Saturday, February 27, 2010
Many borrowers in default stay put live for free as lenders delay evictions
Despite being months behind, many strapped residents are hanging on to their homes, essentially living rent-free. Pressure on banks to modify loans and a glut of inventory are driving the trend.
Text Size  Patricia and Eugene Harrison, who bought their Perris home seven years ago, have lived there since October 2008 without making any payments on their mortgage. (Irfan Khan / Los Angeles Times / February 19, 2010)
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Medal-Worthy Olympic Homes
The homes of America's Winter 2010 Olympic athletes.For the last week or two, the magical mountains in Whistler, British Columbia have been home to the international posse of 2010 Winter Olympians. In just a few days, the athletes will pack up their Olympic dreams and medals and head home. ShelterPop thought it might be interesting to see where home is for a few of our favorite American athletes, who have achieved Olympic greatness in Vancouver. Here's what we found:
Apolo Ohno's Utah digs -- look at that manicured lawn! Photo: Everest Realty Group
Apolo Ohno
Olympic short track speed skater Apolo Ohno may have won the Dancing With the Stars reality TV competition in 2007, but his Olympic career will be his enduring and most impressive legacy. With his bronze medal win in the 1000m short track competition in Vancouver, the soul patch-sporting skating wunderkin became the most medal winning American Winter Olympic athlete of all time earning an undeniably impressive two gold, two silver and three bronze medals.
Presumably Ohno will keep and display his myriad and many Olympic medals at his home in South Jordan, UT, a bedroom community just south of Salt Lake City. Property records show that Ohno bought the suburban residence in July 2006 for an undisclosed amount of money and listing information shows the two-story brick-built traditional has four bedrooms and two and a half bathrooms in 4,467 square feet. Other features include a three-car garage, gourmet kitchen, and outdoor fireplace and a 21-speaker surround sound system.
An aerial view of Shaun White's home. Photo: Bing
Shaun White
Ginger-haired Shaun White grew up in Carlsbad on the balmy southern California coast. He went on to become a snowboarding superstar during the 2006 Winter Olympics in Turin, Itay when he won his first gold medal in the half-pipe competition. White sealed his fate as an Olympic legend during the 2010 games in Vancouver winning a second gold medal in the half-pipe competition.
When White comes down off the slopes, he heads home Rancho Santa Fe, CA, a super-swank suburb of San Diego. In August of 2006, according to property records, White spent $3,350,000 to scoop up a 5,226 square foot, single story Mediterranean in a gated community. The six bedroom and six and a half bathroom residence sits on nearly three acres and includes a four-car garage. Plus, the property boasts an infinity-edged swimming pool and an adjacent pool pavilion.
The condo complex where Shani Davis may live. Photo: Google Maps
Shani Davis
Although speed skater Shani Davis didn't win the 1,500 meter race at the 2006 or the 2010 Olympic games–he settled for a silver in both–he has well earned a seat at the table of great American winter Olympic athletes. In addition to setting a total of 8 world records Davis has earned two Olympic gold medals in the 1,000 meter competition, the first in Turin and the second just last week in Vancouver.
Davis trains in Wisconsin but grew up in Chicago where records seem to indicate* that in September of 2008 he forked over $269,000 for a modest condo in a brick-faced building in the Roger Park area that faces Lake Michigan.*The records are not entirely clear that this condo is owned by the Shani Davis of Olympic fame.
Exterior and interior views of Bode Miller's pad. Photos: Re/Max Mountain Properties
Bode Miller
In the 2002 Olympic games in Salt Lake City, American skier Bode Miller earned two silver medals. Hopes were high that he would better his Olympic achievements in the 2006 games. But alas, he failed to earn a single medal in Turin. Miller went on to give interviews that turned many of his fans off, telling reporters that he had a great time at the 2006 Olympics and that he, "got to party and socialize at an Olympic level."
Miller arrived at the 2010 games in Vancouver with a renewed vigor and a far less cocky attitude. The skiing demon redeemed his honor and reputation during the 2010 games and earned a place on the awards podium three times, winning a bronze, silver and gold medal.
http://www.shelterpop.com/2010/02/25/medal-worthy-olympic-homes/
Couple financially trapped in home
Q. My wife and I purchased a one-bedroom condo in Anaheim at the peak of the market in 2006 for $370,000. We have a first mortgage with Bank of America for $346,000 and a silent second with CalHFA for 12,500. Since our purchase our home has decreased in value and is currently worth $230,000 to $250,000. We never imagined living here for more than three years. Now that three years have passed there is no light at the end of the tunnel. My wife and I want to start a family but find it extremely difficult to do in an 800-square-foot condo. We are struggling with the fact that we are paying a mortgage on a home that has dropped over 30% in value. We have stable jobs and good income. We have been able to save a large portion of money over the last three years. In 2011 our first mortgage adjusts to principal plus interest and increases by about $500 a month. What can we do? We do not want to face foreclosure, and I am reluctant to use our life savings to cover the negative equity on our home if we sell. Are there any new programs we can work on with our lender to get out of this home?
A. I must say I feel for you and while I commend you for wanting to meet ethically the obligations you signed up for, it’s difficult to justify economically. It may be 2015 before your property has any equity in it at all, and it might be 2020 before it is worth $370,000 again.
Assuming for the moment that you are willing to hang in there for such an extended period of time, you can rent that property and buy another home to meet your needs. It comes with conditions. Other people have done this and when they get the loan on their new home, they just walked away from the old home and the old loan. You can imagine that the lenders aren’t thrilled with this. So here are the rules.
Either you prove that you have at least 30% equity in the old home that will become an investment property. You obviously cannot do that so the other way to is to be able to qualify for the loan payment, taxes, and insurance or HOA dues on BOTH properties without credit for any rental income.
You say you have saved a sizeable amount of money so perhaps you have sufficient income to do this. I hope so. Good luck.
AlmostDesperate in Mission Viejo asks:
Q. I have a 1st mortgage with a balance of about $165,000 and rate of 5.25% fixed with Bank of America. The loan is a 20-year loan with about 14 years left to pay. I also have a line of credit balance (interest only) of about $245,000 with an adjustable interest rate (currently 2.99%) with Citibank. My home in Mission Viejo has a current value of about $600,000. I am 51 years old, currently unemployed and feeling the financial pinch. Am I a candidate to refinance to obtain a lower overall payment? Is it a good idea? I have made all my payments and maintain a fico credit score above 750.
A. With some prospects for rising interest rates in the next few years, it would make sense to get that adjustable line of credit fixed by combining the 1st and 2nd into a new fixed-rate loan. However, because of your unemployed status you will not be able to do that now. You have to have the income to qualify for the loan. With rates low right now you are in reasonable shape but I would move to refinance as soon as you find new employment. Note that the monthly payment on the proposed loan would actually increase. The line of credit is now interest-only while the new loan would, almost surely, be fully amortizing.
Friday, February 26, 2010
LeCave, Costa Mesa.......almost Newport , at 17th st
Big nite, singing to Neil Diamond and Frank Sinatra....all nite..http://www.lacaverestaurant.com/
Looking Twice at Overpriced Homes
The number one reason why an otherwise attractive home does not sell is price. Homes that are grossly overpriced often never sell at all. Why? Because home buyers don't make offers on them.
Why Don't Home Buyers Make Offers on Overpriced Listings?
- They don't want to offend the seller. It goes against human nature to offer substantially less than asking price to a seller. It's insulting to the seller and embarrassing for the buyer.
- Buyers erroneously believe that the seller knows the home is overpriced. They believe that if a seller would be willing to sell for less, the seller would simply lower her price.
- Buyers also assume that the seller must have turned down low-ball offers from other buyers because surely someone, somewhere along the line, had offered a reasonable price to the seller. But many times, there are no offers at all.
How Do You Find an Overpriced Listing?
The easiest way is to ask your Realtor about the average days on market (DOM) for your area. Multiple listing systems are designed so it's fairly easy to compute the DOM. Then ask your Realtor to sort through the listings and give you a print-out of every home that has been on the market longer than the average DOM.If your Realtor is a neighborhood specialist, it is likely she has toured these homes and has intimate knowledge of condition and layout of these homes. Ask her to share this information with you. You can also ask your Realtor which of the homes she thinks are overpriced as well. You will be amazed to learn that often agents don't tell listing agents whether their listings are overpriced because agents don't want to offend anyone either! But listing agents aren't infallible. Sometimes they make mistakes when estimating market value prices for a seller. Ultimately, however, remember that it is always the seller's responsibility to select the sales price.
Why Would a Seller Lower the Price?A couple who bought the house you see pictured on this page at first wondered the same thing. That home sat on the market at an asking price of almost $950,000 for three months. In a hot market seller's market, it probably could have sold for about $800,000, but the market was softening and demand was decreasing. Moreover, the sellers had moved out of the area, leaving the home vacant. The listing agent was unaware that the home was overpriced. The sellers were motivated. Pointing out market conditions to the seller, this couple was able to negotiate a deal to buy the home for about $400,000 less than list price. Their contract was the only offer on the table while the sellers' clock was ticking. To make the offer more attractive to the sellers, the buyers did not include the sale of their existing home as a contingency. They offered the seller a sizable earnest money deposit to show that they meant business. And they also showed the seller a list of homes that sold in the neighborhood at more reasonable prices.Now, not every home that is overpriced will ultimately sell for less than market value. But many homes that are listed at unrealistic prices are owned by sellers who are motivated and who are willing to listen to reasons why they should sell at a reduced price to you. If you find out that a seller has turned down multiple offers for less money, it might mean that it's just a matter of timing. Eventually the light bulb will go on and a seller will say yes. There are overpriced gems hiding among the inventory of homes for sale every day. Don't just pass them by. You could be passing up an opportunity to buy your dream home.Interesting Side Note: After this transaction closed and the final sales price was published, an irate buyer who had previously seen this home called the listing agent. She was upset and complained, saying if she had known the seller was willing to go that low, she would have bought the house and offered $100,000 more. Well, why didn't she?
http://homebuying.about.com/od/homeshopping/a/Buyoverprice.htm
Looking Twice at Overpriced Homes
It's Not Always a Physical Defect that Drives Away Homebuyers
This Home Sold Under Market
Common knowledge dictates that if a home doesn't sell, there must be something wrong with it. That's a true statement. In a market that is moving, there is something wrong with a home that doesn't sell. But contrary to popular belief, it's not always location or condition.
The number one reason why an otherwise attractive home does not sell is price. Homes that are grossly overpriced often never sell at all. Why? Because home buyers don't make offers on them.
Why Don't Home Buyers Make Offers on Overpriced Listings?
- They don't want to offend the seller. It goes against human nature to offer substantially less than asking price to a seller. It's insulting to the seller and embarrassing for the buyer.
- Buyers erroneously believe that the seller knows the home is overpriced. They believe that if a seller would be willing to sell for less, the seller would simply lower her price.
- Buyers also assume that the seller must have turned down low-ball offers from other buyers because surely someone, somewhere along the line, had offered a reasonable price to the seller. But many times, there are no offers at all.
How Do You Find an Overpriced Listing?
The easiest way is to ask your Realtor about the average days on market (DOM) for your area. Multiple listing systems are designed so it's fairly easy to compute the DOM. Then ask your Realtor to sort through the listings and give you a print-out of every home that has been on the market longer than the average DOM.If your Realtor is a neighborhood specialist, it is likely she has toured these homes and has intimate knowledge of condition and layout of these homes. Ask her to share this information with you. You can also ask your Realtor which of the homes she thinks are overpriced as well. You will be amazed to learn that often agents don't tell listing agents whether their listings are overpriced because agents don't want to offend anyone either! But listing agents aren't infallible. Sometimes they make mistakes when estimating market value prices for a seller. Ultimately, however, remember that it is always the seller's responsibility to select the sales price.
Why Would a Seller Lower the Price?A couple who bought the house you see pictured on this page at first wondered the same thing. That home sat on the market at an asking price of almost $950,000 for three months. In a hot market seller's market, it probably could have sold for about $800,000, but the market was softening and demand was decreasing. Moreover, the sellers had moved out of the area, leaving the home vacant. The listing agent was unaware that the home was overpriced. The sellers were motivated. Pointing out market conditions to the seller, this couple was able to negotiate a deal to buy the home for about $400,000 less than list price. Their contract was the only offer on the table while the sellers' clock was ticking. To make the offer more attractive to the sellers, the buyers did not include the sale of their existing home as a contingency. They offered the seller a sizable earnest money deposit to show that they meant business. And they also showed the seller a list of homes that sold in the neighborhood at more reasonable prices.Now, not every home that is overpriced will ultimately sell for less than market value. But many homes that are listed at unrealistic prices are owned by sellers who are motivated and who are willing to listen to reasons why they should sell at a reduced price to you. If you find out that a seller has turned down multiple offers for less money, it might mean that it's just a matter of timing. Eventually the light bulb will go on and a seller will say yes. There are overpriced gems hiding among the inventory of homes for sale every day. Don't just pass them by. You could be passing up an opportunity to buy your dream home.Interesting Side Note: After this transaction closed and the final sales price was published, an irate buyer who had previously seen this home called the listing agent. She was upset and complained, saying if she had known the seller was willing to go that low, she would have bought the house and offered $100,000 more.
http://homebuying.about.com/od/homeshopping/a/Buyoverprice.htm
3 things to know before you buy a house
This week I interviewed Grant Cardone, author, international speaker, CEO and founder of multiple businesses including a real estate 
3 things to know before you jump into the market
“The property either makes sense, or it doesn’t. It shouldn’t have to make sense tomorrow; it has to make sense today. You shouldn’t have to calculate some expectation in the future,” Cardone says.
Some people argue that now is the right time to buy due to historically low interest rates, but Cardone says that interest rates should have nothing to do with the purchase of a house. If you are able to buy a property and this is the right time for you, that should be the driving reason behind the purchase.
“If people would have done that (bought when the property made sense for them) over the past five years, half the people wouldn’t have bought homes.”
And, when buying a home, cash flow has to be positive, Cardone says.
The third tip? “Don’t buy the house, buy the location,” he says.
Cardone just invested in 19 units of oceanfront condominium space in La Jolla that he intends to fix up. Even in the worst of times, he says, people will always buy in that particular location.
The home itself doesn’t matter as much as the location, he says. Updates and remodels can always be made.
“If a guy was looking at the Strand, I promise you there’s 100 feet in that area that is more desirable than all the footage (in the community), Cardone says. “It’s the difference between being on the corner to being 12 houses to the middle of the neighborhood.”
If you want to make a smart investment, Cardone suggests finding the home you want and doing ‘homework’ on every house on the street to study sales prices, which homes had how many bids, etc.
“You need to make sure that you can sell that property in any kind of market,” he says.
Cardone followed his own advice with his current residence in Hollywood. “The lot has always commanded the highest money in this neighborhood.”
Living nextdoor to Leonardo Dicaprio, you can imagine how desirable Cardone’s neighborhood is. But he still sought out the most profitable property.
In fact, he outbid Ben Affleck on his home, Cardone says.
“Even when times are difficult, if you have a property that is highly desirable and truly irreplaceable you will have a person that will say ‘I will pay up for that.’”
Real estate as an investment
“A home should not be considered a way to make money. It is not a way to make money. That was true for our parents who lived in their homes for 30 years.”
People were saving money then, Cardone says. Homeowners who live in their homes for only seven years, he says, aren’t saving money. Thinking of real estate as a ‘get rich quick’ deal is “a mistake that millions of people made over the last couple years,” he says.
Taking a look at coastal Orange County 20 years ago, Cardone says no one wanted to buy real estate. “If you bought then and still have the house now, you’re a big winner. You want to buy when other people don’t.”
Always think in terms of selling
“People don’t need to think in terms of buying, they need to think in terms of selling,” he says. In order to get the deal you want, Cardone says that you have to sell yourself as a buyer with your offer, you have to sell the bank on your offer, sell your family and friends on investing with you and lastly sell the seller on accepting your offer.
He says that those cringing over job-loss numbers and dreary housing stats need to see their opportunity if they are in a position to buy real estate.
“The bad news is your friend right now. You just need guts and a long-term view. It’s a marathon, not a sprint.”
http://lagunahomes.freedomblogging.com/2010/02/26/3-things-to-know-before-you-buy-a-house/1189/
Patrick and Tanner Gudauskas ready to ride crest of their sport
San Clemente siblings are set to start rookie season on Assn. of Surfing Professionals' World Tour, which boasts top 45 wave riders. Southland's Nathan Yeomans and Brett Simpson will join them.
 The pro surfing Gudauskas brothers of San Clemente -- (from left) identical twins Dane and Pat and younger brother Tanner -- at the Riviera tunnel near their local break. (Allen J. Schaben, Los Angeles Times / February 11, 2010)
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Home Shoppers, homes in 12 cities head to repo auction
First, in recent foreclosure news:
- Freeze Frame: O.C.’s distressed home sales (How is your city, price range, doing?)
- Warning: Avoid new ‘phony’ repo relief pitch
- Short sale process is ‘absolute crapshoot’
Every week, homes throughout Orange County go to foreclosure auctions. The owners can be millions of dollars in debt, 
Often these homes revert to the lenders, who eventually put them back on the market. Sometimes the homes are bought by investors and resold.
Foreclosures affect more than the homeowners involved. They can impact entire neighborhoods. At the very least, they can affect nearby home sales.
All of these homes and addresses have been listed in the public notices, as required by law.
For auction info, click on city:
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Read more:
Recycle Your Gear to Help Combat Global E-Waste
Feb 23, 2010 9:41 am
The UN says global e-waste is growing by about ......http://bx.businessweek.com/e-waste/view?url=http%3A%2F%2Ffeeds.pcworld.com%2Fclick.phdo%3Fi%3D46623db30e6ffd3ccb6619f32de86157
Better to Wait Until Home Buyer Tax Credit Expires?
The home builders and Realtors are jazzed for the home buyer tax credit’s remaining weeks. It’s tempting for home buyers to get caught up in the hype. But perhaps you’re better off waiting?
In case you missed the news, the federal government will give you money if you buy a house–$8,000 for first-time buyers and up to $6,500 for current homeowners within certain price and income limits. The benefit covers buyers who enter into contracts before April 30 and close by June 30.
Over at Zillow’s Blog, they’re debating a Denver reader’s question: “It it better to buy now or wait until the credit expires?” He explains that competition is heated in his price range of below $150,000 in Denver and wonders if that will ebb after April.
Answers are mixed. One commenter says that prices will fall after the credit expires: “I’ve seen prices in my neighborhood jump up over $30k since the credit started,” he writes. Indeed, some analysts have argued that the benefit of the tax credit has been priced into the market and that by stimulating demand, home sellers have been able to hold off on steeper price cuts. When the credit expires, the thinking goes, home prices could fall a bit to compensate.
Others tout low mortgage rates. As we’ve written, these historically low rates may rise in the months ahead as the Fed pulls back on its mortgage purchase program–or they may not. Chances are fair that the Fed extends the program. One fellow, with the handle “NYC condos,” writes “I truly wish this meant more in Manhattan.” (Ed. note: Us, too!)
Of course, every market’s different. In Las Vegas there’s a flood of investors (with cash) who are scooping up “bargain-priced” foreclosed homes, as James R. Hagerty wrote this week. Inventory is shrinking and competition for these homes is heated, making it tough to find something to buy. One renter says he’s been outbid eight times trying to get a house. It doesn’t look likely that the credit’s expiration will quell the frenzy.
Readers, are any of you waiting out the tax credit in the hopes that prices will fall further?
Thursday, February 25, 2010
Fire Proof Foam Insulation: Peace of Mind with Lower Energy Bills
Green Talk Podcasts
Turning the Planet, Green One Conversation at a Time
Are you part of the Conversation?
Note: post has been updated as of 2/15/2010 due to conversation with Keene Christopher, CEO of AirKrete.
The other day as I was sitting around of table of women at a Super Bowl Party, one of the women commented on how cold this particular winter has been Quickly the conversation turned to how cold their own houses were and the cost of their utility bills. Some were wearing bulky clothing and keeping their homes quite chilly to keep their bills in check. So, I wondered, have you seen your own energy bill soar in the last couple of years?
As many of my loyal Green Talk readers know, I have written extensively about how to button up those air leaks in your house especially in your attic. But sometimes, simply caulking is not enough when you don’t have adequate insulation in your attic, crawlspace or walls.
I am fascinated about different types of insulation, and have been particularly interested about AirKrete, for sometime. This product has been around for over 25 years.
During a recent green exhibition, I interviewed New Jersey AirKrete installer, Fabio Alberti of Alberti Insulation, about the attributes of the product. I urge you to listen to the above short podcast. It is really quite informative.
What is AirKrete? According to Alberti, it is a cementitious foam insulation comprised of Portland cement high quality magnesium oxide (MgO) cement, ceramic talc, water, and a foaming agent. The Company states that the product is fire proof and mold resistant, and free of formaldehyde, CFCs, asbestos, and all other carcinogenic fibers. It does not off-gas.
In addition, it has an R factor of 3.9 per inch and completely fills all the nooks and crannies within a wall cavity. It does not expand within the cavity like foam, so there is no worry that it will blow out the wall. (See the Material Data Safety Sheet here as well as independent tests and approvals authenticating the Company’s claims.)
According to Alberti, the main difference between ordinary foam and Airkrete is that AirKrete is 100% fireproof rather than containing a flame retardant ingredient. In the event of a fire, AirKrete foam will not burn or create smoke.
As to cost, Kristopher stated a board foot (12″ by 12″ by 1″) on average costs the same as 1/2 lb polyurethane foam. New Jersey based Alberti states that a typical AirKrete installation would cost 20% more than the installation of foam, but would be 40-50% more effective than foam (depending on the installation) since it does not shrink from its original installed state. He claims foam, on the other hand, shrinks.
How is the product installed? Watch the above video. The product fills the walls like other foam applications and cures within a few days. It is ideal for new construction and can be added to existing homes. The beauty of the product, according to Alberti, is left over product could easily be disposed of in your garden.
During my conversation with Alberti, I was impressed that AirKrete could be installed through an exterior wall so less damage would be done to the interior walls of your home. He explained it is the only insulation that can be installed from the exterior as well as through brick veneer.
So, is it really fire proof? The above video shows a penny being burned on top of AirKrete. The foam does not burn. The Penny…well, it did not do as well.
The Company does not maintain a list of installers on their website. If you are interested in AirKrete, simply contact the Company through their email address and they will furnish you with the name of a local installer.
A couple of caveats about the product. While I was writing this article, I thought all types of cement are the same. Creating Portland cement is a heavily embodied energy process. According to the Material Resource Institute at Penn State,
“Concrete is, by volume, the most common manmade material in the world, with 2 ½ billion tons poured each year. In the process of making Portland cement, a main component of concrete, one ton of CO2 is released into the atmosphere for each ton of cement produced, accounting for 7 percent of manmade global emissions.” [Source]
However, what makes AirKrete different is that it is made out of Magnesium Oxide not Portland Cement. According to George Swanson, in his article, “ Magnesium Oxide, Magnesium Chloride, and Phosphate-based Cements,”
“Depending upon where they are mined, magnesium oxide and magnesium oxide/magnesium chloride cements require only 20%-40% of the energy required to produce Portland cement.”
Swanson’s article is a must read, comprehensive look at the use of Portland Cement versus magnesium oxide and magnesium chloride cement. Most notably, he explained the health benefits of using magnesium oxide and magnesium chloride cement to Portland Cement.
Inevitably, with greener products, you have to pick your poison. Foam insulation, on the other hand, contains polyurethane, a petroleum based product, which environmentalists have argued depletes a dwindling natural resource.
One caveat about the product. Alex Wilson, founder and executive editor of BuildingGreen, LLC in Brattleboro, Vermont, who I admire very much, wrote in his September, 2009 article entitled “Foam-In-Place Insulation,” that there were few trained installers and it may be more expensive to hire one that was far away from your area. In my situation, Alberti covers New Jersey, and he is reasonably close to me. Like Alex stated, installing AirKrete may not be so easy for you in your area. Christopher confirmed this issue but stated more and more installers are coming aboard.
In addition, Wilson states,
“Other than availability, the biggest problem with Air Krete is that the cured foam is fairly fragile; if exposed to frequent vibration, such as along a busy highway, the foam can begin to disintegrate, reducing its performance. The manufacturer is working to solve this problem.”
Top 5 Reasons Banks Reject Short Sale Offers
Short Sale List Prices
The list price of a short sale home generally has very little bearing on the actual price a bank may accept. The list price may be too high to attract an offer or too low for the bank to accept. Some agents advertise short sales at unbelievable prices, in hopes a buyer will be enticed to submit an offer. Moreover, just because the seller may accept the offer does not mean the bank will agree to take a short sale.
Short Sale Definition
Short sales happen when a bank agrees to accept less than the amount of the mortgage the seller owes to the bank. The property may be encumbered by two loans or one loan. If it has two loans, both lenders must agree to accept a short sale.
Why Banks Reject Short Sales
Banks demand a plethora of documentation before approving a short sale. Contrary to popular belief, sellers do not need to be in foreclosure or have fallen behind in making mortgage payments, for a short sale to occur. Here are reasons that banks turn down short sale requests:
- Short Sale Offer Price is Too Low
Banks will request an appraisal, sometimes several appraisals, and may also order a BPO. When the listing agent submits the short sale offer, the agent should also include a comparative market analysis that justifies the price in the short sale offer. If the bank believes it can make more money by taking the property through foreclosure proceedings, the bank will reject the offer.
Tip: Be prepared to argue with a rejection and show comparable sales that support the short sale offer price.
- The Short Sale Package is Incomplete
Ask any short sale specialist and you'll hear horror stories of how banks lose documentation. In some cases, it doesn't matter how many times the package is expressed overnight or faxed, the bank might misplace it. Worse, an important document might not be in the file, and without every single required document, the sale will not be granted.
Tip: Ask the bank for a list of documents, make copies, and send complete packages.
- The Seller Does Not Qualify
If the seller is asking for debt forgiveness, the bank will want to see a hardship letter from the seller that explains why the seller cannot afford to pay back the shortfall difference. Sellers who have tapable assets are at a disadvantage if the sellers are unwilling to work out a repayment plan with the bank.
Tip: Prepare a hardship letter, profit and loss statement and monthly budget that show the seller has little or no assets and no disposable income.
- The Buyer Does Not Qualify
A desire to buy a home and the financial means to afford a mortgage payment does not mean a buyer qualifies to buy a home. A buyer's lender will examine credit history, length of time on the job, debt ratios, and a host of other criteria to determine a borrower's qualifications. To gain credibility with the seller's bank, buyers need to submit a loan prequalification letter along with the offer, but a loan preapproval letter carries more weight.
Tip: Send a preapproval letter and a copy of a sizeable earnest money deposit that adequately reflects the buyer's ability to obtain a mortgage and intent to close the transaction.
- The Bank Sold the Loan
Sometimes, the bank won't realize it no longer holds the mortgage on the property until many months have passed by during short sale negotiations. If the bank has sold the mortgage to another lender, the bank has no authority to approve a short sale because it has released the asset. Although the seller may continue to receive statements from the bank, the bank might be servicing the loan but not own it.
Tip: Ask the title company to check the public records for an assignment of deed of trust or other documents that reflect the loan has been sold. Redirect your short sale package to the new lender.
http://homebuying.about.com/od/shortsale/a/100108_RejectSS.htm
Top 5 Reasons Banks Reject Short Sale Offers
Banks Reject Short Sales for Basic Reasons
Unless the bank has agreed upfront to accept a short sale, which is rare, no one knows for certain -- not the buyer's agent, not the listing agent nor the seller -- if a short sale offer will be accepted or rejected by the bank. Simply because a listing is advertised as a short sale does not mean it is a short sale. It means the listing agent and seller hope it will sell as a short sale and the bank will take the offer.
Short Sale List Prices
The list price of a short sale home generally has very little bearing on the actual price a bank may accept. The list price may be too high to attract an offer or too low for the bank to accept. Some agents advertise short sales at unbelievable prices, in hopes a buyer will be enticed to submit an offer. Moreover, just because the seller may accept the offer does not mean the bank will agree to take a short sale.
Short Sale Definition
Short sales happen when a bank agrees to accept less than the amount of the mortgage the seller owes to the bank. The property may be encumbered by two loans or one loan. If it has two loans, both lenders must agree to accept a short sale.
Why Banks Reject Short Sales
Banks demand a plethora of documentation before approving a short sale. Contrary to popular belief, sellers do not need to be in foreclosure or have fallen behind in making mortgage payments, for a short sale to occur. Here are reasons that banks turn down short sale requests:
- Short Sale Offer Price is Too Low
Banks will request an appraisal, sometimes several appraisals, and may also order a BPO. When the listing agent submits the short sale offer, the agent should also include a comparative market analysis that justifies the price in the short sale offer. If the bank believes it can make more money by taking the property through foreclosure proceedings, the bank will reject the offer.
Tip: Be prepared to argue with a rejection and show comparable sales that support the short sale offer price.
- The Short Sale Package is Incomplete
Ask any short sale specialist and you'll hear horror stories of how banks lose documentation. In some cases, it doesn't matter how many times the package is expressed overnight or faxed, the bank might misplace it. Worse, an important document might not be in the file, and without every single required document, the sale will not be granted.
Tip: Ask the bank for a list of documents, make copies, and send complete packages.
- The Seller Does Not Qualify
If the seller is asking for debt forgiveness, the bank will want to see a hardship letter from the seller that explains why the seller cannot afford to pay back the shortfall difference. Sellers who have tapable assets are at a disadvantage if the sellers are unwilling to work out a repayment plan with the bank.
Tip: Prepare a hardship letter, profit and loss statement and monthly budget that show the seller has little or no assets and no disposable income.
- The Buyer Does Not Qualify
A desire to buy a home and the financial means to afford a mortgage payment does not mean a buyer qualifies to buy a home. A buyer's lender will examine credit history, length of time on the job, debt ratios, and a host of other criteria to determine a borrower's qualifications. To gain credibility with the seller's bank, buyers need to submit a loan prequalification letter along with the offer, but a loan preapproval letter carries more weight.
Tip: Send a preapproval letter and a copy of a sizeable earnest money deposit that adequately reflects the buyer's ability to obtain a mortgage and intent to close the transaction.
- The Bank Sold the Loan
Sometimes, the bank won't realize it no longer holds the mortgage on the property until many months have passed by during short sale negotiations. If the bank has sold the mortgage to another lender, the bank has no authority to approve a short sale because it has released the asset. Although the seller may continue to receive statements from the bank, the bank might be servicing the loan but not own it.
http://homebuying.about.com/od/shortsale/a/100108_RejectSS.htm
Best Training for Surfing?
Well, besides just going out and surf alot.....
I personally believe the best training for a sport is the sports it self. There is nothing really that compares or feels the same as surfing. The bottom line is that the more you surf the better you get at it. But If you cant get to the ocean here are my recommendations for preparation for surfing.
Yoga
Yoga is less stress on the joints and actually works on some of the similar muscle structures that is useful for surfing. Core strength is very important to surfing because you are constantly pulling and turning your mid section. Your power and speed comes from the stomach muscles and yoga is especially good to target those muscle groups. I would recommend to get yoga for surfers the video. You can cell some clips on you tube or go to get the CD or books.
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Indo Board:
Indo boards are fun and can be quite a good surf trainer. You can pick one for really cheep and it will help your balance skills!
Here is a video:
$100 million reported lost in OC real estate fraud
Investigators search Ladera Ranch home
More than 1,000 victims have lost more than $100 million in cases of real estate fraud referred to a special unit of the Orange County District Attorney’s Office, a report from the DA states.
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“The number of referrals has been overwhelming, with more than 346 referrals to date,” says the report, an update on the special unit approved last year. ”The vast majority of referrals have been direct from victims or real estate professionals to the District Attorney’s Office.”
A “significant number” of cases involve loan modification schemes.
Several cases were cited, including one in which 3 men were charged with 101 counts of real estate fraud in a loan mod scheme that “generated millions of dollars in boiler room loan modification receipts. Victims lost their homes to foreclosure after paying up-front fees.”
The report by the numbers:
Referrals to the DA of suspected real estate fraud: 346 +
Referrals from county Clerk-Recorder: 16
Investigations received from law enforcement agencies: 17
Filed criminal cases: 29
Cases rejected for filing: 30
Cases referred to other state or federal agencies: 12
Convictions: 14
Victims in referred/investigation/filed/refused cases: 1,000 +
Total money loss in referred cases: Exceeds $100 million
Want to report a case to the DA’s office? Go to orangecountyda.com.
We’ll do updates in the coming weeks and months on cases going to trial.
More on real estate crime:
Wednesday, February 24, 2010
Cucina Alessa , Newport Beach California
Where there is no wine, there is no love" - - Euriphid
What's Italian food without the wine? Cucina Alessa without company and conversation? Came here for a monthly dinner out with friends. Hubby ordered the Conchigle Gamberi E Asparagi which was seashell pasta with shrimp and asparagus tossed in lobster cream sauce. I started off with just a side salad. Garden greens with pepper. For my entree, I had ordered off the Chef's menu and hooked myself a Lobster ravioli. A creamy ravioli stuffed with lobster and smothered with lobster cream sauce. I had paired my dish with a couple glasses of the Zenato Ripassa wine, which is a velvety deep red which is just smooth down the palate. I was also fortunate to try the buttery nut squash ravioli too. Mmm, heaven sent as well. A vegetarian dish that is just as creamy as can be. From the appetizers, entrees, desserts and wine I cannot complain. Cucina Alessa is a definite do-over!With true Italian chefs, a hostess from Italy, good wine, great food and even better company, my time at Cucina Alessa was worth every penny. A true little Italian gem right here in Orange County. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~5/5 Ambiance - The mood, character, quality, tone, atmosphere.
4/5 Service - Helpful, accommodating, efficient, delivery and speed?
4/5 Food / Merchandise - Quality, taste, presentation.
4/5 Price - Reasonable, inexpensive, high priced?
(Based on Irma's review rating rubric - http://static.px.yelp....
We were there as well last sat nite, great company and excellent service and food, go there!
Fraud Didn't Cause Housing Meltdown
The financial crisis was the result of home buyers’ rational reactions to misaligned incentives – not fraud, argues Todd Zywicki, a George Mason University law professor and a Mercatus Center senior scholar.
Zywicki, who has studied the financial meltdown, argues that taking out a risky bank loan looks like a foolish choice today, but at the height of the housing boom was actually a smart decision for many people. He says the crisis began when the Federal Reserve pushed interest rates to extreme lows from 2001 to 2004, making adjustable rate loans very attractive. It wasn’t until the Fed pushed rates back up that people walked away from their loans.In the next phase of the crisis, Zywicki says, the availability of foreclosed properties pushed down home prices, which led to more home owners walking away from their properties. Now in the current phase of the decline, unemployment has led to even more foreclosures.Zywicki writes: “The problem isn't consumer gullibility or ignorance. Borrowers have shown they understand, and act on, the incentives they face all too well.”Source: The Wall Street Journal, Todd Zywicki (02/19/2010)
Home purchase loan demand at lowest since 1997
W YORK (Reuters) - U.S. mortgage applications fell for a third straight week, with demand for home purchase loans sinking to the lowest level in A continued drop in demand for purchase loans, a tentative early indicator of home sales, would not bode well for the hard-hit U.S. housing market, which remains highly vulnerable to setbacks and heavily reliant on government intervention.
The Mortgage Bankers Association reported an 8.5 percent decline in its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended February 19.
The four-week moving average of mortgage applications, which smoothes the volatile weekly figures, was up 1.6 percent.
The MBA's seasonally adjusted purchase index fell 7.3 percent, the lowest level since May 1997.
"As many East Coast markets were digging out from the blizzard last week, purchase applications fell, another indication that housing demand remains relatively weak," Michael Fratantoni, MBA's vice president of research and economics, said in a statement.
"With home prices continuing to drift amid an abundant inventory of homes on the market, potential homebuyers do not see any urgency to lock in purchases," he said.
The MBA's seasonally adjusted index of refinancing applications decreased 8.9 percent.
The refinance share of mortgage activity decreased to 68.1 percent of total applications from 69.3 percent the previous week. The shares of adjustable-rate mortgages, or ARM, increased to 4.7 percent from 4.4 percent the previous week.
A rise in rates may have played a role. Interest rates on mortgages typically play less of a role in home purchase loan demand than in refinancing activity.
The MBA said borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 5.03 percent, up 0.09 percentage point from the previous week.
That is above the all-time low of 4.61 percent set in the week ended March 27, 2009, but below the year-ago level of 5.07 percent. The survey has been conducted weekly since 1990.
"Demand is waning due to rising mortgage rates and the fear that rates will move higher after March 31," said Alan Rosenbaum, president of Guardhill Financial, a New York-based mortgage banker and brokerage company.
Mortgage rates are expected to rise when the Federal Reserve stops buying mortgage-related securities at the end of March.
The MBA said fixed 15-year mortgage rates averaged 4.35 percent, up from 4.33 percent the previous week. Rates on one-year ARMs increased to 6.80 percent from 6.67 percent.
The lowest mortgage rates in decades and high affordability helped the hard-hit U.S. housing market find some footing in 2009 after a three-year slump.
More key insight into the state of the housing market will emerge on Wednesday when the U.S. Commerce Department releases January new U.S. single-family home sales data.
Jumbo mortgage market is beginning to thaw
The meltdown sent interest rates soaring and availability shrinking, but rates are declining and lenders are more willing to make loans that top the limits for Freddie Mac, Fannie Mae and the FHA.
 The lower rates and somewhat easier terms for jumbo mortgages reflect newfound confidence among banks in the housing market. Above, a house for sale in San Francisco. (Justin Sullivan / Getty Images / January 26, 2010)
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- Phil Kelly had 18 more months to go before the fixed rate on his $2.5-million mortgage became adjustable.But when Kelly, a former computer executive living in Rancho Santa Fe, learned he could knock his interest rate down by a full percentage point by refinancing, he went for it."It's always tough to pick the exact bottom or top of anything," Kelly said. "But I think this rate is about as low as you're going to get."Rates on jumbo mortgages -- loans of more than $729,750 in counties with the highest-cost housing -- shot up during the financial crisis as lenders and loan investors shunned anything tainted with even a whiff of higher risk. Rates on big mortgages were especially high relative to those on smaller loans.But in a boon for borrowers in California's expensive housing markets, the jumbo-loan market is starting to return to normal.Two weeks ago, the average interest rate on 30-year fixed-rate jumbos dropped to 5.79%, a nearly five-year low, according to rate tracker Informa Research Services of Calabasas. It edged up to 5.88% on Tuesday, still very attractive by historical standards. The average is down from well above 7% in late 2008.Rates are even lower on so-called hybrid adjustable mortgages, on which the rate is fixed for, say, five years and then adjusts annually. Kelly's new loan is a five-year hybrid adjustable identical to his old one, except that he's paying about 5%, down from 6%.Banks are also relaxing slightly some of their requirements for jumbo loans. That's an encouraging sign because the market for jumbos, in contrast with the rest of the mortgage business, isn't being propped up by Uncle Sam.The lower rates and somewhat easier terms reflect newfound confidence among banks in the housing market. That's because, by definition, jumbos are too big to be bought by Freddie Mac and Fannie Mae or to be insured by the Federal Housing Administration. Plus, the private market for mortgage-backed bonds dried up when the meltdown hit. So lenders making jumbo loans these days must be willing to take the risk of keeping them in their portfolios.The maximum amounts for Freddie Mac and Fannie Mae "conforming" mortgages, and for FHA mortgages, are set by Congress. The cutoff for single-family homes was $417,000 from 2006 until February 2008, when lawmakers increased it temporarily to $729,750 in certain high-cost areas, including Los Angeles, Orange and Ventura counties. Conforming loans top out at $500,000 in Riverside and San Bernardino counties and $697,500 in San Diego County.The increased upper limits, which have been extended until the end of this year, have created a three-tier system in expensive areas, mortgage professionals say: loans of up to $417,000, which are the easiest to obtain and carry the lowest rates; "conforming jumbos" from $417,000 to $729,750, which are somewhat harder to get and have slightly higher rates; and true jumbos, with the toughest standards and highest rates.In the boom years of 2005 and 2006, interest rates were typically no more than a quarter of a percentage point higher on jumbo loans than on conforming loans, according to Informa Research. That widened as the mortgage meltdown intensified and home prices dropped in late 2007. The spread ballooned to nearly 1.7 percentage points in early 2009 after the entire credit system froze.But this year the rate spread has narrowed to less than a percentage point. It could shrink more if conforming-loan rates rise as expected after the Federal Reserve wraps up a $1-trillion-plus program to support the market for conforming loans next month.In addition to lower rates, down-payment requirements are being relaxed in some cases. For example, to write a jumbo loan in coastal areas of Los Angeles and Orange counties, Wells Fargo Home Mortgage looks for a 20% down payment or that percentage of equity, down from 25% last year, said Brad Blackwell, a national mortgage sales manager at the lender.The reason: Wells believes high-end home prices are stabilizing in those coastal counties. But the bank still requires higher down payments in the Inland Empire and other battered housing markets such as Florida, Nevada and Arizona, where prices for jumbo-size homes don't appear to be stabilizing, he said.Jumbo loans remain much harder to get than before the credit crunch and recession. Borrowers typically must have a credit score of at least 700, compared with boom-era minimums in the 600s, though Laguna Niguel mortgage broker Jeff Lazerson said at least one lender was again making sub-700 jumbos available.What's more, unless their down payments are very large, borrowers must provide evidence of high income, have sizable bank accounts as a cushion against the unforeseen and occupy the houses themselves.But there are clear signs that the jumbo market has loosened. One is an increasing availability of "stated income" loans -- those that don't require proof of income -- of as much as $2 million to borrowers with at least a 40% down payment, said mortgage broker Gary Bluman, owner of Real Estate Resources in Brentwood.Also, instead of a true jumbo loan, some "piggyback" second loans are available again to help certain borrowers with 25% down payments pay for high-priced homes, Lazerson said.Of course, adjustable, stated-income and piggyback loans were big contributors to the mortgage meltdown. But such provisions are less risky if a borrower has 25% to 40% equity.Despite the confidence in the market that such terms imply, lenders and mortgage investors are still dealing with piles of bad jumbos made during the boom.Delinquencies of 60 days or more on prime jumbo loans that were packaged into securities jumped to 9.6% in January, up from 3.7% a year earlier, Fitch Ratings reported this month.The jumbo delinquency rate in California climbed to 11.3% from 4.1% a year earlier.For now, the jumbo market remains limited to the volume of loans that banks are willing and able to keep on their books. But there is hope for a return to private outside funding.Although no jumbos have been turned into securities for at least two years, packages of delinquent jumbos have begun to be sold again to "vulture" investors, a sign that the secondary market for the loans may revive, said Michael Fratantoni, vice president of research at the Mortgage Bankers Assn."The ice sheet," he said, "is starting to crack here and there." http://www.latimes.com/business/la-fi-jumbo-loans24-2010feb24,0,1111820.story
$87 million mansion coming to life
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A mansion, a lake, stables and tennis court are shaping up at Villa del Lago, O.C. super agent John McMonigle’s $87 million dream home in Newport Coast.
Register staff writer Jeff Overley visited the project last week and shot photos showing the 16,700-square-foot home, lake and other features coming to life. (Click on Overley’s photos above to enlarge or click on his photo of the Gate House below right to see the entire slide show.)
Overley writes:
“Developed by John McMonigle of Monarch Estates, the Pelican Hill palace first made headlines in 2005, when its asking price was just $50 million. Even then, amid a roaring housing market, real estate experts doubted the 12.5-acre property could sell for such a towering sum.
“… Repeated price increases have raised eyebrows from commentators who suggest it’s an attempt to inflate the value. The project is also behind schedule – perhaps partly because of the housing downturn – with officials once promising it would be finished by summer 2007.
“As Monarch notes in promotional literature, the acreage is remarkable for the area. “In a place where land is scarce, Villa del Lago offers it in abundance,” Monarch says. However, the quantity of the land may exceed its quality – the view is mainly of city lights and canyon, with a sliver of ocean visible in the distance.”
Read the full report HERE!
For a map showing the priciest homes in Orange County, CLICK HERE!
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