Nondistressed Prices Bouncing Back to 2009 Levels?

Daily Real Estate News | Wednesday, July 27, 2011

Gov’t in Talks to Rent Out Foreclosures

Daily Real Estate News | Friday, July 22, 2011

New California Law Requires CO Detector

July 18, 2011 |

California Senate Bill 183 was signed into law to regulate the installation of Carbon Monoxide detectors. The law is a two-part law that requires an update to the Transfer Disclosure Statements used in a real estate transaction, and puts into law the Carbon Monoxide Poisoning Prevention Act of 2010.

The first part of the new law requires that as of July 1, 2011, Transfer Disclosure Statements (TD forms) include a line item regarding the presence or absence of a Carbon Monoxide detector in the same manner as Smoke Detectors, for all residential units that are sold. This applies to nearly all types of occupancies from single family owner-occupied and rentals, to multi-family housing. If the property is being sold, it must now include a CO Detector if the dwelling has gas appliances, fireplaces, and/or attached garages as described below.

The second part of the law enacts the Carbon Monoxide Poisoning Prevention Act of 2010 which requires that all residential properties, not just those being sold, be equipped with a Carbon Monoxide detector when the property has a fossil fuel burning heater or appliance, fireplace, and/or an attached garage. All single-family homes in structures with 1-4 units (owner or tenant occupied) must be equipped with a detector on or before July 1, 2011.

ftp://leginfo.public.ca.gov/pub/09-10/bill/sen/sb_0151-0200/sb_183_bill_20100507_chaptered.pdf

Make sure a CO Detector is installed in all properties prior to the Appraisal being completed, so that a re-inspection is not required

On Friday July 15^th, California Governor Jerry Brown Signed Senate Bill 458 into Law which amendsthe Section 580e of the Code of Civil Procedure.   The previous law required first mortgage lien holders in a short sale transaction to agree to a paid in full settlement and waive any right to collect from the seller in the future (deficiency judgment). With a short sale, a homeowner is allowed to sell their home for less than the owed on their first mortgage. The state saw a problem with the former law because it only addressed first mortgages and did not protect homeowners from deficiency from second mortgages.

The new law, added Protections for Short Sale candidates  
The new law will give home sellers protection from deficiency judgments on all liens involved in the short sale. Now, when accepting the terms of a short sale, junior liens must waive their right to pursue a deficiency. The borrower will not be required to owe or pay any amount after the short sale. SB 458 contains an urgency clause making it effective upon signing.

The California Association of realtors applauds Gov. Jerry Brown on Signing SB 458 (Corbett) into law.
““The signing of this bill is a victory for California homeowners who have been forced to short sell their home only to find that the lender will pursue them after the short sale closes, and demand an additional payment to subsidize the difference,” said C.A.R. President Beth L. Peerce.  “SB 458 brings closure and certainty to the short sale process and ensures that once a lender has agreed to accept a short sale payment on a property, all lienholders – those in first position and in junior positions – will consider the outstanding balance as paid in full and the homeowner will not be held responsible for any additional payments on the property.”
 
This may prove to be a step in the right direction for homeowners who are weighing their options and considering short sale vs. foreclosure.

How do you feel this new law will affect short sales in California? We would love to hear your feedback.
 
Call or email us today! 888-746-7820 Info@ShortSaleExpertsInc.com

1 Million Foreclosures Delayed Until 2012
An estimated 1 million foreclosure-related notices for defaults, auctions, and home repossessions that should be filed by lenders this year will be pushed back until next year, according to the latest report by RealtyTrac.

While the delays could give home owners more time to catch up on their payments and try to avoid foreclosure, housing experts warn this means the looming shadow inventory of distressed properties likely will continue to plague the real estate market even longer.

“The best-case scenario is we don’t get back to normal levels of foreclosure activity until 2015, which means the housing market recovery gets delayed by at least a year,” says Rick Sharga, a senior vice president at RealtyTrac.

Foreclosure Notices Drop, Threat Still Looms
Overall, the number of homes repossessed by lenders in the first half of this year dropped 30 percent compared to the same period in 2010. But foreclosure processing delays — with lenders taking longer to take action against delinquent borrowers — is stalling the housing recovery, experts note.

About 1.2 million homes received a foreclosure-related notice in the first six months of this year — in other words, one in every 111 U.S. households, RealtyTrac reports.

Nevada continues to face the most foreclosures; one in every 21 households in that state received a foreclosure notice in the first half of the year.

The foreclosure process continues to lengthen too. From April and June, homes took 318 days on average to go from the first stage of foreclosure to ultimately where it was repossessed by the lender — that’s up from 298 days in the first three months of the year. (In New York, the foreclosure process took the longest at an average of 966 days or 2.6 years; Texas boasted the shortest at 92 days.)

Source: “Delays in Bank Processing Push Likely U.S. Foreclosures Until 2012, Stalling Recovery,” Associated Press (July 14, 2011)

Fastest Way to Sell a Home? Underprice By 10%
Home sellers probably won’t be too happy, but housing experts in an article at CNNMoney say that underpricing a home by 10 percent may help it sell faster. And while sellers may lose out on thousands from the sale, they likely will avoid months of carrying costs from the home lingering on the market to offset that loss.

The high inventory of foreclosures on the market is making it difficult for sellers to compete against these ultra-low prices. Therefore, “listing your home for less than comparable ones in your neighborhood is the best way of unloading it as quickly as possible,” according to the article.

You could even attract a bidding war, says Steve Murray, editor of the Real Trends newsletter.

Furthermore, it may take the property a lot less time to sell. For example, a home underpriced by 10 percent in Somerdale, N.J., may sell in a few days rather than in the average four months, says Denise Riordan, a Sotheby’s International real estate professional.

Source: “Sell Your House Faster in a Tough Market,” CNNMoney (June 27, 2011)

7 of 10 Renters Say Owning a Home Is a Top Priority
Most Americans still believe that owning a home is a solid financial decision, and a majority of renters aspire to home ownership as a long-term goal. According to the 2011 National Housing Pulse Survey released today by the National Association of REALTORS^®, 72 percent of renters surveyed said owning a home is a top priority for their future, up from 63 percent in 2010.

Seven in 10 Americans also agreed that buying a home is a good financial decision while almost two-thirds said now is a good time to purchase a home. The annual survey, which measures how affordable housing issues affect consumers, also found that more than three quarters of renters (77 percent) said they would be less likely to buy a home if they were required to put down a 20 percent down payment on the home, and a strong majority (71 percent) believe a 20 percent down payment requirement could have a negative impact on the housing market.

“Despite the economic setbacks Americans have experienced in today’s current climate, it is clear that a strong majority still believe in home ownership and aspire to own a home,” said NAR President Ron Phipps. “However, achieving the dream of home ownership will become increasingly difficult for buyers if they are required to make a 20 percent down payment, which may be a reality for many of tomorrow’s buyers if a proposed Qualified Residential Mortgage rule is adopted. That is why REALTORS^® are strongly urging regulators to go back to the drawing board on the proposed rule.”

Defining the QRM rule is important because it will determine the types of mortgages that will generally be available to borrowers in the future. As currently proposed, borrowers with less than 20 percent down will have to choose between higher fees and rates today — up to 3 percentage points more — or a delay of between nine and 14 years while they save up the necessary down payment.

More than half — 51 percent — of self-described “working class” home owners as well as younger non-college graduates (51 percent), African Americans (57 percent), and Hispanic Americans (50 percent) who currently own their homes reported that a 20 percent down payment would have prevented them from becoming home owners.

Pulse surveys for the past eight years have consistently reported that having enough money for a down payment and closing costs are top obstacles that make housing unaffordable for Americans. Eighty-two percent of respondents cited these as the top obstacle, followed by having confidence in one’s job security.

The survey also found respondents were adamantly against eliminating the mortgage interest deduction (MID). Two-thirds of Americans oppose eliminating the tax benefit, while 73 percent believe eliminating the MID will have a negative impact on the housing market as well as the overall economy.

“The MID facilitates home ownership by reducing the carrying costs of owning a home, and it makes a real difference to hard-working American families,” Phipps said. “Home ownership offers not only social benefits, but also long-term value for families, communities and the nation’s economy. We need to make sure that any changes to current programs or incentives don’t jeopardize our collective futures.”

When asked why home ownership matters to them, respondents cited stability and safety as the top reason. Long-term economic reasons such as building equity followed closely behind. On a local level, respondents said neighbors falling behind on their mortgages and the drop in home values were top concerns. Foreclosures also continue to remain a large concern, with almost half of those surveyed citing the issue as a problem in their area.

Source: NAR