From walls to floors and cabinets to countertops, asset managers have to cover a lot of ground in order to make sure an REO property is clean and ready to sell.
It is a wise move for asset managers to give their real estate agents, brokers and service providers a guide to use when getting real estate-owned assets spic-and-span, according to CJ Gehlke, president and founder of REO Nationwide in Newport Beach, Calif.
Let's get down to specifics. Inside the home, Ms. Gehlke recommends to take a close look at the kitchen. Remove the refrigerator if it is inoperable and not repairable. If it is in working condition, remove the kick plate at the bottom front of the refrigerator and remove and clean the defrost pan. Defrost the fridge, remove and clean all shelves, racks and drawers. After cleaning, reassemble the refrigerator, and turn it on, setting the control at the warmest setting.
For drawers in the kitchen, empty and clean all stains and food particles by washing them with mild soap and warm water. Remove any worn paper lining. Wipe out drawers. It is important to clean the interior of the dishwasher and remove any food particles. Clean the soap holder, racks and trays. Clean the exterior by wiping with mild soap and warm water.
Next, move down the hallway of home to the washer and dryer. REO Nationwide says it's important to clean the interior thoroughly and include any filters. Remove all mineral and dried soap deposits from the top of the washer.
"For the furnace, remove and thoroughly clean or replace filter in the bottom of furnace. Clean all windows inside and out. Don't forget the screens. Vacuum Venetian blinds to remove dust and spots," says Ms. Gehlke. "Wipe the window sills to remove dust, spots or stains. The walls and ceilings take up a great deal of time. Brush out all corners to remove any dust. Clean the ceiling surrounding all vents."
There's more work to be done. Inside the bathroom, make sure to sanitize all tile and shower doors to remove lime deposits and mildew. Scrub the tub as well as the shower and sinks. "It is important to clean thoroughly any woodwork, including doors, door frames and baseboards."
Also, sweep and mop hardwood floors, title and linoleum. Don't forget to take care of the carpet. Remove stains and shampoo when this is requested. Empty and tidy up shelves, drawers and closets thoroughly. Remove, dust and replace the light fixtures. All fixtures should have an operable 60-watt bulb in each socket, says Ms. Gehlke. "If the house has a fireplace, go over it thoroughly to include the ash compartment. Sweep, clean and remove all trash and debris from the back porch."
Don't forget the garages and carports. Get rid of all trash and debris, and sweep clean these areas of the property. Remove the oil and grease from floor of carport/garage and driveways. Vacuum any vents in the property and haul off items from the storage sheds and make sure to sweep this area clean. And of course, remove all items of personal property.
If the amount of personal property exceeds a certain threshold (industry standards are $500), the personal property goes through an eviction process in accordance to state and local requirements. When it comes with dealing with the outside of the home, Cheryl Lang, president of the Houston-based Integrated Mortgage Solutions, says in the summer, contractors mow the lawn every two weeks and trim the bushes during April to October.
She says part of property preservation means ensuring that all hazardous materials have been removed from the property. This may include removing swing sets, tires, paint, boarding up in-ground pools or removing aboveground pools and draining ponds.
"The process of preserving property has been greatly improved by the use of digital imaging," describes Ms. Lang. "Because contractors may miss something or deem a property vacant when it is occupied, most vendors today require pictures to verify contractor's work. It is estimated that roughly 20% of contractor mistakes are caught using digital photos."
Some vendors today even provide phones with camera capabilities to contractors, so they may collect and share real-time photos in order to expedite the property preservation process. As more and more REO homes need to be monitored and preserved, technology ultimately allows more details to be presented on every property.
Photoinspection.com, a Buffalo, New York based company, provides property inspection services for the insurance and mortgage industries. The company, which was established in 1999, has focused on developing a robust and functional technology platform from the very beginning. The company has built a national network of inspectors, which was not an easy thing to do for a small company that was surviving on a bootstrap financing, says Ted Onyeji, president.
A network that includes several thousand appraisers located across the country has become the backbone of the company, he describes. Inspectors are monitored on their first 10 jobs to make sure they comply with industry standards. "We've noticed a lot of inspection companies are beginning to add inspectors across the country, especially in the areas of Florida and Michigan because of the glut of houses out there."
The biggest goal is to make sure the vacant property is not an eyesore.
Safeguard Properties, a privately held field services company located in Valley View, Ohio, makes sure the grass is cut, that there are no broken windows and if there is a gas or water leak inside the home, the company addresses those types of problems immediately.
Safeguard also offers maid services. Contractors are to follow the maid services checklist included in the work order and leave it at the property signed by the person who completed the services. This is a requirement when completing the initial services order. "You have no idea what we find in some of these properties. We will wash the counters down, clean the fridge, put in air fresheners so it doesn't smell like an REO," says Mr. Klein.
Bleach and household cleaners are used to rid a property of a smell, along with a powder scent put down on the carpet before vacuuming. Contractors bring a hot water supply with them to perform the cleaning. If carpet is in deplorable condition, the contractor will notify Safeguard to have it removed. "The lender wants to sell the REO as soon as possible to a homeowner who will live in the property. You want to make it as attractive as possible. You have to make it look and smell good. We try to do the best we can. We do as much as we can so the neighbors don't have a rundown home with 50 tires in the front yard," he adds.
Properties are becoming more seriously damaged as well. Some homeowners in foreclosure are so frustrated they will do serious damage to the property. They take out appliances, put holes in the walls and holes in the floor, he says. "There is no rhyme or reason. They are taking their frustration out on the system or the process. We are seeing that more and more."
By the time the mortgage company gets a hold of one of these properties, it is sometimes problematic. Safeguard hire various contractors they have built relationships with to do repairs such as re-roof a home. In today's market the industry is seeing an increase in the amount of repairs being done to vacant REOs.
"The goal of the mortgage company is to sell this property as quickly as possible. Every day they hold on to it is costing them money, in addition to the foreclosure process. It's a bigger financial loss. We want to make the house inviting and attractive to the possible homeowner."
Full Article: http://www.managingreo.com/feature/?story_id=89
Tuesday, June 23, 2009
PTC neighbors mow foreclosed lawns
Peachtree City has not escaped the nationwide trend of home foreclosures.
While some of those homes are in the lower price range, some are in the very high price range too, as they are not confined to any area or neighborhood, said Senior Code Enforcement Officer Tami Babb.
Foreclosed homes have ranged from the $60,000 range to upwards of $600,000 or more, she said. One home in foreclosure was listed at $1.5 million in public newspaper notices, the main resource code enforcement uses to track foreclosures, Babb said.
“We’ve dealt with foreclosures before,” Babb said. “What’s different now is that it’s in every area.”
The foreclosed homes have not led to major issues so far, Babb said. But homes in foreclosure limbo, after they have been abandoned but before the banks resume ownership, have caused some trouble, she added.
To secure pool fences on abandoned properties, the city uses nylon straps to prevent trespassers from entering, Babb said. In some cases, neighbors are mowing the lawns of abandoned homes, Babb said.
One homeowner in particular who skipped town was particularly onerous and would have merited a citation with an appearance in city court had he remained here with the property unkempt, Babb said. But the owner moved out of state, so it may be impossible to hold him accountable, she added.
“Lots of people have left town and we can’t find them,” Babb said. “But they are still legally responsible.”
Once banks take possession of foreclosed homes, they generally do a good job of making sure the lawn is kept up and that the house doesn’t fall into disrepair, Babb said.
The city has not had to condemn any foreclosed homes due to structural defects or code violations, she added.
One private company, Safeguard, does a particularly good job of handling such issues including the regular lawn work and also fixing broken windows, Babb said.
Dealing with foreclosures is time-consuming, Babb said, adding that it has been made a bit easier since Fayette County deed records can be searched by computer to find the true owner of a given parcel.
Babb noted that the recently expired three-month moratorium on foreclosures was difficult because most of the city’s homes in the foreclosure process had already been abandoned ... but the banks had been unable to take possession of them during that time.
The code enforcement department also has seen a drop in the number of calls from potential investors looking for a good deal on real estate, Babb added. Yet she remains optimistic that the future will improve.
“I really believe this is going to turn around,” Babb said.
Babb asks anyone with questions about particular homes to call code enforcement. Some neighbors are aware homes are in trouble before the notice is published in the newspaper, she added.
Original Article: http://www.thecitizen.com/~citizen0/node/37030
While some of those homes are in the lower price range, some are in the very high price range too, as they are not confined to any area or neighborhood, said Senior Code Enforcement Officer Tami Babb.
Foreclosed homes have ranged from the $60,000 range to upwards of $600,000 or more, she said. One home in foreclosure was listed at $1.5 million in public newspaper notices, the main resource code enforcement uses to track foreclosures, Babb said.
“We’ve dealt with foreclosures before,” Babb said. “What’s different now is that it’s in every area.”
The foreclosed homes have not led to major issues so far, Babb said. But homes in foreclosure limbo, after they have been abandoned but before the banks resume ownership, have caused some trouble, she added.
To secure pool fences on abandoned properties, the city uses nylon straps to prevent trespassers from entering, Babb said. In some cases, neighbors are mowing the lawns of abandoned homes, Babb said.
One homeowner in particular who skipped town was particularly onerous and would have merited a citation with an appearance in city court had he remained here with the property unkempt, Babb said. But the owner moved out of state, so it may be impossible to hold him accountable, she added.
“Lots of people have left town and we can’t find them,” Babb said. “But they are still legally responsible.”
Once banks take possession of foreclosed homes, they generally do a good job of making sure the lawn is kept up and that the house doesn’t fall into disrepair, Babb said.
The city has not had to condemn any foreclosed homes due to structural defects or code violations, she added.
One private company, Safeguard, does a particularly good job of handling such issues including the regular lawn work and also fixing broken windows, Babb said.
Dealing with foreclosures is time-consuming, Babb said, adding that it has been made a bit easier since Fayette County deed records can be searched by computer to find the true owner of a given parcel.
Babb noted that the recently expired three-month moratorium on foreclosures was difficult because most of the city’s homes in the foreclosure process had already been abandoned ... but the banks had been unable to take possession of them during that time.
The code enforcement department also has seen a drop in the number of calls from potential investors looking for a good deal on real estate, Babb added. Yet she remains optimistic that the future will improve.
“I really believe this is going to turn around,” Babb said.
Babb asks anyone with questions about particular homes to call code enforcement. Some neighbors are aware homes are in trouble before the notice is published in the newspaper, she added.
Original Article: http://www.thecitizen.com/~citizen0/node/37030
AN ACT CONCERNING NEIGHBORHOOD PROTECTION Connecticut SB 951
http://www.cga.ct.gov/2009/BA/2009SB-00951-R01-BA.htm
SUMMARY:
This bill creates a registration system for tracking the owners of uninhabited one- to four-family dwellings obtained by strict foreclosure or foreclosure by sale (“registrants”). It specifically allows municipalities to enforce against a registrant any provision of the statutes or municipal ordinance on the repair or maintenance of real estate after the municipality has provided notice and an opportunity to remedy the situation.
The bill prohibits municipalities from imposing registration requirements outside of the bill unless they were in effect before the bill's effective date. It also prohibits municipalities from adopting an ordinance or regulation on the property maintenance activities of a person who obtained title by foreclosure. However, any such ordinances or regulations adopted before the bill's effective date remain in effect and municipalities can enact or enforce ordinances or regulations that apply generally to all property owners. The bill also provides that these provisions do not prohibit or limit a municipality from adopting or enforcing an ordinance or regulation adopted under statutes relating to (1) the prevention of housing blight, (2) the maintenance of safe and sanitary housing, or (3) the abatement of nuisances.
*Senate Amendment “A” makes a number of changes, including:
1. eliminating new property maintenance standard, penalties, and enforcement procedures, and instead referring to existing laws on property repair and maintenance;
2. allowing notices under these existing laws to be delivered to registrants in accordance with the bill;
3. closes a gap with regard to the registration requirement by including properties that become vacant after an eviction (rather than just though an ejectment action) and limits it to those that become vacant within 120 days of title vesting;
4. specifying the information that must be included with MERS registrations; and
5. specifies that registrations must include information about property maintenance companies only if the registrant hired one.
EFFECTIVE DATE: October 1, 2009
REGISTRATION
The properties must be registered with the town clerk of the municipality in which they are located or with the Mortgage Electronic Registration Systems (MERS) (see BACKGROUND). The deadline for doing this depends on when the property becomes vacant. If the property is vacant on the day title vests, then it must be registered within 10 days of that date. If the property becomes vacant due to an execution of ejectment or eviction within 120 days after title vests, then it must be registered within 10 days after the property becomes vacant.
If the registration is with the municipality, the registrant must pay a $ 100 fee and provide (1) the registrant's name, address, telephone number, and electronic mail address (“contact information”) and, if the registrant is a corporation or an individual who resides out-of-state, the contact information for a direct contact; and (2) if there is one, the contact information for the local property maintenance company responsible for the security and maintenance of the vacant residential property. The registrant must indicate whether it prefers to be contacted by first class or electronic mail and the preferred addresses for such communications and must report any changes in the registration information within 10 days following the date of the change. Those registering with MERS must provide contact information for either the registrant or the property maintenance company, if there is one.
VIOLATIONS AND DUE PROCESS
If the registrant violates any provision of the general statutes or municipal ordinance on the repair or maintenance of real estate, the municipality can issue a notice to the person citing the violating conditions. The notice must be sent by first class or electronic mail, or both, and must be sent to the address or addresses identified on the registration. A copy of the notice must be sent by first class or electronic mail to the identified local property maintenance company, if there is one. The notice must also meet the same standards as notices to remedy a health, housing, or safety code violation (i. e. , notice must be sent to the lienholder).
The notice must provide a date by which the registrant can remedy the conditions in question. The date must be reasonable under the circumstances. If the registrant or property maintenance company fails to do so, the municipality can enforce its rights under the relevant statute or ordinance.
The bill allows municipalities to use the bill's notice procedure when enforcing property maintenance and repair ordinances and statutes against registrants.
BACKGROUND
Mortgage Electronic Registration Systems
According to its website, MERS is an online system, created by the real estate finance industry, that “simplifies the way mortgage ownership and servicing rights are originated, sold and tracked. ”
SUMMARY:
This bill creates a registration system for tracking the owners of uninhabited one- to four-family dwellings obtained by strict foreclosure or foreclosure by sale (“registrants”). It specifically allows municipalities to enforce against a registrant any provision of the statutes or municipal ordinance on the repair or maintenance of real estate after the municipality has provided notice and an opportunity to remedy the situation.
The bill prohibits municipalities from imposing registration requirements outside of the bill unless they were in effect before the bill's effective date. It also prohibits municipalities from adopting an ordinance or regulation on the property maintenance activities of a person who obtained title by foreclosure. However, any such ordinances or regulations adopted before the bill's effective date remain in effect and municipalities can enact or enforce ordinances or regulations that apply generally to all property owners. The bill also provides that these provisions do not prohibit or limit a municipality from adopting or enforcing an ordinance or regulation adopted under statutes relating to (1) the prevention of housing blight, (2) the maintenance of safe and sanitary housing, or (3) the abatement of nuisances.
*Senate Amendment “A” makes a number of changes, including:
1. eliminating new property maintenance standard, penalties, and enforcement procedures, and instead referring to existing laws on property repair and maintenance;
2. allowing notices under these existing laws to be delivered to registrants in accordance with the bill;
3. closes a gap with regard to the registration requirement by including properties that become vacant after an eviction (rather than just though an ejectment action) and limits it to those that become vacant within 120 days of title vesting;
4. specifying the information that must be included with MERS registrations; and
5. specifies that registrations must include information about property maintenance companies only if the registrant hired one.
EFFECTIVE DATE: October 1, 2009
REGISTRATION
The properties must be registered with the town clerk of the municipality in which they are located or with the Mortgage Electronic Registration Systems (MERS) (see BACKGROUND). The deadline for doing this depends on when the property becomes vacant. If the property is vacant on the day title vests, then it must be registered within 10 days of that date. If the property becomes vacant due to an execution of ejectment or eviction within 120 days after title vests, then it must be registered within 10 days after the property becomes vacant.
If the registration is with the municipality, the registrant must pay a $ 100 fee and provide (1) the registrant's name, address, telephone number, and electronic mail address (“contact information”) and, if the registrant is a corporation or an individual who resides out-of-state, the contact information for a direct contact; and (2) if there is one, the contact information for the local property maintenance company responsible for the security and maintenance of the vacant residential property. The registrant must indicate whether it prefers to be contacted by first class or electronic mail and the preferred addresses for such communications and must report any changes in the registration information within 10 days following the date of the change. Those registering with MERS must provide contact information for either the registrant or the property maintenance company, if there is one.
VIOLATIONS AND DUE PROCESS
If the registrant violates any provision of the general statutes or municipal ordinance on the repair or maintenance of real estate, the municipality can issue a notice to the person citing the violating conditions. The notice must be sent by first class or electronic mail, or both, and must be sent to the address or addresses identified on the registration. A copy of the notice must be sent by first class or electronic mail to the identified local property maintenance company, if there is one. The notice must also meet the same standards as notices to remedy a health, housing, or safety code violation (i. e. , notice must be sent to the lienholder).
The notice must provide a date by which the registrant can remedy the conditions in question. The date must be reasonable under the circumstances. If the registrant or property maintenance company fails to do so, the municipality can enforce its rights under the relevant statute or ordinance.
The bill allows municipalities to use the bill's notice procedure when enforcing property maintenance and repair ordinances and statutes against registrants.
BACKGROUND
Mortgage Electronic Registration Systems
According to its website, MERS is an online system, created by the real estate finance industry, that “simplifies the way mortgage ownership and servicing rights are originated, sold and tracked. ”
California running out of $10,000 tax credits
First-time home buyers wanting to take advantage of the state's $10,000 tax credit may have less time than originally expected. California set aside $100 million to help home buyers purchase newly built homes, hoping to jump start the residential-construction market. According to state officials, the tactic has worked well and is helping to entice home buyers into the market. However, there only is approximately 20 percent of the program's funding remaining.The program launched in March, and as of June 3 nearly $24 million in tax credit certificates already had been issued, according to the state's Franchise Tax Board, leaving nearly $76 million in credit available. Many applications still are in the pipeline awaiting approval. If all of the submitted applications are approved, only $17.5 million would remain in the fund. The California state legislature is considering adding another $200 million to the program. However, securing approval may be difficult due to the state's estimated $24 billion budget deficit. A bill to extend the program already has won Assembly approval and now is awaiting activity in the state Senate.
Sunday, June 14, 2009
90-day foreclosure moratorium law Starts June 15, 2009
By Jim Wasserman jwasserman@sacbee.com q{
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Published: Saturday, Jun. 13, 2009 - 12:00 am Page 6B
After a severe economic storm of more than 365,000 California foreclosures since early 2007, the state's long-awaited 90-day foreclosure moratorium law goes into effect Monday.
But it doesn't mean foreclosures will stop.
Supporters acknowledge the state is likely to see thousands more foreclosures before the crisis subsides. The law, indeed, goes into effect as lenders are ramping up repossessions following expiration of earlier moratoriums, according to housing trackers.
But the California Foreclosure Prevention Act, passed as Assembly Bill X2 7 by lawmakers in February and signed by Gov. Arnold Schwarzenegger, raises a new hurdle in the foreclosure process.
Backers say it will make lenders try harder to keep borrowers in homes. Starting Monday, loan servicers must prove to the state they have comprehensive loan modification programs in place – or be denied rights to foreclose on their own schedules.
"You have voluntary programs that they don't have to do," said Assemblyman Ted Lieu, a Torrance Democrat who was the author of the bill. "This creates an enforcement mechanism to force them to do it. The hammer is the 90-day foreclosure moratorium, which they all hate."
The law will largely press lenders to follow the Obama administration's Making Home Affordable Program that began in March. That encourages lenders to cut interest rates or rewrite loans to 40-year terms to get payments below 38 percent of a borrower's monthly income. Other options include reducing principal and tacking missed payments to the back of the loan. Under the law, California officials also can encourage short sales or deeds in lieu – options in which banks accept less than owed – for borrowers who want to leave or don't qualify for modifications.
"The vast majority of large servicers should have no trouble complying. They have already complied with similar requirements at the federal level," said Dustin Hobbs, spokesman for the California Mortgage Bankers Association.
As the nation's first statewide moratorium law of its kind, according to Lieu, hopes are it will "slow down the rate of foreclosures."
"For some people there's not much that can be done," said the lawmaker. "But there are a fair number of people on the bubble … if they can get some assistance, they can stay in their home."
California Department of Corporations spokesman Mark Leyes said the state can't force or guarantee loan modifications. But the law is rooted in another state power that gives it leverage with lenders.
"What we do have control over is the legal process by which foreclosure is executed in this state," he said. Hence, adding 90 days to the process for those that don't comply.
Lieu said, "Not all banks are doing it at the same level. Some have good (modification efforts), some have bad ones and some have none."
Lenders have received widespread criticism for being overwhelmed by the foreclosure crisis and slow to rewrite loans despite receiving billions of dollars in federal assistance. Borrowers and nonprofit loan counseling agencies alike have complained of frustrating delays and snafus in the process.
On the front lines of the crisis it's easy to be wary about yet another new law or program.
"We're hopeful it will help, but in reality, time after time these things come out and the results are the same," said Pam Canada, executive director of the nonprofit counseling firm NeighborWorks Homeownership Center of Sacramento.
The new law represents a third evolution of California's response to a housing crisis that has severely damaged the economy and devastated local and state government budgets. In late 2007, Schwarzenegger entered into a voluntary agreement with subprime lenders to modify more loans.
Last summer, he signed Senate Bill 1137, which temporarily slowed banks' foreclosure machinery, making them work harder to contact borrowers and offer alternatives.
But foreclosures, while down in recent months, have continued in hard-hit California, especially in the capital region.
The region suffered almost 4,000 new foreclosures in January, February and March, and another 12,000 households are well behind on payments, according to Bay Area tracker ForeclosureRadar.
In summary, here's what will happen starting Monday:
• Lenders will submit applications to the state outlining their loan modification programs. That gives them a 30-day exemption from a moratorium.
• If the state OKs a lender's program, the firm is permanently exempt from the 90-day delay on foreclosures.
• If the state rejects the program as inadequate, a lender has 30 days to upgrade it and be reconsidered.
Leyes said consumers will be able to see a list of lenders that comply with the state's requirements by mid-July.
Refer to this link verify post: http://www.sacbee.com/business/story/1943201.html
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Published: Saturday, Jun. 13, 2009 - 12:00 am Page 6B
After a severe economic storm of more than 365,000 California foreclosures since early 2007, the state's long-awaited 90-day foreclosure moratorium law goes into effect Monday.
But it doesn't mean foreclosures will stop.
Supporters acknowledge the state is likely to see thousands more foreclosures before the crisis subsides. The law, indeed, goes into effect as lenders are ramping up repossessions following expiration of earlier moratoriums, according to housing trackers.
But the California Foreclosure Prevention Act, passed as Assembly Bill X2 7 by lawmakers in February and signed by Gov. Arnold Schwarzenegger, raises a new hurdle in the foreclosure process.
Backers say it will make lenders try harder to keep borrowers in homes. Starting Monday, loan servicers must prove to the state they have comprehensive loan modification programs in place – or be denied rights to foreclose on their own schedules.
"You have voluntary programs that they don't have to do," said Assemblyman Ted Lieu, a Torrance Democrat who was the author of the bill. "This creates an enforcement mechanism to force them to do it. The hammer is the 90-day foreclosure moratorium, which they all hate."
The law will largely press lenders to follow the Obama administration's Making Home Affordable Program that began in March. That encourages lenders to cut interest rates or rewrite loans to 40-year terms to get payments below 38 percent of a borrower's monthly income. Other options include reducing principal and tacking missed payments to the back of the loan. Under the law, California officials also can encourage short sales or deeds in lieu – options in which banks accept less than owed – for borrowers who want to leave or don't qualify for modifications.
"The vast majority of large servicers should have no trouble complying. They have already complied with similar requirements at the federal level," said Dustin Hobbs, spokesman for the California Mortgage Bankers Association.
As the nation's first statewide moratorium law of its kind, according to Lieu, hopes are it will "slow down the rate of foreclosures."
"For some people there's not much that can be done," said the lawmaker. "But there are a fair number of people on the bubble … if they can get some assistance, they can stay in their home."
California Department of Corporations spokesman Mark Leyes said the state can't force or guarantee loan modifications. But the law is rooted in another state power that gives it leverage with lenders.
"What we do have control over is the legal process by which foreclosure is executed in this state," he said. Hence, adding 90 days to the process for those that don't comply.
Lieu said, "Not all banks are doing it at the same level. Some have good (modification efforts), some have bad ones and some have none."
Lenders have received widespread criticism for being overwhelmed by the foreclosure crisis and slow to rewrite loans despite receiving billions of dollars in federal assistance. Borrowers and nonprofit loan counseling agencies alike have complained of frustrating delays and snafus in the process.
On the front lines of the crisis it's easy to be wary about yet another new law or program.
"We're hopeful it will help, but in reality, time after time these things come out and the results are the same," said Pam Canada, executive director of the nonprofit counseling firm NeighborWorks Homeownership Center of Sacramento.
The new law represents a third evolution of California's response to a housing crisis that has severely damaged the economy and devastated local and state government budgets. In late 2007, Schwarzenegger entered into a voluntary agreement with subprime lenders to modify more loans.
Last summer, he signed Senate Bill 1137, which temporarily slowed banks' foreclosure machinery, making them work harder to contact borrowers and offer alternatives.
But foreclosures, while down in recent months, have continued in hard-hit California, especially in the capital region.
The region suffered almost 4,000 new foreclosures in January, February and March, and another 12,000 households are well behind on payments, according to Bay Area tracker ForeclosureRadar.
In summary, here's what will happen starting Monday:
• Lenders will submit applications to the state outlining their loan modification programs. That gives them a 30-day exemption from a moratorium.
• If the state OKs a lender's program, the firm is permanently exempt from the 90-day delay on foreclosures.
• If the state rejects the program as inadequate, a lender has 30 days to upgrade it and be reconsidered.
Leyes said consumers will be able to see a list of lenders that comply with the state's requirements by mid-July.
Refer to this link verify post: http://www.sacbee.com/business/story/1943201.html
Wednesday, June 3, 2009
Market Update and How a 15 Year Mortage saves you $$P
Signs of more trouble ahead for housing marketSeveral recent market barometers, including declining housing inventory, increasing buyer competition, slowing price depreciation, and rising builder confidence all point to a real estate market rebound. However, other signs such as rising unemployment, lack of “move-up” buyers, stricter loan underwriting standards, and foreclosures also may impact the market’s recovery.Rising unemployment means that those who own a home, but are not currently employed, could lose their homes to foreclosure. While the first round of foreclosures mainly encompassed people who had difficulty affording their homes even when employed, a second wave may be brought on by those who lose their jobs and are not able to continue paying their mortgages. Numerous programs are in the works to help remedy this situation, including C.A.R.’s Mortgage Protection Program. Eligible first-time buyers who lose their job may be able to receive $1,500 for six months to help pay their mortgages. For more information on this program, please visit:
http://www.car.org/aboutus/hafmainpage/carhafmortgageprotection/While some housing analysts believe overall the state’s housing prices remain unaffordable; 69 percent of the state’s households could afford to purchase an entry-level home in California in the first quarter of this year, compared with 46 percent during the first quarter last year, according to C.A.R.’s First-time Buyer Housing Affordability Index (FTB-HAI).A study conducted by the Comptroller of the Currency found that more than half of modified mortgages again were delinquent within months of the modification, often because the homeowners still were unable to make regular mortgage payments despite the modified terms. However, the study was conducted prior to the Obama administration’s mortgage modification plan. For more information about the Obama administration’s foreclosure-prevention efforts, please visit:
http://www.car.org/newsstand/newsreleases/fapsummary
Mortgage News: This week’s Mortgage Update contains information about refinancing and 15-year mortgages.A battle plan for refinancing your mortgageHomeowners seeking to refinance their mortgages may be surprised by the amount of paperwork required. During the “easy credit” years, some lenders did not require proof of income or documentation. Nowadays, most lenders require borrowers to provide pay stubs, banks statements, brokerage statements, and possibly tax returns. Self-employed individuals may be asked for a profit-and-loss statement. Those relying on bonus income should expect that most lenders will assume this year’s bonus will be a lot less than last year’s, which could make securing approval more difficult. Determining the amount of equity in the home is key to being approved for a new loan. Homeowners whose mortgage obligations are less than 80 percent of the home’s value are more likely to have refinancing options available to them. Other homeowners who are current on their mortgages, owe 80 percent to 105 percent of the home’s value, and have a loan owned by Fannie Mae or Freddie Mac may be able to refinance under the government’s “Making Home Affordable” program. Other factors to take into consideration when refinancing are the property’s appraised value, the homeowners’ credit score(s), whether or not the property has a second mortgage, and the length of the original loan.
MortgagesMore Takers for 15-Year Loans
THE 30-year fixed-rate mortgage has traditionally been the go-to loan for borrowers who want stability and lower payments. Adjustable-rate mortgages, by contrast, are often seen as more suitable for risk takers and those who expect to sell their homes in a short time.More recently, there has been increased activity in another loan alternative: a fixed-rate mortgage with a 15-year term. Debt shedding comes at a price. Those borrowing $400,000 on a 15-year loan, with a 4.375 percent interest rate, the average rate earlier this month, can expect to pay about $3,034 a month, compared with about $2,056 a month for a 30-year fixed-rate loan with a 4.625 percent average rate. (The payment excludes costs like property taxes and insurance.) Because a 15-year loan also has 180 fewer interest payments than a 30-year loan, the borrower with that 15-year loan would pay $194,000 less in interest over the life of the mortgage.
http://www.car.org/aboutus/hafmainpage/carhafmortgageprotection/While some housing analysts believe overall the state’s housing prices remain unaffordable; 69 percent of the state’s households could afford to purchase an entry-level home in California in the first quarter of this year, compared with 46 percent during the first quarter last year, according to C.A.R.’s First-time Buyer Housing Affordability Index (FTB-HAI).A study conducted by the Comptroller of the Currency found that more than half of modified mortgages again were delinquent within months of the modification, often because the homeowners still were unable to make regular mortgage payments despite the modified terms. However, the study was conducted prior to the Obama administration’s mortgage modification plan. For more information about the Obama administration’s foreclosure-prevention efforts, please visit:
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Mortgage News: This week’s Mortgage Update contains information about refinancing and 15-year mortgages.A battle plan for refinancing your mortgageHomeowners seeking to refinance their mortgages may be surprised by the amount of paperwork required. During the “easy credit” years, some lenders did not require proof of income or documentation. Nowadays, most lenders require borrowers to provide pay stubs, banks statements, brokerage statements, and possibly tax returns. Self-employed individuals may be asked for a profit-and-loss statement. Those relying on bonus income should expect that most lenders will assume this year’s bonus will be a lot less than last year’s, which could make securing approval more difficult. Determining the amount of equity in the home is key to being approved for a new loan. Homeowners whose mortgage obligations are less than 80 percent of the home’s value are more likely to have refinancing options available to them. Other homeowners who are current on their mortgages, owe 80 percent to 105 percent of the home’s value, and have a loan owned by Fannie Mae or Freddie Mac may be able to refinance under the government’s “Making Home Affordable” program. Other factors to take into consideration when refinancing are the property’s appraised value, the homeowners’ credit score(s), whether or not the property has a second mortgage, and the length of the original loan.
MortgagesMore Takers for 15-Year Loans
THE 30-year fixed-rate mortgage has traditionally been the go-to loan for borrowers who want stability and lower payments. Adjustable-rate mortgages, by contrast, are often seen as more suitable for risk takers and those who expect to sell their homes in a short time.More recently, there has been increased activity in another loan alternative: a fixed-rate mortgage with a 15-year term. Debt shedding comes at a price. Those borrowing $400,000 on a 15-year loan, with a 4.375 percent interest rate, the average rate earlier this month, can expect to pay about $3,034 a month, compared with about $2,056 a month for a 30-year fixed-rate loan with a 4.625 percent average rate. (The payment excludes costs like property taxes and insurance.) Because a 15-year loan also has 180 fewer interest payments than a 30-year loan, the borrower with that 15-year loan would pay $194,000 less in interest over the life of the mortgage.
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