listed on www.HomePath.com by June 30.

Properties listed on www.HomePath.com are owned by Fannie Mae and include a variety of homes, including single-family homes, condominiums, and town houses. HomePath properties also may be eligible for HomePath Mortgage and HomePath Renovation Mortgage financing, which offers prospective buyers an opportunity to purchase properties with as little as 3 percent down.

Nationwide home values decline in first quarter

2010-05-19T13:00:00.000-07:00

Home values in most U.S. markets continued to decline in the first quarter of 2010, according to the Zillow Home Value Index which decreased 3.8 percent year-over-year, and 1 percent quarter-over-quarter. However, home values in several California markets showed signs of improvement, according to the report.

Housing market conditions varied across the country, with 106 of the 135 areas tracked by Zillow continuing to decline on a year-over-year basis. Negative equity rose to 23.3 percent in the first quarter nationwide compared with 21.4 percent in the fourth quarter of 2009, Zillow reported. Foreclosures reached a new peak in March, with more than one out of every 1,000 U.S. homes entering into foreclosure during the month.

Home values in the Los Angeles, San Diego, San Francisco, Santa Barbara and Ventura MSAs have stabilized significantly in the past year, marking what may be a bottom, according to the report. Home values in those markets have risen significantly for the past 10 months, following lows set in April or May 2009.

Foreclosure resales nationwide accounted for more than one-fifth (22.2 percent) of all U.S. home sales. Foreclosure resales also accounted for the majority of sales in several MSAs, including 66.3 percent in the Merced MSA; 63 percent in the Madera MSA); and 61.7 percent the Modesto MSA.

Most homes to begin building positive equity by late 2015

2010-05-15T13:00:00.000-07:00

The typical U.S. homeowner in a negative equity position will begin to build positive home equity by late 2015 or early 2016, according to a forecast by First American CoreLogic. In some depressed markets, typical borrowers with negative equity may not experience positive equity until 2020 or later, according to the report. Research conducted by First American CoreLogic indicates more than 11.3 million, or 24 percent, of all residential properties with mortgages, had negative equity at the end of the fourth quarter of 2009.

Although house price appreciation will, over time, offset negative equity, in most cases, amortization will be a more significant remedy to negative equity. According to the report, over the next 10 years, the average loan balance will decrease by an annual rate of 3.3 percent, while home price are expected to increase at a three-percent annual rate over the next decade.

Private mortgage insurance companies return to market

2010-05-12T13:40:00.000-07:00

from the Los Angeles Times

Private mortgage insurance companies return to marketGenerally, private lenders require borrowers with down payments of less than 20 percent to purchase private mortgage insurance. It is typically paid for by the borrower and protects lenders against default. However, mortgage insurance does not protect the borrower. The Federal Housing Administration (FHA) insures lenders against losses incurred when borrowers default on their home loans. However, because the FHA insured nearly 30 percent of all single-family loans—higher than the 10 percent share considered optimal by government officials—the FHA is tightening its requirements for borrowers with small down payments. This has resulted in private companies that provide lenders with similar protection against defaults entering the market.

Traditionally, the FHA enabled low- to moderate-income borrowers to put down as little as 3.5 percent as a down payment on a home. Beginning this month, down-payment requirements on loans insured by the FHA have increased to 10 percent for borrowers with credit scores below 580. Borrowers with credit scores of 580 or above still will be able to put down the traditional 3.5 percent.

Other changes to the FHA mortgage program include increasing the upfront mortgage insurance premium from 1.75 percent to 2.25 percent and reducing permissible seller concessions from 6 percent of the loan amount to 3 percent. The FHA also has asked Congress for authority to increase the maximum monthly insurance fee from the current 0.5 percent level to 1.55 percent.

Resulting from the more-stringent FHA policies, fewer borrowers qualify for government-insured mortgages and are turning to private mortgage insurers, who also have made changes to their borrower requirements. For example, one private mortgage insurance company now will insure five-percent down-payment loans to borrowers nationwide. Previously, such mortgages were not available to borrowers in markets with declining home prices, which included California.

Premiums for both private mortgage insurance and government-insured FHA loans may be tax deductible. Additionally, in most instances, coverage can be canceled when the borrower’s equity reaches 20 percent of the original loan amount. Borrowers are advised to review both options to decide which one works best for their situation.

www.sfbaywindow.com—One Central Resource Guide for SF Homeowners

2010-05-11T18:03:00.000-07:00

The San Francisco Realtor Association’s web site for homeowners, www.sfbaywindow.com, contains more than 130 articles on subjects important to owners. From “Adding a Room” to “Zoning Districts,” it’s all there, making the site the most robust resource guide for San Francisco homeowners on the web.

Want to know more about sidewalk repair? What to do about barking dogs? Confused about who’s responsible for repairing the fence between your backyard and your neighbor’s? Aren’t sure if you need a permit to remodel your bathroom? The answers to all these questions and many more can be found on the Association’s very informative and unique site.

Topics are separated into three easy-to-navigate sub-headings: Your House, Your Neighborhood and Your City.In addition, the site contains a fourth, separate category—Your Government—which provides descriptions of legislative proposals and ballot measures affecting the interests of property owners at the local, State and federal levels.

Sometimes accompanying these descriptions are letters supporting or opposing legislative proposals (as the case might be) that site visitors can send to selected legislators, with their name attached to the letters with a single mouse click. To view the political content, however, you must click on the separate Your Government link.

Visit the site regularly for information on how to make homeownership and living in San Francisco even more rewarding.

How to buy a foreclosure

2010-05-08T13:18:00.000-07:00

Many buyers, especially first-timers, hope to purchase a foreclosed property at a bargain price. While purchasing a foreclosed home can be a wise choice for some buyers, it is important that buyers understand the differences in buying at different stages of foreclosure and be prepared to take on the challenges typically associated with each.

There are three basic stages of foreclosure in California: Pre-foreclosure (aka short sales), trustee’s sale, and repossession, often called an REO or real estate owned by the bank.

Pre-foreclosure homes are in the foreclosure process, but have not yet been auctioned. Owners of pre-foreclosed homes often try to sell the properties because they are “underwater,” meaning they owe more on the mortgage than the home currently is worth. Many homeowners attempt to sell via short sale, where the lender must agree to accept less than the amount owed on the mortgage. Buying at this stage of foreclosure often is a complicated and slow process. However, buyers of pre-foreclosed properties often are given the opportunity to inspect the home prior to purchasing, whereas this is not always the case when buying at other stages of foreclosures.

The second basic stage of foreclosure is the public auction at a trustee’s or foreclosure sale. Homes in this stage often are well priced, but also come with challenges to buy. These homes may not be available for inspection and buyers may later discover the property needs numerous repairs. As a result, many of the homes at auction are purchased by investors and contractors who have experience working with homes needing numerous repairs, or taken back as REO by the foreclosing lenders.

If a home does not sell to a third party at the trustee’s auction, the bank takes the property--the final stage of the foreclosure process. Although homes in this stage typically do not offer buyers the best prices, buyers generally can perform a thorough inspection of the property prior to closing.

Foreclosure sales nearly double from prior year

2010-05-01T09:00:00.000-07:00

Foreclosure sales increased 92.3 percent in March 2010 compared with March 2009 and 24.2 percent compared with February according to ForeclosureRadar’s March foreclosure report. Nearly 80 percent of foreclosure sales in February were for properties returning to lenders; the remaining properties were sold to third parties, primarily investors.

Notices of Default declined significantly in March compared with the prior year, when filings reached record levels as lenders caught up on a backlog of filings. Third-party purchases of foreclosure sales set a new record in March, surpassing 4,000 properties for the first time.

LEAD RENOVATION RULE EFFECTIVE 4/22/10

2010-04-30T11:00:00.000-07:00

Starting today, renovations that disturb lead-based paint in older residential dwellings and child-occupied facilities must generally comply with the Lead-Based Paint Renovation Rule of the Environmental Protection Agency (EPA). REALTORS® acting as listing agents or property managers who advise their clients to perform renovations, repairs, or painting projects for such properties may, as a matter of prudence, also want to inform them about these lead renovation requirements. One common example is when a listing agent recommends that a seller has a home painted to improve its marketability.

Under the newly implemented rule, renovators of target housing built before 1978 must now be trained and EPA-certified to perform safe work practices to prevent lead contamination. Additionally, renovators must deliver EPA's lead renovation pamphlet to an occupant within 60 days before a project begins (and, if mailed, at least seven days before a project begins). Renovators must also obtain the occupant's signed acknowledgment of receipt or substitute documentation as specified.

The EPA issued this rule in 2008, but delayed implementation until now. The rule generally applies to building contractors, handymen, residential landlords, property managers, and anyone else who is paid to perform renovations or to direct workers to perform renovations as specified. The lead renovation rule does not apply to homeowners renovating the homes they live in. However, sellers of target housing must, among other things, disclose to their buyers any known lead-based paint and lead-based paint hazards (C.A.R. Form FLD).

Renovation work covered by the lead renovation rule is defined as a modification of an existing structure that disturbs a painted surface, such as surface restoration or surface preparation activity. Excluded are minor repair and maintenance activities that disrupt up to 6 square feet of interior painted surface or 20 square feet of exterior painted surface. Demolitions and window replacements are not considered minor repairs.

For more information about the lead renovation rule, C.A.R. offers a legal article entitled Federal Lead-Based Paint Renovation Rule. See also EPA's Renovation, Repair and Painting webpage which includes the new requirements, pamphlets, and other resources. To locate an EPA-certified renovation firm, go to http://cfpub.epa.gov/flpp/searchrrp_firm.htm.

San Francisco Housing Market Tightens; Median Sale Prices Rise

2010-04-27T10:33:00.000-07:00

Sales activity in San Francisco’s housing market rebounded during the second half of 2009 and into early 2010, resulting in a significantly tighter housing market from a year ago, according to the most recent Market Focus report released jointly by the Rosen Consulting Group and the San Francisco Association of REALTORS®. The report states that completed home sales in March 2010 increased 58 percent from the same month a year ago, absorbing much of the excess inventory in the market and intensifying competition among buyers for desirable properties.

John Lee, president of the San Francisco Association of REALTORS®, notes that the scarcity of housing units for sale has driven up the median sale price of single-family homes. “In March,” he notes, “the median single-family home sale price increased by 19.4 percent, compared to a year ago, to $791,000.”

In a welcomed development for a city known for the high value of its real estate, the report indicates that the sale of luxury property has gained traction in recent months. The Rosen Consulting Group attributes this development to sentiment among high-end buyers becoming more positive.

The condominium market also gained ground during March with the median sales price rising to $670,000, a 4.9 percent increase from the March 2009. Stimulated by the availability of FHA financing, tax-credits, and attractive pricing/concessions in comparison to recent periods, completed condominium sales reached 206 units in March, a 76 percent increase from the previous year.

The report sounds an optimistic note about housing sales activity in the near-term future by noting that the market’s return to supply and demand fundamentals as a result of a decline in the number of foreclosures is likely to drive home price appreciation. California’s $200 million home buying tax credit program should continue to incentivize home buying, supplanting the expiring federal tax credit. While mortgage rates are expected to increase in coming months, with the end of the Federal mortgage-backed security purchase program, rising interest rates from private investments should help offset the rise in mortgage rates.

Hints on today's market

2010-04-26T11:00:00.000-07:00

Home buyers waiting for a mortgage loan to fund are advised to be conservative when it
comes to buying new furniture, appliances, or the like for the house they are purchasing. It has become standard practice for lenders to check borrowers’ credit scores in the weeks leading up to the closing, sometimes even the day prior to closing. Large purchases can use up a considerable proportion of a borrower’s total credit limit, which can lead to a drop in the borrower’s FICO score and possibly change the terms of the loan.

Many homes currently on the market are distressed properties – foreclosures and short sales—which increases the importance of home inspections. According to the America Society of Home Inspectors, the owners of distressed properties usually didn’t have the money to maintain their homes and often deferred property maintenance. A home inspection can find problems with the foundation, electrical, plumbing, roof, attic insuand heating and air conditioning. Although home inspections can be costly, in the long run, home buyers will be better situated when they know what, if anything, needs repairing on the home.

Median list price rises in March

2010-04-24T13:00:00.000-07:00

The median list price of homes increased by 1.07 percent in March to $263,754, and the median price reduction declined 3.02 percent to $20,200, based on homes surveyed by ZipRealty for its monthly review of Multiple Listing Services in 26 major U.S. markets.

San Diego and San Francisco were among the housing markets with the lowest percentage of price-reduced MLS-listed homes. In total dollars, San Francisco, Orange County, San Diego, and Los Angeles were among the markets with the largest median price reduction.

California won’t tax forgiven mortgage debt

2010-04-21T13:00:00.000-07:00

Governor Schwarzenegger on Monday signed SB 401 (Wolk) into law providing distressed homeowners with state tax exemption on debt forgiven in a short sale, foreclosure, or loan modification. Effective immediately, this bill generally aligns California's tax treatment of mortgage debt relief income with federal law. For debt forgiven on a loan secured by a qualified principal residence, borrowers now will be exempt both from federal and state income tax consequences. The tax exemptions apply, with certain restrictions, to debts discharged from 2009 through 2012. Californians who have already filed their 2009 tax returns may claim the exemption by filing a Form 540X amendment.

Taxpayers who do not qualify for the above exemptions (e.g., second home or rental property) may nevertheless be exempt under other provisions. Most notably, taxpayers who are bankrupt are exempt from debt relief income tax. Also, taxpayers who are insolvent are exempt from debt relief income tax to the extent their current liabilities exceed current assets.

CALIFORNIA'S TAX CREDIT MONIES MAY GO FAST

2010-04-20T09:00:00.000-07:00

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 availablee.

Only 13 days left for homebuyer tax credit!!!!

2010-04-19T09:00:00.000-07:00

Only 14 days to get in to contract if you want to take advantage of the Federal Homebuyer Tax Credit ($8000 for first time buyers and $6500 for repeat buyers) . Reminder of the program limitations : $800,000 maximum purchase price, $125,000 individual income/$225,000 joint filers income , $8000 for first time buyers and $6500 for repeat buyers. The credit is fully refundable, meaning even if the taxpayers Federal Tax liability is not $8000/$6500 , they will receive credit for the full amount . The filing for the credit is made when the buyer files their Federal tax return. Buyers must be in contract by April 30 and closed by June 30.

The State of California tax credit will go in to effect May 1 and last through January 1, 2011 - OR - until the funds are exhausted. The buyer must be a first time buyer (can not have owned a primary residence in the past 3 years); the $10,000 will be credited toward State tax liability over a 3 year period - up to $3,333 each year for the next three years. If the buyers State Tax Liability is not $10,000 they will not receive the full credit. The buyer must submit a request to reserve or claim funds within 14 days of closing. The program has a new home and existing home budget.

A home buyer can not claim the credit if:
The taxpayer or the taxpayer’s spouse is related to the seller
The taxpayer qualifies as a dependent of any other taxpayer for the tax year of the purchase

HUD redefines “foreclosed” and “abandoned” properties

2010-04-18T13:00:00.000-07:00

The U.S. Dept. of Housing and Urban Development (HUD) has expanded the Neighborhood Stabilization Program (NSP) by changing its definition of “foreclosed” and “abandoned” properties to include properties in mortgage default and uninhabitable homes with lingering code violations. These expanded definitions, effective immediately, will increase the reach of NSP by allowing more properties to qualify for NSP assistance, remove existing barriers caused by market conditions, and help state and local grantees to meet a Congressional requirement that they obligate all of their NSP1 funding by September of this year.

Properties now will be eligible for NSP assistance if any of the following conditions apply: The property is at least 60 days delinquent on its mortgage and the owner has been notified; or the property owner is 90 days or more delinquent on tax payments; or under state or local law, foreclosure proceedings have been initiated or completed; or foreclosure proceedings have been completed and title has been transferred to an intermediary aggregator or servicer that is not an NSP grantee, subrecipient, developer, or end user.

HUD also is expanding the definition of an abandoned property to include homes where no mortgage or tax payments have been made by the property owner for at least 90 days or a code enforcement inspection has determined that the property is not habitable and the owner has taken no corrective actions within 90 days of notification of the deficiencies.

San Francisco Homeowners Have New Way to Pay for Going Green

2010-04-17T13:00:00.000-07:00

San Francisco homeowners have a new way of paying for solar panels, energy-efficient appliances and low-flow toilets.

A new city-run program, GreenFinanceSF, will give San Franciscans the money to pay for such projects up front and let them pay it back through installments on their property tax bills. Berkeley pioneered the idea in 2007, and since then, hundreds of cities, counties and states have adopted their own versions.

For more details, visit https://greenfinancesf.org/systems/energy.

SB 1275, Home Owners Bill of Rights, Makes Its Way through Legislature

2010-04-15T06:55:00.000-07:00

SB 1275, the Homeowner’s Bill of Rights, would require that homeowners receive notice of their rights regarding their mortgages prior to foreclosure, as well as the remedies available to them if they believe their rights under the law have been violated.

The bill also would require loan servicers to process any application for loan modification before starting the foreclosure process.

Millbrae Community Shred Event April 17, 2010

2010-04-14T06:51:00.000-07:00

MILLBRAE, CA – Mills High School will hold a Community Shred Event on April 17, 2010. The event will be held at Mills High School, 400 Murchison Drive, Millbrae, CA 94030. The event will take place in the school parking lot at the front of the school on Murchison.

Community Shred: Consumer fraud and identity theft are becoming an epidemic in our communities. To raise awareness and to promote prevention, Shred-it organizes Community Shred events. These events give individuals the opportunity to have their confidential documents destroyed on site. Whether it is small business documents you no longer need or personal papers you want to safely dispose of, Shred-it’s trucks contain cutting-edge proprietary technology that can handle the job.

Fee: One standard size banker’s box $8.00 each; Three (3) standard size banker’s boxes total $20.00. Brown bag (standard grocery paper bag) $3.00 each. Note: All Proceeds will benefit Mills High School Senior Class of 2010.

About Mills High School: Mills High School is one of seven schools in the San Mateo Union High School District . Current enrollment in Grades 9-12 is approximately 1,547. This year, Mills received an Academic Performance Index (API) of 837. Mills is ranked number one out of eighteen comprehensive high schools in San Mateo County by the California Department of Education. In 2006, Mills High School was granted a six-year accreditation through the Western Association of Secondary Schools and Colleges organization. Enrollment in AP classes has grown over the past four years. Current enrollment in AP classes stands at 918. For more information:
http://www.millshigh.org/

For more information Contact: Cathy Hidalgo by email at millsgrad2010@gmail.com or call Shred It at 650-588-2227.
For further information on other recycling options, visit www.recycleworks.org or call 888-442-2666.

NO MORE STATE TAX ON FORGIVEN DEBT

2010-04-13T18:45:00.000-07:00

Distressed homeowners no longer have to pay California state income tax on debt forgiven in a short sale, foreclosure, or loan modification. Enacted into law yesterday, Senate Bill 401 generally aligns California's tax treatment of mortgage debt relief income with federal law. For debt forgiven on a loan secured by a "qualified principal residence," borrowers will now be exempt from both federal and state income tax consequences. The existing federal exemption is for indebtedness up to $2 million, whereas the new California exemption is for indebtedness up to $800,000 and forgiven debt up to $500,000.

"Qualified principal residence" indebtedness is defined as debt incurred in acquiring, constructing, or substantially improving a principal residence. It includes both first and second trust deeds. It also includes a refinance loan to the extent the funds were used to payoff a previous loan that would have qualified.

The tax breaks apply to debts discharged from 2009 through 2012. Californians who have already filed their 2009 tax returns may claim the exemption by filing a Form 540X amendment. Taxpayers who do not qualify for the above exemptions (e.g., second home or rental property) may nevertheless be exempt under other provisions. Most notably, taxpayers who are bankrupt are exempt from debt relief income tax. Also, taxpayers who are insolvent are exempt from debt relief income tax to the extent their current liabilities exceed current assets.

For more information about mortgage forgiveness tax consequences, go to California Franchise Tax Board's Mortgage Forgiveness Debt Relief Extended webpage and the Internal Revenue Service's Mortgage Forgiveness Debt Relief Act and Debt Cancellation webpage. The full text of Senate Bill 401 is available at www.leginfo.ca.gov.

$18,000 IN COMBINED HOMEBUYER TAX CREDITS FOR A LIMITED TIME

2010-04-10T13:00:00.000-07:00

Californians have a brief window of opportunity to receive up to $18,000 in combined federal and state homebuyer tax credits. To take advantage of both tax credits, a first-time homebuyer must enter into a purchase contract for a principal residence before May 1, 2010, and close escrow between May 1, 2010 and June 30, 2010, inclusive. Buyers who are not first-time homebuyers may use the same timeframes to receive up to $16,500 in combined tax credits if they are long-time residents of their existing homes as permitted under federal law, and they purchase properties that have never been previously occupied as provided under California law.

Under the federal law slated to soon expire, a first-time homebuyer may receive up to $8,000 in tax credits, and a long-time resident may receive up to $6,500, for certain purchase contracts entered into by April 30, 2010 that close escrow by June 30, 2010. Additionally, under a newly enacted California law, a homebuyer may receive up to $10,000 in tax credits as a first-time homebuyer or buyer of a property that has never been occupied. The new California law applies to certain purchases that close escrow on or after May 1, 2010 (see Cal. Rev. & Tax Code section 17059.1(a)(4)). California law generally allows buyers of never-occupied properties to reserve their credits before closing escrow, but buyers seeking to combine the federal and state tax credits will not be able to satisfy the timing requirements for such reservations (see Cal. Rev. & Tax Code section 17059.1(c)(1)(A)). Other terms and restrictions apply to both tax credits.

Home Affordable Foreclosure Alternatives (HAFA)

2010-04-05T09:00:00.000-07:00

What is HAFA?
HAFA is a government-subsidized Home Affordable Foreclosure Alternatives program for distressed homeowners to sell their homes to avoid foreclosure, even if the sales price is not enough to pay off their existing mortgage loans. Under HAFA, a participating lender will pre-approve the terms of a short sale and give the borrower at least 4 months to market and sell the property using a licensed real estate professional.

Eligibility
The eligibility requirements for a HAFA short sale include the following: • Property must be borrower’s principal residence; • Loan must be a first trust deed originated before 2009; • Loan must be delinquent or default must be reasonably foreseeable; • Current unpaid principal balance must be $729,750 or less for single-family home (or higher amounts for 2-to-4 units); and • Borrower must be eligible for, but unable to complete, a loan modification under the Home Affordable Modification Program (HAMP).

Financial Incentives
The government incentives under HAFA are as follows: • $1,500 to borrower for relocation expenses; • $1,000 to servicer for each successful short sale; and$1 to investor for every $2 paid to extinguish junior liens, up to $1,000 maximum.

Effective Dates
April 5, 2010 to Dec. 31, 2012.

HAFA Procedures
The general standardized procedures for HAFA short sales are as follows:Step 1: Lender evaluates borrower for a loan modification under HAMP. Step 2: Lender evaluates borrower unable to complete HAMP modification for short sale. Step 3: Lender issues Short Sale Agreement (HAFA SSA). Step 4: Borrower lists the property for sale using a licensed real estate agent. Step 5: Borrower and agent market and sell the property. Step 6: Borrower submits to lender a Request for Approval of Short Sale (RASS). Step 7: Lender approves RASS within 10 business days. Step 8: Sale closes escrow.

Lender's Evaluation
Each participating lender will have its own written policy for approving or rejecting a HAFA short sale, based on factors such as the severity of the loss, market conditions, the borrower’s motivation and cooperation, property valuation, and title review.

Short Sale Agreement (HAFA SSA)
The Short Sale Agreement (HAFA SSA) will include, among other things, the following: • Either a list price or net proceeds acceptable to the lender; • An agreement to fully release borrower from all liability for repayment of the loan; • An agreement not to complete a foreclosure sale if borrower complies with SSA; • Amount of acceptable closing costs and up to 6% real estate commission. • Notice that the sale must be an arm’s length transaction; and • Notice that the buyer must agree not to resell the property within 90 days of closing.

Tax, Credit, and Other Consequences
A HAFA short sale may have serious tax, credit, financial, legal, and other consequences. A homeowner is strongly encouraged to seek the advice of a qualified professional regarding these consequences.

Participating Lenders
A list of lenders participating in the HAMP program is available at http://makinghomeaffordable.gov/contact_servicer.html. Fannie Mae and Freddie Mac have their own HAFA guidelines for their loans.

More Information
Supplemental Directive 09-09 dated Nov. 30, 2009 available at https://www.hmpadmin.com/portal/docs/hamp_servicer/sd0909.pdf.

California gets into the First Time Buyer Tax Credit Act

2010-04-03T11:41:00.000-07:00

The State of California tax credit will go in to effect May 1 and last through January 1, 2011 with new construction eligible for contracts written by Dec. 31, 2010 - OR - until the funds are exhausted.

The rules differ from the Federal Tax Credit in that the buyer must be a first time buyer (can not have owned a primary residence in the past 3 years) and the $10,000 will be credited toward State tax liability over a 3 year period - up to $3,333 each year for the next three years. If the buyers State Tax Liability is not $10,000 they will not receive the full credit.

The buyer must submit a request to reserve or claim funds within 14 days of closing. The program has a new home and existing home budget - once the funds are used, the program ends, even though the program dates are in effect on paper until January 1, 2011.

A home buyer can not claim the credit if:
The taxpayer or the taxpayer’s spouse is related to the seller
The taxpayer qualifies as a dependent of any other taxpayer for the tax year of the purchase.

Question - contact us! We work with some great lenders.

Interest rates are going up - Federal Reserve policy is changing on March 31st

2010-03-27T12:17:00.000-07:00

The Federal Reserve has been purchasing mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac since early last year. The purchase program has helped maintain low interest rates for borrowers. As planned, the Fed this week announced it will stop purchasing these securities at the end of this month. Many analysts anticipate this will result in a slight rise in rates by year’s end.

Interest rates have hovered at or near historic lows for much of the past 18 months, resulting in lower payments for many borrowers. With the Fed discontinuing its purchase program, some analysts believe a rise in interest rates could range from 0.25 percent to as much as 1 percent by the end of 2010.

The federal tax credit for home buyers also is scheduled to end April 30. The tax credit combined with the expectation interest rates will increase has created a sense of urgency for many home buyers. In fact, 23 percent of California home buyers purchased a home in 2009 due to the perception that interest rates will rise and they would be priced out of the market, according to C.A.R.’s 2009 Survey of California Home Buyers.

Rising interest rates will have an effect on home buyers. For example, a qualified couple with a combined pretax income of $100,000 per year and debt obligations (excluding mortgage) of $500 who receive a mortgage rate of 5 percent could qualify for a loan of up to $590,000, assuming a 20 percent down payment. If the interest rate were to rise to 6 percent, as analysts at Barclays Capital predict, the same couple could only qualify for a mortgage of $540,000.

First-time homebuyer TAX CREDIT has been extended!

2010-03-20T11:55:00.000-07:00

When does the tax credit expire?
First-time homebuyers have until April 30, 2010 to be in contract on a home purchase. The purchase must close by June 30, 2010.

How much can a home cost?
Homes purchase for up to $800,000 are eligible.

How much is the credit?
10 percent of sales price or $8,000, whichever is less.

What is the income limit for first-time homebuyers?
The income limit for claiming the full tax credit is $125,000 for single taxpayersand and $225,000 for married taxpayers filing a joint return.

Does the tax credit have to be repaid?
No.

How is the credit claimed?
Use IRS Form 5405 to claim. The IRS will require a copy of your HUD-1 Settlement Statement to verify the purchase.

How is a first-time buyer defined?
A first-time buyer is defined as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, this includes the home ownership history of both spouses.

CALHFA Announces $700 Million to Assist Homeowners

2010-03-13T12:00:00.000-08:00

The U.S. Treasury has allocated $699.6 million to CalHFA to help low and moderate income borrowers who have been hit hardest by unemployment and falling home values. These funds will be used for innovative programs to help stabilize the housing market.

The HFA Hardest-Hit Fund was designed to allow the maximum possible flexibility to Housing Finance Agencies in designing locally-focused programs that address the needs of a specific state or region within a state. All programs must have foreclosure prevention and housing market stability as their primary objectives.

CalHFA's proposal, along with proposals from the four other states selected (Arizona, Nevada, Florida and Michigan) is due by April 16, 2010. The Treasury will then review each proposal for compliance with program objectives and other requirements. The Treasury expects that CalHFA may be in the position to begin drawing down funds within four to six weeks following submission of proposals, or mid-year.

More info: http://www.calhfa.ca.gov/about/publications/press-releases/

Understanding Wood Burning Regulations

2010-03-06T12:11:00.000-08:00

To reduce fine particulate pollution and protect public health, the Bay Area Quality Management District adopted Regulation 6, Rule 3: Wood Burning Devices.

The wood-burning regulation includes a mandatory prohibition on wood-burning on days when air quality is forecast to be unhealthy, as well as restrictions on excessive chimney smoke and a prohibition on the burning of garbage, plastics and other unsuitable materials.

The Air District will issue Winter Spare the Air Alerts through the end of February, at which times it will be illegal to use any wood-burning devices such as fireplaces, wood stoves or pellet stoves within the Bay Area. Residents failing to comply with the restrictions will be subject to a $400 fine, which will increase with subsequent violations (unless the resident's ONLY source of heat is from a wood-burning device).

How you can comply with the wood burning regulation:

Check before burning from November - February.
Do not burn wood, fire logs or pellets if Winter Spare the Air Alerts are issued. Call 1-877-4NOBURN.
Listen for announcements on radio and television.
Sign up for email notification at http://www.sparetheair.org/.
Sign up for automatic phone alerts at http://www.sparetheair.org/ or call 800-430-1515.
These regulations apply to households and businesses with fireplaces or other wood-burning devices, even hotels and restaurants.
It is okay to use gas-fueled fireplaces and logs, gas inserts or electric fireplaces.
NEVER burn any garbage, plastics, wrapping paper or other inappropriate materials.
Burn cleanly when burning is allowed.
Burn only clean, dry wood in short, hot fires with plenty of air in order to prevent excessive smoke from chimneys or flues.

Cell Phone Numbers Went Public to Telemarketers in January, 2010

2010-02-27T13:06:00.000-08:00

All cell phone numbers are being released to telemarketing companies and you will start to receive sales calls.

To prevent this, call the following number from your cell phone: 888-382-1222 .It is the National DO NOT CALL list.

It will only take a minute of your time. It blocks your number for five (5) years.

You must call from the cell phone number you want to have blocked. You cannot call from a different phone number.

First time and past home owners tax credit explained

2010-02-20T13:00:00.000-08:00

As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed new legislation that:

Extends the First-Time Home Buyer Tax Credit of up to $8,000 to first-time home buyers until April 30, 2010.
Expands the credit to grant up to $6,500 credit to current home owners purchasing a new or existing home between November 7, 2009 and April 30, 2010.

Here is more information about how the Extended Home Buyer Tax Credit can help prospective home buyers become part of the American dream. If you have specific questions or need additional information, please contact a tax professional or the Internal Revenue Service at 800-829-1040.

Recent news:IRS Releases Revised Tax Forms, Instructions for Claiming Tax Credit (Jan. 25)Economists' Podcast: Lawrence Yun Discusses Market Recovery, the Tax Credit, and Employment (Jan. 12)Economists' Commentary: Existing-Home Sales and the Tax Credit (Dec. 22)

Who Qualifies for the Extended Credit?
First-time home buyers who purchase homes between November 7, 2009 and April 30, 2010.
Current home owners purchasing a home between November 7, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.

To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.If you or your client purchased a home between January 1, 2009 and November 6, 2009, please see: 2009 First-Time Home Buyer Tax Credit.

Which Properties Are Eligible?
The Extended Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

How Much Is Available?
The maximum allowable credit for first-time home buyers is $8,000.
The maximum allowable credit for current homeowners is $6,500.

How is a Buyer's Credit Amount Determined?
Each home buyer’s tax credit is determined by two additional factors:

The price of the home.
The buyer's income.

Price

Under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchased for $800,000 or less.

Buyer Income

Under the Extended Home Buyer Tax Credit, which is effective on November 7, 2009, single buyers with incomes up to $125,000 and married couples with incomes up to $225,000—may receive the maximum tax credit.

These income limits have changed from the 2009 First-Time Home Buyer Tax Credit limits. If you or your client purchased a home between January 1, 2009 and November 6, 2009, please see 2009 First-Time Home Buyer Tax Credit.

If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?
Yes, some buyers may still be eligible for the credit.
The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $145,000 for singles and over $245,000 for couples are not eligible for the credit.

Can a Buyer Still Qualify If He/She Closes After April 30, 2010?
Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.

Will the Tax Credit Need to Be Repaid?
No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.

FHA program announces changes

2010-02-13T12:00:00.000-08:00

FHA is an integral part to the continued recovery of the real estate industry and the overall economy. NAR will continue to work with FHA, the Administration, and the Congress to ensure FHA can fulfill its mission while providing for the safety and soundness of the insurance fund.
NAR is committed to assisting FHA as they balance risk management with creating homeownership opportunities across the country.

In October 2009, FHA announced that its capital reserve fund had fallen below the congressionally mandated level of 2 percent. The drop in capital reserves has led Congress and the Administration to call for changes to strengthen FHA.

On January 20, 2010, FHA announced major changes to ensure its long-term financial soundness.

FHA is trying to balance three fundamental objectives:
1) financial soundness of the FHA insurance fund – ensuring that its capital ratio returns above 2 percent;
2) fulfilling its mission of serving borrowers not adequately served by the private sector; and
3) facilitating the recovery of the housing industry and the overall economy

NAR has met with the Commissioner on several occasions to discuss the state of the housing market and to underscore FHA’s invaluable role. By all accounts the new changes are a victory for home buyers. FHA has carefully balanced the need to make financial reforms with the need to keep FHA available to a large segment of consumers. This is evident by retaining the 3.5 percent minimum down payment requirement and allowing the upfront mortgage insurance premium to be financed.

The upfront mortgage insurance premium (UFMIP) will increase to 2.25 percent up from 1.75 percent. Contrary to reports, FhA will continue to allow the financing of the UFMIP.

Borrowers with a credit score below 580 will be required to have at least a 10 percent down payment. The minimum down payment will remain at 3.5 percent for all other borrowers.

FHA will seek legislative authority to increase the annual premium (currently capped at .55 percent). Over time, increasing the annual premium may allow FHA to reduce the upfront
premium.

Seller concessions will be reduced to 3 percent from 6 percent.

FHA will make the following lender enforcement changes:
• FHA will implement credit watch terminations at lender underwriting.
• Public reporting of lender performance through scorecard system will be implemented.
• FHA will implement, through notice and comment, indemnification against lenders.
• Indemnification will be expanded beyond fraud and misrepresentation.
• FHA will seek legislative authority to enforce indemnifications against direct endorsed (DE) lenders.
• FHA will seek legislative authority to sanction lenders nationwide based on performance of local branch.

C.A.R. Insurance for First-time Home Buyers

2010-02-06T09:47:00.000-08:00

California Association of Realtor's Housing Affordability Fund has committed $1 million to support the Mortgage Protection Program (and the National Association of Realtors another $420,000) an insurance product that kicks in when the unexpected happens: job loss. Your first-time buyers who enroll in the program can draw upon their mortgage protection policy in the event they lose their job after purchasing their home. Under the program, first-time buyers will be eligible to receive $1,500 per month for six months in the event of a job loss; co-buyers are eligible to receive $750 per month.

To be eligible for coverage, the home must be a principal residence in California and a first-time buyer is defined as someone who has not purchased a home in the past three years. While there are no caps on the applicant's income or the purchase price of the home, the applicants are required to use a California Realtor in their transaction; they cannot be self-employed or older than age 70. Consumers can apply for the program via their Realtor; you can enroll your clients on the C.A.R. Web site (www.carhaf.org).

Healthy Home Improvements

2010-02-01T12:38:00.000-08:00

Almost everyone’s thoughts turn towards wellness at the start of a new year—and even your home can be part of your plans for a healthier lifestyle. The connection between your health and the building you live in has been extensively studied since the 1980s.

Even though most homes don’t suffer from “sick building syndrome,” many homeowners feel better making improvements that promote the family’s health. Here are a few popular health-related home upgrades:

Whole-House Air Filter

Because we spend up to 90 percent of our time inside our home, the U.S. Environmental Protection Agency reports dust, molds, pet dander, pests and second-hand smoke can trigger asthma in family members or visitors. In addition to regularly cleaning furniture and bedding, you may also consider cleaning the air through your forced-air heating or central air-conditioning system. Types of filters include disposable HEPA filters, electronic “ionizing” filters and UV filters that kill airborne bacteria.

Household Water Filter

Many people want extra-clean drinking water, while others simply don’t like the taste of tap water. In any case, filtration can remove chlorine and other unwanted substances from your water. Installed under the sink, a plumbed-in water filtration system connects directly to an existing water pipe. Such a system offers convenience, though you may still need to change the filter cartridge regularly.

Low-Emission Paint

Are you thinking about repainting a room? Many paints and household finishes still contain volatile organic compounds (VOCs), formaldehyde, heavy metals such as mercury, or other toxins. Using paints and other finishes with low or no VOCs can help people with allergies and sensitivities breathe more easily.

If you add these health-promoting features to your home, remember to call attention to them when you decide to sell. Your “healthy” home may stand out from the competition so you receive a higher price.

2009 San Mateo County Market Snapshot

2010-01-25T17:19:00.000-08:00

We wanted to provide you with a 2009 market snapshot of the real estate activity for San Mateo County. If you have specific questions about the value of your home or the activity in your specific area, we would be glad to provide. Just let us know what you are looking for – we are happy to help!

2009 Market Snapshot
Property Type/Avg Price /Median Price / Avg DOM / Active Listings

San Mateo County
Condos & Townhomes $463,220 / $430,000 /83 / 392
Single Family $876,637 / $678,750 / 72 /1045

Atherton
Condos & Townhomes $426,337 / $426,337 / 169 / 2
Single Family $3,317,045 / $2,790,000 / 109 /23

Belmont
Condos & Townhomes $578,092 / $651,000/ 82 / 5
Single Family $847,969 / $833,725/ 56 / 36

Burlingame
Condos & Townhomes $604,364 / $572,500 / 91 / 13
Single Family $1,298,411 / $1,200,000 / 56 / 43

Daly City
Condos & Townhomes $304,371 /$300,000 / 88 / 36
Single Family $512,667 /$510,000 / 74 / 108

Hillsborough
Single Family $2,750,990 / $2,350,000/ 77/ 40

Menlo Park
Condos & Townhomes $853,443 / $775,000 / 93 / 22
Single Family $1,239,814 / $1,095,000/ 64 / 68

Millbrae
Condos & Townhomes $581,352 / $520,000 / 141 / 13
Single Family $929,265 / $926,250 / 54 / 24

Pacifica
Condos & Townhomes $392,544 / $366,500 / 59 / 11
Single Family $569,014 / $535,000/ 72 /59

Portola Valley
Single Family $1,976,002 / $1,650,000 / 79 / 11

Redwood City
Condos & Townhomes $389,916 / $418,500 / 77 / 12
Single Family $721,471 / $672,000 /73 /129

Redwood Shores
Condos & Townhomes $583,264 / $575,000 / 70 / 23
Single Family $1,008,129 / $994,000 / 55 / 11

San Bruno
Condos & Townhomes $228,771 / $213,250 / 79 / 38
Single Family $543,784 / $543,000 / 71 / 53

San Carlos
Condos & Townhomes $582,399 / $530,000 / 70 / 24
Single Family $928,560 / $880,000 / 53 / 35

San Mateo
Condos & Townhomes $460,765 / $413,000 / 72 /101
Single Family $818,946 / $730,000 / 64 / 109

South San Francisco
Condos & Townhomes $349,143 /$340,000 / 96 /39
Single Family $545,602 / $523,000 / 66 / 64

Woodside
Single Family $2,046,230 / $1,568,000 / 124 / 27

If you have specific questions about the value of your home or the activity in your specific area, we would be glad to provide. Just let us know what you are looking for – we are happy to help!

FHA Announces Stricter Standards

2010-01-25T14:08:00.001-08:00

It’s going to be harder to get a government-backed mortgage from now on. Looking to shore up its weakening finances, the Federal Housing Administration has announced stricter standards. The agency, which insured nearly a third of new mortgages in 2009, will increase the premium it charges for its mortgage insurance and require those with weaker credit scores to come up with larger downpayments.

The FHA will also reduce the amount of money a seller can provide a homebuyer for closing costs, as well as tighten its enforcement of lenders. "Striking the right balance between managing the FHA’s risk, continuing to provide access to underserved communities, and supporting the nation’s economic recovery is critically important," FHA Commissioner David Stevens said in a statement. Source: CNN/Money. Editors Note: These changes go into effect shortly and anyone who is thinking about purchasing a home can benefit by using the old rules if they act quickly.

Real estate investors are moving back into the market, according to a recent survey from Move.com. According to the Move.com survey, 12.1 percent of home buyers today plan to buy a home as an investment property, compared to 5.6 percent in March 2009. The survey found that 15.8 percent of those interested in investment property were men and 8.1 percent were women and 52.6 percent of the investment buyers were between ages 35 to 49. Of the 25.3 percent of buyers who are focusing on foreclosure properties, 42 percent regard the purchase they are considering an investment and don’t plan to live in the property themselves; 13.2 percent plan to rent out the property; 11.3 percent are going to fix up the property and resell it; and 17.4 percent plan to house a family member until the property can be sold profitably. Of the 9.8 percent of buyers who say that they plan to purchase and live in a property in the next two y ears, 5.4 percent plan to purchase in the next 12 months; 48.3 percent are first-time buyers; 52.8 percent are women, and 44.1 percent are men. Source: Move.com

Home prices are expected to grow modestly this year and sales will keep rising as the housing market continues to recover from the worst downturn since the Great Depression, the National Association of Realtors said in their latest report. Home resales are projected to total 5.7 million this year, up from an estimated 5 million last year. Prices will climb about 4 percent after a projected decline of 13 percent last year, according to Lawrence Yun, chief economist for the trade association. "Going into 2010, I anticipate that prices will also begin stabilizing or begin to modestly improve," Yun indicated at the association’s annual conference. "That should help ease buyers’ anxiety." Yun said. The housing market’s rebound has been aided by an aggressive federal intervention to lower mortgage rates and bring more buyers into the market. Home resales rose in the previous quarter to t he highest level in more than two years, something Yun said shows buyers are eager to get back into the market. A federal tax credit of up to $8,000 for first-time homebuyers has helped stoke sales last year. The buyers can claim the credit if they sign a contract by April 30 and close the deal by the end of June. Lawmakers also expanded the program to include a $6,500 credit for existing homeowners who have lived in their current residence for at least five years. Source: National Association of Realtors

GSE loan mods, refinancings rise in November

2010-01-17T10:40:00.000-08:00

As of November 2009, Fannie Mae and Freddie Mac implemented more than 405,000 trial and permanent loan modifications under the Home Affordable Modification Program (HAMP), according to a third quarter Federal Housing Finance Agency’s (FHFA) report. The agency also refinanced 4 million loans. The report details the actions each enterprise has taken to prevent foreclosures and help homeowners remain in their homes.

According to the report, as of Nov. 30:

Fannie and Freddie had implemented 405,700 HAMP active trial and permanent loan modifications.

Foreclosure starts on loans owned or guaranteed by the GSEs declined 15 percent in the third quarter.

Loan modifications, excluding HAMP trial loan modifications, increased 14 percent compared with the second quarter.

Nearly half of loan modifications completed in the third quarter, excluding HAMP trial modifications, resulted in borrowers’ payments decreasing by more than 20 percent.

Short sales and deeds in lieu increased by 39 percent during the third quarter.

Loans 60 or more days delinquent increased nearly 20 percent during the third quarter to 1.6 million.

Why don't banks want to modify mortgages with principal reductions?

2010-01-09T12:36:00.000-08:00

Basically, lenders get to write-off loans from their balance sheet to their income statement when they allow a short sale or foreclosure. This results in a loss which can be offset against other income, resulting in a tax savings for the lender.

When lenders agree to reduce principal, they still have to carry the loan on their balance sheet at the original value, plus get a smaller payment. The teenie bitty incentive payment (around $1,000) to allow modification is a small drop in the bucket. Thus, there is absolutely no tax incentive to allow principal reductions.

When lenders agree to reduce the interest rate, they typically add any reduction back to principal (remember negative amortization?) and can actuall INCREASE the asset shown on the balance sheet.

Unless the tax treatment is equalized, don't look for voluntary principal reductions.

Which low cost remodel projects are still paying off?

2010-01-05T14:27:00.000-08:00

According to the annual Realtor.com Cost vs. Value Report, the following 10 small projects pack a large return on investment:

1. Tidy up kitchen cabinets - add organizing trays, bright liner paper
2. Add or replace tile
3. Add a breakfast bar
4. Install granite tile instead of slab
5. Freshen up a bathroom
6. Freshen up a basement (definitely more relative back East)
7. Look for extra spaces to enclose and make a new room
8. Recondition kitchen cabinet fronts
9. Replace light fixtures
10. Tech up the garage with a remote touchpad entry system

Email us to request a pdf file detailing these great, low cost ideas.

Click here for a link to the Realtor.com article.

Mortgage Protection from C.A.R. and HAF

2009-11-14T11:00:00.000-08:00

A message from the California Association of REALTORS® and the Housing Affordability Fund.

What is the Mortgage Protection Program? Through the California Association of REALTORS® (C.A.R.) Housing Affordability Fund Mortgage Protection Program, first-time home buyers who lose their jobs due to layoffs may be eligible to receive $1,500 per month, for up to six months, to help make their mortgage payments. A qualified co-buyer also can participate in the program, and receive a monthly benefit of $750 per month for up to six months. Program benefits also include coverage for accidental disability and a $10,000 death benefit.

How do I qualify? To qualify for the Mortgage Protection Program, applicants must:*- Be a first-time home buyer – someone who has not owned a home in the last three years- Open escrow April 2, 2009, or later, and close on or before December 31, 2009- Use a California REALTOR® in the transaction- Purchase the property in California- Be a W-2 employee (cannot be self-employed)

How do I apply? If you are interested in applying, you may request an application for the Mortgage Protection Program from your REALTOR®.

*For more information, including application requirements and possible restrictions, please visit:www.car.org/aboutus/hafmainpage/carhafmortgageprotection/

How much of my remodel cost will I get back?

2009-11-07T12:50:00.000-08:00

Every year the National Association of Realtors publishes a report from the remodeling magazines that estimate the cost vs. value of common remodel projects. Remember, this is an estimate and not a scientific study.

It's very interesting to see what percentage of your investment is likely to be returned in different parts of the country.

Here is a link to the report for 2008.

http://www.realtor.org/rmohome_and_design/articles/2008/0812_costvsvalue_2008

New brochure explaining requirements of San Francisco’s energy and water conservation laws issues

2009-10-31T10:22:00.000-07:00

The City of San Francisco has finally issued a revised "informational brochure" to provide buyers with notice of the requirements of San Francisco’s energy and water conservation laws, as amended. Click here for the brochure.

Governor Signs SB94 Prohibiting Advance Fees for Loan Modifications

2009-10-25T22:15:00.000-07:00

No Advance Fee for Loan Modifications:
This new law, which went into effect on October 11, 2009 (and expires January 1, 2013), prohibits any person, including licensed real estate brokers and attorneys who negotiate, attempt to negotiate, arrange, attempt to arrange, or otherwise offer to perform a mortgage loan modification or other form of mortgage loan forbearance for a fee or other compensation paid by the borrower related to mortgages and deeds of trust secured by residential real property containing one to four dwelling units to do any of the following:

Claim, demand, charge, collect, or receive any compensation until after the licensee has fully performed each and every service the licensee contracted to perform or represented that he/she/it would perform.
Take any wage assignment, any lien of any type on real or personal property, or any other security to secure the payment of compensation.
Take any power of attorney from the borrower for any purpose.

No Dividing Services into Phases to Avoid Advance Fee Law:
The new language in California Business & Professions Code Section 10026 that defines "Advance Fee" has been modified to clarify that services may not be divided into phases to avoid the new law: "Neither an advance fee nor the services to be performed shall be separated or divided into components for the purpose of avoiding the application of this section."

Lenders and Loan Servicers Are Exempt from Advance Fee Law:
This law further provides that these provisions do not apply to actions taken by a person who offers loan modification or other loan forbearance services for a loan owned or serviced by that person, including, but not limited to, collecting principal, interest, or other charges under the terms of a loan, before the loan is modified, including charges to establish a new payment schedule for a non-delinquent loan.

Fees Already Collected Prior to October 11th Not Affected:
Loan modification agreements entered into and advance fees already collected on or before October 11, 2009 are not affected. Any advance fees collected after October 11, 2009 must be fully refunded to the clients. Even if the DRE issued a "no objection" letter, licensees may no longer collect advance fees despite executed loan modification agreement.

Caution - if it sounds too good to be true........

2009-08-25T16:10:00.000-07:00

One of our clients contacted us last week asking if we were familiar with an FHA loan offering with a super low interest rate of 4 7/8 %. He had received a letter in the mail with government-type headings/logos, using the pretext of the government's stimulus bill as the reason behind the low interest rate.

The closing costs seemed super high so he wondered if we had heard of this program. We had not and told him to proceed with caution but only after checking with several other mortgage professionals the team had experience with and trusted.

When he called the number on the letter for more information, they finally admitted that this was not an FHA loan, and the very low rate of 4 7/8% had a point included in the closing costs.

He asked that we let other clients know there are still unscrupulous loan folks out there trying to take advantage so remember….

If it sounds too good to be true, it probably is! Be careful out there.

Questions? Concerns? Contact us and we’ll help. That’s what we are here for.

How to Get the First-Time Home Buyer Tax Credit

2009-08-08T11:52:00.000-07:00

This article is from the Realtor.org Essentials for August, 2009:

You've decided to purchase a home and take advantage of the 2009 First-Time Home Buyer Tax Credit. Here's what you have to do to get your benefit:
Close on your home purchase by November 30, 2009,
Ensure that you are a qualified first-time buyer under IRS guidelines,
Decide which year to file under, 2008 or 2009,
File an amended 2008 return or choose to apply the credit to your 2009 tax return.

Deciding When to Apply the Credit
If you want the benefits of your credit as soon as possible:
You might choose to file under your 2008 tax year. Since April 15 has already passed, you would have to file an amendment to your return. However, if you've already filed for an extension of your 2008 return, then you can simply claim the credit when you submit your return.

If you anticipate a drop in income next year:
You can wait to claim the credit as part of your 2009 filing. In some cases the value of the credit might be higher, particularly if in 2008 you qualify for only a partial credit because your income is over $75,000 (single) or $150,000 (joint).

Your Next Steps
Once you have determined which year to apply the tax credit, you will need to do two things to claim the credit:
1. Fill out Form 5405 to determine the amount of your available credit, and
2. File an amended return for your 2008 taxes, or wait and apply to credit when you file your 2009 tax return.

San Francisco Real Estate Market is Stable and Improving!

2009-08-01T16:18:00.000-07:00

This just in from the SF MLS:

As reported earlier, the nationally recognized real estate economic consulting firm of Rosen Consulting Group has been retained by the Association to prepare monthly reports on the condition of the San Francisco economy and the residential real estate market and to issue them to the press with accompanying press releases. The monthly reports will include the following:

Analyses of various for-sale housing statistics, utilizing housing data provided by Terradatum:
Median home price and change in home prices;
Average days on the market;
Month’s supply of inventory; and
The number of homes for sale on the market.

Rosen Consulting Group’s view of the current housing and mortgage markets.

A brief description of the employment situation in San Francisco, using employment data from the Bureau of Economic Analysis.

The July report is imbedded within this blog.

HUD provides more details on how the $8,000 tax credit can be used.

2009-06-06T16:08:00.001-07:00

May 29, 2009

MORTGAGEE LETTER 2009-15

TO: ALL APPROVED MORTGAGEES

SUBJECT: Using First-Time Homebuyer Tax Credits

The American Recovery and Reinvestment Act of 2009 (Recovery Act) provides for as much as an $8000 tax credit to qualified first-time homebuyers. FHA supports this important initiative to promote homeownership. This mortgagee letter provides:
· Basic information on the first-time homebuyer credit obtained from the Internal Revenue Service (IRS) website. Complete information on how the first time homebuyer tax credit works, including the eligibility requirements for the tax credit, the amount of the tax credit that a first-time homebuyer may be eligible to receive, and how a homebuyer may claim the tax credit is available on the IRS website at http://www.irs.gov/newsroom/article/0,,id=204671,00.html?portlet7.
· Guidance on how FHA-approved mortgagees and FHA-approved nonprofit organizations as well as Federal, state, and local government agencies or instrumentalities may assist homebuyers that are eligible for the tax credit.
I. About the First-Time Homebuyer Tax Credit

Please check the IRS website to ensure you have up-to-date information. A brief overview of the tax credit from the IRS website and a copy of IRS Form 5405 (including instructions) are attached for reference.

Pursuant to 31 U.S.C. 3727 and 26 U.S.C. 6402, a refund of the first-time homebuyer credit will be made by the IRS only to the taxpayer, not to a third party. In other words, any refund issued in response to a claim for this credit cannot be assigned by a taxpayer to a third party.
II. FHA Tax Credit Guidance

Secondary Financing

Consistent with existing FHA policy, FHA will permit entities covered by Section 528 of the National Housing Act to use the current authority to offer tax credit advances with second liens in a manner consistent with the requirements in 12 U.S.C. 1709(b)(9). Eligible government agencies and instrumentalities of government are described in handbook HUD-4155.1 5.C3 and 5.C4.

Conditions:
· The tax credit advance, when combined with the FHA-insured first mortgage may not result in cash back to the borrower.
· The second lien may not exceed the total amount needed for the down payment, closing costs, and prepaid expenses.
· Secondary financing may be “soft” (silent) or require a monthly repayment.
· If payments are required, they must be included within the qualifying ratios and, when combined with the first mortgage, cannot exceed the borrower’s reasonable ability to pay.
· Payments must be deferred for at least 36 months to not be included in the qualifying ratios.
· If the tax credit advance loan has a short term for repayment, it must also provide that if the borrower fails to repay by the designated deadline, principal and interest payments begin automatically or the loan converts to a “soft” second.
· The secondary financing may not require a balloon payment before ten years.

Purchase of Tax Credit

FHA-approved mortgagees and FHA-approved nonprofit organizations as well as Federal, state, and local governmental agencies and instrumentalities thereof may purchase the tax credit anticipated by the homebuyer.

Conditions:
· The proceeds of the sale of the tax credit may not exceed the anticipated tax credit due the homebuyer based on the computations of form IRS 5405;
· The borrower must submit a signed certification that the tax credit is not subject to offset due to other indebtedness.
· A copy of the borrower’s tax refund and/or the IRS 5405 must be collected and retained in the FHA case binder.
· Any costs attendant to the purchase of the tax credit are to be nominal and discounting the anticipated credit to cover the costs and expenses of the transaction must be reasonable and disclosed to the homebuyer. In FHA’s view, fees and costs that total more than 2.5% of the anticipated credit are considered excessive. (Example: $6000 to be refunded, with all fees and costs discounted, borrower should receive not less than $5850.00 for sale of tax credit.)
· Pursuant to 12 U.S.C. 1709(b)(9), the homebuyer’s downpayment required for eligibility for FHA insurance may not consist of any funds (including funds derived from a sale of the homebuyer tax credit) provided by the mortgagee, the seller, or any other person or entity that financially benefits from the transaction (or by any third party or entity that is reimbursed, directly or indirectly, by the financially benefiting person or entity). Accordingly, the proceeds of the sale of the tax credit to FHA approved mortgagees, the seller, or any other person or entity that financially benefits from the transaction (or any third party or entity that is reimbursed, directly or indirectly, by the financing benefiting person or entity), may not be used to meet the 3.5% minimum downpayment, but may be used as additional downpayment, buying down of interest rate, or other closing costs.

Due Diligence
FHA expects that entities purchasing tax credit assets will employ appropriate due diligence measures including, but not limited to:
· Require the homebuyer to draft and provide the IRS form 5405 “First-Time Homebuyer Credit.”
· Contact the borrower’s employer and review pay stubs to confirm there are no outstanding garnishments.
· Review the homebuyer’s credit report to ensure there are no unpaid student loans, or other obligations that could be offset against the credit.
· Validate that all of the eligibility requirements for the tax credit are fulfilled
· Review previous tax returns and IRS tax assessment letters, if any, to determine that the borrower does not have unsettled obligations to the IRS

III. Monitoring

In order to track the tax credit monetization activities, FHA will require FHA-approved mortgagees to input into FHA Connection the following data:
· Name and EIN of the party who purchased the tax credit,
· The amount of the anticipated credit, and
· The amount the homebuyer paid for the monetization services.

The lender must also collect and maintain in the FHA case file the documentation that validates all of the tax credit monetization data submitted via FHA Connection.

FHA will monitor the purchase of tax credit transactions closely. Charging of excessive fees or costs in the purchase of the tax credit or increasing other fees or charges in the transaction without FHA approval may result in referral to the Mortgagee Review Board, and particularly with respect to entities that are not FHA-approved mortgagees, referral to the Federal Trade Commission, or referral to the appropriate State Attorney General office, as may be applicable.

If you have any questions regarding this mortgagee letter, please call FHA’s Resource Center at 1-800-CALL-FHA (1-800-225-5342). Persons with hearing or speech impairments may access this number via TDD/TTY by calling 1-877-TDD-2HUD (1-877-833-2483).

Sincerely,

Brian D. Montgomery
Assistant Secretary for Housing-
Federal Housing Commissioner

Attachments

IRS Form 5405

IRS Tax Credit Summary

HUD reverses plan to allow use of $8000 tax credit for downpayment

2009-05-29T10:13:00.000-07:00

On May 14th, HUD announced that first-time homebuyers would soon be able to access their $8,000 federal tax credit when closing on a home through a short-term bridge loan that will cover their down payment on FHA-backed loans.

HUD officials on Monday, May 18th reversed this earlier decision and details backing the 5/14 announcement were withdrawn from the HUD website.

Despite favorable reaction from the real estate industry to the bridge-loan proposal, not everyone was in favor of using the tax credit as collateral on a down-payment loan.

The loans also could have potentially created income-tax issues, according to the IRS officials who derailed HUD's plan.

This doesn't mean that HUD and lawmakers will not allow this in the future. Stay tuned - we'll keep you posted!

NEW FEDERAL LAW AFFECTING DISTRESSED PROPERTIES

2009-05-23T13:50:00.000-07:00

This week, President Barack Obama signed into law the Helping Families Save Their Homes Act of 2009 to help homeowners and lenders avoid foreclosure. Previously included in this bill was a measure to allow bankruptcy judges to modify mortgage loans for principal residences, but the U.S. Senate did not pass this "cram-down" legislation.

The Helping Families Save Their Homes Act of 2009 contains various new laws to address the national foreclosure crisis. Major provisions that may affect you include the following:

HOPE FOR HOMEOWNERS (H4H) REVAMPED: The new law loosens the H4H program requirements to help homeowners refinance out of their troubled mortgages and into more affordable, fixed-rate FHA-insured loans. Originally launched in October 2008, the H4H program intended to help 400,000 distressed homeowners, but in the program's first seven months, it only helped one family stay in its home. The maximum loan-to-value ratio for an FHA refinance is 96.5% of the appraised value. If refinance proceeds are insufficient to pay off existing liens, the existing lienholders must voluntarily agree to a short payoff, but a new inducement is an opportunity for them to share in the homeowner's equity. Other changes to the H4H program include monetary incentives for both the participating servicers of the existing loans and originators of the FHA refinance. Millionaire borrowers (with net worth over $1 million) are now excluded from the program. HUD will establish the requirements and standards to implement the H4H program as revised.

LONGER STAY FOR TENANTS OF FORECLOSED HOMES: Effective immediately, an REO lender or buyer who acquires title through a foreclosure sale must give at least a 90-day notice to terminate a bona fide tenant as defined. A 90-day notice to terminate is sufficient for a month-to-month tenant or if a new owner will occupy the property as a primary residence at the end of the 90 days. Otherwise, a tenant with a one year or other fixed-term lease with a remaining lease term exceeding 90 days can stay in the premises until the remaining lease term ends. This new 90-day notice requirement applies to foreclosures of a federally-related mortgage loan or residential real property, except for properties under rent control, rent-subsidized programs (such as Section 8), or other state laws that provide additional protections for tenants. This law expires on December 31, 2012.

NOTIFICATION OF TRANSFER OF MORTGAGE LOANS: The Truth in Lending Act now requires a lender to whom a mortgage loan is sold or otherwise transferred to notify the borrower in writing of such transfer within 30 days. The notice must include the new lender's identity, address, telephone number, authorized representative's contact information, and other relevant information. This measure should help alleviate the problem borrowers often face in determining who owns their mortgage loans.
Other provisions of the Helping Families Save Their Homes Act include a 4-year extension of the $250,000 FDIC deposit insurance to December 31, 2013, protection for loan servicers who establish qualified loss mitigation plans from liability for an alleged breach of duty to maximize mortgage values for their investors, $130 million for foreclosure prevention counseling and education, and $2.2 billion to strengthen homeless programs.

President Obama has also signed into law the Fraud Enforcement and Recovery Act (FERA) which authorizes the Department of Justice to prosecute mortgage fraud crimes against private mortgage brokers and companies that previously were not regulated by the federal government. FERA also earmarks almost $500 million for federal enforcement agencies to investigate and prosecute mortgage fraud and other fraud crimes.

Santa Clara County Flood Insurance Rate Maps Released

2009-05-17T11:26:00.001-07:00

The Federal Emergency Management Agency (FEMA) has issued revised Flood Insurance Rate Maps (FIRMs) for all of Santa Clara County that become effective on Monday, May 18, 2009. These maps show areas that are considered to be in a floodplain, and therefore may require homeowners to obtain flood insurance. Flood zone disclosure is a statutory requirement in California real estate transactions.
The revised FEMA maps will expand the 100-year flood zone and affect residential parcels in Palo Alto near Foothill Expressway, in Cupertino near Heney Creek Place, and in San Jose near Zanker Road and Component Drive, and Kingston Way and Manitoba Drive. In some areas, the 100-year flood zone will be reduced in size and parcels will be removed.
Prospective home buyers may wish to check with their insurance agent to see if the property's flood zone, and insurance requirements, will be affected by the map changes. To comply with federal law and to obtain the lowest available rate, owners drawn into a higher-risk zone must purchase flood insurance before the new maps become effective on May 18, 2009.
NOTE TO AGENTS: Where escrows are currently open in the affected areas, agents may wish to consider the impact that added flood insurance costs may have on the borrower's loan qualifications. In addition, where properties are drawn into a high-risk flood zone, building permits for future construction may require design standards that minimize flood risk, which could increase project cost. This development impact, and the insurance requirement triggered by the new flood zones, are material facts in real estate disclosure where properties are affected.
More information about...
- the flood map changes and how they may affect your clients
- insurance requirements which these changes may trigger
- opportunities that may benefit your clients with lowered flood insurance costs
- disclosure compliance
- how to view the new FEMA maps online
...is at the link below:
http://www.fanhd.com/Portals/0/fanhd/pdf/SantaClara_FEMAmaps_May2009.pdf

Breaking News - May 14, 2009 - First Time Homebuyer Credit To Be Used For Downpayment

2009-05-16T16:30:00.000-07:00

First-time homebuyers will soon be able to access their $8,000 federal tax credit when closing on a home through a short-term bridge loan that will cover their down payment on FHA-backed loans.

The Federal Housing Administration will soon publish a policy that will allow FHA-approved lenders, HUD-approved non-profits, and state and local housing finance agencies to "monetize" the tax credit through short-term bridge loans, Secretary of Housing said Tuesday.

This is a great time to be buying a home!!

Foreclosure Alternatives Program (FAP) Announced by Obama Administration

2009-05-16T16:24:00.000-07:00

We wanted to share some interesting news on the new Foreclosure Alternatives Program (FAP) with you:

May 14, 2009 from the CALIFORNIA ASSOCIATION OF REALTORS®

Good news from Washington, D.C., today. The Obama administration announced new details under its Foreclosure Alternatives Program (FAP) enabling servicers and borrowers to pursue short sales and deeds-in-lieu (DIL) of foreclosure in cases where the borrower is generally eligible for a Making Home Affordable modification but does not qualify or is unable to successfully complete the three month trial period. The program, effective through 2012, requires that prior to proceeding with a foreclosure, servicers must determine if a short sale is appropriate.

We’re gratified that the administration has recognized the need to streamline the short sale and deeds-in-lieu processes, and has provided viable options to homeowners who have fallen behind on their mortgages but owe more than their homes would sell for in today’s challenging market. We also appreciate the efforts of our colleagues at NAR for keeping this issue front and center in our nation’s capital.

Incentives in the FAP program include $1,000 for servicers for successful completion of a short sale or deed-in-lieu of foreclosure; $1,500 for borrowers/homeowners to help with relocation expenses; and up to $1,000 toward the cost of paying junior lien holders to release their liens ($1 from the government for every $2 paid by the investors to the second lien holders).

The FAP includes streamlined and standardized documents, including a Short Sale Agreement and an Offer Acceptance Letter to minimize complexity and increase use of the short sale option. Servicers will independently establish both property value and minimum acceptable net return, in accordance with investor requirements, based on an appraisal or one or more broker price opinions, issued no more than 120 days before the date of the short sale agreement.

In the Short Sale Agreement, servicers must give borrowers/homeowners at least 90 days to market and sell the property, or up to one year, depending on market conditions. The property also must be listed with a licensed real estate professional with experience in the neighborhood, and no foreclosure may take place during the marketing period, of at least 90 days, as specified in the Short Sale Agreement.

The Short Sale Agreement also must specify the reasonable and customary real estate commissions and costs that may be deducted from the sales price. The servicer must agree not to negotiate a lower commission after an offer has been received. Servicers may not charge fees to borrowers/homeowners for participating in the program. Servicers have the option to require the borrower/homeowner to agree to deed the property to the servicer in exchange for a release from the debt if the property does not sell within the time allowed in the Short Sale Agreement, plus any extensions.

Additional details will be forthcoming. Please check C.A.R.’s Market Response Center for updated information as it becomes available.

Sincerely,

James Liptak

2009 President

CALIFORNIA ASSOCIATION OF REALTORS®

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Choice of Escrow Bill (AB 957)

2009-05-04T17:23:00.000-07:00

C.A.R. achieved a compromise in AB 957, “Choice of Escrow Bill.” In multiple discussions with the author, C.A.R. worked with Assemblywoman Galgiani to come up with compromise language that will require fair treatment for real estate owned (REO) buyers in the choice of title and escrow providers.

The new language now protects fair negotiation over settlement services, and has removed C.A.R.'s opposition.

The new language will codify in California law the federal RESPA rules for selection of title insurance, and extend the same rules to protect buyers in the selection of escrow services. In a nutshell, the sellers will have to negotiate the selection of title and escrow. Under the new language, if an REO seller wants to try and direct choice of escrow, the seller will have to pay for the privilege.

AB 957 will also impose new penalties on REO sellers that violate the law, and will empower state regulators to go after both RESPA and "steering" violations.

C.A.R. launches Mortgage Protection Program

2009-04-03T16:15:00.000-07:00

To help provide first-time home buyers with peace of mind when purchasing a home, the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) Housing Affordability Fund is offering a new mortgage protection program to first-time home buyers. Through the C.A.R. Housing Affordability Fund’s Mortgage Protection Program, first-time home buyers who lose their jobs due to layoffs may be eligible to receive up to $1,500 per month, for six months, to help make their mortgage payments. A qualified co-buyer also can participate in the program, and receive a monthly benefit of $750 per month for up to six months. Program benefits also include coverage for accidental disability and a $10,000 death benefit. For more information including eligibility requirements and information on applying for the C.A.R.H.A.F. Mortgage Protection Program, please visit www.car.org/aboutus/hafmainpage/carhafmortgageprotection/.

Scam Artists Using Forged Letterhead To Con Californians

2009-03-21T12:18:00.000-07:00

California Attorney General Edmund G. Brown Jr. is warning consumers that scam artists are using the forged letterhead of major lenders to con worried Californians into paying thousands of dollars for non-existent loan modification services.

"Californians should be deeply skeptical of anyone who demands money up front and makes extravagant promises that they can save their home," Brown said.

Steps consumers can take to protect themselves from loan modification fraud are available at http://ag.ca.gov/newsalerts/release.php?id=1697.

Complaints may be filed with the Attorney General's Office at: Office of the Attorney General - Public Inquiry Unit, P.O. Box 944255, Sacramento, CA 94244, or online at http://ag.ca.gov/consumers/general.php.

S.F. Real Estate Rebounding—A Channel 5 News Story

2009-03-17T18:49:00.000-07:00

The lead story yesterday on the six o’clock news on Channel 5 (the local CBS affiliate station) was a report by Emmy Award-winning political editor Hank Plante on the rebound in real estate sales that has been noticed recently in San Francisco. The story cited the upsurge in sales that has occurred in the Excelsior district, the Sunnyside district, at the Infinity Towers and many other areas in the city. Plante explained that the driving factors are historically low interest rates, more rational asking prices, the availability of credit and the effects of pent-up demand. The Association which worked on the story with others provided statistical support for what had been observed in the field through Terradatum, the company which provides the Association with reports for publication in REALTOR® Advantage Online.

Click here to view the story.

Scam Alert - NAR is not involved in property rental

2009-03-17T16:03:00.000-07:00

The National Association of REALTORS® has just learned that its good name is being used as part of a property rental scam. In this scam, rental property is offered to consumers, who are led to believe that NAR is functioning as an intermediary to receive rental deposits from prospective tenants and, upon receipt of the deposit, to deliver the keys to the property to the tenant. The tenant is instructed to send money via Western Union to NAR's purported agent, in the United Kingdom.

NAR is not involved in this business and believes it is a scam. NAR has contacted law enforcement officials to request that the matter be investigated.

If you have encountered this scam, be advised you may file a complaint with the Internet Crime Complaint Center, sponsored by the Federal Bureau of Investigation and the National White Collar Crime Center.

Read more and file a complaint.