Sunday, December 26, 2010

Preserving Pipes

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.

Saturday, November 20, 2010

Legal Help for San Bruno Pipeline Explosion Victims

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.

Monday, November 15, 2010

Cashin Company is now Coldwell Banker

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

Saturday, October 23, 2010

Homebuyer tax credit: 950,000 must repay

NEW YORK ( -- 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.

Saturday, October 16, 2010


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,

which includes an acknowledgement of receipt for parties to sign.

Saturday, October 9, 2010

FHA may slash upfront costs of some reverse mortgages

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."

Saturday, October 2, 2010

Debate might give new life to mortgage cramdown legislation

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.
Distributed by United Feature Syndicate.
Copyright © 2010, Los Angeles Times

Monday, September 27, 2010

California home sales drop in August compared with last year

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.

Saturday, September 4, 2010

Home Values on Appraisal Sites Often Not Valid

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,, and 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.

Saturday, August 28, 2010

Millbrae Art and Wine is next weekend!

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.

Saturday, August 21, 2010

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

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.

Saturday, August 14, 2010

What will the new consumer protection bureau do?

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.

Saturday, August 7, 2010

Nearly one quarter of homes reduced asking price in July

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 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.

Saturday, July 31, 2010

Foreclosure sales account for 31 percent of Q1 sales

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.

Saturday, July 24, 2010

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

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.

Thursday, July 22, 2010

Fast Facts

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)

Tuesday, July 20, 2010

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

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."

Thursday, July 15, 2010

Reform bill retools lending

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.

Saturday, May 29, 2010

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

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.

Wednesday, May 26, 2010

5 Reasons to Move in the Summer

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.

Saturday, May 22, 2010

Fannie Mae extends seller assistance program

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 by June 30.

Properties listed on 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.

Wednesday, May 19, 2010

Nationwide home values decline in first quarter

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.

Saturday, May 15, 2010

Most homes to begin building positive equity by late 2015

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.

Wednesday, May 12, 2010

Private mortgage insurance companies return to market

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.

Tuesday, May 11, 2010—One Central Resource Guide for SF Homeowners

The San Francisco Realtor Association’s web site for homeowners,, 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.

Saturday, May 8, 2010

How to buy a foreclosure

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.

Saturday, May 1, 2010

Foreclosure sales nearly double from prior year

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.

Friday, April 30, 2010


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

Tuesday, April 27, 2010

San Francisco Housing Market Tightens; Median Sale Prices Rise

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.

Monday, April 26, 2010

Hints on today's market

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.

Saturday, April 24, 2010

Median list price rises in March

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.

Wednesday, April 21, 2010

California won’t tax forgiven mortgage debt

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.

Tuesday, April 20, 2010


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.

Monday, April 19, 2010

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

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

Sunday, April 18, 2010

HUD redefines “foreclosed” and “abandoned” properties

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.

Saturday, April 17, 2010

San Francisco Homeowners Have New Way to Pay for Going Green

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

Thursday, April 15, 2010

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

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.

Wednesday, April 14, 2010

Millbrae Community Shred Event April 17, 2010

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:

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

Tuesday, April 13, 2010


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

Saturday, April 10, 2010


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.

Monday, April 5, 2010

Home Affordable Foreclosure Alternatives (HAFA)

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.

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 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

Saturday, April 3, 2010

California gets into the First Time Buyer Tax Credit Act

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.

Saturday, March 27, 2010

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

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.

Saturday, March 20, 2010

First-time homebuyer TAX CREDIT has been extended!

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?

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.

Saturday, March 13, 2010

CALHFA Announces $700 Million to Assist Homeowners

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:

Saturday, March 6, 2010

Understanding Wood Burning Regulations

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
  • Sign up for automatic phone alerts at 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.

Saturday, February 27, 2010

Cell Phone Numbers Went Public to Telemarketers in January, 2010

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.

Saturday, February 20, 2010

First time and past home owners tax credit explained

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.


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.

Saturday, February 13, 2010

FHA program announces changes

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

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.

Saturday, February 6, 2010

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

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 (

Monday, February 1, 2010

Healthy Home Improvements

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.

Monday, January 25, 2010

2009 San Mateo County Market Snapshot

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

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

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

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

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

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

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

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

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 According to the 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:

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

Sunday, January 17, 2010

GSE loan mods, refinancings rise in November

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.

Saturday, January 9, 2010

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

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.

Tuesday, January 5, 2010

Which low cost remodel projects are still paying off?

According to the annual 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 article.