Biz Break: Will California's flailing real estate market stabilize next year?

Just how grim is the real estate market in the Golden State? Even the Realtors (normally an optimistic bunch whose income depends on improving conditions in the housing market) expect sales to plunge 10 percent this year from 2009. 

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From the San Jose Mercury News

Mortgage rates fall to decades-low of 4.27 percent

NEW YORK (AP) -- Rates on 30-year mortgages fell to the lowest level in decades for the ninth time in 12 weeks, pushed down by traders anticipating a move by the Federal Reserve to pump more money into the economy. 

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From the San Jose Mercury News

Bank of America halts foreclosure sales in all 50 states

WASHINGTON -- Potential flaws in foreclosure documents are threatening to throw the real estate industry into a full-blown crisis, as Bank of America on Friday became the first bank to stop sales of foreclosed homes in all 50 states. 

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From the San Jose Mercury News

Lack of title insurance could slow sales of foreclosed homes

Foreclosed homes could get harder to buy now that one of the nation's largest title insurance companies has stopped insuring titles to homes foreclosed by JPMorgan Chase and GMAC Mortgage.

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From USA Today

Refinancing into shorter loans

Grim headlines about the housing market can make that final mortgage payment seem like a distant dream. But a growing number of homeowners are refinancing into shorter-term mortgages designed to make the dream become a reality sooner.

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From the New York Times

A new way to cut a mortgage

Some homeowners who already have refinanced into low-interest-rate mortgages are using a little-known strategy to make their monthly payments even smaller.  Called "recasting" or "re-amortizing," the strategy allows a borrower to lower the monthly payment on an existing fixed-rate home loan for a small fee without having to apply for a new loan and without having to pay reappraisal and other fees.

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Wall Street Journal

Serious delinquencies fall for fifth month in a row

Fannie Mae said serious delinquencies on single-family mortgages slid in July from June, the fifth-straight month of declines, further signaling that home-loan problems were on the downswing.

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From the Wall Street Journal

College-student housing presents investment opportunities

It's not free of risk and is far more management-intensive than conventional multifamily properties, but student housing has a long history of growth and stability.

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From the Los Angeles Times

Prices rise for homes in foreclosure or sold by banks

Prices for homes either in foreclosure or sold by banks rose in the second quarter, according to a real estate group, underscoring competition in the market for distressed properties and the degree to which the mortgage crisis has spread to more affluent neighborhoods.

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From the Los Angeles Times

California REALTORS® forecast slight rise in 2011 home sales

Sales of existing, single-family homes are expected to decline slightly in 2010 compared with 2009, but are forecast to rise slightly in 2011, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) “2011 California Housing Market Forecast.”  Meanwhile, the median price of homes in California is expected to increase both in 2010 and 2011 compared with the year prior.

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New California Laws for 2011

The recent end of the 2009-10 legislative session has brought the end of short sale deficiency judgments for first loans, and other new laws affecting REALTORS® and their clients.  To view the full text of the following bills, go to www.leginfo.ca.gov.

• No Short Sale Deficiencies: Starting January 1, 2011, a seller's first trust deed lender cannot obtain a deficiency judgment against the seller after a short sale.  Providing written consent to a short sale shall obligate the first trust deed lender to accept the sales proceeds as full payment and discharge of the remaining amount owed on the loan.  This law applies to first trust deeds secured by one-to-four residential units, but does not limit the lender from seeking damages for fraud or waste by the borrower.  Senate Bill 931.  Governor Schwarzenegger vetoed Senate Bill 1178, our sponsored bill, which would have extended California's anti-deficiency protection to refinance loans.
• Energy Audit in Home Inspection Report: Beginning January 1, 2011, a home inspection and inspection report may, upon a client's request, include an audit of the energy efficiency of a home, according to the standards of the Home Energy Rating Systems (HERS).  REALTORS® are also strongly encouraged to give the newly released HERS booklet to residential buyers, because doing so provides a valuable shield from liability.  Delivery of the booklet will be deemed to be adequate to inform the buyer about the statewide HERS program.  Assembly Bill 1809 and California Civil Code section 2079.10.
• Restriction on Adverse Possession Claim: Effective January 1, 2011, a claim for adverse possession requires, among other things, certified records of the county tax collector showing that all state, county, or municipal taxes have been timely paid for the five-year period the property has been occupied and claimed.  Existing law merely requires proof that taxes have been paid for the five-year period, not certified proof of timely payments.  Assembly Bill 1684.
• Enforcement of MLO Requirements: Effective January 1, 2011, anyone acting as a mortgage loan originator (MLO) without an MLO license endorsement will be guilty of a crime punishable by six months imprisonment, plus a $20,000 fine.  Furthermore, a broker cannot employ or compensate a real estate licensee for MLO activities unless that licensee has a license endorsement.  This law has also given the Department of Real Estate (DRE) the authority to deny or revoke a MLO license endorsement or take other action.  This law also amends the MLO requirements for finance lenders and residential mortgage lenders under the Department of Corporation.  Senate Bill 1137.
• Post-Foreclosure Protection for Tenants: Commencing January 1, 2011, a notice to terminate a residential tenant who remains after a foreclosure sale must generally include a statutory notice of the tenant's rights.  This requirement, which sunsets on January 1, 2013, applies to an immediate successor-in-interest for one year after a foreclosure sale.  The tenant's rights must be on a separate cover sheet or, for a 90-day termination, incorporated into the notice to terminate.  Another provision of this bill protects a residential tenant's credit by generally prohibiting the court clerk from revealing unlawful detainer court records unless the plaintiff prevails at trial.  Senate Bill 1149.
• Tenant Protection for Domestic Violence Victims: Starting January 1, 2011, a residential landlord cannot terminate or fail to renew a tenancy based on domestic violence against the tenant or tenant's household members as specified.  This law applies if the person restrained from contact with the tenant by court order or named in a police report is not also a tenant of the same dwelling unit.  If the protected tenant subsequently allows the person restrained to visit the property, or the landlord reasonably believes the person restrained poses a physical threat to others or to quiet possession by other tenants, the landlord may serve a three-day notice to correct or quit.  To further ensure safe housing for domestic violence victims, this law also requires that, for leases entered into after January 1, 2011, a landlord changes the exterior locks of a protected tenant's dwelling unit within 24 hours after the tenant provides a written request and supporting court or police documentation as specified.  Senate Bill 782.
• Protections Against Real Estate Fraud: Effective January 1, 2011, new laws protecting consumers from real estate fraud include, without limitation, the following: (1) Expanding the foreclosure consultant law to include someone who performs a forensic audit of a residential mortgage loan (Assembly Bill 2325); (2) Requiring any mailed solicitation that offers to provide a copy of an owner's grant deed or other title records for a fee to include a prominent statutory disclosure that the copy service is not associated with any governmental agency and that the homeowner can obtain such records from the county recorder (Assembly Bill 1373); and (3) Increasing the criminal punishment for renting out a residential dwelling without the owner's consent from six months imprisonment plus a $1,000 fine, to one year imprisonment, plus a $2,500 fine (Assembly Bill 1800).
• Other Laws: Some of the other laws that may interest REALTORS® include, but are not limited to, revisions to the mechanics' lien law (Senate Bill 189); clarification that the prohibition against discrimination of tenants based on source of income pertains to lawful and verifiable income (Senate Bill 1252); extension of the CalVet Home Loan program to include 2-to-4 residential units (Assembly Bill 2087); and lien enforcement by a municipal utility district for a tenant's delinquent charges (Senate Bill 1035).

Brandon Knapp's Views You Can Use October 2010

• Unintended consequences and home loan rates
• 7 Ways to teach financial responsibility to children
• Q & A:  How much home can you afford?

Full Details Here

Brandon Knapp's Market update 9/27/10

Last Week in Review, Forecast for the Week, Mortgage Market Guide
Full Market Update Here

Downsizing is booming

Smaller homes are trendy again as baby boomers look to shed excess room and recession makes large homes too costly.

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From the San Diego Union Tribune

One in three unlikely to qualify for a mortgage

Nearly a third of Americans are unlikely to qualify for a mortgage because their credit scores are too low, making homeownership out of the question for many, according to an analysis by Zillow.com

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From the Orange County Register

22 percent of private mortgage mods redefault

Banks have been ramping up their mortgage modifications, helping out troubled borrowers who can’t qualify for President Obama’s foreclosure-prevention program.  Too bad these homeowners redefault at more than twice the rate.

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From CNN Money

Fannie Mae offers housing aid to military families

Mortgage giant Fannie Mae plans to give military families a break on their home loan payments if they are struggling because of the death or injury of a service member.

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From The Sacramento Bee

Home prices up, but growth rate slows

Home prices have risen for five straight months, but the rate of growth has slowed, according to an industry report released Tuesday.

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From CNN.com

How to buy a home at a $100,000 discount

With nearly 150,000 foreclosed homes on their books, Fannie Mae and Freddie Mac are trying to pare down their growing inventory of repossessed properties, in turn providing home buyers with tremendous purchasing opportunities.


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From Smart Money

Mortgage rates: 30-year fixed lonas match low of 4.32 percent

WASHINGTON -- Rates on 30-year mortgages matched the lowest level in decades and rates on 15-year loans dropped to their lowest point in nearly 20 years.

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From the San Jose Mercury News

Congress holds conforming loan limites at nearly $730,000

WASHINGTON -- Congress has extended a policy that allows homeowners in pricey real estate markets to secure government-backed mortgages of nearly $730,000.

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From the San Jose Mercury News