Beginning with the 2012 tax bill (the one due in April 2013), the state Franchise Tax Board will require property owners to break down their property taxes into deductible and non-deductible portions.
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Orange County Register
State targets property-tax payers
January 12, 2012 By Leave a Comment
FHA extends waiver of anti-flipping regulations
December 28, 2011 By Leave a Comment
The Acting FHA Commissioner has extended a temporary waiver of FHA’s anti-flipping regulation through 2012.
“This extension is intended to accelerate the resale of foreclosed properties in neighborhoods struggling to overcome the possible effects of abandonment and blight,” said Carol J. Galante. “FHA remains a critical source of mortgage financing and stability, and we must make every effort to promote recovery in every responsible way we can.”
With certain exceptions, FHA rules prohibit insuring a mortgage on a home owned by the seller for less than 90 days. In 2010, however, FHA temporarily waived this regulation through Jan. 31, 2011, and later extended that waiver through the remainder of 2011. The new extension will permit buyers to continue to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. It will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.
The extension announced is effective through Dec. 31, 2012, unless otherwise extended or withdrawn by FHA. All other terms of the existing Waiver will remain the same. The Waiver contains strict conditions and guidelines to prevent the predatory practice of property flipping, in which properties are quickly resold at inflated prices to unsuspecting borrowers.
California Association Realtors.org
PMI files for bankruptcy, listing $736 million in debts amid rough housing market
November 25, 2011 By Leave a Comment
Walnut Creek-based PMI Group filed for bankruptcy Wednesday, listing debts of $736 million resulting from the meltdown of a housing market that remains weak.
The company, which insures mortgages when borrowers make small down payments, was forced into bankruptcy when a judge upheld the takeover by Arizona state regulators of PMI’s primary units to insure mortgages.
“Continued high unemployment in the United States and the slow economic recovery in U.S. residential and mortgage and housing markets” have contributed to PMI’s losses, L. Stephen Smith, PMI’s CEO, said in a court filing.
PMI pays lenders after an insured homeowner defaults and a foreclosure fails to recoup enough to cover the lender’s losses. Over the 12 months that ended in June, it lost $727.1 million and generated revenue of $762.9 million.
PMI has lost money for 16 straight quarters, including a $1.01 billion loss in the October-December period of 2007. The last time PMI turned a profit was in the April-June quarter of 2007.
Arizona regulators took control of PMI Mortgage Insurance and PMI Insurance in August. Neither of those companies filed for bankruptcy but were ordered to cease writing new policies, which undermined a vital revenue stream for PMI.
The regulatory seizure also unleashed a new financial squeeze for PMI because takeover allowed lenders to seek immediate payment in full of the financing. In this case, about $736 million in notes were due in short order.
PMI, in a last-ditch attempt to dodge bankruptcy, asked an Arizona judge to overturn the seizure by the state’s Insurance Department. But earlier this week, the judge denied PMI’s gambit, leaving the company with few escape routes.
The company filed for Chapter 11 in a quest to reorganize its finances, listing assets of $225 million. It said it hopes the bankruptcy filing will enable the company to assess its options following the regulatory actions.
Mortgage insurers, including PMI, have been able, in recent years, to capture decent profits in providing mortgage insurance to cover lenders. But PMI has been battered by losses because of mortgages it insured before the collapse of the housing market.
The slump in home prices has erased equity and shoved some borrowers to the brink of foreclosure.
“There are still an extremely high number of underwater loans,” said Jeffrey Michael, director of the Stockton-based Business Forecasting Center at University of the Pacific. “The worst of the price declines are over. But foreclosures continue to be a problem. There is a very long road before we have a normal housing market.”
By George Avalos
Contra Costa Times
Congress reinstates FHA loan limit
November 24, 2011 By Leave a Comment
C.A.R. applauds reinstatement of FHA loan limits; urges longer extension of flood insurance
LOS ANGELES (Nov. 18) – The U.S. Congress late yesterday passed a “minibus” appropriations measure that will continue to fund the government and includes a provision to reinstate the Federal Housing Administration (FHA) loan limit in high-cost areas for two years. President Obama signed the measure into law today.
The higher Fannie Mae, Freddie Mac, and FHA conforming loan limits of $729,750 expired Oct. 1, when it was reduced to $625,500. The passage of H.R. 2112 provides for an extension of FHA-insured mortgages at the higher level through December 2013. It also provides for a short-term extension of the National Flood Insurance Program (NFIP) through Dec. 16, 2011. C.A.R. and NAR strongly urge Congress to work on a five-year NFIP reauthorization bill to provide certainty and avoid further disruption to real estate markets.
“C.A.R. is pleased the Senate and House were able to come to a reasonable compromise on extending the FHA loan limit to ensure affordable home financing for middle-class buyers,” said 2012 C.A.R. President LeFrancis Arnold. “However, we are disappointed that the Senate and House could not agree on increasing the loan limits for Fannie Mae- and Freddie Mac-insured loans, especially since the Senate bill included a premium on high-cost loans that protected U.S. taxpayers from footing the costs.”
The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) and the NATIONAL ASSOCIATION OF REALTORS® (NAR) have long advocated making permanent higher loan limits.
A continued government role in housing financing will ensure stability in mortgage markets and that home buyers in high-cost areas will be able to refinance and obtain FHA financing for new home purchases more easily. However, it will cost these home buyers more to finance their homes either through jumbo mortgages or with FHA than it would have through Fannie Mae or Freddie Mac.
The conforming loan limit determines the maximum size of a mortgage that government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac can buy or “guarantee.” Non-conforming or “jumbo loans” typically carry higher mortgage interest rates than conforming loans, increasing monthly payments and hampering the ability of families in California to purchase homes by making them less affordable.
Leading the way…® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with more than 160,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.
C.A.R. November 18, 2011
REALTOR.com Goes Global
November 8, 2011 By Leave a Comment
The National Association of REALTORS® and Move Inc. have announced the launch of the REALTOR.com International Web site. Available at www.REALTOR.com/International, the new site delivers 4.4 million for-sale property listings to buyers across the globe, as well as residential properties fed to the site by foreign content providers.
At launch, Realtor.com International will feature residential real estate listings from Brazil, Bulgaria, Croatia, France, Italy, Portugal, Romania, Serbia, Slovakia, and Spain. The site can also be accessed from the REALTOR.com home page. In the past three months, nearly 2.6 million international visitors searched for U.S. real estate on REALTOR.com. The top five countries where searches originated from are Canada, the United Kingdom, Germany, Australia, and India. Daily Real Estate News
FHFA revises HARP to help more borrowers
October 26, 2011 By Leave a Comment
The Federal Housing Finance Agency, along with Fannie Mae and Freddie Mac, on Monday announced changes to the Home Affordable Refinance Program (HARP) to help more borrowers.
The program will continue to be available to borrowers with loans sold to Fannie Mae and Freddie Mac on or before May 31, 2009, with current loan-to-value (LTV) ratios above 80 percent.
The new program enhancements address several other key aspects of HARP including:
Eliminating certain risk-based fees for borrowers who refinance into shorter-term mortgages and lowering fees for other borrowers;
Removing the current 125 percent LTV ceiling for fixed-rate mortgages backed by Fannie Mae and Freddie Mac;
Waiving certain representations and warranties that lenders commit to in making loans owned or guaranteed by Fannie Mae and Freddie Mac;
Eliminating the need for a new property appraisal where there is a reliable AVM (automated valuation model) estimate provided by the Enterprises; and
Extending the end date for HARP until Dec. 31, 2013, for loans originally sold to the Enterprises on or before May 31, 2009.
Fannie and Freddie plan to issue guidance with operational details about the HARP changes to mortgage lenders and servicers by Nov. 15. Since industry participation in HARP is not mandatory, implementation schedules will vary as individual lenders, mortgage insurers and other market participants modify their processes.
CAR.org
How will Fed decision affect home loan rates?
September 22, 2011 By Leave a Comment
The Federal Reserve announced it’s changing its investment strategy, which means we could have lower mortgage rates in the future. The Fed has deccided to shift $400B in holdings to boost the lagging economy.
Operation Twist? The committee’s words: To help support conditions in the mortgage markets, the Committee will now reinvest principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. In addition, the Committee will maintain its existing policy of rolling over maturing Treasury securities at auction.
The Director of SDSU’s real estate center, Mr. Lea (former past chief economist of mortgage giant Freddie Mac), said officials are basically selling off shorter-term Treasury holdings for longer-term ones and mortgage-backed securities.
“They’re changing the composition of their balance sheet,” said Lea.. “This isn’t a new round of quantitative easing. They’re reinvesting, not injecting more money into the economy.”
This could mean pushing down long-term interest rates, and in turn, mortgage rates.
Mortgage rates hit 60-year low, but few qualify
September 9, 2011 By Leave a Comment
Mortgage rates have reached their lowest levels in six decades, making this the best time in most Americans’ lives to buy or refinance a home. For people who qualify, today’s rates could save thousands of dollars a year. Read article MercuryNews.com
Getting a fair appraisal in a tough market
September 9, 2011 By Leave a Comment
Since the real estate market took a downturn, some people have complained they couldn’t buy, sell, or refinance a home because an appraiser used bank-owned (REO) or short-sold homes as comparables in the valuation process, which dragged down the value of their home. While using REO and short-sold properties can lower the value of a home, some homeowners are upset that their county assessor will not use these properties as comps for their property taxes.
Making sense of the story
In California, some assessors will consider distressed sales when looking at comps, but it varies widely by county, neighborhood, and house. In general, assessors will always look at non-distressed sales first and if there are enough, disregard REO and short sales. However, if there are not enough standard sales, or the home is in an area dominated by distressed sales, the assessor likely will take these properties into account.
Under Proposition 13, property is assessed upon a change in ownership at its fair market value. That is usually the same as the sale price. However, with distressed property, the sale price may not equal fair market value.
Between changes of ownership, assessors can raise values only by an inflation rate, not to exceed 2 percent per year, plus the value of major improvements or additions.
Under Prop. 8, owners who think the market value of their property has fallen below its assessed value can ask for a temporary reduction to the fair market value.
Homeowners who think their homes are worth less than the assessed value can usually ask their assessor for an informal review. If they are still not satisfied, they can file a formal appeal with their county’s assessment appeals board by Sept. 15 or Nov. 30, depending on the county.
San Francisco Chronicle
Gov. Brown signs AB 771
September 7, 2011 By Leave a Comment
Last week, Gov. Brown signed AB 771, a bill that prevents home buyers in a common interest development (CID), such as a condominium or townhome, from being charged excess document fees.
Homeowner associations (HOAs) are required to provide specific documents to prospective purchasers of homes in a CID — a form of real estate ownership in which each homeowner has an exclusive interest in a unit and a shared interest in the common area property. In addition to the standard residential property disclosures, purchasers of a unit within a CID must receive basic information about the structure, operation and management of the HOA that operates the CID.
Current law requires that this information come from the HOA and prohibits it from charging fees in excess of what is “reasonable,” not to exceed the actual cost of processing and producing these documents. HOAs generally have provided the documents for approximately $75 to $250. Increasingly, HOAs have been delegating document preparations to third party vendors or contractors who, under a 2007 court decision, are exempt from this fee limitation. This delegation of responsibility by HOAs sometimes resulted in home purchasers being forced to pay additional fees, as much as $1,000, for other documents which were “bundled” with the required documents.
Assembly Bill 771 (Betsy Butler, D-Torrance) addresses this situation by specifying that only fees for the required documents may be charged when such documents are provided, effectively prohibiting any “bundling” of fees for other documents with these fees. The bill also creates a new form detailing which documents are required, and requires the provider to disclose the fees that will be charged for the documents before they are provided. The seller of a CID must complete this form and transmit it to the prospective purchaser along with the required documents. This will eliminate any uncertainty for the prospective purchaser as to exactly which documents are being provided and the precise fees being charged for those documents.
CAR.org
DRE# 00917133