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Page 8 of 9

Real Estate News Roundup

What will the new consumer protection bureau do for home buyers? Part of the financial reform bill signed into law by President Obama includes the creation of a Consumer Financial Protection Bureau, which plans to write new rules and monitor problems and abuses in areas such as residential real estate settlements, credit scores, “truth in lending,” and equal credit opportunity.

Is setting up yet another bureaucratic agency really going to provide any significant benefit to consumers?  Well, it may be a way to finally get rid of the poorly thought out and implemented Home Valuation Code of Conduct (HVCC) rules imposed by Fannie Mae and Freddie Mac in 2009.  HVCC is responsible for many of the late and undervalued appraisals we have been seeing since it’s implementation.

The new Bureau will include a hotline that will allow aggrieved mortgage borrowers and others to issue complaints and alert the Bureau to unfair and deceptive practices.  Does that make you feel more protected?

It will also include rules requiring mortgage loan officers to verify mortgage applicants possess the ability to repay the loans they’re seeking.   Is this different from making sure that a mortgage loan applicant is qualified to get the loan?  Isn’t this already part and parcel of the mortgage application?

Does this new Consumer Financial Protection Bureau really offer any benefit beyond getting rid of HVCC or is it just another bureaucratic agency that will slow down transactions while providing more government jobs to staff the Bureau?  Please share your thoughts by leaving a comment.  For more on this story check out this article.

California Home Buyers Tax Break funds are low or gone. Did you know that California had to build a new computer system to handle the faxed applications for the home buyers’ tax credit?  You may recall that the tax credit was available for first time home buyers or for new home buyers in two separate blocks of $100 million.  If you missed it the first time, you can get the scoop here.

The Franchise Tax Board is allowing people to submit applications for the first time home buyer tax credit even though they reported having allocated all the available funds by the end of June.  They claim they are continuing to accept applications  because they want to make sure that they really use all the funds available and don’t have leftover funds as a result of duplicated, incorrect or incomplete applications.

I wonder how much the new computer system cost on top of the $200 million in tax credits we are giving these first time home buyers?  You can read more about this here, but please share your thoughts below.

Home ownership rates are down. CNN reports that home ownership rates are lower in the second quarter of 2010 than they were a year ago.  In fact the rate is the lowest it’s been since 2009.  What do you think accounts for that?  could it be all the foreclosures?  Despite the fact that home ownership is down among individuals, it’s rising among investors.

What do you think is responsible for the decline?  Are foreclosures the result of bad underwriting for loans, loss of jobs, a combination of both?

Agents for buyers rate higher. Home buyers rate real estate agents higher than home sellers this year as compared to last year, according to a national consumer satisfaction study released last week by a leading marketing information company.  Moreover, home buyers were more satisfied with their real estate experience in 2010 than they were in 2009.  On a 1000 point scale, home buyers on average ranked their experience at 803 points in 2010.

It doesn’t seem much of a surprise that home sellers were less satisfied.  It is more difficult to be on the selling end lately when every buyer seems to be looking for a bargain.

To read the full story, please click here.

What are your thoughts?  Comment on this story and let us know what you think.

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Are House-hunting Priorities Different for Women and Men?

ZipRealty conducted a survey in June that highlights where men and women differ in their house-hunting priorities.  Overall it seems the survey respondents had fairly similar priorities.  I wonder if any of them were house-hunters from the Tehachapi area.

It is interesting to note that men are not focused on “man-caves” or home theater rooms.  Instead, they are even more interested than women in a nice master suite.   Would you be surprised to know that women placed a higher priority than men on a garage?

Men and women agree about the top three home features.  They both rank garages, master suites, and ample storage space as first second and third in importance.  The next five items appear on both lists, although not in exactly the same order: large or walk-in closets, outdoor entertainment areas, guest bedroom, gourmet or updated kitchen, and breakfast room or eat-in kitchen.

Finally, for women the last two top ten features are a large yard and wood floors.  For men, it’s a view and a large yard.  I guess men don’t care about wood floors and women probably figure they don’t have much time to enjoy a view.

The survey only included 1000 participants.  Do you think this is enough to provide a representative sample nationwide?  What about for the Tehachapi or Kern County area?  Share your thoughts below.  If you want to see the entire survey results, click here.

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Foreclosure Alternative?

There’s been lots of talk about how to get out from under a mortgage that is more than the value of your home.  One of the possible choices is a short sale. definitely a better choice than foreclosure.  Another choice that may be often overlooked is a deed-in-lieu-of-foreclosure, or deed-in-lieu for short.

Choosing a deed-in-lieu might be a viable option for many.  It allows you to cancel your mortgage in exchange for turning over the deed to your house.  In most cases, it is a much faster process than either a short sale or foreclosure.  Another advantage is that Fannie Mae has reduced the time that a borrower has to wait from four years to two as compared to a foreclosure.

Want to know more?  Check out this article from the LA Times, or use the Contact page to phone, text or email with your questions.

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What is a Short Sale?

Lots of people have questions about short sales.  What is it? How does it work? Is it good for me as a buyer?  Is it good for me as a seller?  None of the answers are easy, but let’s try to sort out some facts.

What is a short sale? A short sale situation exists when a homeowner owes more on his property than it’s value.   For example, a homeowner purchased a home in 2005 for $350,000 and wants to sell it now.  If the current mortgage amount is $275,000 but the house is only worth $250,000, the seller is “underwater” or upside-down.”  A short sale occurs when the lender agrees to accept less than is owed on a mortgage.

How does it work? When a homeowner realizes he is in a short-sale situation, he should take immediate action and contact the lender to request a short sale (or short pay) package.  The lender will require a number of documents to substantiate that accepting a short pay-off on the mortgage is appropriate.  A competent real estate agent with specialized training in short sale transactions can help guide you through the process.

Is it good for me as a buyer? That question is a little complicated.  Whether or not a short sale is good for you as a buyer depends on many factors.  Short sale transactions often take longer than other types of transactions, so if you need to move on a specific deadline, it may not be the best bet for you.  If you have a flexible schedule in arranging your move, a short sale can be good.  You will likely be able to purchase a property at a reasonable price and feel good for helping out a distressed homeowner.

Is it good for me as a seller? Generally, yes.  The advantages to sellers are many.  In the first place, you can feel good about doing your best to make a bad situation better.  Lenders understand that things happen — jobs are lost, catastrophic illness, or any number of other legitimate issues.  For the most part they are willing to work with homeowners who are suffering from a  hardship.

The downside?  The process will feel invasive and embarrassing.  The lenders are going to exercise every legal method at their disposal to make sure that the homeowner is deserving of help.   At the end of the process you should understand that your credit rating will be adversely affected, but not nearly to the extent that it would in the event of a foreclosure.  And, finally, won’t you fell better knowing that you did your very best to live up to the obligations you incurred?

Get more information. The best thing you can do whether you are interested in buying or selling a home that is a short sale is get more information.  It’s important to work with a real estate agent who understands the short sale process.  One good choice when interviewing an agent is to ask if he or she has any special training in short sale transactions or holds any certifications.  There are many certifications available, such as the SFR® (Short Sale & Foreclosure Resource) available through the Natianal Association of REALTORS®.

You can ask more questions by leaving a comment below, or contact me privately (see the Contact page for email and phone details.)  You can find out more about me here.

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