SHOULD MOM AND DAD CO-SIGN?

Years ago, most young people purchased their first home with help from Mom and Dad or other family members.  For most families in the 50's, 60's, 70's, less cash was available so they helped by co-signing. In the 80's and 90's and 2000's we experienced a surge of affluece across all generations and loans were easier to obtain.   We were seeing very few co-signers.  Today we've turned
the corner again.  Tighter lender standards and an unstable job market have made it tougher for some people, especially those just starting out, to qualify for a home mortgage on their own. So, some home buyers are turning to family members or close friends with good credit to co-sign a home loan.

Making sense of the story

• While becoming a cosigner may seem like a good solution, money manager and lenders caution against those who are asked to be the cosigner.
  
• A cosigner, even if not living in the house, is really a coborrower, meaning he or she still is responsible for payments if the occupant is unable to meet his or her obligations. In other words, if the principal party defaults on the loan, the cosigner is on the hook.
  
• One financial planner suggests potential cosigners take a less risky alternative, such as providing a cash gift for the down payment. Under current tax laws, a person can give as much as $13,000 to a person, free of gift taxes, or $26,000 per person, if a married couple filing jointly is giving the money.
  
• Those considering cosigning a mortgage must conduct due diligence. First, the cosigner must understand why the family member or friend is asking for help. Potential cosigners shouldn’t be afraid to look into the requestor’s personal finances to help determine whether he or she will be able to repay the loan. Perusing credit reports also will show the track record he or she has for paying off debts. A discussion about worst-case scenarios also should take place before signing on the dotted line. Working out a written contract containing an agreement about what would happen in the event of a default, also is recommended.
  
• Cosigners also should keep in mind that the mortgage will show up on their credit report, and could affect their own ability to borrow money or buy a second home. If the principal borrower makes a late payment, that also will show up on the cosigner’s report.

Call me and I can help you review all your options before agreeing to co-sign for financing in today's market.  We should always look at the long term effects of any financing before signing on the dotted line. 

Check with Team South Bay Realty for all your real estate and financing needs.  We have a team of qualified professionals who are accountable and ready to help.  We're your Realtors For Life!

Timeshare property resale scam

As if we don't have enough problems with real estate

these days...now there's a new way consumers are getting

fleeced as they try to sell their "Time Shares" to keep up

with our not so robust economy. 

Always a way for thieves to prosper, Rats, they did it again...

Check out this article from the

California Association of Realtors...

A federal court has temporarily halted a telemarketing operation that targeted consumers trying to sell their timeshare properties. The defendants allegedly charged consumers thousands of dollars, falsely claiming they had buyers lined up for sales that supposedly would be reviewed and approved by the Federal Trade Commission.

According to court papers filed by the FTC, the Orlando, Florida-based defendants, who operated out of mail drop addresses in places such as Las Vegas, Boston, and Orlando, contacted consumers trying to sell their timeshare properties and told them they had buyers for their properties. In order for the sale to proceed, the defendants charged consumers up to $3,150 – either as an “earnest money deposit” to commit them to the sale, or for sale-related expenses – which, consumers were told, would be refunded when the sale closed. Consumers were instructed to pay by cashier’s check or money order sent by overnight delivery, and to immediately sign and return a “sales agreement” or “sellers’ document” that would be mailed to them.

In the complaint, the FTC alleged that the “sales agreement” was a marketing contract for advertising the property, not a sales contract. Consumers who signed the contract and sent their payment to the defendants often were not contacted again, and consumers’ properties were never sold.

Contrary to the defendants’ alleged assertions, the FTC

does not review or approve timeshare sales.

Dont' fall prey to these scams.  If you have a real estate question, call me!  If I don't have the answer, I'll find it for you. 

Fast Facts
Calif. median home price: May 2011: $291,760 (Source: C.A.R.)
Calif. highest median home price by region/county May 2011: San Mateo: $810,000 (Source: C.A.R.)
Calif. lowest median home price by region/county May 2011: Merced $113,000 (Source: C.A.R.)

Calif. Pending Home Sales Index: June 2011: 119, an increase of 1.9 percent compared with prior month. (Source: C.A.R.)

Calif. First-time Buyer Affordability Index: First quarter 2011: 53 percent (Source: C.A.R.)

Mortgage rates: Week ending 7/14/2011 30-yr. fixed: 4.51 fees/points: 0.7% 15-yr. fixed: 3.65 fees/points: 0.6% 1-yr. adjustable: 2.95% Fees/points: 0.5% (Source: Freddie Mac)

Have a great summer! 

Charlie (and Dyna)

Team South Bay Realty

Your Realtors for Life! 

They're Always Waiting For An Opportunity!

An Old Mortgage Scam Aims To Hijack A Payment Or Two!

A mortgage scam in which con artists send letters telling borrowers they should begin sending their mortgage payments to a fictitious company that has begun servicing their loan, is making the rounds again. Unfortunately, by the time borrowers figure out their loan has not changed servicers, they’ve already sent one or two mortgage payments to the fictitious company.

According to those familiar with the scam, it typically works because most borrowers are unaware of the rules when it comes to the transfer of mortgage-servicing rights. Under the law, the current servicer is required to send a “goodbye” letter notifying the borrower that payments should be sent to a new company as of a certain date.

A week or two later, the law says the borrower should receive a second letter, which, by law, should include a welcome missive from the new servicer with the details of the mortgage payment – a breakdown among principal, interest, and escrow. The package also is likely to include a few payment coupons, if not a brand-new coupon book, and self-addressed printed envelopes for borrowers to make payments.

Both the goodbye and welcome letter should include the mortgage loan number. If either letter does not, or if the information included in one doesn’t match what’s in the other, borrowers should call their original servicers to inquire.

Borrowers only receiving one letter should be extra cautious. Even if everything appears to be standard procedure, borrowers are still advised to call the first company’s toll-free number just to be sure.

(Los Angeles Times Reprint)

When in doubt, call me!  I'll find out for you.  For all your real estate needs, count on Team South Bay Realty.  We're here to help...we're your neighborhood real estate consultants FOR LIFE! 

Financing Foreclosed Homes

 A "not so beautiful day in the neighborhood" for some homeowners today. Living next door to a boarded up home after foreclosure is not anyone's choice. Even with the price being way below market value (also not a blessing for the neighbors) the problem generally lies in being able to finance a severely distressed property. There is an answer that a lot of folks are over-looking in today's market. That is the old 203K loan. Still viable, available and a real good way to purchase that "fixer property" and have enough money to make it habitable.

Foreclosure properties, especially those with the water and power turned off, may not qualify for standard financing, but may qualify for a federally insured 203(k)loan. Buyers who are going to "owner occupy" the property and do not have enough money to purchase a foreclosure home using cash, may qualify for the federally insured 203(k) loan, which allows borrowers to roll projected rehab costs into the loan.

Since most foreclosure properties are sold "as is" and, oftentimes, heating, plumbing, and/or electric are problematic or inoperable, it's unlikely a conventional lender will lend money on the home. With a 203(k) loan, buyers generally employ an independent consultant hired by the Federal Housing Administration to review contractor cost estimates and architectural plans for things like whether the work will bring the property up to minimum standards, while not going overboard on improvements.

Buyers should be aware that not all foreclosure properties will be eligible. For instance, a partially built house that has never had a certificate of occupancy will require a construction loan of the kind that a commercial developer would use. We're also seeing more and more "unfinished remodeling job" homes today where the seller ran out of money and the building systems and/or structural definitions are lacking or insufficient. Those would require construction loans as well.

The interest rate on a 203(k) loan is approximately a quarter of a percentage point higher than on a standard FHA-insured loan, and a buyer also can expect to pay 1 or 2 points. Also, as with other FHA-backed loans, down payments may be as low as 3.5 percent, and loan limits apply. Currently, most FHA loans are capped at $729,750.

My friends at PACIFIC FIRST FINANCIAL will give you all the information necessary to investigate the 203K loan for your purchase. They also work with the CHF Platinum Program which is a Homebuyers Assistance Program featuring low interest rates and down payment along with closing cost assistance with Grants that do not have to be repaid. Call Sheila for the latest info at 310-214-9299.

Tote your toolbelt over to my office and I'll give you list of great opportunities in your neighborhood! We're always ready to work for you here at Team South Bay Realty, Your Realtors For Life!

Call 310-534-3940 or email: Charlie

EVEN THOUGH IT'S 40 DEGREES, SPRING IS HERE!

And let the ritual of spring cleaning begin... but here's a tip for all year round from one of our Home Warranty Companies. Something to think about! 

“Failure is simply the opportunity to

begin again more intelligently.”  Henry Ford

Home Maintenance Tip 

Keeping Your Water Heater Fit

Most people don't give much thought to their water heater - they just turn on the faucet and expect hot water to come out. Water heaters are relatively maintenance free, and you can keep your water heater in peak operating condition just by performing two

simple maintenance tasks every six months: test the pressure valve and then flush the tank.

If the pressure release valve is not operating properly, the tank can potentially over pressurize and explode. Flushing the tank prevents sediment build up, which can reduce your water heater's energy efficiency and clog your water lines. Consult your owner's manual or other maintenance guide for instructions on how to safely perform these maintenance tasks. Visit OLD REPUBLIC and click on the QUICK FIX TIPS link in the Homeowner's Section of their site for more information.

If you have any homeowner tips you'd like to offer, please email Charlie@TeamSouthBayRealty.com  and we'll post for everyone. 

Happy Spring! 

p.s. You might want to invest in a hot tub for "after Spring Cleaning" to treat your aching back!  I purchased a FreeFlow Spa about 5 years ago and I love it.  Lots of good deals right now.  Shop around and get one that is "self-contained" like mine.

Call if you want some tips on on tubs. 

Charlie :) 
and Dyna too, Of course  (with her friend Moose on a Doggie Playdate)

Short Sales - What's Happening!?

That's the daily question from my buyers today...

What's happening with my offer!?  Even though I've been through all the Short Sale Training and I'm even HAFA Certified, I can't breach the chasm for communication with the banks holding the sellers' notes.  If we're lucky, the listing agent is also well educated and certified.  In that case,  we may make some progress.  Sometimes even with everything being done correctly and by the bank's requirements we still find ourselves at a standstill.  A lot of buyers today give up and walk away.  We're reaching a boiling point in the industry.  California Association of Realtors has been trying to help these lenders approach some semblance of organization so we have everyone conducting this business the same way.  There is a lot of resistance from the larger banks.  They want to use their own methods, paperwork and programs.  So, in the meantime, as we try to get "all our ducks in a row," the prime requirement for home purchases in today's market is PATIENCE.  It used to be 1) Good FICO scores  2) Verifiable Income 3) Down Payment ...today we have to add one more to the buyers' list of requirements ...PATIENCE.  Sorry everyone, I hope this market will turn the corner soon on this issue.  In the meantime, remember this is a "Hurry Up and Wait" business.  Bring a book!

LA Times Article...

Banks are dragging their feet when considering so-called short sales, an increasingly prevalent type of real estate transaction in which lenders allow homes to be sold for less than what is owed on them, according to a survey of California real estate agents.

Nearly two-thirds of the 2,150 respondents to the California Assn. of Realtors' survey of member agents said banks took longer than 60 days to respond to short sale offers and that fewer than three out of every five offers ultimately resulted in a sale.

The response times are much longer than those specified in government guidelines for banks who agreed to participate in programs that help troubled borrowers when they accepted a share of the $700-billion Wall Street rescue.

"The survey results show that the short sale system is clearly flawed," CAR president Beth L. Peerce said. "Increasing the number of successful short sale transactions is one important way we can help California families and move our economy closer to recovery."

Although the survey only covered agents in California, National Assn. of Realtors spokesman Walter Molony said similar complaints had come from across the country, especially from states with hard-hit housing markets such as Nevada, Florida and Arizona.

"Banks just have not been equipped or willing to make quick decisions on this," Molony said. "It's unfair to all parties concerned."

Short sales have played an increasingly large role in California's real estate market, with declines in property values leaving many borrowers with crushing payments on mortgages that are greater than their homes' worth.

The transactions allow troubled borrowers to dodge the hit to their credit scores that would come from a foreclosure, while banks are able to keep distressed properties off their books without going through the costly foreclosure process.

The estimated percentage of resales in the state that were short sales went from about 10% in 2008 to 18% in 2010, according to tracking firm DataQuick Information Systems.

But foreclosures are still much more common, accounting for nearly 38% of all resales in 2010, DataQuick said.

Richard Green, who directs the USC Lusk Center for Real Estate, said the market would benefit from avoiding foreclosures, which can lead to homes languishing on the market, by encouraging more short sales.

"Forcing banks to clear the market through short sales would almost certainly get us through this faster than we're getting through it," he said.

Green said he suspected banks were slow to approve short sales because the transactions force them to immediately report the difference between the sale price and what they're owed as a loss, rather than carrying the loan balance as a purported asset. He said some banks may also fear inadvertently letting property go for less than it's worth.

CAR had previously written to federal government agencies that oversee short sales to ask them to mandate faster responses by banks and to take other steps to foster more of the transactions.

The association said in the December letter to the Treasury and the Federal Housing Finance Agency, which oversees government-supported lenders Fannie Mae and Freddie Mac, that banks were not living up to the terms of the Home Affordable Foreclosure Alternatives' short sale program.

Since most lenders have repaid their bailout funds to the government, participation in HAFA is now primarily voluntary, but CAR said the banks should still be bound by the agreement.

The association noted that banks were taking much longer to approve short sales than the time allotted by HAFA: Ten days in cases where the lender has already decided on a selling price; 30 days if the selling price is being proposed by a listing agent.

CAR asked for the government agencies to force banks to complete all short sales following HAFA guidelines and to comply with the program's time frames. It also recommended increasing monetary incentives to banks for completing short sales.

Treasury spokeswoman Andrea Risotto said that her agency was still working on its response to CAR's letter, but that some of the requests — such as punishing banks for not meeting HAFA's time frames — would require legislative action.

A message left with the Federal Housing Finance Agency was not returned.

business@latimes.com

So hang in there everyone.  It's a great time to buy, lowest interest rates in decades, inventory priced at affordable levels, good loan programs for qualified buyers ...

Patient, qualified buyers that is...

Charlie :) (and Dyna)

RED FLAGS

Today, buyers are looking for a Great Deal.   Sometimes we forget that a great deal is about a lot more than just the price.  So many of our distressed properties today (those in foreclosure or involving short sales) have not been maintained for quite a while.  Think about the homeowner who can't afford to pay the mortgage payment.  Do you think this homeowner is being diligent about the maintenance?   So, here are just a few RED FLAGS to look for when choosing a "smoking buy" in today's market ...

RED FLAGS

 Steep slopes (especially of concern in areas of periodic heavy rains and in areas sloped to create subdivisions, which have resulted in many landslides.)

Floors that appear unlevel

Cracks in the foundation, walls, or ceilings

Doors and door casings which are not square to each other

Water stains on walls or ceilings

Smell of dampness in structure

Apparent additions or structure modifications

(were additions or modifications done under a valid building permit?)

 Presence of an oil heating system or evidence of a prior oil heating system

Soft floors in an area such as a bathroom or kitchen

Evidence of poor caulking in tub/shower surround areas

Use of manufactured siding

Gas or oil furnaces that show yellow flames

Evidence of water stains on crawl space piers, footings, or walls

Evidence of crumbling concrete foundation walls (often, older homes in California were built with sand that contained a great deal of organic material. This material over time breaks down and simply leaves the foundation concrete in a deteriorated state)

Evidence of standing water on a property

 

When I am showing a home to one of my buyers, while they are looking at the floorplan and the backyard and the upgraded kitchen, I'm looking for signs on my "Red Flag" list.  Better to find these problems before we close the escrow than having to deal with the headache and expense of curing or repairing after close.  I have several very good Home Inspection Companies that I highly recommend.  If you are thinking about buying a home in this market with over 50% distressed home inventory, call me first.  Even if you are using another Realtor (which I certainly hope you are not) you will still need a very good home inspector.  It doesn't hurt to have more than one set of eyes examining the home before you pay for the inspection either!  (That would be mine and yours first of all.)  It pays to know what you're buying or know exactly what you are paying before you commit.  Call Your Real Estate Consultant For Life!

You'll be glad you did...

Charlie & Dyna  

 

 

When will housing come back in California?

Happy New Year! 

Foreclosures in the state are still high. Sales of new homes are at historic lows. And millions of homeowners are underwater on their mortgages.

 So what's the outlook for 2011 and beyond?

Although the steep decline of home prices in California ended in spring 2009, the weakness in the housing market after the expiration of federal tax credits for home buyers last year has led to some speculation as to whether the recovery is sustainable. Five experts, including Leslie Appleton-Young, the chief economist for the CALIFORNIA ASSOCIATION OF REALTORS®, were asked to provide their view on the state of real estate and what they think is needed to get the housing market moving again.

• In terms of home prices, the experts differed slightly with the majority predicting that home prices will remain flat throughout 2011. Ms. Appleton-Young predicts home prices will rise 2 percent this year, while a foreclosure expert predicts housing prices to decline 5 percent in 2011. According to Ms. Appleton-Young, there is little chance of home prices returning to their previous peak levels anytime soon. “We are in a slow-moving recovery with prices stabilized at the moderate and low end,” she said. “We are still seeing price attrition and price softening at the upper ends of the market.” 2011 will be lackluster, she said, but that does not mean California is not improving. "We are almost two years into a price recovery. The problem is not to look at 2007 as the normal market that you are moving back up to, because it wasn't a normal market. We are back in an underwriting environment that actually makes sense." "You are seeing prices recovering throughout the state," she added. "It is just going to take time."

• California’s recovery will hinge on location, according to Richard Green, director of the USC Lusk Center for Real Estate. Areas between El Centro and Sacramento likely will not see a return to peak prices for a long time. However, places like La Jolla, Laguna, Huntington Beach, Atherton, Palo Alto, the city of San Francisco, and Marin County could experience a return to their peak prices within the next five years, according to Mr. Green.

• Foreclosure expert Bruce Norris of the Norris Group believes the market is being artificially boosted by government programs and is set to fall further this year. Mr. Norris believes the demand for housing is most-needed for a sustainable recovery.

• California’s coastal markets will make a return once the job market improves, according to Emile Haddad, chief executive at FivePoint Communities Inc. In turn, that will lift consumer confidence. However, California’s inland areas are more likely to lag behind, and builders will have to reconsider the kind of product they offer in certain places.

• Former UCLA senior economist Christopher Thornberg, predicts home prices will remain flat in 2011. Thornberg was one of the first to predict the housing crash, pointing to prices that were way out of line with what people earned. In that vein, he views the plunge in home values as its own recovery of sorts "because that is when prices went from stupid-high levels to levels that made sense again," Thornberg said. "Now we are in a post-recovery recovery, if you will."

Here in the South Bay we are still treading water!  Looking forward to a stabilizing market in 2011 through 2012 and price increases equal to inflation only.   Those downsizing or moving up this year will find plenty of good quality housing at great prices.  Don't forget we still have the lowest interest rates in over 30 years available today at fixed rates!