Welcome to Jean's Jingles!

What Improvements Will You Get Back on Resale?

2011-06-07T13:24:00.000-07:00

Home improvements that boost resale value
When deciding which home improvements to make, many homeowners consider the amount of resale value the improvement may or may not make and compare that against the cost of the renovation. Homeowners concerned with making home improvements that will pay off when it’s time to sell the property, should consider the following tips.

Making sense of the story

The first improvement/repair homeowners should consider are those that impact the home’s basic structures and systems. Potential home buyers generally do not want to face expensive repairs, and if items such as the foundation, roof, air conditioning, water heater, or other basic structure need to be fixed, the property will be considered a fixer-upper and its market price will be discounted accordingly.
Some minor replacements will produce big results for minimal cost. Replacing and coordinating bathroom and kitchen hardware and fixtures are generally inexpensive, but tend to make a big difference. The same can be said for getting rid of any dated finishes, such as old wallpaper and brass light fixtures.
Homeowners who don’t know when or even if they will be able to sell their home are advised to choose home improvement projects carefully. Unless the home is located in an upscale neighborhood and the property already is immaculate, owners can skip expensive upgrades – such as remodeled bathrooms – and focus on the fundamentals.

Read the full story

Weekly Real Estate Information!

2009-01-10T16:21:00.000-08:00

It is very important to keep consumers updated on real estate issues. Click on My Weekly Blog for real estate information and contact me if you need me!

View My Weekly Local Blog..

Do You Really Know the Difference?

2009-01-03T10:22:00.000-08:00

REOs Foreclosures Regular Sales Online Auctions Short Sales Pre-Foreclosure

In today’s San Francisco Bay Area market there are numerous properties for sale. I have been working with buyers and sellers in this challenging market. For the most part, prices ranging from $200,000 to $400,000 are being sold as Short Sale or REO properties. There are some being sold on Auction websites. Very few homes in the above price range are being sold by homeowners as what we call a Regular sale. Below are a summarized definition of these types of transactions.

Regular Sale - A sale where the seller has equity in the property. The buyer and seller will the
negotiate price and terms of the sale. The seller is required to provide Disclosures according
to California Law and statute. The transactions in this type of sale are generally much easier to come together as there are timelines in which the seller needs to abide by in the transaction. The seller is motivated to sell and move on in his/her life.

Short Sale - A short sale is the sale of real property where the fair market sale price is less than the loan(s) on the property. A short sale means the seller's lender is accepting a less than the existing loans on the property. Just because a property is listed with short “sale terms” does not mean the lender will accept your offer. These properties must be purchased “As Is” without any repairs or warranties. Some are in need of repair. The lender is already taking a 30% to 50% loss on the property. This is why a majority of the time, they will NOT negotiate on the price. In fact, in most cases in our area, there are multiple offers on most properties that are in good condition and the price will higher than the listed price.

If the property in encumbered with more than one loan, there could be a problem. All of the lenders must agree to a short sale or a contract can never be ratified. There is no guarantee the lender will approve of the sale. My buyers have waited over 4 months for the lender to respond to their offer. We are still waiting for an acceptance! I have heard of circumstances where it took the lender over 9 months to respond and did not accept the offer. Statistics show over the last six months that only 20 % of these sales have closed. The homeowner should consult their CPA or Tax Attorney before entering into a Short Sale agreement.

REO/Bank Owned Property - REO is an acronym for a real estate owned property that has been
foreclosed on or repossessed by banks or lenders. These properties are also sold in “As Is” condition without any repairs or warranties. The seller (lender) is exempt by law from completing any disclosures. The agents involved in the transaction are not exempt from completing their visual inspection as per California’s disclosure laws.

Prior to these properties going on the market, the lender has had an agent submit a BPO (Broker’s Price Opinion). So, just as in a short sale transaction, the lender is already taking a 30% to 50% loss on the property. This is why a majority of the time, they will NOT negotiate on the price. In fact, in most cases in my area, there are multiple offers on most properties that are in good condition and the price will higher than the listed price. Again, some properties are in need of repair. The process for bank approval can be anywhere from 3 – 10 days.

Pre-Foreclosure Property - A property where the homeowner has fallen behind in their payments or when a Notice of Default (NOD) has been filed against the property by the lender. May not have much flexibility in negotiating. These properties may be regular sales or potential Short Sales. The homeowner should consult their CPA or Tax Attorney before entering into a Short Sale agreement.

Online Auctions - Recently I have found that some of the REOs that have not sold were placed on an online auction website. Do not be fooled in thinking that you can purchase these properties lower than what they were listed for by an agency. The agency still has the listing. The website starts with a minimum bid and the buyer is made to believe that they can purchase this property for this amount if there are no other bidders. Not so, there is a reserve amount that the lender expects to get for the property. This price is usually what the real estate agency has listed the property for in the multiple listing service. There is a 5–10% fee paid to the auction house in addition to the final bid price. These properties are all “As Is” sales without inspections or warranties.

For All Your Real Estate Needs:
Jean Powers CRS,ASP®,PMN,e-PRO
Real Estate Broker
510.908.9002 Cell/Text
http://www.jeanpowers.net/
Homes@JeanPowers.com

2009-01-02T13:28:00.000-08:00

My state association has great information for Realtors to pass on to the consumer. I have been a state director since 1993 which keeps me updated on current laws, contracts and also allows me to be part of decision making on many issues that arise on our committees. Below is information I received from the California Association of Realtors regarding the timeline for foreclosure on owner occupied 1-4 unit properties.

When a real estate transaction involves a property in foreclosure, knowing the foreclosure timeline helps you as the real estate agent to assess whether you have enough time to close escrow before the foreclosure sale. Starting September 8, 2008, California has a special foreclosure timeline for loans originated between 2003 and 2007, inclusive, which are secured by owner-occupied residences.

Indeed, loans involved in short sales are likely to be owner-occupied loans from the years 2003 to 2007, which was the heyday for subprime lending.

The special foreclosure timeline does not apply if the borrower has filed for bankruptcy, surrendered the property, or contracted with a person or entity whose primary business is advising people, who have decided to leave their homes, on how to extend the foreclosure process and avoid their contractual obligations. The special foreclosure timeline will remain in effect until January 1, 2013. (Cal. Civ. Code § 2923.5.)

FORECLOSURE TIMELINE FOR OWNER-OCCUPIED REAL PROPERTY LOANS (made from 2003 to 2007)

The approximate minimum time frames for the non-judicial foreclosure of owner‑occupied real property loans made from 2003 to 2007 are as set forth below. In California, most lenders elect to foreclose non-judicially by conducting trustees' sales, not by judicial foreclosure.

Pre-Foreclosure Period
A lender may initiate the foreclosure process when a borrower defaults on a loan, such as by missing a mortgage payment. However, a slight delay may not justify acceleration and foreclosure by the lender. Hence, in practice, lenders generally wait a few months after a missed payment before starting the foreclosure process.

Day 1: Lender Contacts Borrower
For owner-occupied loans from 2003 to 2007, a lender initiating the foreclosure process must generally contact the borrower by phone or in person to assess the borrower's financial situation and explore options for avoiding foreclosure. During the conversation, the lender must inform the borrower of the right to meet with the lender within 14 days. The lender must also give the borrower the toll-free number for finding a HUD-certified housing counseling agency.

Day 31: Filing of Notice of Default
For owner-occupied loans from 2003 to 2007, the lender may file a notice of default 30 days after contacting the borrower to explore options for avoiding foreclosure. The notice of default must be filed in the county where the property is located and a copy must be mailed within 10 business days after recordation to the borrower and all other persons who have requested such notice. The notice of default informs the borrower of the default. It must also include the lender's declaration that it has contacted the borrower to explore options for avoiding foreclosure, tried with due diligence to contact the borrower, or the borrower has surrendered the property.

Day 121: Filing of Notice of Trustee's Sale
Three months after the filing of the notice of default, the lender may record a notice of trustee's sale setting forth the date, time, and place of the upcoming trustee's sale. Because of the gravity of a notice of trustee's sale, it must be widely disseminated. The notice of trustee's sale must be recorded, posted, mailed to the borrower and others, as well as published once a week for three consecutive weeks in a newspaper of general circulation.

Day 145: Deadline to Cure Default
Up to five business days before the trustee's sale, the borrower may reinstate the loan by curing the default or paying the missed payments plus allowable costs. After the reinstatement period expires, the borrower still has the right to redeem the property by paying the entire debt, plus interest and costs (not just the arrearage), before the bidding begins at the trustee's sale.

Day 152: Trustee's Sale
Although California law allows a trustee's sale to take place 20 days after the posting of the notice of trustee's sale, lenders customarily wait at least 31 days instead to help protect against federal tax liens. At the trustee's sale, the property is sold through a public auction to the highest bidder. Title is transferred to the successful bidder by trustee's deed.

USING THIS FORECLOSURE TIMELINE
A foreclosure timeline helps you as a listing agent ascertain whether you have enough time to market and sell the property as a short sale. Depending on the stage of foreclosure the homeowner is in ("Foreclosure Stage"), the chart below gives you the total time frame you have, at a minimum, to sell a property as a short sale before the trustee's sale occurs ("Minimum Time Left to Sell").

Foreclosure Stage
Minimum Time Left to Sell
Homeowner just missed making mortgage payment for the first time.
About 6 to 8 months total

Homeowner has just been contacted by the lender to explore options for avoiding foreclosure.
About 5 months total

Notice of default has just been filed.
About 4 months total of trustee's sale has just been filed.

Date of trustee's sale is on notice of sale
As an example, if a notice of default has just been filed, you have a minimum of about four months to sell the property before the trustee's sale may occur. That's four months not only to find a buyer, but also to get the lender to approve the short sale and close escrow. The short sale lender may agree to postpone the trustee's sale in some situations (such as when there's an accepted offer), but be sure to get any agreement for a postponement in writing.

December Parties!

2009-01-02T13:14:00.000-08:00

Do you have a group of good friends and celebrate each other's birthdays? I do. Every year the group takes the birthday person out to dinner. Last week I have 2 friends, Michael and Sandra whose birthdays are in December. The group decided to take them out to lunch at Bing Crosby's in Walnut Creek. This restaurant opened a couple of years ago and became an instant hit. It's nostalgic with an atmosphere of the days that Bing was alive and a great place to eat. We all gave gifts to the birthday boy and girl and also exchanged Christmas gifts. Lisa's family makes their yearly tamales and we all received a batch! Umm Yummy! I can't remember whose birthday is next, but I do know we will find a wonderful place to go!

Giving Back to Your Community!

2008-11-20T20:43:00.000-08:00

Give Back to Your Community!

20 Ways to Give Back!!

Have any of you wondered how to find as many ways as possible to give back to your community. Well, here are 20 ways in which you can help others! 20 Simple Ways to Give Back to Your Community. Not every volunteer effort has to change the world. Let your efforts make your corner a little brighter. Here are some simple ways you can improve your community:

1. Help an elderly neighbor rake leaves, grocery shop or do home repairs.

2. Give away free flowers, seeds or plant to a neighbor in the Spring.

3. Put out flags for the Fourth of July in neighborhood front yards.

4. Sponsor a Little League team or any children's athletic team.

5. Become active in the Chamber of Commerce.

6. Start a garden or historical walk.

7. Speak at career day at the elementary school.

8. Repaint a playground.

9. Take your pet to the local senior center.

10. Organize and gather goods & beds for the Women's Shelter.

11. Be a Big Brother or Sister to a child.

12. Encourage homeowners to donate clothing and furniture.

13. Get involved with your local community.14. Sponsor a school to help with their needs.

15. Bring a carload of newspapers,towels & blankets to the animal shelter.

16. Ask a local teacher what supplies his or her class needs most and donate them.

17. Hold a canned food drive and deliver the goods to the food bank..

18. Organize a town or beach clean-up day.

19. Take a lonely child with you when your family goes to the movies.

20. Sponsor a family in need who needs food and clothing.

Alameda County Housing Statistics

2008-11-20T19:45:00.000-08:00

October 2008

The continued decline in home sales prices throughout most of southern and eastern Alameda County has increased housing affordability and inspired buyers to act. Sales activity remained strong in the Central County and Tri-Cities regions in October 2008 fueled by modest month-to-month price drops. Sales, on average, dropped 9% in the Tri-Valley markets.

Sales prices proved once again the variability between real estate markets.

Prices actually increased in specific communities from September to October.Central County (Castro Valley, Hayward, San Leandro and San Lorenzo)Castro Valley was the notable exception in the Central Valley by showing a 10% increase in median sales price from September to October. However, units sold slipped by 20% in Castro Valley. Active listings were also down an average of 4% throughout the Central County communities - a trend that's consistent with decreasing inventory throughout Alameda County. Pending sales increased an average of 9% month-to-month. In terms of actual units listed and pending sale, the pace of home sales has remained steady since August 2008.

Tri-Cities (Fremont, Newark and Union City)Union City showed positive growth in all market indicators this month. Units Sold shot up 76% from 21 units in September to 37 units in October; pending sales were up 13% and active listings increased 7%. The median sales price increased 7% from $480,000 in September to $511,500 in October. Newark did well last month, too. A modest 2% increase in sales prices, a 13% increase in units sold and a 7% increase in active listings. However, it was the only Tri-City community to post a decline in pending sales. Median prices slipped 16% in Fremont from $685,000 in September to $573,000 in October. Sales activity was virtually the same with only two fewer units sold in October.

Tri-Valley (Dublin, Livermore and Pleasanton)All Tri-Valley communities, but Danville, saw a drop in sales prices in October. Livermore prices decreased 16% from $499,950 to $420,000 while prices in Dublin, Pleasanton and San Ramon dropped 8% and 4%. In terms of actual dollars, the prices in each community are still well above both the state and county median prices. The pace of home sales and pending sales also slowed throughout the region with the exception of Livermore which saw a 10% month-to-month increase in actual units sold. Meanwhile, with the exception of Pleasanton, active units increased across the rest of the Tri-Valley

Information is deemed reliable but not verified

It's Your Move!

2008-10-11T20:02:00.000-07:00

Purchase a Home in Today's Market? Is it Wise and Possible?

Buying a home in today's market may be a challenge. And given the economic news we're getting, it may take nerves of steel to jump in right now. But there are many homes on the market right now that are great values. If you have good credit, money for a down payment and are pre-approved by a bank, there are homes that may fit your needs.

There are many factors that make buying a home today a great option. Interest rates are near their all time lows. The rate on a 30-year, fixed mortgage is hovering around 6 percent. By contrast interest rates were hitting 8 percent and higher during the last market downturn, and were between 10 and 12 percent at the height of the last housing boom in the 1980s. Lower interest rates make it easier to qualify for a loan, and your monthly payments are more affordable.

Another factor impacting the real estate market is that today there are many homes for sale that are bank-owned because of foreclosures. The banks are taking anywhere from a 30% to 50% loss on these listings. It's true not all bank-owned properties are good deals and that dealing with these sales can be a challenge, but with help of a good Realtor there are bargains to be had.

The same can sometimes be said for so-called "short sales" (short, because the seller is asking their lender to take less than the amount left on the loan.) These are even harder to put together than bank-owned properties and much trickier as well. It is really important that you are working with an experienced realtor who is on the same page as you are. And be careful--just because it's a short-sale or an bank-owned property doesn't necessarily mean it's a good deal.

"Normal" sales--a property that is not a short sale or banked-owned property-- are easier to purchase today than just a few years ago. The value of properties has finally adjusted downward from their peak highs during the real estate boom. Buyers are finally able to find affordable homes. And there are choices.

The length of time a home remains on the market before it is sold has increased from roughly two weeks in 2004 to between eight and nine weeks in 2007. According to the unsold inventory index provided by the CALIFORNIA ASSOCIATION OF REALTORS®, it would take 16.3 months to sell all the homes on the market at the current sales pace, compared with 6.4 months in 2006. With more homes on the market for longer periods of time, now you have more choices when it comes to selecting a home.

I often hear potential buyers say "I think prices will drop even more and I am going to wait." Of course that is their prerogative. But over the long term across California the median sales price for a single-family home has been consistently rising for several decades. In short, housing remains a solid, long-term financial investment. While the pace of home appreciation has slowed over the last year, historical data suggest home prices will continue to appreciate over time. The projected median home price for a single-family home in California in 2008, for example, is $553,000. By comparison, the median price in 2000 was $241,350; $193,770 in 1990, and $99,550 in 1980. (source: C.A.R.)

In the Bay Area it's a great time to buy. So if you are ready to buy, find a service oriented, caring, ethical Realtor®. Get yourself preapproved by a lender. Start your journey for that home that you have always wanted and that is now attainable. Contact me when you are ready for that journey to purchase the biggest investment of your life. Why rent when you might be able to purchase in today's market?

Call Jean Powers a Certified Residential Specialist and Broker Associate at Kane & Associates.

Jean can be reached by email at Homes@JeanPowers.com or by telephone at 510.908.9002

Buyers in Northern California!

2008-08-24T20:58:00.000-07:00

Buyers! Please! Please!

For all you buyers in Northern Calfornia who want to purchase a Bank Owned or Short Sale property:

1. Please do not believe what you hear or read from the Media.

2. Please listen to the advice of your Realtor.

3. Please believe us when we say the lenders are not willing to give away the properties.

4. Please understand that that the lenders are taking anywhere from 30 to 50 per cent loss on the home.

5. Please understand for the most part the lenders will not take less than listed price.

6. Please understand that when the property is in great condition and in a good location that the there will be multiple offers.

7. Please understand that when there are multiple offers, you need to offer more than listed price.

8. Please understand that real estate in the long run has always gone up in value.

9. Please understand that interest rates will not remain low forever and now is the right time to buy.

10. AND finally, Please understand that there are not any deals! The deals are here right now! Homes are ON SALE right now!!!

Jean Powers, CRS
Broker-Associate
Windermere Welcome Home
Homes@JeanPowers.com

http://www.jeanpowers.net/
510.908.9002

Do You Know the Difference?

2008-08-10T21:40:00.000-07:00

Buyers and Sellers! Do You Really Know the Difference?

In today’s San Francisco Bay Area market there are numerous properties for sale. I have been working with buyers and sellers in this challenging market. For the most part, prices ranging from $200,000 to $400,000 are being sold as Short Sale or REO properties. There are some being sold on Auction websites. Very few homes in the above price range are being sold by homeowners as what we call a Regular sale. Below are a summarized definition of these types of transactions.

Regular Sale - A sale where the seller has equity in the property. The buyer and seller will the
negotiate price and terms of the sale. The seller is required to provide Disclosures according
to California Law and statute. The transactions in this type of sale are generally much easier to come together as there are timelines in which the seller needs to abide by in the transaction. The seller is motivated to sell and move on in his/her life.

Short Sale - A short sale is the sale of real property where the fair market sale price is less than the loan(s) on the property. A short sale means the seller's lender is accepting a less than the existing loanson the property. Just because a property is listed with short “sale terms” does not mean the lenderwill accept your offer. These properties must be purchased “As Is” without any repairs or warranties. Some are in need of repair.The lender is already taking a 30% to 50% loss on the property. This is why a majority of the time, they will NOT negotiate on the price. In fact, in most cases in our area, there are multiple offers on most properties that are in good condition and the price will higher than the listed price.

If the property in encumbered with more than one loan, there could be a problem. All of the lenders must agree to a short sale or a contract can never be ratified. There is no guarantee the lender will
approve of the sale. My buyers have waited over 4 months for the lender to respond to their offer. We are still waiting for an acceptance! I have heard of circumstances where it took the lender over 9 months to respond and did not accept the offer. Statistics show over the last six months that only 20 % of these sales have closed. The homeowner should consult their CPA or Tax Attorney before entering into a Short Sale agreement.

REO/Bank Owned Property - REO is an acronym for a real estate owned property that has been
foreclosed on or repossessed by banks or lenders. These properties are also sold in “As Is” condition without any repairs or warranties. The seller (lender) is exempt by law from completing any disclosures. The agents involved in the transaction are not exempt from completing their visual inspection as per California’s disclosure laws.

Prior to these properties going on the market, the lender has had an agent submit a BPO (Broker’s Price Opinion). So, just as in a short sale transaction, the lender is already taking a 30% to 50% loss on the property. This is why a majority of the time, they will NOT negotiate on the price. In fact, in most cases in my area, there are multiple offers on most properties that are in good condition and the price will higher than the listed price. Again, some properties are in need of repair. The process for bank approval can be anywhere from 3 – 10 days.

Pre-Foreclosure Property - A property where the homeowner has fallen behind in their payments or when a Notice of Default (NOD) has been filed against the property by the lender. May not have much flexibility in negotiating. These properties may be regular sales or potential Short Sales. The homeowner should consult their CPA or Tax Attorney before entering into a Short Sale agreement.

Online Auctions - Recently I have found that some of the REOs that have not sold were placed on an online auction website. Do not be fooled in thinking that you can purchase these properties lower than what they were listed for by an agency. The agency still has the listing. The website starts with a minimum bid and the buyer is made to believe that they can purchase this property for this amount if there are no other bidders. Not so, there is a reserve amount that the lender expects to get for the property. This price is usually what the real estate agency has listed the property for in the multiple listing service. There is a 5–10% fee paid to the auction house in addition to the final bid price. These properties are all “As Is” sales without inspections or warranties.

Call me for more information and help!

Tomb of the Unknown Soldier

2008-08-01T20:17:00.000-07:00

Today I received an email from a friend on the Jeopardy question in which all 3 contestants incorrectly answered regarding the men who guard the Tomb of the Unknown Soldier. I decided to research the information on the guards as it was quite interesting to me. Not only did I find the questions and answers on these fabulous men but I also found a YouTube piece on the subject which got to my heart! I hope you enjoy this information. I did!!

Do You Know About the Federal Housing Bill?

2008-07-31T16:39:00.000-07:00

How Does Federal Housing Bill Affect You?

On June 26, 2008, the Senate passed a housing bill that will offer up to $300 billion in loans for troubled hsomeowners and establish a government rescue plan for mortgage finance giants Fannie Mae and Freddie Mac.

The President will roll over once again - but this time to the benefit of the economy and the consumer. At first, Bush said he would veto the bill, but after consulting with his "advisers" he will concede this coming week and sign the bill into law.
The bill will take effect October 1st, 2008.

What does all of this mean to you, the consumer?

For Distressed Home Owners
Some folks may be able to cancel their old mortgages with high interest rates and replace them with new fixed-rate loans lasting at least 30 years...with some caveats:

1) New loans would be no more than 90 percent of what the borrower's property is worth currently;

2) Loan must have originated on or before January 1, 2008;

3) The loan must be on the borrower's primary residence;

4) Income verification is required, which might be an issue for subprime borrowers who did not have to disclose their income to receive their current loan;5) Your housing payment has to be at least 31 percent of your monthly household income;

6) You cannot take out a home equity loan for at least five years;

7) Appreciation made on the home within five years goes back to the government;

8) Fifty percent of any appreciation after five years must go to the government.

For Home Buyers

1) Conforming loan limits increased permanently to $625,000 (great for California!)

2) The bill includes a tax refund for first-time home buyers worth up to 10% of a home's purchase price but no more than $7,500 (The refund, however, serves more as an interest-free loan, since it would have to be paid back over 15 years in equal installments. )

3) The bill eliminates a program that has allowed sellers to provide down payment assistance.

For Veterans

1) Lenders will have to wait nine months, not 90 days, before beginning foreclosure proceeding on homes owned by someone returning from the military.

2) Lenders will have to wait a year before raising interest rates on a mortgage held by someone returning from military service.

I will continue to learn more about this legislation. If you have any questions, or if I can help you in any way, please call or e-mail me...I am here to help!

Purchase in a Totally Green Community!!

2008-05-26T11:32:00.000-07:00

“Yes, the First Totally Green Community
In The United States,
Where? Of Course In California”
4/22/2008

CastleView Estates, the leader in innovation for the first certified Environmentally Friendly community in the State of California announces the opening of its Tract 7338 near Pleasanton, California. A unique gated 52 acre Ag and residential community in Alameda County, that borders Pleasanton, California, the CastleView Estates community, although nestled next to Pleasanton, is the first in California to provide a completely environmentally secured gated community with full recycling of its energy use. We have established within the County of Alameda our own Sewer Water District. Being our own Sewer Water and Power District, we pump our own water, purify it and then we recycle it back through our waste system it grows grapes and alfalfa for crops and for ostrich/beef meat; this includes wine grapes. The advanced engineered treatment system for the overflow affluent of the sewer’s disposal is able to clarify it up to 97% making it virtually drinkable. These nutrients go into growing the crops; the system is monitored by computer systems, and is serviceable on an annual basis for a very low cost, making it basically maintenance free, but very high reliability. Power, provided by windmills and solar, helps to offset the costs of our water usage, pumping costs, and maintenance for the association. All of which is under a non-profit organization registered within the State of California for the purpose of providing for its members and residences.

Being the first to totally go green in a community which recycles all of its energy needs and is completely self-contained, it’s such a unique concept in California it took years of planning by the CastleView Estates leaders. The uniqueness of this project is such that very high end homes are built GREEN with certification from the Department of Energy with the Energy Smart label. These homes are constructed from Green materials being environmentally friendly at a cost below the typical market. Therefore, buying scenic view lots and building a home well below the typical high end market by 20-30%. Homes are nestled and hidden from others atop the hills over looking the entire community, not utilizing precious Ag land from below. Secured access in the first gated community in years in this particular area, allows full security for all of its residences yet with the Ag Bent allows them to not only have high end homes, but also participate in the Ag should they want a horse or other type of animal in their particular area, especially given lots up to 2.5 acres.

Homes can be pre-fabricated in a factory environment by Palm Harbor, the Nation’s leader in energy green supplied homes and have an AARP oversight. Unique on-site building allows the construction of very high end expensive homes way below market price. These homes can be constructed in less than nine months and be ready for move-in. Red tape and burocratic delays are minimal with far less middle men involved in this construction. Given the economic change in the housing market, this is an opportunity for those to come in at a lower price which a much nicer home in an environment that is friendly for our community as well as the State of California. We are proud to participate and to introduce this first pioneering concept, proving reality.

Waste, Waste, What are You Doing?

2008-05-06T21:24:00.000-07:00

We live in a society that produces so much excess waste. Some of it is garbage and other is recycle. Our association, my office, family and friends are attempting to go green. In my research here is what I found and I thought it was work passing along.

Garbage........ Americans produce more and more of it every year, when we need to be producing less. Even the most waste-conscious among us can feel overwhelmed by the amount of household waste that goes beyond what municipal recyclers and compost bins can handle. That's why our editors spent the summer of 2007 investigating the state of waste management in our country, putting this list together for you, explaining how we can get serious about the three R's

- reducing, reusing, and recycling - and divert more waste away from landfills.

1. Appliances: Goodwill accepts working appliances, www.goodwill.org, or you can contact the Steel Recycling Institute to recycle them. 800/YES-1-CAN, http://www.recycle-steel.org/.

2. Batteries: Rechargeables and single-use: Battery Solutions, 734/467-9110, http://www.batteryrecycling.com/.

3. Cardboard boxes: Contact local nonprofits and women's shelters to see if they Boxcan use them. Or, offer up used cardboard boxes at your local Freecycle.org listserv or on Craigslist.org for others who may need them for moving or storage. If your workplace collects at least 100 boxes or more each month, UsedCardboardBoxes.com accepts them for resale.

4. CDs/DVDs/Game Disks: Send scratched music or computer CDs, DVDs, and PlayStation or Nintendo video game disks to AuralTech for refinishing, and they'll work like new: 888/454-3223, www.auraltech.com <http://www.auraltech.com/> .

5. Clothes: Wearable clothes can go to your local Goodwill outlet or shelter. Shirts donate wearable women's business clothing to Dress for Success, which give then to low-income women as they search for jobs, 212-532-1922, www.dressforsuccess.org <http://www.dressforsuccess.org/> . Offer unwearable clothes and towels to loca l animal boarding and shelter facilities, which often use them as pet bedding. Consider holding a clothes swap at your office, school, faith congregation or community center. Swap clothes with friends and colleagues and save money on a new fall wardrobe and back-to-school clothes.

6. Compact fluorescent bulbs: Take them to your local IKEA store for recycling: http://www.ikea.com/.

7. Compostable bio-plastics: You probably won't be able to compost these in your home compost bin or pile. Find a municipal composter to take them to at http://www.findacomposter.com/.

8. Computers and electronics: Find the most responsible recyclers, local and national, at www.ban.org/pledge/Locations.html.

9. Exercise videos: Swap them with others at http://www.videofitness.com/.

10. Eyeglasses: Your local Lion's Club or eye care chain may collect these. Lenses Glassesare reground and given to people in need.

11. Foam packing: Your local pack-and-ship store will li kely accept foam peanuts for reuse. Or, call the Plastic Loose Fill Producers Council to find a drop-off site: 800/828-2214. For places to drop off foam blocks for recycling, contact the Alliance of Foam Packaging Recyclers, 410/451-8340, www.epspackaging.org/info.html

12. Ink/toner cartridges: Recycleplace.com pays $1/each.

13. Miscellaneous: Get your unwanted items into the hands of people who can use them. Offer them up on your local Freecycle.org or Craigslist.org listserv, or try giving them away at Throwplace.com or giving or selling them at iReuse.com. iReuse.com will also help you find a recycler, if possible, when your items have reached the end of their useful lifecycle.

14. Oil: Find Used Motor Oil Hotlines for each state: 202/682-8000, http://www.recycleoil.org./

15.Phones: Donate cell phones:

Collective Good will refurbish your phone and sell Cell phone it to someone in a developing country: 770/856-9021, www.collectivegood.com. Call to Protect reprograms cell phones to dial 911 and gives them to domestic violence victims: http://www.donateaphone.com/. Recycle single-line phones: Reclamere, 814/386-2927, http://www.reclamere.com/.

16. Sports equipment: Resell or trade it at your local Play It Again Sports outlet, 800/476-9249, http://www.playitagainsports.com/.

17. "Technotrash": Project KOPEG offers an e-waste recycling program that can help you raise funds for your organization. Use Project KOPEG to recycle iPods, MP3 players, cell phones and chargers, digital cameras, PDAs, palm pilots, and more. Also, easily recycle all of your CDs, jewel cases, DVDs, audio and video tapes, pagers, rechargeable and single-use batteries, PDAs, and ink/toner cartridges with GreenDisk's Technotrash program. For $30, GreenDisk will send you a cardboard box in which you can ship them up to 70 pounds of any of the above. Your fee covers the box as well as shipping and recycling fees. 800/305-GREENDISK, http://www.greendisk.com/.

18. Tennis shoes: Nike's Reuse-a-Shoe program turns old shoes into playground and athletic flooring. www.nikereuseashoe.com. One World Running will send still-wearable shoes to athletes in need in Africa, Latin America, and Haiti. http://www.oneworldrunning.com/.

19. Toothbrushes and razors: Buy a recycled plastic toothbrush or razor from ToothbrushRecycline, and the company will take it back to be recycled again into plastic lumber. Recycline products are made from used Stonyfield Farms' yogurt cups. 888/354-7296, http://www.recycline.com/.

20. Tyvek envelopes: Quantities less than 25: Send to Shirley Cimburke, Tyvek Recycling Specialist, 5401 Jefferson Davis Hwy., Spot 197, Room 231, Richmond, VA 23234. Quantities larger than 25, call 866/33-TYVEK.21. Stuff you just can't recycle: When practical, send such items back to the manufacturer and tell them they need to manufacture products that close the waste loop responsibly.

By the way what are you doing to go green?

2008-05-06T18:02:00.000-07:00

Point-of-Sale Legislation Held in Committee

C.A.R. is OPPOSING AB 2678 (Núñez) which among other things, will require that ALL homes and commercial property in California have an energy audit at point-of-sale and that mandatory energy efficiency investments be made. AB 2678 was to have been voted on by the Assembly Appropriations committee last week but is now being held in that committee for at least a few days due to its potential cost. We are now expecting the bill to have a hearing some time before May 23rd.

ISSUE BACKGROUND
AB 2678 will require a state agency to set up a process to require point-of-sale energy efficiency audits that will cost up to $400 and ultimately will require point-of-sale energy efficiency retrofits that may cost THOUSANDS of dollars. While C.A.R. has no objection to increasing energy efficiency, AB 2678 will be both dangerous to the real estate market and grossly ineffective. Here's why AB 2678 is a bad idea:

-AB 2678 will hurt your business. Heaping costly requirements on all sales will slow every residential AND commercial transaction, further weakening the real estate market and the economy.

-Point-of-sale approaches take too long. Research shows that only 22% of the properties most in need of energy efficiency retrofits will actually be sold by 2020. AB 2678 will be grossly ineffective in achieving its goals.

-AB 2678 will hurt housing affordability. The mandatory audit and retrofit requirements ultimately created could add THOUSANDS of dollars to every transaction. And every $1,000 increase in the price of a home disqualifies 26,600 families from owning.

-Politicians want to make an end-run around you! They know REALTORS® will fiercely oppose point-of-sale mandates. By passing the buck to a state agency, they hope to make this proposal more acceptable to other legislators. But be forewarned: once the legislation is passed and the bureaucrats take charge, you will have NO SAY!!

For additional information, please contact DeAnn Kerr at deannk@car.org

The M&M's of Life!

2008-04-30T21:04:00.000-07:00

I was going thru my computer this afternoon looking for something I saved in my document folder and of course I couldn't find what I was looking for. I did however find something I needed called the m & m's of life.

We always talk about taking care of ourself and sometime wonder how. Some time ago this passed my life and a nice way to treat ourself.

music - start and finish your day with music in your life

moisture - live near water, alcohol (1 oz only)

movement - exercise, non competitive

massage - relax, the best way to eliminate stress. hugs are mini massages

menu - what you eat, size & self esteem. lower fat & increase exercise

meditation - few minutes for yourself. take time for you.

myrrh - humor, share with others. laugh.

If you take care of yourself!!! Then you can give back to others

So, what are you doing to take care of yourself?

Technology?

2008-04-17T23:48:00.000-07:00

Your road warriors could be leaving a trail of customer data behind them.

I recently read and article about Computerworld's sales department's performance and how it is measured on revenue, not on data protection. So it's no surprise that salespeople focus on closing deals, not security holes. As a result, they sometimes sacrifice security for convenience. We log onto Wi-Fi hot spots in airports to work on presentations despite the risk of being hacked. We carry reams of information, some of it propriety, on their smart phones. They transfer deal details on USB drives. Although companies have done much to address the challenges of this frequently mobile population, there's still more work to do.

1. Be wary of unsecured connections.
Salespeople have the tools to phone home from anywhere. Unfortunately, those connections aren't always secure. Even if a salesman is using his laptop at a Wi-Fi hot spot at the airport just to check sports scores, he could be putting a slew of sensitive information at risk.
IT's response: Mandate encryption and a connection to the corporate virtual private network. Peter Evans, director of marketing at IBM Internet Security Systems, says employees should always use a corporate VPN and encryption to ensure that hackers can't get in. Moreover, companies should automate the process for users so they have no excuse for trying to circumvent the rules.

2. Guard access to the CRM system.
Customer relationship management systems give sales departments an efficient way to handle information. But Rena Mears, a partner in the security and privacy services unit at Deloitte & Touche LLP, says it's often too easy for salespeople to access the system to enter, read or forward information. "You can have data proliferating in ways that you can't control," Mears says.
IT's response: Set policies governing access, and back them up with IT controls. Companies must establish who should have access to the CRM system and for what reasons, Mears says. IT should implement access controls, automated encryption and content-monitoring applications.
3. Keep a close eye on mobile devices.

Mobile devices regularly go missing as a result of carelessness or theft. In fact, a 2005 study sponsored by data protection company Pointsec Mobile Technologies (now owned by Check Point Software Technologies Inc.) found that 85,619 mobile phones, 21,460 handhelds or pocket PCs, and 4,425 laptops were left in a Chicago cab company's vehicles in a six-month period.
IT's response: Deploy security applications to company-issued devices. Businesses should require salespeople to use only company-issued mobile devices that are equipped with auto??matic protections -- boot-up and screen passwords, as well as automatic encryption of data, e-mail and hard drives, says Jonathan Gossels, president and CEO of System Experts Corp., an IT compliance and network security consultancy in Sudbury, Mass.

4. Cut the cell phone chatter.
People have a tendency to use their cell phones to carry on public discussions of confidential matters, says Howard A. Schmidt, a security strategist at International Information Systems Security Certification Consortium Inc., or (ISC)2, which offers the Certified Information Systems Security Professional certification. He remembers once hearing all of the details of a fellow traveler's business call at Dulles International Airport. "Everyone in the cabin could hear him," he says.
IT's response: Provide education. Awareness training is often enough to remind people to watch what they say and when. "We show [video of] people running their mouths really loud and ask, 'Is this you?'" says Schmidt, who has also served as the cybersecurity adviser to the White House and in security roles at eBay Inc. and Microsoft Corp.

5. Curb access to all that information.
Not everyone in the sales department has equal responsibilities. Why should they all have equal access to information? Companies often fail to ask that question, says Ed Zeitler, executive director of (ISC)2.

IT's response: Manage information access and reinforce that effort with technology. Sales managers, security personnel and IT workers should define who needs access to what information. Once that's done, IT should use access controls in databases and applications to ensure that only authorized individuals can get in. Moreover, that team of managers must update access controls when employees' responsibilities change.

Jury Finds Realtor Not to Blame for Purchase Price

2008-04-16T18:24:00.000-07:00

A jury sided Thursday with Carlsbad real estate broker Mike Little in a closely watched lawsuit that pitted a local couple against the agent that helped them buy a home. The couple, Vern and Marty Ummel, claimed that Little neglected to mention recent sales in their neighborhood, leading them to overpay by about $150,000 for their home in July 2005.

The case attracted national attention as it posed a hot question: What are the responsibilities of a real estate agent? The real estate camp was concerned that if the plaintiffs won Thursday, it would catalyze and focus a growing urge around the country to find someone to blame -- and to hold financially responsible -- when houses aren't worth as much as their buyers once paid. Those who sided with the Ummels worried their case would be chalked up to rich people problems, a matter of a measly $150,000 in the scope of a million-dollar tract home near a golf course in North County.

With an enthusiastic and unanimous response, the jury found that Little had executed a reasonable standard of care when he showed his clients, Vern and Marty Ummel, more than 80 homes in a house hunt that began in May 2005, ultimately leaving them to their decision to pay $1.2 million for their house two months later.

In arguments delivered Thursday morning to conclude the jury trial that began last week, attorney David Bright said his client, Little, was being unfairly blamed for the Ummels' house dropping in value.

"The Ummels want to own the most desirable house and pay for the least desirable house and have Mr. Little make up the difference," he told the jury.

At a time when housing market trouble has rocked the global economy, the individual roles of people involved in the basic housing transaction have come under fire. A soaring market this decade hid a multitude of mistakes, a plethora of cut corners and fudged appraisals, because buyers could sell for a profit, nearly no matter what.

But now that the value of housing has come unhitched from what once propelled it upward by double-digit percentages year after year, a spotlight has become trained on the topic of ethics in real estate. Scores of fraud cases, underpinned by inflated appraisals and collusion between buyers' and sellers' agents, have landed in national headlines and aggravated bank losses in a major nationwide housing slump.

And arguments in this two-week trial attempted to answer some of those questions: What right did the Ummels have to expect Little to know and tell them about all of the other nearby homes? What duty do buyers have to do their own research, to challenge what their agents and appraisers and mortgage brokers tell them?

At least in this specific case, the Realtor was found to have exercised sufficient care in helping the Ummels find their house, including helping them negotiate other offers they made on houses before they settled on this one. That made an important part of the case Vern Ummel's admission on the stand that after looking at so many homes, he had a good sense of value in the neighborhood.As for the buyers' responsibilities, juror after juror gushed praise for Little and heaped criticism on the Ummels' failure to research the comparable sales themselves.

Bright argued the trial had illuminated the hard work that responsible real estate professionals, those that have been in the industry for a while, do for their clients.

"I think Realtors are scapegoats for a declining market," Bright said after the verdict was reached Thursday afternoon.

"There are always people out there who will blame someone for something that is beyond their control."But Marty Ummel, "devastated" by the conclusion of the case, said the jury's decision enables real estate agents to skimp on information they provide to their clients.

"I think it sends a bad message to people about the real estate industry," she said. "Evidently there is not the relationship of trust that I would've expected.

"The verdict marked an end of a battle that began soon after the Ummels bought a house on Amante Court in Carlsbad for $1.2 million in late July 2005. They were still unpacking when Marty found on their doorstep one day a flyer from another real estate agent, touting a recent sale of a similar-sized home down the street from the Ummels'. What caught Marty's eye: that house sold six weeks earlier for $105,000 less than they'd paid.

When they received a paper copy of their appraisal after they bought their house, the Ummels noticed the comparable sales in the neighborhood had not just lower prices, but, in their view, better amenities and larger lot sizes. A few months later, they saw another flier for a house down the street that sold for $175,000 less.

The Ummels contended their agent had misrepresented a reasonable value to pay for their house and had breached his fiduciary duty to them, acting to protect his commission instead of their best interest. They filed suits in July 2006 to that effect against their agent, Mike Little, and Re/Max Associates, the parent franchise of 14 affiliated offices in San Diego County.

The Ummels picketed, carrying signs that exclaimed "Caution, Beware: All Re/Max offices are independently owned," and "It's our money; we want justice" to Re/Max offices around the county and even to the Greenwood Hills, Colo., national headquarters of Re/Max.

The original lawsuit named the appraiser and the mortgage broker, who each settled with the Ummels for $10,000.And though the case was decided in his favor Thursday, the impact of the picketing and the media attention over the last 18 months was significant for Little, Bright said.

"It's been extremely hard," Bright said. "Now, when he looks at a client, he's got to wonder, what's going to happen? Are these people going to second-guess me?"Marty Ummel said her efforts weren't in vain. The jury spoke and the Ummels lost, but she said she was proud of herself for "doing what I thought was right.""The fact that there's dialogue on what Realtors need to do, the fact that it looks like the Realtors don't need to do as much," she named as aspects she was happy the case brought to the public consciousness.

Todd Lackner, a real estate appraiser not associated with the case, said the Ummels had "lost the battle but won the war" when it came to raising questions and delivering a hit to the reputation of real estate agents.

"I think it's scaring Realtors more than anything else," he said. "[Little] won the court case, but there's a lot of other Realtors out there that are very concerned. Not just in San Diego. It's got to be nationwide.

"I think people are a little bit more skeptical, more concerned, and rightly so," he said. "If you don't think this is the right value, don't do it."

California Agents Representing Investment Buyers

2008-04-12T11:35:00.000-07:00

California agents have not been able to represent investors on properties which there is a notice of default filed because the law stated that buyer's agents needed to be bonded. The issue is that the bond didn't exist. Below is information from the California Association of Realtors legal department with the latest news on this subject!

C.A.R.'s Member Legal Services team has published a revised legal article, "Notice of Default and Investor-Buyer Transactions: Home Equity Sales Contracts," which has been revised to reflect the holding in the case, Schweitzer v. Westminster Investments, 157 Cal. App. 4th 1195 (2007), review denied March 26, 2008.

The Fourth District Court of Appeal held that the bond requirement under Civil Code Section 1695.17 for an equity purchaser's representative is "void for vagueness under the due process clause and may not be enforced." The California Supreme Court has declined to review this case which means that the bond requirement has been eliminated from the Home Equity Sales Contract Law.

This article can be found on the What's New and Legal Articles pages of the Legal section on C.A.R. Online (http://www.car.org/).

Want to Lower Your Credit Card Rate?

2008-04-09T22:05:00.000-07:00

Credit cards are one of the most pervasive forms of your financial picture. On a daily basis, they provide the flexibility and freedom to reserve a hotel room, travel without carrying cash, and purchase just about anything at anytime.

As such, your credit cards can have a major impact on your financial wellbeing and even your credit score. But did you know that your credit score can also impact your credit cards...specifically your interest rates? Although some companies have abandoned the practice, many won't hesitate to raise your interest rate if your credit score declines - even if you are paying them on time! By following these tips, you can help avoid inflated interest rates on your credit cards...and perhaps even enjoy more trips to the ballpark:

Understand the terms. The best way to protect yourself from high interest rates and hikes is to read and understand your credit cards policy terms. Pay particular attention to the interest rate, how long that rate is in effect, and what actions can lead to a hike - such as a late payment on your card, a declining credit score, or even a late payment on a completely unrelated bill.

Don't be late. Making a late payment can lead to increased interest rates on all your cards. In addition, they can lower your credit score, causing you even more problems down the road. So make a schedule and always pay on time.

Watch the mail. We all get junk mail, but some of it may not be junk after all. Whenever you receive any information in the mail from your credit card, read it carefully in case any policies or interest rates are changing.

Make a call. If your rate does change, call the company. If you've made your payments on time consistently, you may be able to get your original rate restored. If the company seems hesitant, you may want to threaten to transfer your balances to another card - customers in good standing may find they have more bargaining power than they realize. And don't just threaten to make a change...actually do it if it makes sense. You may find the grass actually is greener on the other side.

Be careful what you close. Closing a card that has a current balance will likely send your interest rate soaring. In addition, closing your oldest credit cards can have a negative impact on your overall credit score.

So make sure you check and double check which cards are best to close.

Are You Molding or Molting?

2008-04-08T20:27:00.000-07:00

Mold seems to be a growing issue in our area. There is always some mold everywhere - in the air and on many surfaces. Molds have been on the Earth for millions of years. Mold grows where there is moisture. While doing my research I came accross some information from the CDC that is worth passing along.

Mold and Your Health

Exposure to damp and moldy environments may cause a variety of health effects, or none at all. Some people are sensitive to molds. For these people, molds can cause nasal stuffiness, throat irritation, coughing or wheezing, eye irritation, or, in some cases, skin irritation. People with mold allergies may have more severe reactions. Immune-compromised people and people with chronic lung illnesses, such as obstructive lung disease, may get serious infections in their lungs when they are exposed to mold. These people should stay away from areas that are likely to have mold, such as compost piles, cut grass, and wooded areas.

A link between other adverse health effects, such as acute idiopathic pulmonary hemorrhage among infants, memory loss, or lethargy, and molds, including the mold Stachybotrys chartarum (Stachybotrys atra), has not been proven. Further studies are needed to find out what causes acute idiopathic hemorrhage and other adverse health effects.

Mold and Your Home

Mold is found both indoors and outdoors. Mold can enter your home through open doorways, windows, vents, and heating and air conditioning systems. Mold in the air outside can also attach itself to clothing, shoes, bags, and pets can and be carried indoors.

Mold will grow in places with a lot of moisture, such as around leaks in roofs, windows, or pipes, or where there has been flooding. Mold grows well on paper products, cardboard, ceiling tiles, and wood products. Mold can also grow in dust, paints, wallpaper, insulation, drywall, carpet, fabric, and upholstery.

You Can Control Mold

Inside your home you can control mold growth by:
Keeping humidity levels between 40% and 60%;
Promptly fixing leaky roofs, windows, and pipes;
Thoroughly cleaning and drying after flooding;
Ventilating shower, laundry, and cooking areas.

If mold is growing in your home, you need to clean up the mold and fix the moisture problem. Mold growth can be removed from hard surfaces with commercial products, soap and water, or a bleach solution of no more than 1 cup of bleach in 1 gallon of water.

Mold growth, which often looks like spots, can be many different colors, and can smell musty. If you can see or smell mold, a health risk may be present. You do not need to know the type of mold growing in your home, and CDC does not recommend or perform routine sampling for molds. No matter what type of mold is present, you should remove it. Since the effect of mold on people can vary greatly, either because of the amount or type of mold, you can not rely on sampling and culturing to know your health risk. Also, good sampling for mold can be expensive, and standards for judging what is and what is not an acceptable quantity of mold have not been set. The best practice is to remove the mold and work to prevent future growth.

If you choose to use bleach to clean up mold:

Never mix bleach with ammonia or other household cleaners. Mixing bleach with ammonia or other cleaning products will produce dangerous, toxic fumes.
Open windows and doors to provide fresh air.

Wear non-porous gloves and protective eye wear.

If the area to be cleaned is more than 10 square feet, consult the U.S. Environmental Protection Agency (EPA) guide titled Mold Remediation in Schools and Commercial Buildings. Although focused on schools and commercial buildings, this document also applies to other building types. You can get it free by calling the EPA Indoor Air Quality Information Clearinghouse at (800) 438-4318, or by going to the EPA web site at http://www.epa.gov/mold/mold_remediation.html.

Always follow the manufacturer's instructions when using bleach or any other cleaning product.

MOLD PREVENTION TIPS

Keep the humidity level in your home between 40% and 60%. Use an air conditioner or a dehumidifier during humid months and in damp spaces, like basements.
Be sure your home has enough ventilation. Use exhaust fans which vent outside your home in the kitchen and bathroom. Make sure your clothes dryer vents outside your home.

Fix any leaks in your home's roof, walls, or plumbing so mold does not have moisture to grow.

Clean up and dry out your home thoroughly and quickly (within 24-48 hours) after flooding.
Add mold inhibitors to paints before painting.
Clean bathrooms with mold-killing products.
Remove or replace carpets and upholstery that have been soaked and cannot be dried promptly. Consider not using carpet in rooms or areas like bathrooms or basements that may have a lot of moisture.

To learn more about preventing mold in your home, see the Environmental Protection Agency's publication A Brief Guide to Mold, Moisture, and Your Home at http://www.epa.gov/iaq/molds/moldguide.html.

Information from the Center of Disease Control and Prevention

The Housing Market is OK! The High Cost of Oil is Messing Us Up!

2008-04-04T21:01:00.000-07:00

I read an article today by Linda Tremblay that I wanted to pass along that says a lot about our market.

Everywhere you go, the news has been about foreclosures and the real estate market going downhill. I hate to tell the press, but if they would leave the housing market alone, we would be fine. Historically, the market has always had peaks and valleys. Along with this the press has send that home ownership is getting beyond our reach. As i have said before, I wish I would of bought about ten houses back then. If I sold them now, even at a reduced sale price now, I would be a millionaire.

The oil industry on the other hand is another story. The oil companies are making billions in profit as we are having to cut back on certain things to be able to drive our cars. That is bad enough and somehow we need to get away from depending on oil for our automobiles. But today I heard that the independent truckers are possibly going on strike because they can not afford the high cost of diesel.

This weekend I saw regular gas at $3.15 and deisel was $4.20. Ouch! Apparently it is costing the trucking industrymore money to run a load than they are making.This is going to cause the price of everything to go up. Look at all the materials and food that is transported by the trucking industry. This is crazy. There ae so many smart people out there, hopefully someone can come up with an alternative method to run our trucks, our homes and our cars. After all, we can send a man to the moon.

The Hope Awards!!

2008-03-30T10:46:00.000-07:00

Champions for Minority Homeownership Encouraged to Apply for HOPE Awards

Applications are now being accepted for the fifth HOPE (Home Ownership Participation for Everyone) Awards. The HOPE Awards is a national industry awards program that recognizes individuals and organizations that are making outstanding contributions to increase minority homeownership, revitalize communities and expand affordable housing opportunities across the country. Many American families own their home, but not everyone realizes the dream of homeownership. While more than three out of four white households own their own home, only half of minority households enjoy the benefits of homeownership. The HOPE Awards honors those who strive to remove barriers to minority homeownership and focus public attention on that vital issue.

The HOPE Awards is sponsored by a partnership of real estate associations; awards are conferred every other year. HOPE Awards winners receive $10,000, national media coverage, paid travel expenses to attend and speak at a minority housing symposium, and recognition at the HOPE Awards Gala in May 2009. The categories for the HOPE Awards are Finance, Homeownership Education, Leadership, Media, Project of the Year, Public Policy, and Real Estate Brokerage. Entries are evaluated by a panel of distinguished judges, based on the impact of the nominee's work in promoting minority homeownership, focus on affordability, use of innovative ideas, and acceptance by the minority community.

Individuals, nonprofit and for-profit organizations, and state and local agencies are eligible. Self-nominations are encouraged.

HOPE Awards entries must be received by December 5, 2008. For HOPE Awards entry forms and submission guidelines, visit http://www.hopeawards.org/ or call 202/383-1013. Winners will be announced in April 2009. The HOPE Awards Gala will take place in Washington, D.C., in May 2009.
The HOPE Partners are the Asian Real Estate Association of America, Chinese American Real Estate Professionals Association, Chinese Real Estate Association of America, National Association of Hispanic Real Estate Professionals, National Association of Real Estate Brokers® and the National Association of Realtors®.

When you need a Realtor, please contact me!! homes@JeanPowers.com

Do You Qualify for a Home Office Deduction?

2008-03-29T09:35:00.000-07:00

This article is by CRS instructor, Chris Byrd who is well known for his tax strategy seminars He has been a speaker for the Northern CA CRS Chapter and we find him to be very good! Chris@ChrisBirdSeminars.com or http://www/.chrisbirdseminars.com

Qualifying for the Home Office Deduction
The deduction allows you to deduct a pro-rata portion of your residential costs as a business expense when it's used as your principal place of business. The percentage of allowable expense (found by dividing the square footage of the office by the home's total square footage) can be applied to mortgage interest, insurance, property tax, rent, depreciation, utilities, and other home-related expenses.

The two requirements:1. The space is exclusively used for business2. You must regularly conduct some kind of business activity in the space
The home office deduction can only be taken if a portion of the home is used "exclusively and primarily" for business. That means the designated space cannot be used for any other purpose, like a guest room.

Although the space must be "separately identifiable," it needn't be blocked off with a permanent partition. This deduction can also apply to a separate structure not attached to the dwelling unit.

Your Home Office Needs to be Your Principal Place of Business
More taxpayers qualify since the definition of "principal place of business" was broadened to include a place where administrative or management activities are conducted on a substantial basis, if there is no other fixed location where they conduct substantial administrative or management activities (Taxpayer Relief Act of 1997). In short, this means that a self-employed person needs to spend more time running their business from home, not the brokerage sales office.

In my experience, real estate agents often fail to qualify for this deduction because they already have a brokerage sales office, where most of their activities in running their business are conducted.

Also, if you are an employee who works at home, the rules state that the home office must be for your employer's convenience, rather than your own. As popular as tele-commuting has become, make sure this point is clarified with your employer. That way you can document that the office space is specifically required by them.

One caveat for anyone taking this deduction. It cannot be taken for any year when the amount claimed will generate a net loss for the business. However, the untaken deduction can be carried forward to a year when there is sufficient profit to avoid that limitation.

Selling a Residence with a Home Office
In December, 2002, the US Treasury approved a change that removed a major negative for those who'd been taking the home office deduction. (And for those who feared taking it.) Normally, gain on the sale of a principal residence (where you resided two or more years) is tax free. Until that change, homeowners who sold would owe tax on the gain allocated to the office portion of their home.

The new Treasury rules change mean that a seller must no longer allocate the amount of gain between their business and personal use. The home office had to be within the house, however. And the new rules don't excuse any depreciation recapture that may have been taken for the home office.

Make Your House "Pay its Way"
Whether taking the home office deduction is tax-wise depends on your circumstances. Study the details in IRS Publication 587 http://www.irs.gov/publications/p587/Here's a tax strategy that every self-employed person should reconsider. Especially since several of the "traps" regarding the home-office deduction have been dismantled. Its tax advantages are substantial and could bring you significant savings-year after year

Crab Cove in Alameda California

2008-03-28T20:43:00.000-07:00

About The Visitor Center

Crab Cove Visitor Center at Crown Memorial State Beach in Alameda features all new exhibits opened in April 2004. You can see bay creatures in the 800-gallon aquarium system, use interactive stations for varying age groups to view microscopic animals, build a crab from the inside out, or get a lug worm's view of the mudflats. You'll see amazing depictions of the underwater world of San Francisco Bay. At the Visitor Center you can also plunge into San Francisco Bay without getting wet, or travel back in time to Alameda's colorful past.

These entertaining educational opportunities all have a serious purpose--to increase public understanding of the environmental importance of San Francisco Bay. There is strong emphasis on the interdependence of marine life and shore life and on the urgency of preserving the marine and estuarine environment.

Dedicated to interpreting relationships between people and the earth's marine environment, this center attracts visitors from all over the Bay Area.

A focal point for this educational effort is the Visitor Center's Old Wharf Classroom. There, in a picturesque setting, youngsters and adults alike can learn about such topics as shoreline wildlife and the food chains that sustain all living creatures.

The waterless plunge takes the form of a display case showing a cross-section of bay, with lifelike models of shoreline and underwater animals. Adjacent rooms contain an aquarium and lots of interactive exhibits.

Education continues just outside the center, where the Crab Cove Marine Protected Area, at the foot of McKay Avenue, was designated the first California estuarine marine reserve. Its mud flat and rocky shore area are an important wildlife habitat. A special ramp allows wheelchair users to explore the tidepools at low tide. Collecting or disturbing creatures in this protected area is forbidden, thus preserving a unique shoreline environment for study and education.

Naturalist-guided programs for school groups and other organized groups are available Wednesday through Friday by advance reservation. See the Field Trips page for details or call visitor center at (510) 521-6887. Weekend programs provide exciting opportunities for you to learn about Bay ecology and the local area; download our monthly program guide to see a list of upcoming activities.

Up until the late 1930s, the area now occupied by the visitor center was part of a thriving resort community featuring bathing spas and an amusement park. Later, during and just after World War II, it was the site of the U.S. Maritime Service Officers School, a training base for Merchant Marine commanders. What is now the visitor center building was the base infirmary.

More Info About the Isle City of Alameda

2008-03-27T14:37:00.000-07:00

Central Alameda

Even though I was born and raised in Alameda it always amazes me on how it has grown so much. Here is a little information about Central Alameda. The only way to access the main island is to cross either of our 4 bridges or the tube.

The island of Alameda was originally a peninsula connected to Oakland. Much of the peninsula was low-lying and marshy, but on the higher ground, the peninsula and adjacent part of what is now downtown Oakland were home to one of the largest coastal oak forests in the world and the area was therefore called "Encinal", Spanish for "Oakland". "Alameda" is Spanish for "grove of poplar trees" or "tree-lined avenue.” This name was chosen in 1853 via popular vote.

The inhabitants at the time of the arrival of the Spanish in the late 18th Century were a local band of the Ohlone tribe. The peninsula became part of the vast Rancho San Antonio granted to Luis Peralta by the Spanish king who claimed California. The grant was later confirmed by the new Republic of Mexico upon its independence from Spain.

Prior to the gold rush besides Native Americans there were also in modern Alameda French lumberjacks supplying lumber to the quickly expanding San Francisco and Chipman and Auginbaugh, as well as major Spanish descended landowners who founded the village of Alameda near the corner of Encinal Avenue and High Street in Alameda.

The city was founded on June 6 , 1853 . Originally three small settlements grew in town. "Old Alameda" referred to the village at Encinal and High, Hibbardsville was at the NorthShore ferry and shipping terminal, and Woodstock was on the west near the ferry piers of the South Pacific Coast Railroad and the Central Pacific . Eventually, the Central Pacific's ferry pier became the "Alameda Mole " while the Central Pacific itself became the Southern Pacific . The Alameda pier was the site of the first train across the Transcontinental Railroad into the San Francisco Bay Area. The terminus was moved to Oakland a few years later.

In 1917, an attraction called Neptune Beach was built in the area now known as Crab Cove. Often compared to Coney Island , the park was a major attraction in the 1920s and 1930s. The original owners of the facility, the Strehlow family, partnered with a local confectioner to create tastes unique to Neptune Beach. Though many do not know it, both the snow cone and the popsicle were invented at Neptune Beach. The Kewpie doll, hand painted and dressed in unique hand-sewn dresses, became the original prize for winning games at the beach - another Neptune Beach invention. The Strehlows owned and operated the beach on their own, even filling in a section of the bay to add an additional olympic-size swimming pool and an exceptional roller coaster which must have given riders a tremendous view of the bay.

Neptune Beach 's two huge outdoor pools hosted swimming races and exhibitions by famous swimmers like Olympian Johnny Weissmuller , who later starred as the original Tarzan, and Jack LaLane, who started a chain of health clubs. Unfortunately, the park closed down in 1939 because of the Great Depression , the completion of the Bay Bridge, people circumventing paying the admission price and in general, the rise of car culture. Once the Bay Bridge was complete, the rail lines, which ran right past the entrance to Neptunem Beach on the way to the Alameda Mole and the Ferry, lost riders in droves. People began using their cars to escape the city and the immediate suburbs like Alameda and traveling further a field in California. Alameda lost its resort status as more distant locations became more attractive to cash-rich San Francisco tourists. Youngsters in town became aware of ways to avoid paying the dime for admission to the park. Strong swimmers or even waders could sneak in on the bay side, just by swimming around the fence.

Some of the resort homes and buildings from the Neptune beach era still exist in present-day Alameda. The Croll Building , on the corner of Webster St. and Central Ave., was the site of Croll's Gardens and Hotel, famous as training quarters for the some of the greatest fighters in boxing history from 1883 to 1914. James J. Corbett, Bob Fitzsimmons, Jim Jefferies, Jack Johnson, and many other champions all stayed and trained here. Today this beautiful preserved building is home to Croll's Pizza and the New Zealander Restaurant. Neptune Court, just a block away on the corner of Central Ave. and McKay Ave., provides another glimpse of what resort life was like in Alameda in the 1920s. A short walk near Crab Cove will reveal many more historic gems.

Sadly, the vast majority of the Neptune Beach structures - the hand-carved carousel from the world-famed Dentzel Company, the ferris wheel, the roller coaster, and other rides - were auctioned off in 1940 for mere pennies on the dollar of their original cost. Today, an Alameda resident Michael Schiess looks to preserve some of the historic artifacts from the Neptune Beach era at the Neptune Beach Amusement Museum, specifically dedicated to the resort and all "amusement machines." While the existing and more general Alameda Museum has quite a few artifacts from Neptune Beach in its collection, this new museum will focus more on the games, rides and other machines that brought amusement to Alameda's bay shore.
As the Neptune Beach era faded and Park Street developed into the major thoroughfare of the city and the location of the main Alameda train station, residents of Old Alameda pulled up stakes and moved across town to the new downtown. The street's location was chosen by two landowners who wished to attract tenants and development to their land. As a result they designated their mutual border as Park Street.

The need for expanded shipping facilities led to the dredging of a canal through the marshland between Oakland and Alameda in 1902, turning Alameda into an island. Most of the soil from the canal was used to fill in nearby marshland. The area of Alameda called Bay Farm Island is no longer an island, but is attached by fill to Oakland. In his youth, author JackLondon was known to take part in oyster pirating in the highly productive oyster beds near BayFarmIsland, today long gone. The Alameda Works Shipyard was one of the largest and best equipped shipyards in the country. In the 1950s, Alameda's industrial and ship building industries thrived along the estuary, where the world's first-ever; land-based, containerized shipping crane was used. Today, the Port of Oakland across the estuary serves as one of the largest ports on the West Coast, using the shipping technologies originally experimented with in Alameda. As of March 21 , 2006 , Alameda is a "Coast Guard City," one of seven in the country.

In addition to the regular trains running to the Alameda Mole, Alameda was also served by local steam commuter lines of the Southern Pacific (initially, the Central Pacific) which were later transformed into the East Bay Electric Lines . Southern Pacific's electrified trains were not streetcars , but full-sized railroad cars which connected to the mainland by bridges at Webster Street and Fruitvale (only the latter bridge survives today). The trains ran to both the Oakland Mole and the Alameda Mole. In fact, one line which ran between the two moles was dubbed the "Horseshoe Line" for the shape of the route on a map. Soon after the completion of the Bay Bridge , Alameda trains ran directly to San Francisco on the lower deck of the bridge, the ferries having been rendered unnecessary.

In the 1930s Pan American Airways established a seaplane port along the fill that led to the Alameda Mole. This was the original home base for the famous China Clipper . With the advent of World War II , a vast stretch of the marshy area southwest of the Alameda Mole was filled and the Naval Air Station Alameda established. This major Naval facility included a large airfield as well as docks for several aircraft carriers . It closed in 1997

Buying or Selling, I am here to help!

Jean 510.908.9002

The Island in which I Sell, Born and Raised

2008-03-26T21:12:00.000-07:00

Bay Farm Island
Alameda is a small island with a beach that looks to San Francisco. Bay Farm Island is where I grew up and in those days we took a school bus to school, AC transit did not run on the weekends, I took the ferry (the kind that carries vehicles) to San Francisco when I went to the doctor and Bay Farm Island had 3 streets with homes and the rest was the bay and farmland. Right behind Bay Farm Island was a very small airport (Oakland Airport) and now it too has grown! There were no schools and only 1 park. Where the Oakland Raider's headquarters are now, it was the bay.

Bay Farm Island is an area of the city of Alameda, California , near Oakland . It is divided from the main island of Alameda by an estuary and connected by separate drawbridges for both cars and bicycles. Bay Farm Island is adjacent to the Oakland International Airport . In addition to being an affluent neighborhood, it is also the location of a municipal golf course, a high-tech industrial park, a small shopping center and the world headquarters of the NFL football team, the Oakland Raiders.

Also located on BayFarm Island are two public elementary schools: Bay Farm and EarhartElementary Schools. The former is named for the island community that it serves. The latter is named for famed female aviator Amelia Earhart who started many of her flights from the nearby Oakland Airport.

An interesting point to note is that Alameda was once a peninsula and was later divided from the mainland to create an island , while BayFarmIsland was once an island, later to become a peninsula through land reclamation , adjacent to the Oakland Airport.

Once used as farmland, Bay FarmIsland is now home to a the 36-Championship Hole Chuck Corica Golf Complex in addition to its many housing developments. The land mass boasts a chain of lagoons as well as several parks including Shoreline Park, Leydecker, Godfrey, Harrington Field and a greenbelt that surrounds Bay Farm's perimeter.

Wow! Has my town changed!

Tips To Save Gas

2008-03-25T10:11:00.000-07:00

Here is some tips on how to save Gas from a friend……

TIPS ON PUMPING GAS (Good information)I don't know what you guys are paying for gasoline.... but here in California we are also paying higher, up to $3.50 per gallon. But my line of work is in petroleum for about 31 years now, so here are some tricks to get more of your money's worth for every gallon..

Here at the Kinder Morgan Pipeline where I work in San Jose , CA we deliver about 4 million gallons in a 24-hour period thru the pipeline.One day is diesel the next day is jet fuel, and gasoline, regular and premiu m grades. We have 34-storage tanks here with a total capacity of 16,800,000 gallons.

Only buy or fill up your car or truck in the early morning when the ground temperature is still cold. Remember that all service stations have their storage tanks buried below ground. The colder the ground the more dense the gasoline, when it gets warmer gasoline expands, so buying in the afternoon or in the evening....your gallon is not exactly a gallon. In the petroleum business, the specific gravity and the temperature of the gasoline, diesel and jet fuel, ethanol and other petroleum products plays an important role. A 1-degree rise in temperature is a big deal for this business. But the service stations do not have temperature compensation at the pumps.

When you're filling up do not squeeze the trigger of the nozzle to a fast mode. If you look you will see that the trigger has three (3) stages: low, middle, and high. In slow mode you should be pumping on low speed, ther eby minimizing the vapors that are created while you are pumping. All hoses at the pump have a vapor return. If you are pumping on the fast rate, some of the liquid that goes to your tank becomes vapor. Those vapors are being sucked up and back into the underground storage tank so you're getting less worth for your money.

One of the most important tips is to fill up when your gas tank is HALF FULL or HALF EMPTY. The reason for this is, the more gas you have in your tank the less air occupying its empty space. Gasoline evaporates faster than you can imagine. Gasoline storage tanks have an internal floating roof. This roof serves as zero clearance between the gas and the atmosphere, so it minimizes the evaporation. Unlike service stations, here where I work, every truck that we load is temperature compensated so that every gallon is actually the exact amount.

**Another reminder, if there is a gasoline truck pumping into the storage tanks when you stop to buy gas, DO NO T fill up--most likely the gasoline is being stirred up as the gas is being delivered, and you might pick up some of the dirt that normally settles on the bottom.

Hope this will help you get the most value for your money.

DO SHARE THESE TIPS WITH OTHERS!

**(It always felt like the gas lasted longer if it was above ½ a tank!!!)

Lending Institutions Not Permitting Short Sales

2008-03-24T21:50:00.000-07:00

A Realtor friend of mine sent me this information the other day! I truly hope they are trying to help the homeowners and are not just foreclosing on their homes! I know that Wells Fargo Bank did help many homeowners keep their homes by re negotiating the loans. Many thanks to Wells!!

Ocwen Loan Servicing announced that they are no longer permitting short sales. Their goal is to try to keep the homeowners in their homes or just take the property to foreclosure. If Ocwen is in first position and is receiving a FULL payoff, then a short sale can still be done with the second servicer (obviously). However; if Ocwen is being shorted on the first or the second, they will no longer allow the short sale process to take place at this time.

The President of National Short Sale Center is in discussions with the Ocwen Loan Servicing's Upper Management Department in an effort to allow negotiations of short sales with their company.

Northern California's MLS's & California Association of Realtors Statewide MLS

2008-03-23T18:23:00.000-07:00

Except for this year, I have been a director of the Bay East Association of Realtors for over 11 years. I also sat on our MLS committee and the joint committee for Contra Costa, East Bay Regional and Bay East Associations and have been a CAR director since 1992. The MLS is forever changing and the politics just seem to be keeping us from having one Northern Calfornia MLS. Each association does feel they are looking out for the best interest of their members but the reality is that some just want to keep their positions (jobs), protect and keep other agents from selling in their areas and they do not keep in mind what is best for their members or sellers.

Most agents are not receiving the information regarding issues that are coming up within their MLS's and some agents have apathy. Below is some information that is happening in Northern California. The directors at the last couple of meetings at CAR overwhelmingly voted to have CAR move forward in putting together a statewide MLS. This is moving ahead very rapidly! What agents do not understand is that most of us will not sell out of our areas of expertise but we will be able to help our buyers and sellers find good information on properties in the areas in which they are relocating.

We need to start thinking outside the box and get rid of all these fears. We should also be asking questions and receiving proper information of the agents and/or brokers who are running the MLS's and ask them why they do not want to merge into one MLS which is in the best interest of their members. If we do not join forces and come together as one, then someone else might do it for us. We will then not have any control with our data.

Please read below what is happening in Northern California.

It has been difficult to keep up with everything that is going on regarding possible MLS mergers and other data consolidation efforts, especially since it has been changing so rapidly. Expanding our MLS coverage is a goal we have been trying to accomplish for some time. Over the past three years, several alternatives have been proposed. The primary one has been to merge with MLSListings Inc. (formerly NCREX) to form a Bay Area MLS. Unfortunately, this has not worked out because BAREIS (North Bay) and Metrolist (Sacramento valley area) declined to join the merger initially, and then both San Francisco and EBRD decided not to participate.

Although there are other concerns too, without EBRD as a member, merging with MLSListings Inc. would require our members to join two MLSs to get all of the East Bay listings, which would be a move in the wrong direction. Keeping the East Bay together on a single platform is critical to our members' ability to do business. Recognizing this, Bay East, Contra Costa Association and EBRD have agreed to remain on a single MLS platform for at least the next two years. After careful consideration, both Bay East and Contra Costa Associations' Boards of Directors have concluded that merging with MLSListings Inc. is not in the best interest of our members at this time, and the effort to do so has been terminated.

What other opportunities to expand MLS coverage beyond the East Bay have been considered?We have signed the Statement of Intent to take part in the CAR Statewide MLS Initiative, which demonstrates our support for the concept of a statewide MLS. This effort has already gained considerable support throughout the state. To-date, 59 associations and MLS (representing more than 200,000 agents and brokers in California) have signed the Statement of Intent. We have looked at QUATTRO, the data sharing solution that is being used by San Francisco, BAREIS and Metrolist that allows agents to input and search listings in each other's systems. We are also reviewing CARETS, the Southern California group that is currently merging the data from several MLSs into a single database.

The CARETS approach, with its uniform data content and simplified interface with existing MLS systems, appears to have some advantages that we feel are worth exploring further, and might even be something that could be included in CAR's Statewide MLS.Doesn't the CA MLS Alliance do what we need? It provides complete listing information from many of the largest Northern and Southern California MLSs?We believe the CA MLS Alliance (http://rs6.net/tn.jsp?e=001YJaQk_2HnRAC6qVHEyxQmb833MRQDj5cDWHrxeJlXgBvaK78JX_V0DCTA8es798Li0Mv9Xwj7VrvAj7dPAdZRxRVyPWUR8iuSlhW0d6sz-mgmtjoxNYMLw==) is an excellent data sharing product that meets many of our needs. But it falls short of being a unified MLS. It does not create a common set of rules for all participants. Brokers and agents may still have to belong to more than one MLS if they work across MLS boundaries. It does not have uniform information or report content or format. All of these things and more would be possible if there was a single MLS provider across the full area of interest.

Now that the CA MLS Alliance is available to our members, will we continue with the MLSXchange?The MLSXchange is no longer needed, now that the information from all participants is available from the CA MLS Alliance. Therefore, it will be stopped on Monday, April 21, 2008.

Amazing Site for Cookie Recipes!

2008-03-22T22:13:00.000-07:00

WOW! New England's Largest MLS Joined with Zillow!!

2008-03-22T09:31:00.000-07:00

WOW! The largest MLS in New England is really being progressive! They are the first MLS who recently joined with Zillow 's Listings Feed program to provide a daily feed of their active listings. Agents, MLS companies or vendors are allowed to upload listings to Zillow's site and can include a description of the property, photos, contact information of listing agent and links to the listing brokerage's website.

In my area some of us would love to see that happen but because we are on a joint platform of 3 MLS's the politics become a problem. Many agents have that fear of losing control of our information and "They" will take over! In my opinion the more information that the public can access the better off we will be as an industry! Realtor.com is a good example The public loves receiving the information We still have the buyers and sellers seeking out Realtors to negotiate and get them into a property.

Over the past six months, several top brokerages have signed similar deals with Zillow.com to participate in the Listings Feed program, including Realogy, RE/MAX Allegiance, Real Living, Prudential California/Nevada/Texas Realty and ERA Real Estate. Zillow also has forged partnerships with real estate publisher Network Communications, Inc. and some 282 newspapers across the country that now feed classified real estate listings to the site.

Great work New England for leading the way in our industry!!!

California's Prop 60 & 90! Are You Over 55?

2008-03-21T15:01:00.001-07:00

Proposition 13 prohibits property tax increases until property ownership is changed.

If either spouse is over age 55 (when the old home is sold), PROP 60 allows replacement of a primary residence with a new home of equal or lesser value (but see below) within the same county and transfer of the Prop 13 assessed valuation from the old home to the new property. This is allowed once in your lifetime, if a spouse has done it before then the other spouse is prohibited from transferring his or her base.

PROP 90 allows counties to elect to accept transfers of Prop 13 values for moves from other counties when a primary residence is replaced with a less expensive (but see below) home. If you are over 55 and move into a county which accepts Prop 90, you may take your old, lower Prop 13 value, regardless of from which county you move.

Using Prop 90, you can sell your $400,000 Alameda home [assessed value $80,000] and move to a new $300,000 home in Alameda and the new Alameda assessed value will be $80,000!

7 COUNTIES WHICH ACCEPT PROP 90 (Current as of 6/1/2005) *Alameda, *Los Angeles, *Orange, *San Diego, *San Mateo, *Santa Clara, and *Ventura. accept Prop 90.

Contra Costa, Inyo, Kern, Riverside, Modoc, Monterey, and Marin have dropped out of the Prop 90 program. Props 60 and 90 apply if you purchase a home at an equal or lesser value than your old home.

If you purchase the New Home First then sell the Old Home, you must go down price. If you sell the Old Home first then buy the New Home: • In the first 365 days after the sale of Old Home, you may go up 5% in the purchase price of New Home. • If you buy New Home more than 1 year from the sale of Old Home, but less than 2 years, you may go up 10%. Some buyers can pay the commission outside of escrow to lower to sales price.

This information is not intended as legal advice, or guaranteed accurate, verified or complete. Specific situations may differ. Contact your attorney and/or county for information regarding any particular situation.

Hey Californians! Here is the Cell Phone Laws!!

2008-03-20T22:58:00.000-07:00

It is about time that we have a new law regarding using cell phones while driving! It is very frustrating when motorists are inconsiderate on our roads because they do not pay attention while on their cell phones! Here are the facts about the new California law!!!

Wireless Telephone Laws FAQs

Two new laws dealing with the use of wireless telephones while driving go into effect July 1, 2008. Below is a list of Frequently Asked Questions concerning these new laws.

Q: When do the new wireless telephone laws take effect?
A: The new laws take effect July 1, 2008

Q: What is the difference between the two laws?
A: The first prohibits all drivers from using a handheld wireless telephone while operating a motor vehicle. (Vehicle Code (VC) §23123). Motorists 18 and over may use a hands-free device. Drivers under the age of 18 may NOT use a wireless telephone or hands-free device while operating a motor vehicle(VC §23124).

Q: What if I need to use my telephone during an emergency, and I do not have a hands- free device?
A: The law allows a driver to use a wireless telephone to make emergency calls to a law enforcement agency, a medical provider, the fire department, or other emergency services agency.

Q: What are the fines if I'm convicted?
A: The base fine for the FIRST offense is $20 and $50 for subsequent convictions. According to the Uniform Bail and Penalty Schedule, with the addition of penalty assessments, a first offense is $76 and a second offense is $190.

Q: Will I receive a point on my drivers license if I'm convicted for a violation of the wireless telephone law?
A: NO. The violation is a reportable offense: however, DMV will not assign a violation point.

Q: Will the conviction appear on my driving record?
A: Yes, but the violation point will not be added.

- more -

Q: Will there be a grace period when motorists will only get a warning?
A: NO. The law becomes in effect on July 1, 2008. Whether a citation is issued is always at the discretion of the officer based upon his or her determination of the most appropriate remedy for the situation.

Q: Are passengers affected by this law?
A: No. This law only applies to the person driving a motor vehicle.

Q: Do these laws apply to out-of-state drivers whose home states do not have such laws?
A: Yes

Q: Can I be pulled over by a law enforcement officer for using my handheld wireless telephone?
A: YES. A law enforcement officer can pull you over just for this infraction.

Q: What if my phone has a push-to-talk feature, can I use that?
A: No. The law does provide an exception for those operating a commercial motor truck or truck tractor (excluding pickups), implements of husbandry, farm vehicle or tow truck, to use a two-way radio operated by a "push-to-talk" feature.

Q: What other exceptions are there?
A: Operators of an authorized emergency vehicle during the course of employment are exempt as are those motorists operating a vehicle on private property

DRIVERS 18 AND OVER

Drivers 18 and over will be allowed to use a hands-free device to talk on their wireless telephone while driving. The following FAQs apply to those motorists 18 and over.

Q: Does the new "hands-free" law prohibit you from dialing a wireless telephone while driving or just talking on it?
A: The new law does not prohibit dialing, but drivers are strongly urged not to dial while driving.
Q: Will it be legal to use a Blue Tooth or other earpiece?
A: Yes, however you cannot have BOTH ears covered.

Q: Does the new hands-free law allow you to use the speaker phone function of your wireless telephone while driving?
A: Yes.

Q: Does the new "hands-free" law allow drivers 18 and over to text page while driving?
A: The law does not specifically prohibit that, but an officer can pull over and issue a citation to a driver of any age if, in the officer's opinion, the driver was distracted and not operating the vehicle safely. Text paging while driving is unsafe at any speed and is strongly discouraged.

- more -

DRIVERS UNDER 18
Q: Am I allowed to use my wireless telephone hands free?
A: NO. Drivers under the age of 18 may not use a wireless telephone, pager, laptop or any other electronic communication or mobile services device to speak or text while driving in any manner, even hands free. EXCEPTION: Permitted in emergency situations to call police, fire or medical authorities. (VC §23124).

Q: Why is the law stricter for provisional drivers?
A: Statistics show that teen drivers are more likely than older drivers to be involved in crashes because they lack driving experience and tend to take greater risks. Teen drivers are vulnerable to driving distractions such as talking with passengers, eating or drinking, and talking or texting on wireless phones, which increase the chance of getting involved in serious vehicle crashes.

Q: Can my parents give me permission to allow me to use my wireless telephone while driving?
A: NO. The only exception is an emergency situation that requires you to call a law enforcement agency, a health care provider, the fire department or other emergency agency entity.

Q: Does the law apply to me if I'm an emancipated minor?
A: Yes. The restriction applies to all licensed drivers who are under the age of 18.

Q: If I have my parent(s) or someone age 25 years or older in the car with me, may I use my wireless telephone while driving?
A: NO. You may only use your wireless telephone in an emergency situation.

Q: Will the restriction appear on my provisional license?
A: No

Q: May I use the hands-free feature while driving if my car has the feature built in?
A: NO. The law prohibits anyone under the age of 18 from using any type of wireless device while driving, except in an emergency situation.

Q: Can a law enforcement officer stop me for using my hands-free device while driving?
A: No. For drivers under the age of 18, this is considered a SECONDARY violation meaning that a law enforcement officer may cite you for using a hands-free wireless phone if you were pulled over for another violation. However, the prohibition against using a handheld wireless telephone while driving is a PRIMARY violation for which a law enforcement officer can pull you over.

NAR Requests That we Send This Letter!

2008-03-18T15:55:00.000-07:00

I constantly read emails from NAR and CAR to receive as much knowledge as I can regarding the real estate industry. Below is a letter from NAR requesting Realtors to send to their Congressperson and Senators to make the "Loan Limit Increase Key to FHA Reform Bill Permanent!"

Send a letter to the following decision maker(s): Your Congressperson Your Senators
Below is the sample letter:

Subject: Permanent Loan Limit Increase Key to FHA Reform Bill

Dear [decision maker name automatically inserted here],

As a constituent and a REALTOR, I want to stress how important it is for FHA reform legislation to be quickly enacted. These bills, passed the House and Senate in 2007, are now stalled in conference. Permanent increases in the FHA loan limits, lowered FHA downpayment requirements, and new opportunities for condominium purchases are needed to create safe and affordable mortgage options for our state's homebuyers and those wishing to refinance. These changes will also provide much needed stability to our local housing markets and economies.The new loan limits passed in the recently enacted Economic Stimulus bill will expire in less than 10 months. Dramatically reducing these limits at year's end will push our nation's fragile housing markets into turmoil once again. Realistic loan limits that permanently help ALL areas of the country are needed to bring stability to the marketplace.FHA's downpayment levels led many borrowers to opt for the exotic, risky mortgages that have been the hallmark of the foreclosure crisis. The FHA reform bills will allow FHA to modify downpayment requirements and offer flexible financing to eligible borrowers.In many areas of the country, condominiums remain the most affordable option for homeownership, but FHA owner/occupancy and documentation requirements, make it very difficult to purchase a condominium using FHA mortgage insurance. The FHA reform bills will move condominium financing programs into FHA's single-family program where they belong and ease the way for condominium purchases.We cannot wait any further for FHA reform. Pass a permanent FHA reform bill NOW to give American homebuyers and homeowners the peace of mind they so desperately need.

Sincerely,

Possible Relief to Credit Crisis?

2008-03-17T16:48:00.001-07:00

We should almost be there...tomorrow?????

WASHINGTON - Federal Reserve Chairman Ben Bernanke said new steps announced by the central bank Sunday should help squeezed financial institutions get cash infusions_ a fresh effort to provide relief to a spreading credit crisis that threatens to plunge the economy into recession.
The central bank approved a cut in its lending rate to financial institutions to 3.25 percent from 3.50 percent, effective immediately, and created another lending facility for big investment banks to secure short-term loans.

"These steps will provide financial institutions with greater assurance of access to funds," Bernanke told reporters in a brief conference call Sunday evening.

The new lending facility will be available to financial institutions on Monday.It will be in place for at least six months and "may be extended as conditions warrant," the Fed said. The interest rate will be 3.25 percent and a range of collateral - including investment-grade mortgage backed securities - will be accepted to back the loans.

The steps are "designed to bolster market liquidity and promote orderly market functioning," the Fed said in a statement. "Liquid well-functioning markets are essential for the promotion of economic growth."

Tired of High Gas Prices? Check This Out!

2008-03-16T11:28:00.000-07:00

Find the Cheapest Gas Stations in Your Area!

I have this website on my Point 2 NLS website! I think we are all tired of the high gasoline prices! I wish the government would start helping the citizens of the United States with this issue and more! I received this site from a friend and I want to pass it along to everyone I can in order for us to receive a little bit of relief with the gasoline crisis! I hope it helps you. If the link doesn't work, go to my www.JeanSellsDreams.com website and the link is located as one of the menu items on the left.

http://autos.msn.com/everyday/gasstations.aspx?zip=&src=Netx

Get Energy From Good Fats!

2008-03-15T15:28:00.000-07:00

I was referred by a good friend who is a Holistic Veterinarian to http://www.trivita.com/. This website has great information and products to improve our health. The one item Ialways take daily is their vitamin B-12 and I feel it really works! Here is a little bit of Tivitas newsletter.

The inside scoop on calories and fats Do you know what a calorie is? It's a measurement of energy. More specifically, it's the amount of potential energy stored in any food we eat. Generally speaking, both protein and carbohydrate foods each contain about four calories per gram. Fats, in comparison, have more than twice the calories and twice the potential energy per gram (note: 28.3 grams=1 ounce). So for long-term energy and stamina, think fats!
Small snacks with powerhouse fats

English walnuts - It takes about 100 calories of energy for me to walk a mile, and about 130 calories to run one mile. A one-ounce serving of English walnuts (about 7 pieces) provides 180 calories of energy - that's enough fat energy for me to walk nearly two miles or to run 1¼ miles! Plus, walnuts are very high in Omega-3 fats.

Avocado - It takes about 250 calories of energy for me to ride a stationary bicycle for 30 minutes (average speed 10 mph). That's about the amount of energy in a small avocado, a very delicious fruit containing high levels of beneficial fats.

Green olives - It takes about 140 calories for me to swim 20 laps in the pool. That's about the same amount of energy found in a small serving of green olives (my favorites!). The olive oil is beneficial for your heart and brain, as well as serving as a natural antibiotic. It is one of the most healthful oils for your body and like other sources of fat, it's filled with lots of potential energy.
Calories in, calories outFor any single day, whenever you don't use up all the food energy you consume, the excess energy is stored in fat cells as triglycerides. In other words, you gain fat. Conversely, whenever you use up more energy in a day than you consume, that deficit will likely be taken from fat stored in fat cells (the exception to this is when you are under severe stress). Here, you'll lose fat, which is a very good thing for most North Americans.

The good, the bad and the ugly Fats contain more than twice as much potential energy as protein and carbohydrates. For instance, Omega 3 fats are absolutely vital for your brain and heart - so much so that a neurologist said that "Omega-3 is to the brain what calcium is to the bones." Some sound advice: eat small portions of good fats every day and eat more fat when you need more energy - for instance, on a long hike.

Certain good fats are not found in the diets of people in developed countries. Or, at the very least, they are not eaten with the same regularity as they were in past times. If we do not have enough good fats in our diet, our health will suffer in many ways. The internal organs and hormones made up from these fats will not function correctly. Our brain will literally shrink without good fats. We will have blood sugar and hormone imbalances. We may even have a heart attack without enough good fats. Therefore, it's important that we select a good balance of fats in our diet and also include a high quality, Omega essential fatty acid supplement. Omega-3 supplements are perhaps the most important supplement we can take.

Some fats are inherently bad. No matter what foods they're found in they are always bad for you. Both trans-fats and hydrogenated fats fall into this category. Never eat them. Fortunately, neither of these fats occur in nature. So, as long as you are eating whole foods that have not been processed or over-cooked, you are unlikely to be poisoned by these bad fats.

Finally, as with all foods, you can over-consume even the good fats - it's like getting too much of a good thing. This is the ugly side of dietary fats. High fat foods provide a lot of energy. If you do not plan to burn off that energy, be sure to eat very little of these foods. Otherwise, unused stores of excess energy will appear in ugly places!

Consumers Do Value Realtors!

2008-03-14T15:27:00.000-07:00

I have had the pleasure a couple of times to hear a presentation from Bob Hale, CEO of the Houston Association of Realtors HAR.com . He spoke about Houston's great website and how consumers have flocked to their website to get wonderful real estate information and also to find Realtors to represent them in a transactions. The Houston Association of Realtors is the most progressive group of Realtors that I have seen in my 24 years as a real estate broker. They have knocked down the fears that if we give the Public more information then we as Realtors will not be needed anymore. In fact, the opposite has happened in Houston with their great website.

The Boards of Directors of the Contra Costa and Bay East Associations of REALTORS® have signed Statements of Intent to participate in a statewide Multiple Listing Service (MLS) being created by the California Association of REALTORS®. Both organizations have been working with neighboring MLSs for over three years to expand access to property information for their members and believe this approach is the best long term solution.

A solution to the problem of having several MLSs serving a local region has been long sought by larger real estate brokerage companies. They typically must join several MLSs if their business serves more than just a small, local area. The real winner with this initiative, however, is the general public, who would have the ability to access statewide information through their real estate agent

"A statewide MLS would not only give real estate agents and brokers access to comprehensive property information, it would also give them a standard MLS database with a single set of rules, policies and data display requirements" according to the Bay East Association of REALTORS® president. "This is something the real estate community has been seeking for many years, and we encourage our neighboring REALTOR® associations and MLSs to participate in the statewide MLS initiative" .

It is anticipated that under the statewide MLS, the local Associations will be the point of contact for members to subscribe to and participate in the California MLS, and, in turn, enhance the level of MLS services to agents and brokers.

While a statewide MLS in my opinion is a step in the right direction, I truly hope that California Realtors can someday be as progressive as Houston and create a website that leads us to the future as Houston has done! California Realtors need to remove their fears and plunge into the future to give the consumers the service and information possible in order for them to make good decisions in purchasing or selling a home!

See for yourself HAR.com !!!

Best Time to Purchase a Home in 4 Years!

2008-03-13T14:22:00.000-07:00

Best Time to Buy in 4 Years

Home values have declined across the country, giving homebuyers the best buys they've had since 2004.

NEW YORK (CNNMoney.com) -- It may be the best time to buy a house in more than four years.
Home prices have dropped so quickly and so far that valuations - the difference between what a home should cost and its actual price - are the lowest they've been since 2004, according to a report.

The Cleveland-based bank National City Corp. (NCC, Fortune 500), together with financial analysis firm Global Insight, revealed Tuesday that more than 88% of the 330 housing markets surveyed showed price declines and improved affordability during the last three months of 2007.
Housing rescue: What you need to know

"Housing valuations are almost back to long-term norms," said National City's chief economist, Richard DeKaser. He called current affordability "the best in the past four years."
But DeKaser cautioned that home prices could fall even further.
"This isn't to say home price declines are over," he said. "We could move below historic norms. By the end of 2008, housing markets could be broadly under valued."
Prices still improving

There are still 21 housing markets, or 6% of those surveyed, that are severely over valued, including Atlantic City and Madera, Calif. That's down from 56 overvalued markets at the peak of the housing bubble in 2006.

The report compares actual median home prices with what the authors determine are proper home values based on population density, relative income levels and interest rates, as well as historically observed market premiums or discounts, to determine whether markets are over or under valued.

The report also factors in market intangibles that make some areas more desirable places to live, and more expensive.

"Declines are no longer confined to once-frothy markets," said DeKaser.

The survey covered home valuations during the last three months of 2007, but DeKaser pointed out there's reason to believe that valuations are even more favorable for buyers today.
Price declines have continued into 2008 and interest rates, although they have inched up lately, have been steady or lower compared to late last year. There have even been wage gains; personal income rose 0.5% in December. Soaring foreclosure rates have added inventory to many housing markets, depressing home prices further.

The biggest gains in affordability occurred in California, Michigan and Florida, which are areas that have also been some of the hardest hit by foreclosures. Those states registered 43 of the 50 biggest price declines.

Bend, Ore. currently tops the overvaluation list. Home prices there were judged to be about 59% higher than their fair-market value. Miami, despite a median home price decline of 5.7% last year, is the most overvalued big city, by 44%.
All the best bargains were found in Louisiana and Texas. Houses in Houma, La. were under valued by 31.2%, according to the report. Dallas was the most undervalued big city, by 30%.

Compliments of CAR Market Matters

This is Interesting Information!

2008-03-11T16:40:00.000-07:00

I have been researching information on alternative products that work for a variety of reasons!
Did You Know That?
1. Drinking two glasses of Gatorade can relieve headache pain almost immediately -- without the unpleasant side effects caused by traditional "pain relievers."
2. Did you know that Colgate toothpaste makes an excellent salve for burns?
3. Before you head to the drugstore for a high-priced inhaler filled with mysterious chemicals, try chewing on a couple of curiously strong Altoids peppermints. They'll clear up your stuffed nose.
4. Achy muscles from a bout of the flu? Mix 1 Tablespoon of horseradish in 1cup of olive oil. Let the mixture sit for 30 minutes, then apply it as massage oil, for instant relief for aching muscles.
5. Sore throat? Just mix 1/4 cup of vinegar with 1/4 cup of honeyand take 1 tablespoon six times a day. The vinegar kills the bacteria, also try gargling with warm salt water.
6. Cure urinary tract infections with Alka-Seltzer. Just dissolve two tablets in a glass of water and drink it at the onset of the symptoms. Alka-Seltzer begins eliminating urinary tract infections almost instantly -- even though the product has never been advertised for this use. (Note:Alka-Seltzer PlusCold Medicine is not the same and contains aspirin, which can cause stomach bleeding if you have ulcers.)
7. Honey remedy for skin blemishes... Cover the blemish with a dab of honey and place a Band-Aid over it. Honey kills the bacteria, keeps the skin sterile, and speeds healing. Works overnight.
8. Listerine therapy for toenail fungus... Get rid of unsightly toenail fungus by soaking your toes in Listerine mouthwash. The powerful antiseptic leaves your toenails looking healthy again.
9. Easy eyeglass protection... To prevent the screws in eyeglasses from loosening, apply a small drop of Maybelline Crystal Clear nail polish to the threads of the screws before tightening them.
10 Coca-Cola cure for rust... Forget those expensive rust removers. Just saturate an abrasive sponge with Coca Cola and scrub the rust stain. The phosphoric acid in the coke is what gets the job done.
11. Cleaning liquid that doubles as bug killer... If menacing bees, wasps, hornets, or yellow jackets get in your home and you can't find the insecticide, try a spray of Formula 409. Insects drop to the ground instantly.
12. Smart splinter remover... just pour a drop of Elmer's Glue-All over the splinter, let dry, and peel the dried glue off the skin. The splinter sticks to the dried glue.
13. Hunt's tomato paste boil cure.... cover the boil with Hunt's tomato paste as a compress. The acids from the tomatoes soothe the pain and bring the boil to a head.14. Balm for broken blisters... To disinfect a broken blister, dab on a few drops of Listerine .. a powerful antiseptic.
15. Heinz vinegar to heal bruises... Soak a cotton ball in white vinegar and apply it to the bruise for 1 hour. The vinegar reduces the blueness and speeds up the healing process.
16. Kills fleas instantly. Dawn dish washing liquid does the trick. Add a few drops to your dog's bath and shampoo the animal thoroughly. Rinse well to avoid skin irritations. Goodbye fleas.
17. Rainy day cure for dog odor... Next time your dog comes in from the rain, simply wipe down the animal with Bounce or any dryer sheet, instantly making your dog smell springtime fresh.
18. Eliminate ear mites... All it takes is a few drops of Wesson corn oil in your cat's ear. Massage it in, then clean with a cotton ball. Repeat daily for 3 days. The oil soothes the cat's skin, smothers the mites, and accelerates healing.
19. Quaker Oats for fast pain relief.... It's not for breakfast anymore! Mix 2 cups of Quaker Oats and 1 cup of water in a bowl and warm in the microwave for 1 minute, cool slightly, and apply the mixture to your hands for soothing relief from arthritis pain.
20. Get rid of Ants by spreading Baby Powder around the areas ants like to invade.

State Senator Briefs Realtors in California!

2008-03-08T08:19:00.000-08:00

State Senator briefs REALTORS®: On Friday (3/7), State Sen. Ellen Corbett gave the Valley Marketing Meeting in Pleasanton a behind-the-scenes look at what's happening in Sacramento and legislation she's working on that addresses real estate issues. Corbett represents the 10th Senate district which includes the cities of San Leandro, Fremont, Hayward, Union City, Pleasanton, Milpitas and Newark and part of San Jose, as well as the communities of Castro Valley, San Lorenzo and Sunol.

Here's a quick summary of her comments:
State budget: The governor's plan to deal with the state's multi-billion dollar budget deficit could have major negative consequences for public schools. Corbett urged REALTORS® to oppose these cuts because of the impact they could have on property values. She alluded to the possible formation of a coalition of interest groups that could fight to protect school funding and suggested REALTOR participation.

Foreclosures: Corbett discussed pending legislation that would ease the tax burden for property owners faced with a foreclosure.

Transportation: Commute times and traffic congestion have a direct impact on the quality of life for Alameda County residents. Corbett explained efforts to secure funding to improve I-580 and praised work by Alameda County Supervisor Scott Haggerty to ensure our region gets a share of transportation resources.

Corbett also took questions from the audience. While she's not officially involved with the San Leandro School District, she did an admirable job responding to concerns about out-of-district students attending San Leandro Schools.

REALTOR® Impact: Corbett chairs the Senate Judiciary Committee which reviews legislation that may impact the real estate profession. It is in our interest to cultivate a strong relationship with the senator and ensure she understands REALTOR® issues.

Next Steps: Regarding the senator's comments about a school funding coalition, C.A.R. hasn't been approached to join any such group - yet. However, C.A.R. has historically supported school funding bonds and in 2000 supported Proposition 39, which made it easier for school districts to pass bond measures to finance school construction and improvements by reducing the vote requirement from two-thirds to a 55 percent supermajority.

Senator Corbett really enjoyed speaking at the Valley Marketing Meeting this week and her visit to the Tri-Cities group earlier this year. We're looking forward to hosting her at the Central County Marketing Meeting in the near future.

This information is compliments of David Stark Bay East Association of Realtors

Judge throws out ban on down-payment assistance

2008-03-07T16:10:00.000-08:00

Federal regulators have not adequately explained their decision to reverse a policy allowing seller-funded down-payment assistance on FHA-backed loans -- or provided sufficient responses to suggestions on ways to mend, rather than end, the practice -- a federal judge has ruled.
The ruling means the U.S. Department of Housing and Urban Development will have to reopen an administrative proceeding that culminated in a rule change last October banning seller-funded down-payment assistance on loans guaranteed by the Federal Housing Administration (see Inman News story).
Claiming seller-funded down-payment assistance artificially inflates home prices and more than doubles the odds that a loan will end up in default, HUD put forward the proposed rule change last spring. A final rule banning the practice was published in the Federal Register on Oct. 1, after HUD received more than 15,000 comments on the proposal.
Three nonprofits that provide seller-funded down-payment assistance filed separate lawsuits to block implementation of the rule, saying it would have a disproportionate impact on minorities, low-income and single-parent families who rely on the down-payment-assistance programs they provide.
In a Feb. 29 order setting aside the rule change, U.S. District Court Judge Lawrence Karlton said that although HUD provided a "reasoned basis" for the rule change, it "was not honest with itself or the public that it was reversing course from its prior policy."
In putting forward the proposed rule change, Karlton said, HUD presented evidence that seller-funded down-payment assistance harms consumers by inflating home prices, and that the increased default rates on such loans leads to greater losses. HUD also noted abortive attempts at ending seller-funded down-payment assistance during the Clinton administration.
But more recently, Karlton said, HUD had "warmed" to seller-funded down-payment assistance -- a fact omitted in its arguments for a change in course.
In a 2005 letter, HUD Assistant Secretary for Housing Brian Montgomery defended seller-funded down-payment assistance against calls for a ban by the U.S. Government Accountability Office. Although Montgomery recognized problems with the practice, he said those who relied on seller-funded down-payment assistance "are representative of the population that FHA was established to serve."
At the time, Montgomery said that instead of banning the practice, FHA would rather charge higher premiums on loans that relied on seller-funded down-payment assistance.
Karlton said that "while HUD may have set forth good reasons for the rule's adoption, it did not adequately explain why it was changing its mind."
By failing to acknowledge its previous position, HUD violated the Administrative Procedures Act, which governs the process for implementing such changes, the judge said in his order.
Karlton said HUD also failed to provide an adequate response to some arguments put forward by proponents of seller-funded down payment assistance for overhauling, instead of abolishing, the practice.
Those suggestions included the same proposal put forward by Montgomery in 2005 -- that HUD implement risk-based pricing for loans involving seller-funded down-payment insurance -- and require lenders to inform appraisers of the source of down-payment assistance.
HUD maintains that it is implementing risk-based pricing, and that FHA modernization legislation now being considered by Congress will lower or eliminate down-payment requirements for some borrowers.
But Karlton said such an argument is "a non-sequitur" because HUD's intent is to introduce risk-based pricing in conjunction with a ban on seller-funded down-payment assistance, rather than in lieu of a ban, as proposed in 2005.
In ordering the Housing Department to reopen the rulemaking process, Karlton barred HUD Secretary Alphonso Jackson from participating in the proceedings because of remarks attributed to him during the public comment period.
In a June 5, 2007, article by Bloomberg News, Jackson was quoted as saying he was "very much against" seller-funded down-payment assistance. "I think it's wrong. I don't want to continue to be a partner in a program where so many people can't afford to keep up their payments."
The article also paraphrased Jackson as saying HUD intended to approve the new rule even if the agency received critical comments.
"Allowing the public to submit comments to an agency that has already made its decision is no different from prohibiting comments altogether," Karlton said.
But Karlton also said courts have found that just because officials take positions or express strong views doesn't mean they are no longer capable of being objective and fair.
Because Jackson was not involved in the original rule-making proceeding -- he had delegated that authority to Montgomery -- it might be "imprudent" to reopen the process simply to exclude him, Karlton said.
But since he had already decided to reopen the process for other reasons -- because HUD failed to provide a reasoned analysis for its departure from prior policy, and did not adequately respond to comments -- disqualifying Jackson "will likely impose little or no burden on the agency," Karlton ruled.
The ruling was made in a case brought by Nehemiah Corp. of America in the U.S. District Court for the Eastern District of California. Two similar lawsuits were filed by AmeriDream Inc. and the Penobscot Indian Nation in the U.S. District Court for Washington, D.C.
Scott Syphax, the president and chief executive officer of Nehemiah, issued a statement this week saying the company was "thrilled with the Court's decision to support low- to moderate-income families across the country" and looked forward to working with HUD in the future.

Article is by the US Housing and Urban Development
***

There are Pockets of Pain around the US but Not as if Most Americans are Losing Their Homes!

2008-03-06T19:52:00.000-08:00

Sure, there are pockets of pain around the US, but it's not as if most Americans are losing their homes. More than 99% of homes aren't in foreclosure.
By Scott Burns

A recent list of year-end mortgage foreclosure rates in 100 top metropolitan areas drew a lot of attention. Released by RealtyTrac, a company that compiles data on home foreclosures, the list showed the number of foreclosure filings in each metro area, the percentage of homes being foreclosed and the percentage change from the previous year.

Though the report had some dismal news -- such as the nearly 4.9% foreclosure rate in the Stockton, Calif., area -- a close look at the data also provides some reassuring information. It tells me, for instance, that the foreclosure crisis is a regional problem, not a systemic one. It could become a systemic problem, of course, but we're a long way from that now.

This news will disappoint the gloom-and-doom crew and all those seeking the excitement of financial upheaval. But it may be time to temper our worry and take a closer look at some of the year-over-year foreclosure statistics:

Though the national rate of foreclosure increased by a whopping 79% between December 2006 and December 2007, the rate was still only 1.033%. Because about 30% of all homes are owned mortgage-free, this means that for all the noise about a crisis, only seven-tenths of 1% of all homes were in foreclosure.

In the top 100 housing markets, the average foreclosure rate was somewhat higher -- 1.38% -- and it was up 78% over the previous year. But if you rank-ordered the list of the top 100 areas, only 34 had foreclosure rates above the group average. Fifty-one areas had rates of 1% or less.

Foreclosure rates actually fell in 14 of the 100 areas. More important, many of the areas with the highest increases in foreclosure rates were rising off rates that were tiny. The Bethesda, Md., area, to offer the most extreme case, saw foreclosures rise 1,288% -- to a rate of 0.682%. In other words, foreclosures there were virtually nonexistent the year before. Today they are still well below the national average. The same can be said for the Albany, N.Y., area (up 638% to 0.25%), the Baltimore area (up 544% to 0.73%) and the Providence, R.I., area (up 354% to 0.41%).

Another pattern emerges if you cross the foreclosure rates with the Office of Federal Housing Enterprise Oversight (OFHEO) index of home prices. It shows that the top 10 foreclosure areas in America are areas of extreme price change -- changes far from the national average of 46.92% over the past five years. (See the table below.)

Talk back: Do you think the foreclosure crisis is overblown?
Seven of the top 10 foreclosure areas had experienced major price spikes in the past five years. Three of the top 10 foreclosure areas had experienced price increases that were dramatically lower than the national average. That pattern continues when you examine the top 25 foreclosure areas.

A tale of two extremes:
Metro area-Foreclosure rate 12/07 -Year to year increase of foreclosures- 5-year home-appreciation rate
Detroit/Livonia/Dearborn, Mich. 4.92% 68.15% -0.92%
Stockton, Calif. 4.87% 271.3% 65.07%
Las Vegas/Paradise, Nev. 4.23% 169.11% 88.33%
Riverside/San Bernardino, Calif. 3.83% 186.14% 107.80%
Sacramento, Calif. 3.12% 272.54% 56.9%
Cleveland/Lorain/Elyria/Mentor, Ohio 2.97% 112.43% 9.36%
Bakersfield, Calif. 2.96% 244.82% 113.82%
Miami 2.72% 106.13% 114.98%
Denver/Aurora, Colo. 2.64% 27.19% 10.83%
Fort Lauderdale, Fla. 2.63% 110.05% 94.29%
National average 1.03% 79.21% 46.92%
Average of top 100 metro areas 1.38% 78.23% Not available
Sources: RealtyTrac, OFHEO

The seven areas with the top price appreciation for the past five years averaged a stunning 91.6% increase, nearly double the national average. The national average, in turn, was about triple the inflation rate for the period.

Small wonder the foreclosure rate is booming as well. Anyone who bought in the past few years with a 5% or 10% down payment has a good chance of being upside down as froth comes off the market. In those areas the problem is about irrational price spikes and the hazards they bring to homeownership.

Some would call this "a Cadillac problem" -- a great problem to have, like having more boats than you have water-skiers. Though 5% of the homeowners may be losing their homes, most of the other 95% probably feel significantly richer.

Smart Spending blog: When is it OK to walk away from your home?
How much richer? Try this. Suppose you paid three times your income for a house and it nearly doubled in value over five years. What does that mean? It means your net worth grew by nearly three years of income. Try achieving that with your 401(k) plan. Even if you bought halfway through the surge, your gain is likely to be well more than one year of income. However you cut it, the change compares quite favorably with working and saving.

Should you rent or buy?Owning your own home is an idea so popular that it's known as the American dream. But as prices fall and foreclosures rise, for many it's become a nightmare instead.

The three metro areas with low price appreciations are a different matter. Homeowners in Detroit have actually lost money on their homes over the past five years. That, in turn, has limited their ability to make up for income shortfalls by borrowing against home equity. Add a shrinking job market, and places such as Detroit are coping with a perpetual surplus of sellers over buyers.

One indication is the cost of renting a U-Haul truck. It recently cost $1,447 to rent a 26-foot truck to move from Detroit to Dallas but only $521 to rent the same truck to move from Dallas to Detroit. The real economic problem, for the most people, isn't the price-spike states. It's the deflation states.

Questions about personal finance and investments may be e-mailed to scott@scottburns.com

Article is Compliments of California Association of Realtors

Good News! FHA Releases New Mortgage Limits in California

2008-03-05T22:19:00.000-08:00

GOOD NEWS !!!!!

FHA Releases New Mortgage Limits for California Counties

FHA Max Limits Include 14 CA Counties

* FHA Press Release *

WASHINGTON - Tens of thousands of California families could be eligible
this year to purchase or refinance their homes using affordable,
government-backed mortgages, thanks to the economic growth package
signed into law by President Bush. The Economic Stimulus Act of 2008
will allow HUD's Federal Housing Administration (FHA) to temporarily
increase its loan limits and insure larger mortgages at a more
affordable price in high cost areas of the country.

"The Bush Administration is expanding the pool of eligible borrowers,
enabling more American families to qualify for safe, affordable
FHA-insured mortgage loans. These temporarily higher loan limits are a
shot in the arm for communities trying to sustain property values,
bringing much-needed liquidity to the mortgage market, while helping
many current homeowners who desperately need to refinance," said HUD
Secretary Alphonso Jackson at a forum on how to prevent foreclosure at
the Operation Hope Center in Los Angeles and a Hope Now Alliance event
in Anaheim.

Beginning tomorrow, HUD will offer temporary FHA loan limits that will
range from $271,050 to $729,750. Overall, the change in loan limits
will help provide economic stability to America 's communities and give
nearly 240,000 additional homeowners and homebuyers a safer, more
affordable mortgage alternative. The maximum amount of $729,750 will
only be applicable to extremely high-cost metropolitan areas such as:
Los Angeles County , San Francisco County , Orange County , and Santa
Barbara County . Previously, FHA's loan limits in these very high-cost
areas were capped at $362,790.

The Economic Stimulus Act of 2008 permits FHA to insure loans on amounts
up to 125 percent of the area median house price, when that amount is
between the national minimum ($271,050) and maximum ($729,750). The new
minimum and maximum loan limits are based on 65 percent and 175 percent
of the conforming loan limits for Government-Sponsored Enterprises in
2008, which is $417,000. The FHA used a combination of existing
government data sets and available commercial information to determine
the median sales price for each area. The change in loan limits are
applicable to all FHA-insured mortgage loans endorsed after HUD
publishes the increased loan limits tomorrow, and it lasts until
December 31, 2008 .

By increasing loan limits nationwide, FHA will provide much needed
liquidity and stability to housing markets across the country. Already,
as conventional sources of mortgage credit have been contracting, FHA
has been filling the void. From September to December 2007, FHA
facilitated more than $38 billion of much-needed mortgage activity in
the housing market, more than $15 billion of which was through
FHASecure, FHA's refinancing product. By focusing on 30-year fixed rate
mortgages, FHA helps homeowners avoid and escape the risks associated
exotic subprime mortgage products, which have resulted in rising default
and foreclosure rates.

"This is not an easy crisis to address, and there is no silver-bullet,
but I know that we can help hundreds of thousands of people keep their
homes, and we can calm the waters," said Jackson .

In January 2009, FHA's maximum loan limit will return to $362,790,
unless the U.S. Congress approves bipartisan legislation to permanently
increase loan limits as part of the FHA Modernization bill, which is
still awaiting final approval on Capitol Hill.

"In January 2009 the loan limits will return to their previous setting,"
Jackson said. "That is why we need to permanently raise the loan limits
to an acceptable level that more accurately reflect housing prices
nationwide. We also need to make the minimum down payment more flexible
and create a fairer insurance premium structure. This will allow more
families to use FHA."

FHA loan limits are based on the county in which the property is
located. However, for properties located in metropolitan or
micropolitan statistical areas, the limit is set at that of the county
with the highest limit within the metropolitan or micropolitan area.

The new temporary FHA loan limits for California are attached below.
The full text of the Secretary's remarks can be found on the HUD
website.

HUD is the nation's housing agency committed to increasing
homeownership, particularly among minorities; creating affordable
housing opportunities for low-income Americans; and supporting the
homeless, elderly, people with disabilities and people living with AIDS.
The Department also promotes economic and community development, and
enforces the nation's fair housing laws. More information about HUD and
its programs is available on the Internet at www.hud.gov

California County Limits

Obs prop_addr_st county_nm med_price FHA_1unit
185 CA Alameda County 995000 729750 - MAX
186 CA Alpine County 438000 547500
187 CA Amador County 355000 443750
188 CA Butte County 320000 400000
189 CA Calaveras County 370000 462500
190 CA Colusa County 318000 397500
191 CA Contra Costa County 995000 729750 - MAX
192 CA Del Norte County 249000 311250
193 CA El Dorado County 464000 580000
194 CA Fresno County 305000 381250
195 CA Glenn County 230000 287500
196 CA Humboldt County 315000 393750
197 CA Imperial County 260000 325000
198 CA Inyo County 350000 437500
199 CA Kern County 295000 368750
200 CA Kings County 260000 325000
201 CA Lake County 321000 401250
202 CA Lassen County 200000 271050
203 CA Los Angeles County 710000 729750 - MAX
204 CA Madera County 340000 425000
205 CA Marin County 995000 729750 - MAX
206 CA Mariposa County 330000 412500
207 CA Mendocino County 410000 512500
208 CA Merced County 378000 472500
209 CA Modoc County 125000 271050
210 CA Mono County 370000 462500
211 CA Monterey County 599000 729750 - MAX
212 CA Napa County 615000 729750 - MAX
213 CA Nevada County 450000 562500
214 CA Orange County 710000 729750 - MAX
215 CA Placer County 464000 580000
216 CA Plumas County 328000 410000
217 CA Riverside County 400000 500000
218 CA Sacramento County 464000 580000
219 CA San Benito County 790000 729750 - MAX
220 CA San Bernardino County 400000 500000
221 CA San Diego County 558000 697500
222 CA San Francisco County 995000 729750 - MAX
223 CA San Joaquin County 391000 488750
224 CA San Luis Obispo County 550000 687500
225 CA San Mateo County 995000 729750 - MAX
226 CA Santa Barbara County 615000 729750 - MAX
227 CA Santa Clara County 790000 729750 - MAX
228 CA Santa Cruz County 719000 729750 - MAX
229 CA Shasta County 339000 423750
230 CA Sierra County 228000 285000
231 CA Siskiyou County 235000 293750
232 CA Solano County 446000 557500
233 CA Sonoma County 530000 662500
234 CA Stanislaus County 339000 423750
235 CA Sutter County 340000 425000
236 CA Tehama County 250000 312500
237 CA Trinity County 200000 271050
238 CA Tulare County 260000 325000
239 CA Tuolumne County 350000 437500
240 CA Ventura County 599000 729750 - MAX
241 CA Yolo County 464000 580000
242 CA Yuba County 340000 425000

California Statewide MLS?

2008-03-05T11:38:00.000-08:00

The Boards of Directors of the Contra Costa and Bay East Associations of REALTORS® have signed Statements of Intent to participate in a statewide Multiple Listing Service (MLS) being created by the California Association of REALTORS®. Both organizations have been working with neighboring MLSs for over three years to expand access to property information for their members and believe this approach is the best long term solution.

A solution to the problem of having several MLSs serving a local region has been long sought by larger real estate brokerage companies. They typically must join several MLSs if their business serves more than just a small, local area. The real winner with this initiative, however, is the general public, who would have the ability to access statewide information through their real estate agent.

"This action is consistent with our commitment to giving our MLS users access to the widest geographic range of quality MLS data," said CCAR President Moses Guillory.

"A statewide MLS would not only give real estate agents and brokers access to comprehensive property information, it would also give them a standard MLS database with a single set of rules, policies and data display requirements" according to Melrose Forde, the Bay East Association of REALTORS® president. "This is something the real estate community has been seeking for many years, and we encourage our neighboring REALTOR® associations and MLSs to participate in the statewide MLS initiative" .

It is anticipated that under the statewide MLS, the local Associations will be the point of contact for members to subscribe to and participate in the California MLS, and, in turn, enhance the level of MLS services to agents and brokers.

Short Sales versus Foreclosure and Deeds in Lieu

2008-03-04T16:34:00.000-08:00

Short Sales and Deeds in Lieu After the Mortgage Forgiveness Debt Relief Act of 2007
by Richard A. Goodman

Hardly a day goes by without alarming new statistics concerning real estate sales, mortgages and foreclosures. To cite but one, in 2007, there were 84,375 trustee’s sales in California, an all time record. Since the rates on $385 billion of subprime and other nontraditional loans are expected to reset in 2008, nearly as much as in 2007, relief is not expected at any time soon.

Legislative and regulatory proposals abound to stem the tide of foreclosure. At least ten states (not including California) have enacted foreclosure related legislation within the past year. In December, the Federal Reserve proposed rules under the Home Ownership and Equity Protection Act (“HOEPA”) to address the problem. The House of Representatives recently passed the Mortgage Reform and Anti-Predatory Lending Act of 2007 (H.B. 3915) and similar legislation has been passed by the Senate (S.B. 2338).

The harsh reality is that, confronted with loan payments they no longer can afford, owners have only three alternatives short of bankruptcy: giving the lender a deed in lieu of foreclosure; by doing a short sale (i.e., a sale in which the lender agrees to accept less than a full payoff of its loan balance); or walking away from the property and allowing the lender to foreclose. The article will address the differences between these three alternatives and show how the recently enacted Mortgage Forgiveness Debt Relief Act of 2007 affects the tax consequences of each of them.

Major Issues and Considerations

Costs, Timing and Title: In California, a non-judicial foreclosure sale cannot occur until at least three months and twenty-one days after the recordation of a notice of default. If the owner brings a civil action to stop foreclosure or files for bankruptcy, the process can take far longer. In addition, a foreclosure sale costs the lender several thousand dollars, much more if there is litigation. Furthermore, the lender cannot even commence eviction proceedings until after the trustee’s sale. By contrast, if a lender accepts a deed in lieu of foreclosure or approves a short sale, the process can be completed within days rather than months, at minimal cost, and can be conditioned on the owner’s relinquishing possession.
Given the disadvantages of and obstacles to foreclosure, why do so many trustee’s sales occur? One reason is that owners frequently are too dispirited to avoid foreclosure or are unaware that they may be better off attempting to transfer the property through a “deeds in lieu” or a short sale. In addition, lenders frequently require owners to pay all escrow and closing costs as a condition of accepting a deed in lieu. Equally significant, however, is that only by completing a foreclosure sale can junior liens be wiped out. By accepting a “deed in lieu,” the lender takes title to the property subject to all junior liens and encumbrances!

Example 1: Mary Green’s home is worth $500,000 in the current market but is encumbered both by a $500,000 Deed of Trust in favor of Lender A and a $100,000 Deed of Trust in favor of Lender B and she is in default on both loans. She offers a deed in lieu of foreclosure to Lender A, but it declines.

If Lender A were to accept the deed in lieu, it would acquire the property subject to the $100,000 Deed of Trust while if it forecloses, the purchaser at the trustee’s sale will acquire the property free and clear of the $100,000 Deed of Trust.
This is not an insignificant problem since distressed property frequently is encumbered by several deeds of trust. Therefore, any lender willing to consider accepting a deed in lieu invariably requires the issuance of a new title policy to insure that there are no junior liens against the property.

A short sale, like a deed in lieu, can be completed quickly and cheaply. Furthermore, unlike a deed in lieu, the owner rarely is required to pay for escrow and closing costs. However, as with deeds in lieu, the existence of junior liens presents nearly insuperable problems. The reason is that a short sale requires the cooperation of all lenders. The senior lender has little reason to offer any of the proceeds to a junior lender, since all junior liens will be wiped out if the senior lender forecloses. Therefore, the senior lender typically requires that it receive all of the net proceeds of sale or that the junior lienholder be paid only a token amount. If the senior loan has been securitized, the loan securitization agreement may explicitly prohibit the loan servicer from negotiating in this situation. However, if the junior lienholder will receive nothing from a short sale, it has no incentive to cooperate.

Credit Impairment: A foreclosure, which is considered a "major derogatory," typically results in the lowering of one’s FICO credit score by 250-280 points. This can severely hamper someone's ability to get credit for many years. In addition, since many insurance companies now utilize credit histories to evaluate applicants, a foreclosure can later prevent an owner from obtaining life, health or disability insurance.

However, the effect of a major derogatory depends in part upon the circumstances under which it occurred. For example, if the borrower lost his property because of medical bills from a catastrophic illness, a subsequent lender may overlook even a major derogatory. Similarly, a borrower who has been candid and forthcoming with the lender as soon as financial problems occur will be viewed in a far more positive light than one who simply stops making payments, or worse, misleads the lender in any way. Potential lenders are most hostile to borrowers who have defrauded prior lenders or have intentionally delayed foreclosure proceedings in the past.

Although giving a deed in lieu may also have serious credit consequences, these frequently can be ameliorated. For example, an owner can negotiate for the lender, in a deed in lieu transaction to report the loan as “paid” or “settled” rather than as a foreclosure. In addition, loan applications do not always flag such transfers, although the application for conforming loans does request information on deeds in lieu as well as on prior foreclosures.

A short sale usually has significantly less effect than either a foreclosure or a deed in lieu, usually lowering one’s FICO score by 80-100 points. Furthermore, the owner can negotiate, as a condition of a short sale, that, in a short sale, the lender reports its loan as “paid” or “settled” to credit reporting bureaus. In addition, many applications for non-conforming loans do not ask about short sales at all.

Even if a new lender becomes aware that a loan applicant previously completed a short sale, the lender may not treat this as a major derogatory. Many lenders look favorably on a potential borrower who has taken affirmative steps to minimize the prior lender's loss.

Personal liability: As difficult as it is for an owner to face the loss of his entire equity, the possibility that the owner may have personal liability, in addition, is an even greater nightmare. In deciding how to dispose of a distressed property, the owner must understand whether there is any risk of personal liability and, if so, under what circumstances.

In California, "purchase money" loans are automatically non-recourse. A "purchase money" loan is a loan made by a seller to finance the purchase of property of any type or a loan made by a third party lender for the purchase of an owner-occupied, one-to-four unit property. The refinancing of a purchase money loan through the original lender is treated as a purchase money loan up to the amount of the original loan. Any loan other than a purchase money loan is a recourse loan unless it is specifically made non-recourse. This is typically accomplished by including a provision that the lender’s only recourse is to property and that the borrower has no personal liability on the note.

If a loan is non-recourse, either because it is a purchase money loan or because the note contains non-recourse language, the borrower need have no concern about potential personal liability.

But what if the loan is a recourse liability? The first thing to recognize is that even when lenders are entitled to pursue claims for personal liability, they rarely do so because of the expense, delay and uncertainty involved. In order to seek personal liability against the borrower, the lender must utilize a judicial foreclosure rather than a non-judicial foreclosure, which lengthens the foreclosure process by many months. After a decree of foreclosure is obtained, the court must hold a "fair value" hearing to determine if a deficiency judgment will be allowed. And even if a deficiency judgment is awarded, the lender may be unable to collect it. Potential buyers usually are scared away as the prior owner has a one-year right of redemption.

It is no wonder, therefore, most lenders prefer to conduct non-judicial foreclosures even though, by doing so, they must relinquish the possibility of obtaining deficiency judgments. In fact, the only situation in which an owner is likely to face personal liability is where the property is encumbered by a recourse junior lien. If the senior lender forecloses, the holder of the junior lien becomes a "sold out junior lienor." As such, that lender can sue directly on its note and seek personal liability against the borrower. Therefore, an owner whose property is encumbered by a recourse junior lien should take all reasonable steps to avoid a foreclosure of the senior lien. These steps might include agreeing to sign a new, relatively small note in favor of an existing lender in order to overcome the lender’s reluctance to agree to a short sale.

Lender Cooperation: If a short sale is contemplated, the lender should be consulted as soon as possible, as lenders typically require detailed financial information from the borrower as well as the listing and purchase documentation.

The most important factor influencing a lender's decision is whether the lender is likely to recoup more by foreclosing and selling the property as an REO or by accepting the short sale payoff. This decision is usually influenced by the following considerations:

• Has the property been fairly exposed to the market?
• Are the real estate brokers willing to accept a reduced commission?
• How quickly can the short sale be consummated and the loan payoff made?
• How much expense would the lender incur in a non-judicial foreclosure?
• Would the lender undertake significant toxic or other liability risks by
acquiring the property?

Tax Considerations: If a loan is non-recourse, the tax consequences of a short sale, a deed in lieu and a foreclosure are identical: the taxpayer is treated as having taxable gain to the extent that the loan balance exceeds the taxpayer's adjusted basis in the property. This gain generally is treated as capital gain.

Example 2: In 2004, John Doe purchases Blackacre, a vacation home, for $500,000, making a $50,000 down payment and obtaining a purchase money loan from Lender A for $450,000. In 2005, Doe refinances with a $600,000 loan from Lender A, which is secured by a non-recourse deed of trust. In 2006, Doe sells Blackacre for $550,000 in a short sale, paying all of the net proceeds to Lender A.

The $450,000 loan is non-recourse because it is used for the acquisition of Doe’s principal residence. The $600,000 is non-recourse by its terms. In 2006, Doe has a capital gain of $100,000 (i.e., $600,000-$500,000). Similarly, Doe would have had a $100,000 capital gain if he gave a deed in lieu to Lender A or if Lender A foreclosed.

Of course, if the property is the owner’s principal residence, all or part of the gain may be excluded.

Example 3: The facts are the same as in Example 2 except that Blackacre is Doe’s principal residence.

If Doe has owned and resided in Blackacre for at least two years as of the date of the short sale (or deed in lieu or foreclosure) and otherwise meets the requirements of IRC section 121, he will be entitled to an exclusion of up to $250,000 of gain if he is unmarried, $500,000 if he is married (the “Personal Residence Exclusion”).
Prior to 2007, the rule was that if the loan is recourse, an owner will have cancellation of debt income (“COD”) to the extent that the loan balance exceeds the fair market value of the property, regardless of how he disposes of the property. COD income is not eligible for the Personal Residence Exclusion and is taxable as ordinary income, not as capital gain!

Example 4: The facts are the same as in Example 3 except that the refinance in 2005 is through Lender B and is not specifically made non-recourse.
Because the purchase money loan is not refinanced through the original lender, the $600,000 loan is recourse. Therefore, on his 2006 tax return, Doe must report a capital gain of $50,000 (i.e., $550,000-500,000) unless the Personal Residence Exclusion applies. Doe also must report $50,000 of COD income (i.e., $600,000-$550,000).

In theory, the result was the same whether a recourse loan was cancelled through a foreclosure, the giving of a deed in lieu or a short sale. However, in either a foreclosure or a deed in lieu, the seller can contend, with the support of expert appraisals, that the fair market value of the property is at least as great as the loan balance. In a short sale, by contrast, the seller is stuck with the sale price as establishing the property’s fair market value.

The Mortgage Forgiveness Debt Relief Act of 2007 (the “Act”), signed by President Bush on December 20, 2007, provides that certain debt cancellation is not treated as COD income. The Act applies only to “Qualified Personal Residence Indebtedness” (“QPRI”). QPRI is defined as indebtedness incurred in the acquisition of the taxpayer’s principal residence (not exceeding $2,000,000) or the refinancing of that loan up to its initial amount. Thus, a refinancing loan through a different lender is treated as QPRI even though it is a recourse loan. To the extent that COD income is excluded under the Act, the owner’s basis in the property is reduced. The Act applies to QPRI discharged after 2006 and before 2010.

Example 5: The facts are the same as in Example 4 except that the short sale occurs in 2007 rather than in 2006.

The $600,000 loan is QPRI under the Act. Therefore, Doe does not have COD income. However, he has a capital gain of $100,000 (i.e., $550,000-$450,000), unless the Personal Residence Exclusion Applies.

The computations become more complex if some but not all of an owner’s refinancing debt is treated as QPRI.

Example 6: Ray and Janet Burke purchase Greenacre, their personal residence, in 2006. The purchase price is $1,000,000, payable $100,000 down, with a $900,000 loan from Lender X. In 2007, they obtain a $1,100,000 refinancing loan from Lender Y. In 2008, they complete a short sale of Greenacre for $750,000.

Although the $1,100,000 loan is recourse, $900,000 of it is treated as QPRI and the $200,000 balance is treated as COD, which the Burkes must report in 2008 as ordinary income. Since the Burkes have been relieved of $150,000 of COD income (i.e., $900,000-$750,000), their basis in Greenacre is reduced by $150,000 to $850,000 (i.e., $1,000,000 basis-$150,000 basis reduction). Therefore, in addition to reporting, as ordinary income, the $200,000 COD income, the Burkes have a non-deductible loss of $100,000 (i.e., $750,000 sales price-$850,000 adjusted basis).

Conclusion

From the standpoint of cost, credit impairment and personal liability, a short sale usually is preferable to a deed in lieu and both generally are advantageous as compared with a foreclosure. However, if a property is encumbered by a junior lien, the holder of the senior lien is unlikely to approve either a deed in lieu or a short sale. If the junior lien is recourse, avoiding foreclosure becomes all the more important since foreclosure of the senior lien may well expose the owner to personal liability on the junior lien. From a tax standpoint, some owners will be relieved of COD income under the Act. However, in situations where the Act does not apply (such as vacation homes and investment property), the tax consequences of a short sale will continue to be harsher than those of either a deed in lieu or of a foreclosure.

Information is compliments of Placer Title Company

Looking for a California Realtor contact: Jean Powers 800 378-7300

"Are You Over 55? Do You Want to Transfer Your Property Tax Base in California?,"

2008-03-02T21:09:00.000-08:00

In California Proposition 13 prohibits property tax increases until property ownership is changed.

If either spouse is over age 55 (when the old home is sold), PROP 60 allows replacement of a primary residence with a new home of equal or lesser value (but see below) within the same county and transfer of the Prop 13 assessed valuation from the old home to the new property. This is allowed once in your lifetime, if a spouse has done it before then the other spouse is prohibited from transferring his or her base.

PROP 90 allows counties to elect to accept transfers of Prop 13 values for moves from other counties when a primary residence is replaced with a less expensive (but see below) home. If you are over 55 and move into a county which accepts Prop 90, you may take your old, lower Prop 13 value, regardless of from which county you move.

Using Prop 90, you can sell your $400,000 Alameda home [assessed value $80,000] and move to a new $300,000 home in Alameda and the new Alameda assessed value will be $80,000!

7 COUNTIES WHICH ACCEPT PROP 90 (Current as of 6/1/2005)
*Alameda, *Los Angeles, *Orange, *San Diego, *San Mateo, *Santa Clara, and *Ventura. accept Prop 90. Contra Costa, Inyo, Kern, Riverside, Modoc, Monterey, and Marin have dropped out of the Prop 90 program.
Props 60 and 90 apply if you purchase a home at an equal or lesser value than your old home.

If you purchase the New Home First then sell the Old Home, you must go down price.
If you sell the Old Home first then buy the New Home:
• In the first 365 days after the sale of Old Home, you may go up 5% in the purchase price of New Home.
• If you buy New Home more than 1 year from the sale of Old Home, but less than 2 years, you may go up 10%.
Some buyers can pay the commission outside of escrow to lower to sales price.

This information is not intended as legal advice, or guaranteed accurate or complete. Specific situations may differ. Contact your attorney and/or county for information regarding any particular situation.

Ready to select a REALTOR®….I am here to help! Toll Free: 800.378.7300
http://www.jeansellsdreams.com/Listing/VirtualTour.aspx?ListingID=1148835
Jean Powers
Broker Associate, CRS, ASP, LTG, PMN, SRES

Windermere Welcome Home
925.824.4827
Toll Free: 800.378.7300
Homes@JeanPowers.com
http://JeanSellsDreams.com

Please Remember .... I am never too busy for your referrals!
Ask the REALTOR® if he or she is a Broker?

More About Mortgage Debt Relief Act of 2007

2008-02-29T16:59:00.000-08:00

TAX RELIEF FOR SHORT SALES

As many of you may know, one of the big impediments to short sales was the fact that the taxpayer would be charged with ordinary income for any debt which was forgiven by a lender in the short sale. So the taxpayer might get out from under the property but was left with a big income tax bill. The long awaited tax relief from this provision has now been signed into law. On December 20, 2007, President Bush signed into law the Mortgage Forgiveness Debt Relief Act of 2007 (H.R. 3648) which greatly reduces the negative tax implications of a short sale if the debt being forgiven meets certain criteria. Under this new law, there is a permanent exclusion for discharges of debt of up to $2,000,000 (which was forgiven by the lender after January 1, 2007) if the debt was secured by a principal residence and was incurred in the acquisition, construction or substantial improvement of the principal residence. Instead of including the amount forgiven as income, the basis of the individual's principal residence will be reduced by the amount excluded under the bill. This new law does not change existing law as it relates to forgiveness of a debt which was used for purposes other than acquisition, construction or improvement. So lines of credit and home equity loans which were used for paying off credit cards, buying second homes, boats, etc. will still be treated as ordinary income if forgiven by the lender.

Info compliments of Placer Title Company

Transfer Property Tax Base if You are Over 55 in California!

2008-02-27T09:17:00.000-08:00

Transfer Property Tax Base if You are Over 55 in California
Office of Assessor COUNTY of Alameda CALIFORNIA

1221 Oak St., County Administration Building

Oakland, California 94612-4288

South County Toll Free (800) 660-7725 www.acgov.org/assessor

TRANSFER OF PROPERTY TAX BASE FOR PERSONS 55 AND OLDER OR SEVERELY AND PERMANENTLY DISABLED (Revenue and Taxation Code 69.5) (Proposition 60, 90, or 110)

PURPOSE

This pamphlet will acquaint you with Section 69.5 which allows any person age 55 or older or severely and permanently disabled to transfer the base year value of their original property to a replacement dwelling of "equal or lesser value" that is purchased or newly constructed within two years of the sale of the original property. The full text of the law can be found in the State of California Property Taxes Law Guide, Volume 1.

HISTORY

Proposition 60 allowed for base value transfers to qualified replacement dwellings of "equal or lesservalue" within the same county that were purchased or newly constructed on or after November 6, 1986. Proposition 90 extended the Prop 60 benefits to qualified homeowners transferring their base year values from other counties and was effective July 13, 1989 in Alameda county. Proposition 110 extended the benefits to qualified disabled homeowners of any age and was effective for replacement dwellings purchased or newly constructed on or after June 6, 1990. Senate Bill 1692 effective September 25, 1996 allowed qualified persons who had prior claims based on age 55 to have a second claim based on disability.

REQUIREMENTS

1. At the time of the sale of the original property, the claimant or the claimant's spouse who resides with the claimant is at least 55 years of age, or severely and permanently disabled. The claimant's spouse need not be an owner of record of the original property. If co-owners, only the co-owner who is the claimant must be age 55 or disabled.

2. The claimant has not previously been granted, as a claimant, the property tax relief provided by this section. (See definition of "claimant") The sole exception is where the claimant was first granted relief based on age 55 and subsequently became severely and permanently disabled. The claimant may then qualify for a second claim based on the disability.

3. The replacement property must be purchased or newly constructed within two years either before or after of the sale of the original property.

4. The sale of the original property must be a change in ownership that subjects the property to reappraisal at its current market value or results in a base year value transfer as a replacement dwelling for someone qualifying under Section 69.5 or the disaster relief provisions of Section 69.

5. At the time the claim is filed, the claimant is an owner of the replacement dwelling and occupies it as his or her principal place of residence and, as a result thereof, the property is eligible for the homeowner's exemption.

6. Either at the time of its sale or at the time it was substantially damaged by calamity or within two years of the purchase or new construction of the replacement dwelling, the claimant was an owner of the original property and occupied it as his or her principal place of residence and, as a result thereof, the property was eligible for the homeowner's exemption.

7. The replacement dwelling must be of "equal or lesser value" than the original residence. "Equal or lesser value" means that the market value of a replacement dwelling may not exceed: 100% of the market value of the original property if the replacement dwelling is purchased or newly constructed prior to the date of sale of the original property, 105% of the market value of the original property if the replacement dwelling is purchased or newly constructed within the first year following the date of sale of the original property, or 110% of the market value of the original property if the replacement dwelling is purchased or newly constructed within the second year following the date of sale of the original property. The market value of the original property may include indexing adjustments. Unless the replacement dwelling satisfies the "equal or lesser value" test, no benefit is available, not even a partial benefit.

TO APPLY

To apply for relief the completed claim form and required documents must be filed with the assessor within three years of the date the replacement dwelling is purchased or newly constructed. This claim is not open to public inspection.

TO RESCIND

To rescind a claim a written notice of rescission must be delivered to the assessor within certain time limits. A fee may be required.

DEFINITIONS

"Claimant" means any person claiming relief provided by this law and their spouse if the spouse is also a record owner of the replacement dwelling. "Person" means any individual, but does not include any firm, partnership, association, corporation, company, or other legal entity or organization of any kind except that the claimant(s) may hold their residence in trust for themselves.

"Severely and permanently disabled person" is any person who has a physical disability or impairment, whether from birth or by reason of accident or disease, that results in a functional limitation as to employment or substantially limits one or more major life activities of that person.

"Original property" and "Replacement dwelling" means place of abode that is owned and occupied by the claimant as his or her principal place of residence. Each unit of a multi-unit dwelling is considered a separate dwelling for claim purposes.
"Sale and Purchase" mean "a change in ownership for consideration".

"Market value of the original property" means its market value at the time of its sale or immediately prior to its damage by calamity if it was sold in its damaged state.

QUESTIONS & ANSWERS

Q: When making the "equal or lesser value" test, is a simple comparison of the sales price of the original residence and the purchase price or cost of new construction of the replacement dwelling all that is needed?

A: Generally, when a property is sold on the open market its sales price is considered market value. However, because sale/purchase prices or costs of new construction are not always the same as market value, the assessor may have to determine the market value, which may differ from the sale/purchase price or cost of new construction.

Note: Only the market value of the primary residence and its related improvements are used for the "equal or lesser value" test. For single unit properties this represents the total value of the property. For residential properties with commercial uses or extra living units the appraiser must deduct the market value of those portions for the "equal or lesser value" tests. (See example below)

Q: The claimant sold his original two-unit property that consisted of his primary residence and a second unit and purchased a replacement dwelling. What portion of his sold property will qualify as the "original property" for the "equal of lesser value" test?

A: For the "equal or lesser value" test, the "original property" consists of the claimant's primary residence (land and improvements). The market value of the second unit (land and improvements) would be deducted from the market value of the total property. Only the amount of the indexed base value allocated to the original residence would be transferred.

Q: If otherwise qualified, will I meet the "equal or lesser value" test if I sold my original residence July 20,1999 for $350,000 and purchased my replacement dwelling May 3, 2000 for $365,000? Both properties were bought and sold for market value.

A: Yes. The replacement dwelling was purchased within the first year following the sale of the original and its purchase price did not exceed 105% of the market value of the original residence ($350,000 X 1.05 = $367,500). (See requirement No. 7)

Q: Can an otherwise qualified owner buy a vacant lot and then build a new replacement dwelling and qualify?

A: Yes. As long as the completion of the new dwelling took place within two years, either before or after, the sale of the original property. The purchase of the lot can take place at any time before the completion of new construction. For the "equal or lesser value" test the total market value of the replacement property (land and improvements) is determined as of the date of the completion of the new construction.

Q: Can I, a qualified claimant, sell my original home and buy a replacement dwelling with co-owners not of age 55 and transfer my base value?

A: Yes, co-owners of any age are allowed. However, the total full market value of your original home will be compared with the total full market value of the replacement dwelling for the "equal or lesser value" test regardless of the fact that you are only a part owner of the replacement dwelling.

Q: Can two owners sell their separately owned and occupied properties, combine their base year values, and purchase one replacement dwelling together?

A: No. There is no provision for combining base year values. The base year value of only one original property can be transferred to the replacement dwelling.

Q: Can two co-owners sell their original residence they shared and each still qualify for the claim when each acquires a separate replacement dwelling?

A: No. Only one can receive the benefit. The qualified co-owners must decide between themselves who will get the benefit. Only in the case of a multiple unit original property where several co-owners qualify for separate homeowner's exemptions may portions of the factored base year value of that property be transferred to several qualified replacement dwellings.

Q: Can I sell my original property and purchase a 50% interest in a replacement dwelling and still qualify?

A: No. A partial or fractional interest purchase is not eligible. The entire interests in both the replacement dwelling and the original property must be purchased and sold.

Q: Will the transfer of an original property or acquisition of a replacement dwelling by gift or devise qualify under Section 69.5?

A: A property that is given away or acquired by gift or devise will not qualify because nothing of value was exchanged. Section 69.5 requires a "sale" of the original property and a "purchase" of a replacement dwelling.

Q: May I sell my original property to my child and give my child the benefit of the parent-child exclusion and still transfer my base value when I purchase a replacement property?

A: No. The parents need to choose to which exclusion they wish to apply their base year value. If the parents sell to their children and choose to transfer their base year value to them using the parent-child exclusion, then the base year value is no longer theirs to transfer to a replacement residence.

Q: Can a mobile home qualify as either an original or a replacement dwelling for the base year value transfer?

A: Yes, but only if the mobile home is subject to local property taxation (LPT). Mobile homes that pay vehicle license fees annually (VLF) would not qualify because they have no base year values.

Q: Can a supplemental tax assessment be issued when the base year value is transferred from an original property to a replacement dwelling?

A: Yes. The law requires that supplemental assessments, both positive and negative, be calculated for all transactions that result in base-year value changes. This is accomplished by comparing the base value transferred from the original property to the assessment on the replacement dwelling.

Q: After receiving the notice that my application has been approved, do I still need to pay the existing tax bills?

A: Yes. All outstanding tax bills on your replacement property must be paid. They will not be cancelled or corrected. Any overpayments you make will be refunded when the claim is processed.

Q: Can new construction completed on a replacement dwelling after the transfer of the base value also qualify for relief under this section?

A: Yes, provided that the new construction was completed within two years of the sale of the original property, the assessor is notified within 30 days of the completion, and the market value of the new construction plus the market value of the replacement dwelling when acquired does not exceed the market value of the original property as determined for the original claim.

TELEPHONE NUMBERS

ASSESSOR'S DEPARTMENT

General Information

Assessee Services ................................... 510 / 272-3787

Base Value Transfers ........................... 510 / 272-3787

(Age 55 / Disabled / Disaster Relief / Eminent Domain)

Exclusions .............................................. 510 / 272-3800

(Parent-Child / Grandparent-Grandchild)

Change in Ownership Information ......... 510 / 272-3800

Homeowner's Exemption ....................... 510 / 272-3770

Business Personal Property

General Information ............................... 510 / 272-3836

Boats and Aircraft .................................. 510 / 272-3838

South County Toll Free ....................... 800 / 660-7725

Web Site: www.acgov.org/assessor

RELATED COUNTY OFFICES

Clerk, Assessment Appeals Board

Assessment Appeals Information ........ 510 / 272-6352

Tax Collector

Tax payment information including

24 Hour Automated System ................. 510 / 272-6800

Auditor

Property Tax Rates ............................... 510 / 272-6564

Recorder

Deed Recording Information ............... 510 / 272-6363

Rev 7/02

In need of a Realtor Contact: Jean Powers 800-378-7300

IRS Will Send Stimulus Payments Automatically!

2008-02-26T17:43:00.000-08:00

IRS Will Send Stimulus Payments Automatically Starting in May;Eligible Taxpayers Must File a 2007 Tax Return to Receive Rebate!

IR-2008-18, Feb. 13, 2008

WASHINGTON - The Internal Revenue Service today advised taxpayers that in most cases they will not have to do anything extra this year to get the economic stimulus payments beginning in May.

"If you are eligible for a payment, all you have to do is file a 2007 tax return and the IRS will do the rest," said Acting IRS Commissioner Linda Stiff.

The IRS will use information on the 2007 tax return filed by the taxpayer to determine eligibility and calculate the amount of the stimulus payments.

The IRS will begin sending taxpayers their payments in early May after the current tax season concludes. Payments to more than 130 million taxpayers will continue over several weeks during the spring and summer. A payment schedule for taxpayers will be announced in the near future.

Stimulus payments will be direct deposited for taxpayers selecting that option when filing their 2007 tax returns. Taxpayers who have already filed with direct deposit won't need to do anything else to receive the stimulus payment. For taxpayers who haven't filed their 2007 returns yet, the IRS reminds them that direct deposit is the fastest way to get both regular refunds and stimulus payments.

Most taxpayers just need to file a 2007 tax return as usual. No other action, extra form or call is necessary. This Web site will be the best information source for all updates and taxpayer questions.

In most cases, the payment will equal the amount of tax liability on the tax return, with a maximum amount of $600 for individuals ($1,200 for taxpayers who file a joint return).

The law also allows for payments for select taxpayers who have no tax liability, such as low-income workers or those who receive Social Security benefits or veterans' disability compensation, pension or survivors' benefits received from the Department of Veterans Affairs in 2007. These taxpayers will be eligible to receive a payment of $300 ($600 on a joint return) if they had at least $3,000 of qualifying income.

Qualifying income includes Social Security benefits, certain Railroad Retirement benefits, certain veterans' benefits and earned income, such as income from wages, salaries, tips and self-employment. While these people may not be normally required to file a tax return because they do not meet the filing requirement, the IRS emphasizes they must file a 2007 return in order to receive a payment.

Recipients of Social Security, certain Railroad Retirement and certain veterans' benefits should report their 2007 benefits on Line 14a of Form 1040A or Line 20a of Form 1040. Taxpayers who already have filed but failed to report these benefits can file an amended return by using Form 1040X. The IRS is working with the Social Security Administration and Department of Veterans Affairs to ensure that recipients are aware of this issue.

"Some people receiving Social Security and veterans' benefits may not realize they will need to file a tax return to get the stimulus payment," Stiff said. "To reach these people, the IRS and Treasury will work closely with the Department of Veterans Affairs, the Social Security Administration and key beneficiary groups on outreach efforts."

Eligible taxpayers who qualify for a payment will receive an additional $300 for each child who qualifies for the child tax credit.

Payments to higher income taxpayers will be reduced by 5 percent of the amount of adjusted gross income above $75,000 for individuals and $150,000 for those filing jointly.

Taxpayers must have valid Social Security Numbers to qualify for the stimulus payment. If married filing jointly, both taxpayers must have a valid Social Security Number. And, children must have valid Social Security Numbers to be eligible as qualifying children.

Taxpayers who file their tax returns using an Individual Taxpayer Identification Number issued by the IRS or any number issued by the IRS are ineligible. Also ineligible are individuals who can be claimed as dependents on someone else's return, or taxpayers who file Form 1040-NR, 1040-PR or 1040-SS.

To accommodate taxpayers who file tax returns later in the year, the IRS will continue sending payments until December 31, 2008. The IRS also cautions taxpayers that if they file their 2007 tax return and then move their residence that they should file a change of address card with the U.S. Postal Service.

The IRS will mail two informational notices to taxpayers advising them of the stimulus payments. However, taxpayers should be alert for tax rebate scams such as telephone calls or e-mails claiming to be from the IRS and asking for sensitive financial information. The IRS will not call or e-mail taxpayers about these payments nor will it ask for financial information. Scam e-mails and information about scam calls should be forwarded to phishing@irs.gov.

This information was taken from the IRS website

Proposition 8: Decline in Market Value

2008-02-25T11:23:00.000-08:00

Proposition 8, passed in November 1978, amended Proposition 13 to reflect declines in property value. As a result, Revenue & Taxation Code Section
51 requires the Assessor to annually enroll either a property's Proposition 13 base year value factored for inflation, or its market value as of
January 1st (taking into account any factors causing a decline in value), whichever is less.

Prop 8 reductions in value are temporary reductions which recognize the fact that the current market value of a property has fallen below its current (Prop 13) assessed value. Once a Prop 8 value has been enrolled, a property's value must be reviewed each following January 1st to determine whether its then current market value is less than its Prop 13 factored value. When and if the market value of the Prop 8 property increases above its Prop 13 factored value, the Assessor will once again enroll its Prop 13 factored value. Prop 8 values can change from year to year as the market fluctuates up and down, but in no case may a value higher than a property's Prop 13 factored value be assigned.

The Review process is as follows:

If current market value is below factored Prop 13 value, then:

The assessed value is lowered to market value for the next fiscal year, and the
owner is notified of reduced value by July 1st. A new tax bill is based on the lower
value for the next fiscal year. The following January 1st, the Assessor repeats the
process and enrolls current market value at that time, or Prop 13 factored value,
whichever is lower value.

If market value is higher than factored Prop 13 value, then:

No change in assessed value is made, and the owner is notified that value will not
be reduced (not later than July 1st). If the owner still feels the value should be
reduced, then the owner may file an appeal with the Assessment Appeals Board,
July 2nd-Sept 15th. The Appeals Board then hears evidence from the owner and
Assessor to determine the proper assessed value.

1) Property owner provides Assessor with facts they feel justify a reduction in value and requests a review of the property's value (or the Assessor discovers
the problem independently).

2) Appraisal staff reviews market data as of January 1st, estimates the property's market value as of that date and then compares this market value to the
property's current Prop 13 factored base year value.

This information is compliments of Placer Title Company

For all of Your Real Etate Needs: contact, Jean Powers 800 378-7300

2008-02-24T20:19:00.000-08:00

Why Buy a Home in Today’s Market?

www.yourpieceofcalifornia.com

1 Interest rates on long-term, fixed, and adjustable mortgages are at historically low levels. The rate on a 30-year, fixed mortgage is hovering just below 6 percent,while,by comparison, interest rates were hitting 8 percent and higher during the last market down turn in the late 1990s, and were between 10 and 12 percent at the height of the last housing boom in the 1980s. Lower interest rates make it easier to qualify for a loan, and yourmonthly payments are more affordable.

2 No one can put a price on the intrinsic value of homeownership. Home prices also
reflect financial worth and, the good news is, across California the median sales price for a single-family home has been consistently rising for several decades. In short,housing remains a solid, long-term financial investment. While the pace of home appreciation has slowed over the last year, historical data suggest home prices will continue to appreciate overtime. The projected median home price for a single-family home in California in 2008, for example,is $553,000. By comparison, the median price in 2000 was $241,350; $193,770 in 1990,and $99,550 in 1980. (source: C.A.R.)

3 The length of time a home remains on the market before it is sold has increased from roughly two weeks in 2004 to between eight and nine weeks in 2007. According to the unsold inventory index provided by the CALIFORNIA ASSOCIATION OF REALTORS®, it would take 16.3 months to sell all the homes on the market at the current sales pace, compared with 6.4 months in 2006. With more homes on the market for longer periods of time, you have more choices when it comes to selecting a home today.

4 The multiple-offer frenzy that dominated the latest housing boom has subsided, and there is less pressure on today’s home buyers to outbid one another. REALTORS® in California reported that in 2007 only 28 percent of homes sold had multiple offers,compared with 57 percentin 2004. (source: C.A.R.)

5 The credit industry crisis that has made securing a home loan difficult for many has led to heightened scrutiny of mortgage lenders. As a result, state and federal agencies have created protections for home buyers that were not in place a year ago. The U.S. Federal Reserve, for example,has proposed a plan to require lenders to confirm a borrower’s ability to afford a mortgage before making a loan and establishing guidelines for explaining subprime loan terms in order to better educate buyers. Many new public education and awareness campaigns, such as Freddie Mac’s “Don’t Borrow Trouble®” campaign, have been developed to help you achieve the dream of homeownership without the financial risks that led so many borrowers into trouble in recent years.

Buying a home in today’s market may be challenging, particularly for those with credit problems or little saved to put toward a down payment. But there are many factors impacting the current housing market that make buying a home today a viable option.

Information compliments of California Association of Realtors

Ready to Buy or Sell?

Contact Jean: homes@jeanpowers.com 800-378-7300

Some Banks are Withdrawing Equity Line of Credit From Homeowners!

2008-02-23T16:33:00.000-08:00

Homeowners Losing Equity Lines
As House Values Fall, Some Banks Withdraw Credit

(By Susan Biddle -- The Washington Post)

In one brief phone call, Nancy Corazzi's lender yanked away what was left of the $95,000 home equity line of credit that she and her husband took out five months ago.
The lender informed her that her Howard County home had plummeted in value and the company did not want the risk that she would owe more than the house was worth.
"I got off the phone and I was shaking," said Corazzi, who was using the money to pay preschool tuition for her twins ."I was near tears. We needed this credit line to get us through some tough times."
Several of the nation's largest lenders, along with smaller ones, are shutting off access to home equity lines in areas where home values are declining. It's an unusually aggressive move as the industry grapples with fallout from the mortgage crisis that began unfolding last year.
Now that home prices have dropped in many parts of the country, lenders are nervous that they may never collect the money that they extended to borrowers. They are responding by freezing or lowering the credit limits on home equity lines, leaving thousands of borrowers like Corazzi in the lurch.
"Nearly all the top home equity lenders I know of are doing this or considering doing this," said Joe Belew, president of the Consumer Bankers Association, which represents some of the nation's largest home equity lenders. "They are all looking at how to protect themselves as real estate values go down, and it's just not good for the borrowers to get so overextended."
Countrywide Financial, the nation's largest mortgage lender, suspended the home equity lines of 122,000 customers last month after reviewing their property values and outstanding loan balances. The company, like others, has an internal automated appraisal system that tracks values.
The company declined to disclose how many of the affected borrowers lived in the Washington area. About 381,000 borrowers in the region had home equity lines at the end of last year, according to Moody's economy.com.
USAA Federal Savings Bank froze or reduced credit lines for 15,000 of its customers, including Corazzi, and will not reconsider its decisions until "real estate values improve substantially," the company said in a statement.
Bank of America is starting to do the same and is contacting some borrowers, said Terry Francisco, a bank spokesman.
"We know this can cause hardship to our customers," Francisco said. "If they used the credit to make payments that are in the pipeline, we will work with them to make sure the payment goes through."
The appeal of home equity lines has always been their flexibility
They operate like credit cards, with the home as collateral. Borrowers can use the money when they want, up to a limit, then repay it over time. The limit depends on the amount of equity they have in the house. Home equity lines, which grew popular in the late 1980s, have typically attracted educated borrowers with above-average incomes and job stability who tend to repay what they borrow in a timely manner, industry studies show.
Since the crisis in the housing and mortgage markets started, however, delinquencies on home equity lines reached 0.84 percent in the third quarter, the highest level in a decade, the American Bankers Association said.
Because missed payments are often a precursor to foreclosure, lenders are spooked. Companies that hold credit lines typically recoup little, if any, of their money in a foreclosure, hence the retreat on home equity lending.
Larry F. Pratt, chief executive of First Savings Mortgage in McLean, said most mortgage documents he has seen give lenders wide latitude to suspend or freeze credit lines.
"A layperson would not recognize the language because it's not that blatant," Pratt said. "It talks about deterioration of the value of the asset or the value of the collateral. . . . It's not boilerplate language by any means."
Maggie DelGallo did not realize that when she took out a home equity line a few years ago on her home in Loudoun County. Her lender recently froze the line.
DelGallo, a real estate broker, has used some of her credit line over the years. Had she known the freeze was coming, "I would have drained it," she said. "I would have taken every dime and possibly placed it in a money-market vehicle."
DelGallo said she does not think she is in dire straits. "It's more like a huge disappointment," she said. "I have this line of credit attached to my home that's useless."
Last year, 34 percent of borrowers said they used their home equity lines to pay off other debt and 29 percent used them for home renovation, according to a survey of lenders by BenchMark Consulting International. Another 31 percent used them to pay for other things, such as medical bills, weddings or vacations.
Corazzi initially used her line to consolidate debt. She and her husband took out the credit line in October because they thought her job was in jeopardy.
It was. In December, her salaried position as a loan-processing manager at a local mortgage bank changed to a commission-only job.
Given the slowdown in the industry, Corazzi has collected only one paycheck since then. Her husband, Ron, sells large-format copiers and printers to builders, and his salary alone cannot support them and their four children, ages 4 to 8.
By the time their lender called, the couple had $45,000 remaining unused on the credit line. Ron Corazzi is now looking for a second job, and his wife is hoping to pick up work as a substitute teacher.
Meanwhile, they are trying to open a new home equity line elsewhere, but chances are slim given the change in Nancy Corazzi's job status and the drop in their home's value. Five months ago, the Ellicott City house was appraised at $560,000; the lender says it is now worth $469,100.
"I told them, 'You guys are wrong,' " Nancy Corazzi said. "They said, 'Sorry, this is what we're doing in the entire area.' "
Corazzi said she was blindsided by what's happened. "I didn't know they could do that. I thought I was too smart to have something like this happen to me."

A Seller's Plan! Where do I Start?

2008-02-23T12:15:00.000-08:00

1. Find the Right Representative
The experience and knowledge of a dedicated real estate professional can be priceless. A good Realtor® forms a powerful team with his or her clients that makes it possible for them to have a smooth, successful, stress-free sale.
2. Determine your Needs/Wants for the Sale and for Your New Home
Selling your primary residence can be tricky because you have to simultaneously be thinking about where you would like to buy. First weigh your priorities – selling price is certainly important, but having a quick and efficient sale can often be worth accepting a slightly lower offer. Talk to your agent and make sure you’re comfortable with where your priorities are.

At the same time, you should be compiling a needs/wants list for the home you will buy. You will probably have to act fairly quickly when your house sells, so any amount of preparation you can do will serve you well.

3. Prepare Your House for Showing
Underprepared homes can be sales disasters. Your home will never get as much attention from potential buyers as when it is first listed, so clearing clutter, cleaning, making repairs, and putting your home’s best foot forward is essential. Don’t “open for business” until your home is ready to be seen as favorably as possible.

4. Find out How Your Local Market Looks
Being realistic about your market is the key to a smooth sale. There is no substitute for a professional real estate representative when it comes to local market knowledge.

5. List aAway!
Lots of photos and online exposure are the key to getting a good response for your listing. Working with an agent who uses Point2 Agent software is a great step in the right direction. Now just “open” the house and sit back and wait for the flood of eager buyers!

--------------------------------------------------------------------------------

What is a CMA and Why Do You Need One?

CMA is real estate shorthand for "Comparative Market Analysis." A CMA is a report prepared by a real estate agent providing data comparing your property to similar properties in the marketplace.

The first thing an agent will need to do to provide you with a CMA is to inspect your property. Generally, this inspection won't be overly detailed (she or he is not going to crawl under the house to examine the foundation), nor does the house need to be totally cleaned up and ready for an open house. It should be in such a condition that the agent will be able to make an accurate assessment of its condition and worth. If you plan to make changes before selling, inform the agent at this time.

The next step is for the agent to obtain data on comparable properties. This data is usually available through MLS (Multiple Listing Service), but a qualified agent will also know of properties that are on the market or have sold without being part of the MLS. This will give the agent an idea how much your property is worth in the current market. Please note that the CMA is not an appraisal. An appraisal must be performed by a licensed appraiser.

The CMA process takes place before your home is listed for sale. This is a good assessment of what your house could potentially sell for.

CMAs are not only for prospective sellers. Buyers should consider requesting a CMA for properties they are seriously looking at to determine whether the asking price is a true reflection of the current market. Owners who are upgrading or remodeling can benefit from a CMA when it's used to see if the intended changes will "over-improve" their property compared to others in the neighborhood.

Jean Powers CRS, ASP®, e-PRO, PMN
Real Estate Broker
(510) 908.9002
(800) 378.7300
Homes@JeanPowers.com
www.JeanPowers.com
www.JeanSellsDreams.com

A Buyers's Transaction!

2008-02-22T21:56:00.000-08:00

Where do I Start?
For many, beginning the homebuying process can be overwhelming. You may be uncertain about taking the initial steps. I hope this guide will help clear up some of those uncertainties by providing you with some useful information about the homebuying process.

When is the right time to start talking to a professional, and who do I choose?

Anytime you have questions you want answered is the right time to start. You can begin with either a Realtor or a lender. A Realtor can help you assess your financial picture, counsel you through the entire homebuying process, find a home that suits you and introduce you to a lender who can work with you on a financing package that meets your needs. A Realtor will work through all the intricacies of the transaction until close of escrow. A lender will work with you on the loan process and can preapprove you for a loan before you even begin house-hunting.

If it happens that you are not ready for any of this, both professionals will be happy simply to provide you with information.

How do I choose a Realtor?
In today's market, finding and purchasing a home can be a very involved and a complicated process. It is essential to find a Realtor who is qualified and dedicated to providing you with the best representation. It is best that you hire a Realtor who is a Broker. A Broker has more education, knowledge and skills than a Realtor who only has a Sales license. Always check the Department of Real Estate to see how long the Realtor has had a license and if they are in good standing. You can go to: www.dre.org . Once you have found that the Realtor is experienced and a full-time professional who knows the market in the area in which you are interested, determine if they know the available inventory in your location and price range. Ask for and check for references.

Your Realtor should have the time and energy to devote to you and your search for a home. Perhaps most importantly, choose an agent with whom you have a personal rapport.

Buying a home is an intimate type of business transaction. Trying to go through the process with someone you can't relate to will not work. Find a qualified Broker who you like, one who matches your personality and meets your individual needs. This will make the home purchase experience much more enjoyable.

What happens after I have chosen a Broker Realtor and spoken with a lender?
Given your price range, decide what kind of home you want and need. Think about size, location, special features such as fireplace and garage.

Begin looking at properties with your Realtor Broker so you have a good basis for making a final decision. Assess whether the home you can afford to purchase is the right home for you. If this is not the case, you may be unrealistic in your expectations and may need to adjust them to suit your budget.

When you find the home you like, make an offer to purchase. Your Realtor Broker's knowledge of the market and market values will assist you in making sure the price you offer represents good value for the property.

I've found the home I want. I've made the offer. What happens next?
The seller may accept your offer, reject your offer, or make a counter offer. If your offer is rejected, you can make another offer or look for a different house. If the seller makes a counter offer, you can either accept that offer or counter with yet another offer. Negotiations may continue back and forth until you and the seller agree to a final purchase price and terms of the contract. When this agreement is reached, the offer is "ratified". Your Realtor will now be required to deposit the specifed amount as per your contract, into an escrow account with a Title Company. During the escrow period, which is usually 30 to 40 days, certain conditions ("contingencies") specified in the contract must be met or waived within agreed-upon time periods.

These conditions typically include: having a professional inspection of the property, obtaining formal loan approval from the lender, and reviewing the seller's disclosures.

When Will I Actually Own The Home?
You will own the home when all conditions of the contract are met and escrow closes. The following are some of the conditions commonly found in home purchase contracts:

Finding a loan for the amount and at the terms stated in the contract. You should have a pre approved loan with a lender prior to submitting an offer to purchase the property.
Receiving a satisfactory report on the condition of the home by a professional home inspector, and a termite inspector. Obtaining any other inspections you deem necessary. If major problems are discovered, you do not have to buy the home or you can renegotiate the contract.
Conducting a title search and ensuring the property is free of any legal claims against it. You will also have to buy title insurance for yourself and the lender, in case a problem with the title arises after you purchase the house.
Purchasing homeowner's or hazard insurance is required by the lender.
Asking and receiving satisfactory answers to any and all questions you have about the property.
Obtaining disclosures from the seller informing the buyer of any fact which the seller is aware of that would materially affect the value of the property.
The seller must make any repairs to the home which are agreed upon in the contract, you may purchase property in its present condition or ask the seller to credit money in escrow for repairs.
Just prior to close of escrow, your loan becomes effective (it "funds"). The escrow officer will explain the closing documents which you must sign. One of these is a HUD-1 settlement form from the lender. This form, required by federal law, itemizes the services and costs to the buyer and seller. You will also be required to pay the closing costs and the rest of the downpayment, either wired or by a cashier's check, to the title company at least 2 days prior to closing escrow.
The title company formally records the new deed of trust, and you go "on record" as the new owner. You get the keys to your new home and, it's yours!
How important is my credit?
In addition to verifying income, a lender will want a credit report showing that a borrower has repaid monthly debts on a timely and regular basis. It would be a good idea to examine your credit history prior to submitting a mortgage application. If you discover any discrepancies, be sure to notify the credit bureau to correct them, because any unexplained credit delinquencies can be a basis for a disapproval by a lender.

Many delinquent or late payment accounts can be resolved by writing a detailed explanatory letter to the credit bureau. There are several national credit bureaus that provide credit reports for a nominal fee. Listed below are the credit bureaus commonly used by the lending industry.

Equifax Information Service
P.O. Box 740241 Atlanta, GA 30374-0241
(800) 685-1111 ($8.00 service charge)

TRW Credit Data
P.O. Box 749029Dallas,TX 75374-9029
(800) 392-1122
(1 free yearly)

When writing to the above agencies, provide your full name, present address, previous 5 year addresses, social security number, date of birth, and a verification of your name and present address (e.g. a copy of a billing statement).

How do I find the best loan?
Loans are available from a number of sources, including banks, mortgage companies, federal credit unions and financial companies. Your Realtor can be a good source of information about various lenders.

Assessing current needs and future objectives
You can simplify your search for the right loan if you start with a clear understanding of your plans for the property. Such an understanding requires some soul-searching on you part as to your personal and financial goals.

Ask yourself:

Are you looking to build equity quickly? Are you expecting increases in your income?
Is there a strong possibility of a career change or other situation which might cause you to have to move in the near future?
To what extent will the tax deductions from your home's interest payments affect your present and future tax situation?
Are you planning any major improvements? If so, how will they be financed?Before you start looking for homes, it is important to have a good idea of how much you can put down and how much you can afford in monthly payments.
Downpayment
You may intend to put 20% of the purchase price as a downpayment. There are loans available with as little as 5% down, although lenders may charge somewhat higher fees or interest on these. Also, a downpayment less than 20% often includes a requirement from the lender that you purchase private mortgage insurance (PMI) as a protection against possible default.

Monthly Payments
In addition to the downpayment, lenders want to determine if a borrower has enough stable income to make payments on a mortgage. Typically, they do not want a borrower's total housing costs, principal, interest, taxes, and insurance (PITI), to exceed 33 percent of his/her monthly income. The "33" is sometimes called a "top" ratio. Also, total housing costs plus other monthly expenses (car payments, student loans, credit cards, etc.) should not exceed 38 percent of the borrower's total gross income. These parameters are not absolute. Some buyers may qualify at a higher debt-to-income ratio

Types of loans
Today's borrower can choose from several types of loans. Some loans feature the same rate and payment amount for the duration of the loan (Fixed). Others are more flexible. Their rates and payment schedules can adjust to reflect changing economic factors (Adjustable). Still others offer a convertible feature, enabling you to convert from one type of loan to another after a period of time.

Fixed rate loans
Predictability is the key feature of a fixed rate loan. You can be certain that your rate and payment will never change as long as you have the loan. This makes it easier to plan and budget your finances.

Adjustable rate loans (ARMs)
ARM interest rates are tied to-and fluctuate to reflect changes in-a published financial index. When those index rates go up or down, ARM rates do too. By law, the index a lender uses cannot be controlled by that lender (e.g. a bank cannot use its prime rate as an index). Common indices include 11th District Cost of Funds, one-year T-note, and six-month T-bill. ARMs are easier to qualify for than fixed rate loans because the interest start rate is lower.

Glossary of lending terms
Annual payment capsAn annual cap limits the amount of change in payment that can occur. The maximum amount of change is usually 7.5% of the previous year's monthly payment. Payments cannot exceed that cap, no matter what the index rate does during the year. If, for example, your monthly payment is $1,000, it cannot go up by more than $75 per month the following year.

Annual percentage rate (APR)
APR is the effective interest rate over its projected life. It includes interest plus all other costs such as lender fees and closing costs (escrow, title insurance, appraisal fee, processing, etc.) Your loan's APR is a reflection of what you'll be paying annually for the loan and a good way to compare with other loans. Your lender is required by law to quote the APR when quoting an interest rate.

Closing costs
Expenses in addition to the price of the home incurred by buyers and sellers when a home is sold. Common closing costs include escrow fees, title insurance fees, document recording fees and real estate commissions.

Index
There are a number of them. Some move sharply over relatively short time spans. Others change more slowly over longer period of time.

Interest rate adjustment caps
ARMs that don't have an annual payment cap will usually offer an annual cap of up to 2% of interest rates adjustments.

Lifetime interest rate caps
This feature puts a ceiling on the rate to which an ARM loan can be adjusted over the life of the loan. If the rate ever reaches the lifetime cap, the borrower has a fixed rate loan at that rate until the index falls again, and the rate can be adjusted downward.

Loan assumability
Unlike fixed rate mortgages, many ARM loans can be assumed by a qualified borrower. This can be a valuable benefit when the time comes to sell the home.

Margin
The interest rate for an ARM loan reflects the index plus a fixed margin. The margin covers the lender's operating expenses and profit. The margin amount must be included in the loan document, and can not change once the loan is funded.

Negative amortization
Negative amortization can occur when the payment is not large enough to cover the full amount of interest due. The borrower can choose whether he wants to pay the additional amount or have it added to the loan balance.

No prepayment penalty
Most ARMs can be paid off either fully or partially with no penalty.

Points
One point equals 1 percent of the mortgage amount. Typically lenders charge from zero to two points. Loan points are tax deductible.

Locking in
Also called a rate-lock, this is a lender's promise to commit to a certain interest rate on a loan, usually for 30 to 60 days.

Deciding on a Lender
It is important to find a lender you can depend on to provide you a loan at a competitive rate. In addition, you want your application processed swiftly and accurately at reasonable cost. The lending institution's stability, experience and commitment should also be examined.

Your Realtor can help you find a lender with a financing package that meets your needs.

What is an escrow and why is it needed?
An escrow is an arrangement in which a disinterested third party, called an escrow holder, holds legal documents and funds on behalf of a buyer and seller, and distributes them according to the buyer's and seller's instructions.

People buying and selling real estate often open an escrow for their protection and convenience. The buyer can instruct the escrow holder to disburse the purchase price only upon the satisfaction of certain prerequisites and conditions. The seller can instruct the escrow holder to retain possession of the deed until the seller's requirements, including receipt of the purchase price, are met. Both rely on the escrow holder to carry out faithfully their mutually consistent instructions relating to the transaction and to advise them if any of their instructions are not mutually consistent or cannot be carried out.

An escrow is convenient for the buyer and seller because both can move forward separately but simultaneously in providing inspections, reports, loan commitments and funds, deeds, and many other items using the escrow holder as the central depositing point. If the instructions from all parties to an escrow are clearly drafted, fully detailed and mutually consistent, the escrow holder can take many actions on their behalf without further consultation. This saves much time and facilitates the closing of the transaction.

Who may hold escrows
The escrow holder may be any disinterested third party (some states require escrow holders to be licensed). Escrow officers with established firms generally are experienced and trained in real estate procedures, title insurance, taxes, deeds and insurance.

Impartiality
An escrow officer must remain completely impartial throughout the entire escrow process.He or she must follow instructions of both parties without bias.

Escrow instructions
Escrow instructions are written documents, signed by the parties giving them, which direct the escrow officer in the specific steps to be completed so the escrow can be closed. Typical instructions might include: the method by which the escrow holder is to receive and hold the purchase price to be paid by the buyer; the conditions under which a lapse of time or breach of purchase contract provision will terminate the escrow without a closing; instructions on the payment of prior liens.

Closing the escrow
Once the terms and conditions of the instructions of both parties have been fulfilled, the escrow is closed and the safe and accurate transfer of property and money has been accomplished.

In summary
The escrow holder facilitates real estate sales or purchases by:

Acting as the impartial depository of documents and funds.- Keeping all parties informed of progress on escrow.
Responding to lender's requirements
Securing a title insurance policy
Prorating and adjusting insurance, taxes, etc
Recording the deed and loan documents
It's not always that simple
Every escrow is unique and most are more complex than explained here. If you have further questions, contact an escrow officer or attorney to provide more detailed information.

What protection does title insurance provide?
Title insurance protects against any matter affecting the past ownership of the property. Title insurance is issued after the title company carefully examines copies of the public record. However, even the most thorough search cannot absolutely assure that no title hazards are present, despite the knowledge ad experience of professional title examiners. In addition to matters shown by public records, other title problems may exist that cannot be disclosed in a search.

Some common hidden risks that can cause a loss of title or create an encumbrance on title:

False impersonation of the true owner of the property
Forged deeds, releases, or wills
Undisclosed or missing heirs
Instruments executed under invalid or expired power of attorney
Mistakes in recording legal documents
Misinterpretations of wills
Fraud
Deeds by persons of unsound mind
Deeds by minors
Deeds by persons supposedly single, but in fact married
Liens for unpaid estate, inheritance, income or gift taxes
Title insurance will pay for defending against any lawsuit attacking your title problems or pay the insured's losses. For a one time premium, and owner's title insurance policy remains in effect as long as you or your heirs retain an interest in the property, or have any obligation under a warranty in any conveyance of it.

By combining expertise in risk elimination at the time of issuing a policy, and protection against hidden risks as long as the policy remains in effect, your title insurer protects against title loss.For more detailed information on title insurance, contact a title officer at your title company.

I hope you have found this information helpful. It is designed to be of general interest, and while the content is reliable, it is not intended as a substitute for the advice of professional lenders, accountants, escrow officers, attorneys, etc. Before acting on any matter contained herein, you should consult with your professional adviser.

Do not hesitate to call or email me if you have any questions .

Homes@JeanPowers.com
510.908.9002 Cell
800.378.7800 Bus.

Californians Can Afford to Purchase a New Home!

2008-02-21T17:46:00.000-08:00

Group says more Californians can afford to buy their first home
By ALEX VEIGA, AP Business Writer

(02-19) 12:13 PST Los Angeles (AP) --

Frustrated California renters take heed: A trade group says it's getting easier for people to afford their first home.

With home prices in a downward spiral in many once-booming areas, the percentage of California households that can afford to finance an entry-level home increased in the last three months of 2007 compared to the same period a year earlier, the California Association of Realtors said Tuesday.

The trade group for real estate agents calculates affordability based on the minimum household income required to make a 10 percent downpayment and secure an adjustable interest rate loan at 6.21 percent.

Some 33 percent of the households in the state met those guidelines in the fourth quarter — up from 25 percent in the same three months of 2006, the association said.

Buyers needed to earn $82,200 to afford financing of $411,170, the typical statewide price for an entry-level home during the quarter, the trade association estimated.

The monthly payment for such a purchase, including taxes and insurance, was $2,740, the association said.

An entry-level home was defined as one priced at about 85 percent of the median home price in an area.

The most affordable area of the state during the quarter was the desert north of Los Angeles, where some 54 percent of households met the association's $43,800 annual income threshold to finance an entry-level home priced at $218,880.

Sacramento County was next, with 53 percent of households within the income range needed to afford a home priced at $252,920.

The least affordable area was the Central Coast region of Monterey, where only 20 percent of households earned the $118,200 needed to finance an entry-level home at $591,200.

In Los Angeles County, 27 percent of households earned the $86,700 a year needed to buy a home priced at $433,200.

Some 46 percent of households in Riverside and San Bernardino counties, which have been hit particularly hard by rising foreclosures and falling home values, earned $57,600 a year, enough to finance a $287,330 home, the association said.

In the San Francisco Bay area, meanwhile, only 23 percent of households reported income of at least $132,300, the minimum to purchase a home priced at $660,660.

Compliments of:
California Association of Realtors: www.car.org

NAR's Economist's Commentary!

2008-02-19T19:39:00.000-08:00

Refueling the Housing Bubble?
By NAR Chief Economist Lawrence Yun

The Federal Reserve has been aggressively cutting rates recently and the question is being raised about parallels to the past. Back in 2001, in the aftermath of the internet stock bubble collapse and the September 11 terrorist attacks, Alan Greenspan — then the Fed chairman — made deep cuts in interest rates in order to stave off a possible economic recession. Many also blame Mr. Greenspan for having fueled the housing market bubble and subsequent collapse by keeping the rates too low for too long.

Now in early 2008, with the economy possibly heading into a recession — as evidenced by the GDP growth rate slowing from 4.1% in third quarter to 0.6% in the fourth quarter — the current Fed Chair, Ben Bernanke, has been following a very similar step of sharply cutting fed funds rates in order to revive economic growth — partly by making home buying financially enticing. Though there is never a direct correction between the Fed funds rate and mortgage rates, which are outside of the Fed's control and determined by the global bond market, the current 30-year mortgage rates have come down to essentially 45-year low levels. Aside from a few months in 2003, mortgage rates have never been this low since the early 1960s. A drop in the average mortgage rate from nearly 7% in mid-2005 to the current 5.7% would reduce monthly mortgage payments from $1330 to $1160 on a $200,000 mortgage. The average savings would be $340 per month or $4,000 per year on a $400,000 mortgage.

Therefore, could the Fed be simply refueling the bubble by dangling financial incentives to buy a home? Well, let's replay the key factors related to the recent bubble-collapse and see whether the same behavioral patterns will reemerge. Keep in mind that there are significant local market variations, but the markets that had the huge swings followed the below pattern:

The Fed started cutting rates from 2001 — with the Fed funds rate eventually reaching 1% by mid-2003.

The mortgage rate fell to 5.5% by the summer of 2003 from 8% in 2000. ARMS rates fell from 7% to 3.5% over the same period.

Housing demand rose with existing and new home sales hitting successive high marks in 2003, 2004, and 2005. Inventory fell as a result.

Home prices accelerated. For example, in the D.C. region home prices more than doubled from $204,000 to $426,000 from 2001 to 2005. Homeowners' net worth leapt by over $200,000 as a result — a figure many would considered good lifetime savings.

Given the general weakness in the stock market and relative "easy" wealth gains for real estate owners — there was an increasing view of homeownership and real estate as a financial play rather than in terms of family and housing needs considerations.

Housing demand ran exceptionally high, but the demand could only be realized if people could get the financing.

Global capital providers were chasing after high yields and were eager to provide the financing because…

Ratings agencies gave their blessing on subprime products, giving the impression that these were 'safe' alternatives.

Moody's, Standard & Poor's, and other ratings agency raked in revenue by giving out top Triple-A ratings (an inherent conflict of interest exists when ratings agencies get their revenue from mortgage underwriters/securitizers… rather like a professor who gives out a lot of "A" grades will draw more tuition paying students to his class).

With funding plentiful, subprime and no documentation loans proliferated — if you had a heartbeat, you could get a loan.

Housing demand was further pushed higher as herds of house-flippers entered the market, and home prices accelerated in those markets. Prices grew by leaps and bounds in markets of around 70% in short two years — places like Las Vegas, Miami, and Phoenix, and Sacramento.

Inventories were pushed down to exceptionally low levels and homebuilders could not keep up with demand.

From late 2004, the Fed began to tighten and mortgage rates climb in 2005.

Housing demand naturally fell off.

Inventory quickly built — from a combination of lower demand, builders continuing to build at a high pace, and some speculators/flippers realizing that the period of easy price gains was coming to an end.

Rising inventory held back price gains.

Price stagnation no longer permitted mortgage refinancing. Flippers/speculators started carrying burdensome mortgage costs — some begin to simply walk away — pushing inventory higher.

Non-flippers — primary homeowners, who took out subprime loans, also faced the same price stagnation, but also the resetting higher interest rates. Refinancing is not possible and some have been forced to foreclose

More and more flippers/speculators and homeowners are unable to carry the high resetting interest rates and simply walk away. Lenders begin to write-down loan losses.

After the fact and very late, the ratings agencies stated that subprime loans are no longer Triple-A quality.

Global capital providers stopped funding subprime loans and the subprime market came to a halt.

Global capital providers, having been burned, also stop funding any U.S. mortgages other than those with Fannie and Freddie backing. The jumbo loan market, therefore, struggles.

From mid-2007, a lack of market liquidity and economic slowdown forces the Fed to cut rates.

Conforming mortgage rates again fall to historic lows, but not jumbo loan rates.

The Fed has been and is further ready to make deeper cuts.
Going back to our earlier question: is the current action by the Fed simply trying to replay the same volatile game? The answer is an unambiguous NO. The same game is played out because the global capital providers will not be taken for fools again. After being burned, German mutual funds or the Chinese government or the Florida's teacher pension fund will no longer buy toxic subprime loans. Without the loans, homebuyers simply cannot enter the marketplace independent of their desires. We are back to the careful underwriting standards of verifying people's income, requiring escrow accounts, and back to thoroughly checking borrower's ability to repay the loan.

However, the current low interest rate policies of the Fed are a big help to housing because low rates can begin to furnish genuine potential homebuyers with the financial capacity to think seriously about becoming a homeowner. Furthermore, the rate cut is lessening the degree of forthcoming ARM resets, thereby lessening the burden the current subprime loan borrower faces. So the current policy of Ben Bernanke will help stabilize the housing market.

The Federal Reserve, however, should be mindful to not lower the fed funds rate too greatly. Inflation is expected to head lower in 2008 but too much money can fuel inflationary pressures. If that happens, 30-year mortgage rates will RISE, and therefore, choke off any housing recovery. A careful balance must be taken regarding how low to bring down the fed funds rate.

Though some in the blogosphere have figured Alan Greenspan as one of the key persons to blame for the current housing mess, I do not blame Mr. Greenspan. I believe there is plenty of blame to go around due to other factors. Global capital providers misunderstood and were simply not careful about purchasing securities composed on little income documentation and of risky-borrowers. Mortgage originators just originated loans to anyone including to suspicious borrowers because they had no skin in the game (see the recent academic article on this topic by a group of professors from the University of Chicago). There were also many books about how to endlessly profit from real estate. Consumers — particularly the flippers/speculators — also need to bear some of the blame.

But the biggest blame in my view goes to Moody's and Standard & Poor's — the rating agencies. If they had properly assessed the risk as is their job, then global capital would have never reached subprime homebuyers and flippers. The housing boom would have stopped dead in its tracks. We do not yet know how much of the ratings firms' assessment were clouded by their financial interest in giving out easy Triple-A grades. Many workers at Moody's and Standard & Poor's took home hefty bonus checks when revenue skyrocketed from providing high ratings.

It is also fine for people to point the finger at me. In a fast changing market conditions, I too have been off on my forecast. I knew that the boom was clearly unsustainable and I made the forecast in early 2007 that home prices were likely to experience a price decline on a national level for the first time since the Great Depression. The national median home price indeed fell by 1.4%. I believe I downgraded my forecast for ten or so straight months in 2007 as it was strongly pointed out to me. At the same time, the Blue Chip consensus forecast, comprised of about top 50 private forecasters, including forecasts by Merrill Lynch, Goldman Sachs, UCLA, and the like — had also downgraded the housing forecast by more than 20 straight months. Forecasting is never perfect. Forecasts are bound to be off but the forecaster's job is to make the best prognosis given the available information at the time. The readers should always view any forecast with caveat emptor.

But back to the original question: Will we experience a re-emergence of a housing boom from the current easy money policy by the Fed? The answer is no because as Abraham Lincoln said — fool me once, shame on you. Fool me twice, shame on me. It will be impossible to part global capital providers' money with another foolish investment.

Easing Your Children's Fears When Making a Move!

2008-02-19T08:35:00.000-08:00

Helping Your Children Move to Their New Home!

If you’re relocating to a new city, you should try to make the transition as smooth as possible for your children. The best thing you can do is to keep them informed. Even if you think they don’t care or won’t fully understand the details, keep them as informed as possible so they feel secure about the situation. Children understand much more than some of us give them credit for. Getting them on-board for the move will help to make the relocation less stressful for the whole family.

The greatest fear preschool children typically have is that they will somehow be left behind. If you need to leave your children for a short time to search for your new home or to orient yourself to the new location, reassure them that you will be back. It may help if you bring them back something from the new location. Consider assigning them a task to complete before you return, such as packing some of their toys in boxes. This will help them feel involved in the move.

Elementary children may fear how the move will disrupt their everyday lives. Take pictures of the new location and of spots that you know they will enjoy, such as parks and pizza parlors. If possible, take them to the new location before the move to let them get a first-hand feel for the place and take the mystery out of it. Nothing is scarier to kids than the unknown.

Teenagers may be worried about fitting in and making new friends at their new school. To help ease their fears, find out as much as you can about the high school they will be attending. Make special note of the local trends, sports teams and school clubs.

Again, if possible, visit the new town before the move and visit the school that each child will attend. Schedule a meeting with the principal and teachers before their first day of school. If you can’t do it before the move, make sure to do it as soon as possible after the move. Once your children start to make new friends, encourage them to bring their new classmates home to visit.

Play tourist in your new location. This is a great way to learn the area and makes the children feel like it is a vacation. It will take time to make new friends so the touring keeps them busy and less likely to dwell on the loss of old friends.

Ready to select a REALTOR®….I am here to help!

Jean Powers
Broker Associate, CRS, ASP, LTG, PMN, SRES
Windermere Welcome Home
510.908.9002
Toll Free: 800.378.7300

Successfully Serving Alameda Since 1984

Lenders singling out Specific Counties!

2008-02-18T19:30:00.000-08:00

San Francisco Chronicle
Kenneth Harney

Sunday, February 3, 2008

(02-03) 04:00 PST Washington -- Critics call it the new redlining: Many of the country's largest mortgage lenders are imposing loan restrictions in entire counties or ZIP codes that they rank as risky or "declining."

On Jan. 25, Countrywide Bank sent mortgage brokers a list that categorized hundreds of counties as "soft markets" with rankings from 1 to 5, in ascending order of perceived risk. In areas rated in categories 4 and 5 - roughly 100 counties in metropolitan areas nationwide - Countrywide said it will now require 5 percent larger down payments from most applicants. If a loan program previously allowed a minimum 5 percent down payment, now applicants will be required to come up with 10 percent to qualify.

An additional 970-plus counties are rated more-moderate risks, in categories 1 to 3, with 5 percent down payment increases if an appraisal report indicates there is an "oversupply" of houses for sale or a marketing time of more than six months.

Other national lenders have distributed their own proprietary "declining markets" lists. GMAC-ResCap of Minneapolis even has a Web site allowing loan officers to type in a ZIP code and instantaneously learn whether the company ranks the area a D, C or lower risk. Although the public is not supposed to see the site, one mortgage company executive provided me with an access link.

In late January, a ZIP code for McLean, Va., - a high-income, high-cost residential community and home of mortgage investment giant Freddie Mac - was rated a high-risk D. The upscale residential neighborhood in northwest Washington, D.C., where Fannie Mae, another mortgage investor, has its headquarters was rated at an elevated risk of C.

Ironically, restrictions imposed by Fannie Mae late last year have prompted lenders to compile area by area risk ratings and impose down payment penalties. In a notice to lenders on Dec. 5, Fannie Mae said all loans delivered after Jan. 15 of this year on properties located within "declining" areas would be subject to 5 percent higher down payment requirements. The company's own electronic underwriting system had begun flagging selected markets as high risk in summer. Fannie Mae also strongly encouraged lenders to use "supplemental" data sources to come up with their own risk-ratings by market area.

Critics say that imposing higher down payment standards or other penalties for applicants in an entire county, metropolitan area or ZIP code is unfair to homeowners and buyers whose properties are located in sub-markets or neighborhoods within those jurisdictions that may not be declining in value, or not by enough to justify punitive underwriting requirements.

Ted Grose, president of 1st Mortgage Advisors Inc. in Los Angeles, said labeling entire counties as "declining" is "ridiculous - it totally fails to distinguish between areas where prices are rising or relatively stable, and other neighborhoods or communities where they are not."

David Berenbaum, executive vice president of the National Community Reinvestment Coalition, a consumer advocacy group active in litigation against subprime mortgage companies, said that "sound underwriting has nothing to do with geography. It is based on the income and qualifications of the applicant, and the valuation of the property by a professional appraiser."

"Anything else," said Berenbaum, "runs afoul" of federal fair lending and civil rights statutes. "It is redlining."

Paul Skeens, head broker for Carteret Mortgage Corp. in Waldorf, Md., said he had observed that lenders' county and ZIP code designations "have their heaviest impacts on areas with high proportions of minority groups and people with moderate incomes who bought houses" with low and no-down payment programs during the first half of the decade.

Labeling these areas as "declining" and then imposing higher down-payment requirements "becomes a self-fulfilling prophecy," said Skeens. "People can't buy there because they need more cash up front, the houses don't sell, and prices go down."

In an interview, Brian Robinett, chief credit and operations officer for wholesale lending at Countrywide, vigorously rejected the criticism. Countrywide's risk-ranking list distributed Jan. 25, he said, is based on comprehensive data on prices, sales and other indicators spanning 12 to 18 months.

"It would be hard to make the case (of redlining) against" the company's ratings. After all, according to Robinett, a wide variety of property types, income levels and ethnic groups are "equally affected" by every risk ranking. He cited the Los Angeles area as an example, with "Beverly Hills on one extreme" and lower-income, more heavily minority communities within the county on the other.

The takeaway for the time being on this issue: If a major lender has tagged your ZIP code, county or entire metropolitan area with a scarlet letter - and they exist in virtually every state, including many in places generally assumed to have relatively healthy market conditions - you're going to need more cash up front. That will be the case even if the area risk designation has no real applicability to the house you hope to buy or finance.

Bay Area 'soft' markets
Countrywide Financial gave the following ratings to the nine Bay Area counties. The numbers mean the lender will likely require a larger down payment in Alameda, Contra Costa, Sonoma and Solano counties.

County Level
San Francisco 2
San Mateo 2
Santa Clara 2
Alameda 4
Contra Costa 4
Napa 3
Sonoma 4
Solano 4
Marin 2

E-mail Ken Harney at kenharney@earthlink.net.

This article appeared on page K - 8 of the San Francisco Chronicle

Critical Considerations When Purchasing a Home!

2008-02-17T19:07:00.000-08:00

Thinking about purchasing a home of your own? Keep these critical considerations in mind:

*How long you plan to live in the home? If you purchase a home and get a job transfer or decide to move after only a short time, you may end up paying money in order to sell it. The value of your home may not have appreciated enough to cover the costs that you paid to buy the home and the costs that it would take you to sell your home. The length of time that it will take to cover those costs depends on various economic factors in the area of the home. Most parts of the country have an average of 5% appreciation per year. In this case, you should plan to stay in your home at least 5 to 7 years to cover buying and selling costs. If the area you buy your home in experiences an economic up turn, the length of the time to cover these costs could be shortened, and the opposite is also true. *How long the home will meet your needs? What features do you require in a home to satisfy your lifestyle now? Five years from now? Depending on how long you plan to stay in your home, you'll need to ensure that the home has the amenities that you'll need. For example, a two-bedroom dwelling may be perfect for a young couple with no children. However, if they start a family, they could quickly outgrow the space. Therefore, they should consider a home with room to grow. Could the basement be turned into a den and extra bedrooms? Could the attic be turned into a master suite? Having an idea of what you'll need will help you find a home that will satisfy you for years to come.

*Your financial health - your credit and home affordability. Is now the right time financially for you to buy a home? Would you rate your financial picture as healthy? Is your credit good? While you can always find a lender to lend you money, solid lenders are more skeptical if your credit history is not good. Generally, a couple of blemishes on a credit report will make you a good credit risk and could qualify you for the lowest interest rates. If you have more than a couple of blemishes on your report, some lenders may still provide you with a loan, but you may just have to pay a higher interest rate and fees. Some say that you should refrain from borrowing as much as you qualify for because it is wiser not to stretch your financial boundaries. The other school of thought says you should stretch to buy as much home as you can afford, because with regular pay raises and increased earning potential, the big payment today will seem like less of a payment tomorrow. This is a decision only you can make. Are you in a position where you expect to make more money soon? Would you rather be conservative and fairly certain that you can make your payment without stretching financially? Make sure that whatever you do, it's within your comfort zone. *To determine how much home you can afford, talk to a lender or go online and use a "home affordability" calculator. Good calculators will give you a range of what you may qualify for. Then call a lender. While some may say that the "28/36" rule applies, in today's home mortgage market, lenders are making loans customized to a particular person's situation. The "28/36" rule means that your monthly housing costs can't exceed 28 percent of your income and your total debt load can't exceed 36 percent of your total monthly income. Depending on your assets, credit history, job potential and other factors, lenders can push the ratios up to 40-60% or higher. While we're not advocating you purchase a home utilizing the higher ratios, its important for you to know your options. *Where the money for the transaction will come from. Typically homebuyers will need some money for a down payment and closing costs. However, with today's broad range of loan options, having a lot of money saved for a down payment is not always necessary - if you can prove that you are a good financial risk to a lender. If your credit isn't stellar but you have managed to save 10-20% for a down payment, you will still appear to be a very good financial risk to a lender.

*The ongoing costs of home ownership. Maintenance, improvements, taxes and insurance are all costs that are added to a monthly house payment. If you buy a condominium or a townhouse, a monthly homeowner's association fee might be required. If these additional costs are a concern, you can make choices to lower or avoid these fees. Be sure to make your Realtor and your lender aware of your desire to limit these costs. If you are still unsure and want buy a home after making these considerations, you may want to consult with an accountant or financial planner to help you assess how a home purchase fits into your overall financial goals.

I am here to help!
Jean Powers Broker Associate, CRS, ASP, LTG, PMN, Windermere Welcome Home Please Remember ....I am never too busy for Your referrals! Successfully Serving Alameda County Since 1984

Economic Stimulus

2008-02-17T18:48:00.000-08:00

President Approves Higher Loan Limits: On Wednesday (2/13), President Bush signed the economic stimulus package that includes a temporary increase in the conforming loan limits for mortgages backed by the GSEs (Fannie Mae and Freddie Mac) and the FHA. The new loan limits could rise to $729,750 in high-cost regions.

According to NAR, more than 85,000 REALTORS® contacted their senators urging them to support the increased loan limits and to pass the stimulus package.

REALTOR® Impact: Higher loan limits will have a direct positive impact on REALTORS®. The policy change will allow more buyers (both first-time and move-up buyers) to access loans with lower interest rates. Currently, most home buyers in high-cost regions (such as the SF Bay Area) must finance their purchases with non-conforming "jumbo" loans. The interest rates on these loans can be up to one percentage point higher than those that fall within the current $417,000 limit. Higher rates mean higher payments which could keep potential buyers out of the market. Lower raters will make access to capital easier and provide the incentive for buyers to get off the fence and into real estate.

Next Steps: We may see new loan products as soon as late April or early May. According to sources at C.A.R., the Secretary of the U.S. Department of Housing and Urban Development will have up to 30 days to finalize the actual amount of the regional loan limits. Once the limits are set, Fannie Mae and Freddie Mac will need to update their procedures to reflect the changes. Shifting from a national loan limit to region limits is a major change for both Fannie Mae and Freddie Mac. Regardless, our sources tell us that both GSEs want to implement the new limits as soon as possible.

CAR is not sure when the FHA will respond. However, they may be able to implement the new limits quicker than the GSEs.

This report is compliments of Bay East's Governent Affairs Director David Stark!