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Short Sales and Foreclosures: What Real Estate Professionals Need to Know

Short Sales and Foreclosures – The New “Traditional” Transaction

For many real estate professionals, short sales and foreclosures are the new “traditional” real estate transaction. Knowing how to help sellers maneuver the complexities of short sales as well as help buyers pursue short sale and foreclosure opportunities are not merely good skills to have in today’s market – they are critical. And while short sales and foreclosures are not for the faint of heart, agents with the proper tools and training can use these specialty areas to guild their business for the long term.

Designed for real estate professionals at all experience levels, the National Association of REALTORS® (NAR) Short Sales & Foreclosure Resource certification, or SFR for short, gives you a framework for understanding how to:

  • Direct distressed sellers to finance, tax, and legal professionals
  • Qualify sellers for short sales
  • Develop a short-sale package
  • Negotiate with lenders
  • Tap into buyer demand
  • Safeguard your commission
  • Limit risk
  • Protect buyers

As many agents can attest, your ability to close short sales and foreclosures depends in part on your confidence in seeing these transactions through. Begin building your confidence today with SFR!

Benefits:

  • Training on both the buyer and seller side of short sale and foreclosure transactions
  • Free webinars that you can download anytime, anywhere
  • SFR logo and marketing materials
  • Access to SFR members-only online community
  • Differentiation as an SFR at www.realtor.org and www.realtor.com

How to become SFR Certified:

  • Be a member in good standing of the National Association of REALTORS®
  • Complete REBAC’s Short Sales and Foreclosures course, available online or in classrooms (visit www.coursecalendar.com for locations)
  • Complete 3 one-hour free webinars (find links at www.realtorsfr.org)
  • Submit application (download at www.realtorsfr.org)
    • Send application to SFR@realtors.org
    • $175 application fee waived through March 31, 2010

For complete information and how to add this course to your tool bag, go to:

NAR Short Sale Course

Posted in Announcement, Association Updates, Good News You Can Use. Tagged with , , .

By Gene Wunderlich
February 8, 2010

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CAR Sponsors Eight Bills in 2010 Session

After a successful year spent playing defense against a variety of point-of-sale bills and several tax measures aimed at Realtors®, the California Association of Realtors® is going back on the offense this year with eight new bills we are sponsoring. A sponsored bill is one that we author and then find a legislative sponsor – either Senator or Assembly member – to carry the bill for us. The selection of an author is a critical process as some bills have greater appeal to Democrats, others have more appeal to Republicans, some appeal to both in equal measure and some have no appeal at all. It’s a fascinating process that I’ll explain to you sometime if you’re interested.

The eight bills we’ll be sponsoring this year include:

SB206 (Dutton) – REO Homebuyer Tax Credit. As introduced, SB206 would have created a program similar to the federal first time homebuyer program providing a tax credit up to $8,000 for the purchase of a principle residence. Due to the state’s fiscal crisis it was later determined modofied to limit the tax credit to purchases of REO properties. At our recent BOD meeting, the language was further modified to include supporting a recent proposal by the Governor for the purchase of new or existing homes IF a reliable source of funding is found. This means if the Governor sponsors a bill to address substantially the same issue, we will abandon SB206 and sign on to support the Governor’s efforts assuming anybody can find money to fund such a program.

Local Property Maintenance Ordinance – (No author yet). This legislation will pre-empt over-reaching local vacant property ordinances that may adversely affect the market and unfairly expose Realtors® and homeowners to liability. While many cities, including those in Southwest County, have adopted workable ordinances to address abandoned property maintenance and blight issues, other cities have determined these ordinances are excellent sources of revenue for their cash-flow and have levied substantial fines. In some cases, the level of the fine is in excess of the value of the property. This bill would supersede local ordinances.

Anti Deficiency Protection (Corbett) – This bill would extend the existing borrower protections against personal liability for a purchase money loan to either refi the property or for improvements that increase the value of the property. Current policy states that any refinance, even with no cash out just to reduce interest rates, automatically shifts the loan from non-recourse to recourse. This bill addresses that.

CID Unit Owner Right To Rent – In 2008 we sponsored AB2259 (Mullin) which would have allowed current property owners within an HOA to continue to use their rental rights until such time as they sold the property even if the HOA decided to restrict rentals. Approved almost unanimously in both houses, it was vetoed by the Governor. This bill would require a 2/3 approval in a CID for any amendment that would prohibit owners from renting or leasing their units.

Portable Appraisals (Correia) – Current law permits, but does not require, lenders to utilize an appraisal ordered by a different lender. This bill states that if an appraisal is ordered and prepared by one lender, a second lender would be required to accept the appraisal to support the mortgage.

Appraisal Management Company (AMC) Regulatory Oversight (Hall) – Driven by the HVCC, Appraisal Management Companies have grown
enormously in both scope and power over the past two years. In 2009 CAR supported SB237 (Calderon) which subjects AMC’s to review by the Office of Real Estate Appraisers (OREA). This bill clarifies and expands OREA’s oversight of these behemoths. Since we can’t seem to stop HVCC at the federal level, we are trying to at least establish some control and oversight at the state level. By the way, HVCC technically sunsets this year but nobody is betting that the process or the AMC’s will simply pack it in and go home.

DRE ‘Poison Pill’ Reserve Protections – During the 1990’s the Governor and Legislature raided Department of Real Estate funds to help balance the budget. CAR sponsored legislation stating that if the funds were taken it would trigger a rollback of license fees to 1982 levels. The bill passed. Years later the state again  raided the DRE money but stated that it was borrowed by the general fund so the rollback was not triggered. We again addressed the matter legislatively and closed that avenue of pilferage. In 2009 DRE coffers were again raided in a manner than again did not trigger a rollback as the funds were not stolen, not borrowed, but loaned not to the general fund but directly to another department, the DOJ. Back to the drawing board yet again.

Advance Fee Definition Clarification (Hayashi) - Last year we supported SB 94 (Calderon) to prohibit ‘cash up front’ loan modification contracts. However, the language that emerged in the final bill requires some clarification of the definition of advance fees for services such that it cannot be construed to include a listing agreement – which is technically a fee agreement for future services to be rendered.

The legislative deadline for identifying authors and obtaining bill numbers is February 15 so we will keep you apprised of developments and successes in our 2010 advocacy efforts as they occur. Stay tuned for RED ALERTS as we elicit your support to persuade legislators of the importance of these measures.

There are also hundreds of ‘bills of interest’ in the process of being introduced by others. At future meetings CAR will evaluate those bills and members will be asked to take a position.

For a complete (as of January 2010) summary of both CAR sponsored bills as well as a list of these others bills of interest, please go to:
http://www.car.org/governmentaffairs/

raf

Posted in Announcement, Association Updates, Economic Outlook, Good News You Can Use, Legislative Updates. Tagged with , , , , , , , , .

By Gene Wunderlich
February 8, 2010

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CAR Takes Positions on Ballot Propositions

At last weeks Board of Directors meeting the California Association of Realtors® took the following positions on upcoming ballot propositions:

Proposition 14 – Elections: Open Primaries Legislative Constitutional Amendment. Neutral
It was voted in committee and brought forward to the General BOD that this issue was ‘Not Real Estate Related’ but after some floor debate membership determined it has enough impact on real estate to warrant our involvement in the issue.

Proposition 16 - New 2/3 Requirement for Public Electricity Providers: Against
It was determined by committee that this proposition, supported by PG&E, is aimed at stifling competition by privately owned utility companies and could result in higher utility bills for homeowners.

Proposition 17 - Continuous Coverage Auto Insurance Discount Act: Not Real Estate Related

Safe, Clean and Reliable Drinking Water Supply Act of 2010 (Not yet numbered): Neutral

Proposition 13 – Property Tax: New Construction Exclusion: Seismic Retrofitting ; For

Proposition 15 – Political Reform Act of 1974: California Fair Elections Act of 2008: Not Real Estate Related

On any proposition or legislation evaluated by CAR analysts, the BOD may take any of the following positions:
FOR - implies implicit support of the measure including the possible expenditure of time & money to assure passage.
AGAINST - implies active efforts including the possible expenditure of time and money to insure failure.
NEUTRAL - the measure has some real estate relevance that warrants attention but not enough to spend time & money on.
NOT REAL ESTATE RELATED - arguably any issue can be related to real estate since ‘under all is the land’ but these issues do not have any real estate impact as their primary focus.

As always, we encourage you to examine all propositions and ballot measures on your own and vote your conscience.

raf

Posted in Announcement, Association Updates, Economic Outlook, Legislative Updates, Q & A. Tagged with , , , , , , .

By Gene Wunderlich
February 8, 2010

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Effective 2011 Political Investment No Longer Voluntary

raf

At our Mid-Winter Board of Directors meeting this past Saturday, the California Association of Realtors® overwhelmingly voted on a motion out of the Political Affairs Committee to begin assessing every Realtor® the amount of $49 effective in 2011 for the purpose of funding our political activities.

At the urging of the Government Affairs Director sub-forum, CAR adopted the concept during our October meetings, directing legal staff to determine the most efficient way to implement the policy. The determination, published as an Issues Briefing Paper prior to Januarys meeting, recommended a ‘political assessment opt-over approach’, which was ultimately the direction voted on by the BOD. The opt-over provision allows the member to determine whether the investment amount shall be directed toward the Realtor® Action Fund or ‘opted-over’ to an alternative account.

A bit of history. Since 2000 the CAR political action committees (PAC’s) have grown and shrunk based on membership numbers and the real estate market. In the 2001-2002 election cycle, the PAC’s were funded by $3.8 million of voluntary political contributions. By 2006-2007, the PAC’s funding had increased to $10.1 million. In the past three years those receipts have fallen to just $2.5 million for 2009. As our organization faces increasing challenges at the local, state and federal level, that amount is simply not enough to keep us as a serious player in the political arena.

In addition to our ongoing local and state efforts, we are facing three additional challenges in the coming years that may require significant expenditures.

First there is a proposal on the June 2010 ballot to allow open primaries. If approved by voters this will dramatically increase competitiveness in at least 32 state legislative races. With more competition, the more costly each race becomes and the greater the demands [placed on our PAC’s.

Second, the 2012 re-districting will radically alter the political landscape for Senate and Assembly Districts. That may place additional demands on our PAC’s when combined with the potential for open primaries.

There will also be increased demand in both the 2012 (Gubernatorial) and 2014 (Presidential) election cycles.

With over $19 million spent during the past year, NAR ranks as one of the top ten lobbying organization in the country and the #1 grassroots trade association lobby in Washington. Having achieved so much on behalf of our members and for our customers private property rights, we cannot abandon that position now. We’ve invested too much time and money to make it happen, we can’tsimply walk away from the opportunity we’ve created for ourselves.

In 2009 voluntary contributions to our Realtor Action Fund fell to just 19% of members from a peak of 35% in 2004. That means 81% of our members were freeloading and letting a few of us carry the weight. That’s right. 81% of our members could not see their way clear to investing $49 in their own political survival. $4 a month was too great a burden. That’s less than a #3 special at In-N-Out, one latte, 2 lines in the classifieds. Cheap bastards. (Sorry, did I say that out loud?)

The program has been vetted legally to assure it complies with California laws on campaign contributions and is consistent with other state and federal laws. No doubt the will be some legal challenges from people who would rather spend thousands on attorney fees than $49 for their own political survival – but CAR is confident it will prevail – especially since CAR is not the first or the only trade association to implement this structure. Dentists, teachers and others have long enjoyed a fund-raising advantage since all members invest in their PAC. And we won’t even talk about the unions or the recent decision by the Supreme  Court allowing corporations to fund candidates from their general fund.

For those members with a religious or cultural aversion to political advocacy, you can direct your investment into an issues oriented fund that will not be used to directly support candidates.

This is a terrific move for CAR and one that has long been advocated as a way to equitably share the cost of our successful advocacy program across the membership rather than just saddling a few of us with the burden. It also means I won’t be hitting you up for a contribution every time I see you. That in itself should be worth $49 bucks.

There will be more information available on the CAR website soon and I’ll make sure that is posted for your review.


Posted in Announcement, Association Updates, Good News You Can Use, Legislative Updates, SRCAR Alerts. Tagged with , , , , , .

By Gene Wunderlich
February 7, 2010

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Federal Workers Raking in Big Raises During Recession. How YOU Doing?

Perhaps you missed this in all the end-of-year holiday hoopla, and I didn’t hear Pres. B.H. Obama mention it in his state-of-the-onion undress the other evening. (Well, I didn’t actually listen to it, but I’m betting he didn’t mention it).

This fascinating report came out in USA Today back in early December and didn’t get any airplay at the time either – you’d think the administration would use these figures to buoy their unemployment numbers or something but apparently it’s too hard to get the spin right.

For example – during the past 18 months that we’ve been in a ‘recession’ and 7.3 million people have lost their jobs and millions more have taken furlough days or pay cuts, the number of Federal employees making over $100,000 jumped from 14% of their workforce to 19%. SWEET!

With no furloughs or lay-offs. SWEETER!

Let’s do the math. With nearly 2 million federal workers (and growing), that’s an extra 80,000 people making over $100,000 (Remember, there’s 300,000 others already making 100K plus, these are just the new ones) And, as my calculator sits here smoking, that new 5% equates to $8 BILLION in additional payroll and doesn’t even touch the other 95% of the federal workforce.

Hmmm, I think I see where the jobs stimulus money went.

If you worked for the Department of Defense there were just 1,868 of you making over $150,000 back in December 2007. By June of last year that number had jumped to 10,100 nicely paid porkers. (sorry – that should be ‘workers’. dang spellcheck missed it)

They used to have a rule that personnel couldn’t make more than their boss – which is a pretty stupid rule to begin with. So last year they raised the pay cap for the FAA Director and 1,700 people immediately got raises because of that – all to over $170,000..

Speaking of $170,000, over at the Department of Transportation only one poor soul earned over $170,000 when the recession started – today he has been joined by 1,889 more lucky winners.

In general, if you’re a private sector schmuck, you’ll take home $40,331 annually but if you’re a Federal worker your take home averages out to $71,206.

And in the land of dueling quotes – Republican Freshman Rep Jason Chavez from Utah, who sits on the House Federal Workforce Subcommittee, says “There’s no way to justify this to the American people. It’s ridiculous.”

Not be be outdone, Jessica Klement, the government affairs director for the Federal Managers Association says their workforce is highly paid because the government has to hire highly skilled people like scientists and physicians and attorneys (Which apparently we don’t have in the private sector). She says that if you look at job to job, federal workers make 26% less than their private sector counterparts for comparable jobs.

Lemme see – I’m a Government Affairs Director and Jessica is a Government Affairs Director. I’d be willing to trade jobs straight across and gamble on the fact that she doesn’t make 26% less than me. In fact I bet I could count on a damn nice raise. Anybody else want to take that bet? Of course she is undoubtedly a highly skilled person while I just sit here and blog.

But I bet I got more Google uice.


Posted in Gino's Rants. Tagged with , .

By Gene Wunderlich
February 1, 2010

2 comments

More Local Fraudsters Bite the Big One – Better Late Than Never.

Fraud in the news. Our US Attorneys Office has been busy lately getting some miscreants off the streets. They appear to be stepping up efforts and between their office and Attorney General Jerry Brown, they have been putting a lot of these people behind bars. That’s good – that’s real good. This is a big state and these cases are just a drop in the bucket but it is really gratifying to see people who have given our industry a real black eye being held accountable.

The only thing better than cracking them now would have been to bust them back in 200 or 2003 when they were actively wreaking havoc on the market. It’s like our local Stonewood case, if they’d have been stopped in 2005 or 2006 the damages would only have been $40 or $50 million and a few dozen people would have been victimized. Since they weren’t stopped until late 2007 and into 2008, they racked up hundreds of victims, $140 million in fraud and tore a big hole in our market.

Case #1 is an extension of the classic Stonewood scenario for big kids. Stonewood would add anywhere from $50,000 to $150,000 to the price of a home and pocket the difference. These people  were blatantly bringing in appraisals at 3X the homes value in some very pricey areas like Beverly Hills, Pebble Beach & Malibu. Hey – if you’re going to commit fraud, no use wasting your efforts down the trailer park, ya know?

REAL ESTATE APPRAISER SENTENCED TO 3 YEARS IN PRISON IN MORTGAGE FRAUD SCHEME THAT LED TO $46 MILLION IN LOSSES

LOS ANGELES – A former state-licensed real estate appraiser was sentenced today to three years in federal prison and ordered to pay more than $46 million in restitution for her role in a massive mortgage fraud scheme that caused tens of millions of dollars in losses to federally insured banks.

Lila Rizk, 43, of Rancho Santa Margarita, received the three-year prison term after her conviction last summer on conspiracy, bank fraud and numerous loan fraud charges.

Rizk was sentenced by United States District Judge Dean D. Pregerson, who warned that other professional real estate appraisers should know that if they inflate appraisals and lie about the value of homes, “there is an overwhelming likelihood that they will be caught and go to prison.”

The evidence presented at Rizk’s trial last summer showed that she was part of a wide-ranging and sophisticated scheme that obtained inflated mortgage loans on homes in some of California’s most expensive neighborhoods, including Beverly Hills, Bel Air, Holmby Hills, Malibu, Carmel, Mill Valley, Pebble Beach and La Jolla. Members of the conspiracy sent false documentation, including bogus purchase contracts and appraisals, to the victim banks to deceive them into unwittingly funding mortgage loans that were hundreds of thousands of dollars more than the homes actually cost. Lehman Brothers Bank alone was deceived into funding more than 80 such inflated loans from 2000 into 2003, resulting in tens of millions of dollars in losses.

The evidence presented at trial showed that Rizk profited by collecting hundreds of thousands of dollars in fees for providing inflated appraisals in the scheme. Her appraisals typically valued the homes three times higher than what the homes really cost. In order to supposedly justify these inflated values, Rizk used “comps,” or comparable homes, that were far bigger, more luxurious, and in better neighborhoods than the homes she appraised. Once she had inflated a few dozen homes, she then used those homes as “comps” to supposedly justify inflated prices for homes later in the scheme.

Ten other real estate professionals have been convicted of federal charges related to the scheme.

Case #2 also involved fraud primarily perpetrated against lenders, in this case HUD. This crew not only defrauded the Federal Government but then he ran around buying a Vette, an RV, jewelry, etc. with the money. You’d think if you were smart enough to put together a scheme like this you’d have learned from watching TV that you don’t run around spending money like a drunken sailor or a liberal Senator.  HUD doesn’t so much mind getting taken but dammit you’d better pay your taxes on it.

FORMER PRESIDENT OF INLAND EMPIRE MORTGAGE COMPANY SENTENCED TO 13 YEARS IN FEDERAL PRISON IN FRAUD SCHEME THAT LED TO NEARLY $30 MILLION IN LOSSES AT H.U.D.

RIVERSIDE, California – The former president of Mortgage One Corporation in Hesperia was sentenced this afternoon to 13 years in federal prison for defrauding the United States Department of Housing and Urban Development and private lenders by fraudulently obtaining hundreds of federally insured loans and selling those mortgages to private lenders in a scheme that caused tens of millions of dollars in losses to the federal housing agency.

John Richard Varner, 56, of Hesperia, was sentenced to 156 months in prison by United States District Judge Virginia A. Phillips. In addition to the prison sentence, Judge Phillips ordered Varner to pay $29,749,239 in restitution.

Last April, following a nearly four-week trial, a federal jury convicted Varner of  one count of conspiracy to defraud HUD, one count of bank fraud and two counts of subscribing to false income tax returns. Varner was the fifteenth defendant convicted in relation to the scheme. Varner and co-defendant Richard Elroy Giddens, 69, of Riverside, were at the center of the fraud that was run out of Mortgage One Corporation, which was based in Hesperia, and M-1 Capital Corporation, which was based in Riverside and Rancho Cucamonga. Giddens, the former CEO of Mortgage One, pleaded guilty to the same charges Varner was convicted of at trial and in September 2009 was sentenced to 78 months in federal prison.

Varner and his co-defendants defrauded HUD by submitting fraudulent loan application documents in order to qualify the loans for FHA insurance. The loans went to borrowers who either did not meet the FHA requirements to qualify for the mortgages or were only “straw buyers.” Mortgage One and M-1 Capital sold the funded loans to banks, such as the FDIC-insured Firstar Bank, N.A. and Chase Manhattan Mortgage Corporation, using the same fraudulent documents.

As a result of the scheme, HUD lost $23,628,857 on 905 fraudulent loans, and a total of $29,638,011 when interest paid by HUD during the foreclosure and resale process is included.

Varner was found guilty of filing false tax returns for the years 1999 and 2000 when he failed to report income that he used for personal expenses such as a Corvette, a $153,000 RV, jewelry and more than $150,000 deposited into a personal investment account.

Posted in Announcement, Economic Outlook, Good News You Can Use. Tagged with , , , , .

By Gene Wunderlich
February 1, 2010

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Southwest California 2009 Housing Recap

Welcome to the Realtor Report for January 2010. The attached charts summarize Southwest California housing activity for the year just past and provide some perspective on where we’ve been and where we are today. It’s going to take somebody far sharper than me to figure out where we’re going.

The first chart is always interesting in that it gives us a six year window on the market. One of the first thing you’ll notice is that sales were off 2008 levels – about 20% in Temecula, Murrieta and Lake Elsinore, 40% in Wildomar and Menifee and just 7% in Canyon Lake. However, when you drop down to the Demand Chart you’ll note that we’re still selling 70% of the properties that come on the market and our inventory is still minimal.

What that suggests to me is that even though sales were off, it was primarily a factor of product availability, not a decline in demand. 2008 was a record sales year in most of our cities and that absorbed much of the available housing stock dropping inventory levels from 20-22 months in December 2007 to 2 months or less in December 2009.  A ‘healthy’ market inventory is considered to be 5 – 6 months.

After bottoming out in Oct-Nov 2007, sales have generally posted a gradual increase proscribing a shallow ’smiley face’ trend line – again with sales volume only constrained by available product. (6 Year Sales Graph)

Another thing to note in our sales  - you’ve all heard recent reports trumpeting housing sales off by 40% or more nationwide in December, the biggest monthly drop since Lincoln was a lad. But not in Southwest County. Our unit sales were actually UP December over November by an average of 25%. 12% in Temecula, 17% in Murrieta, 36% to 40% in Wildomar, Lake Elsinore & Canyon Lake and 5% in Menifee. (24 Month Sales Graph)

The Median Price of homes in the region continued to decline year-over-year in 2009 – down 15%, on average, from 2008. That ranged from dips of 22% and 24% in Menifee and Wildomar, to 14% in Temecula, 11% in Murrieta and just 2% in Lake Elsinore. That brought our peak-to-trough median price down 66% in Lake Elsinore, 58% in Canyon Lake, 52% in Menifee & Wildomar, 49% in Murrieta and 45% in Temecula.  (24 Month Median Price Graph)

Ready for some good news? I mentioned peak-to-trough pricing in that previous paragraph because it appears – appears – that our prices may have bottomed out, or be very close to it. Looking at quarter-to-quarter run rates, we have showed 1st to 4th quarter declines every year since 2006. In 2009, 1st to 4th quarter showed nearly a 5% increase in Temecula, 4% in Murrieta, 24% in Canyon Lake and drops of just 1% in Lake Elsinore & Wildomar and 6% in Menifee for a region-wide median price increase of 4%. If we can just keep that up for the next 10 years we’ll be back to where we started.

The last maps show the current status of pre-foreclosure and bank-owned properties in the region. These numbers could change, perhaps dramatically, during the next 60 days. Banks typically hold off foreclosure activities during the holiday season plus some moratoria and loan-mod efforts are scheduled to expire in the first quarter, so the number of notices of default (pre-foreclosure) could increase significantly.

Similarly, there has been a lag between NOD’s filed and actual trustee sales to the banks. As banks get more aggressive about clearing their books of non-performing assets, we may see the banks taking more properties back followed by an increase in releases to the re-sale market – as has long been rumored. Given our current lack of inventory, the extension of the First Time Homebuyer credit, continuing strong demand and historically low interest rates, this could only be good news for our Valley. Of course that’s just my opinion – I could be wrong. (ForeclosureRadar Maps).

Posted in Announcement, Association Updates, Economic Outlook, Good News You Can Use, Q & A, Uncategorized. Tagged with , , , .

By Gene Wunderlich
February 1, 2010

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66th Assemblyman Jeffries Introduces Reform Package

66th District Assemblyman Kevin Jeffries has introduced a series of bills and constitutional amendments that seek to reform some of what’s wrong in  Sacramento. Until we replace about 2/3 of the legislature with honest citizen legislators on a part-time basis we won’t be able to resolve all the issues but this package is a good start.

Yesterday I wrote about AB 1672 which seeks to make the powerful and unaccountable Air Resources Board an elected body instead of the current patronage appointee body. Jeffries has five others in the hopper which, unfortunately, make too much sense to gain much traction in our Capitol.

According to Jeffries, “It is becoming increasingly clear that in addition to the economic and budgetary problems we face in Sacramento, we have serious problems with the way the people’s business is conducted. Too many decisions are made in the dead of night or behind closed doors. How can we possibly arrive at the right solutions for our state when the process itself is so badly broken?”

AB 1671 - Riverside County recently suffered a vacancy on our Board of Supervisors following the untimely death of a member. The position sat vacant with the county being unable to field a quorum on some issues while we waited for the Governor to appoint a replacement. AB 1671 gets the Governor out of what should be a local decision allowing locally elected and accountable county boards to fill their own vacancies or call a special election to fill mid-term vacancies.

ACA 29 – Would create a 2 year budget cycle in which the first year wold be entirely devoted to passing a budget and reviewing our spending priorities. The second year would be devoted to policy matter, programs and oversight. This would allow school districts, local governments and private industry more certainty in their dealings with Sacramento and their own budget process and would eliminate the annual budget wars that consume most of our year every year.

ACA 30 - Seeks to abolish the office of Lieutenant Governor. This waste of space office has few, if any, official duties, it sucks up unnecessary tax dollars for an antiquated and largely ceremonial position, and the duties could easily be assumed by the Secretary of State’s office. Lieutenant Governor has been referred to as the ‘easiest elected job in Sacramento’ and is a running joke even for those elected. The position is currently vacant and most people don’t even know it.

ACA 31 – The ‘Sunshine Law’ would require all legislative sessions (except in limited emergency situations) to be conducted between the hours of 9am and 9 pm. In recent years our budget battles have resulted in ‘lockdowns’ where our legislators were literally locked into chambers overnight until a bill was passed. This has resulted in some really stupid stuff getting passed out of sight of the public and the media. Media’s role is largely relegated to posting pictures of lawmakers sleeping at their desks while the public is prevented from knowing what’s going on until it’s too late.

ACA 8 – This is not a new bill but one that Jeffries is hopeful will see the light of day this year. This bill would require all legislation to be in print at least 24 hours prior to a vote. It would eliminate Sacramento’s propensity to dump hundreds of pages of a bill onto a legislators desk minutes before a vote is taken. This bill, designed to shine a light on back room deals, has been help hostage in a committee back room for over a year.

“All these bills are serious challenges to the status quo but I believe these ideas can increase public involvement and accountability, reduce bureaucracy, and start returning power to local governments and away from state government that has proven itself incapable of governing in an open and deliberative manner.”

Well, good luck with that, Kevin. Here’s hoping at least a couple of these get passed – but given the current state of affairs in Sacramento, I’m not too optomistic.

Posted in Announcement, Economic Outlook, Gino's Rants, Legislative Updates. Tagged with , , , .

By Gene Wunderlich
January 29, 2010

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Get Into Politics or Get Out of the Business

I just read an excellent post from Nestor & Katerina on ActiveRain (do they write any other kind) entitled: Active Rain Should NOT Ban Political Posts – Real Estate Is Political.

In my travels I’m always amazed by Realtors® who are unaware of the political nature of our business. Even worse are those who proudly proclaim they ‘are above that’ or ‘we have no interest in that’. To them I say – Good Luck Making a Living, Schmuck. You can work 20 hours a day to make a living but if somebody in Sacramento or Washington DC decides to reach into your pocket, you’re now going to be working 22 hours a day to make that same living. UNLESS your state and national association is there to prevent it.

politicsOur state association has understood the nature of, and the need for, our political involvement for years. Our Chief Lobbyist, Alex Creel, has been fighting the good fight for over 20 years on our behalf in Sacramento, and his staff and support organization is awesome. I first got a copy of this button over a decade ago and it wasn’t new then. We still hand them out today.

Realtors® need to understand that we are a special interest group. That’s not a dirty word. As NAR members we are part of the largest grassroots political action group in this country. That’s something to be proud of.

And we not only fight for Realtor® issues but we are the last bastion of defense between government intervention and the private property rights of our clients. That is a point we should always convey to our customers – and another differentiation between a Realtor® and a real estate agent.

You may not always agree with either your state position on an issue or with NAR’s position. But anybody who has ever met NAR’s Chief Lobbyist Jerry Giovaniello cannot fail but be impressed by his knowledge and track record on Realtor® issues. He and his staff fight the good fight for us daily. If not for their efforts our business would be substantially different and even more difficult than it is today.

Nationwide more and more of our local associations are hiring GAD’s, or Government Affairs Directors. As we see more local efforts by municipalities to raise revenue on the backs of Realtors® and property owners, more point-of-sale mandates, more transfer taxes and business license fees, the need for local political advocacy has become critical, as has the need to financially support city council and water board and county supervisor candidates. These are the people who not only make those local decision but will eventually migrate to state and federal legislative offices. As former NAR President Dick Gaylord is fond of saying – ‘We must make our friends before we need them.’ You can’t just waltz into these people’s offices when you need something – you’ve got to be there when they need you as well.

I understand that many of you are working twice as hard to make half as much right now. You may not have either the time or the inclination to become involved in the day-to-day of the political process. That’s far different that proclaiming you are above it or choose not to be involved. You simply have too much on your plate, a family to feed, house payments to make and that’s understandable.

But if you are in that position, I encourage you at the very least to make an investment in your state’s political action fund. In California that’s $49 a year. Unbelievable that we only get about 20% participation at that minimal level. The equivalent of one dinner out to support legislative efforts and help elect legislators who understand real estate reality. The remaining 80% just enjoy the free ride and reap the benefits. That’s got to change.

As you formulate your business plan for 2010, please include a small expense item for your political future and business success. It’s less than a single ad in the local paper and the return on that investment is priceless. To quote Nestor & Katerina,:

A Realtor® who does not get involved with the political process does not understand real estate.

I hope you understand.


Posted in Announcement, Economic Outlook, Gino's Rants. Tagged with , , , , , .

By Gene Wunderlich
January 29, 2010

2 comments

CA Senate Illustrates Egregious Cluelessness In Pursuit of Reality

Just when you think our Legislature might get a clue as to what’s going on in the world they are quick to remind us – they are so far out of touch it’s almost comical. Two items from today’s news:

#1 – Our illustrious State Senate passed a bill yesterday cracking down on… FREE PARKING. Yeah, you read that right, FREE PARKING. They don’t have enough to do figuring out how to make up a $20+ Billion budget deficit or how to get water to 70% of the state – they’ve got to stick their nose into yet another local issue.

Sen. Alan Lowenthal, a Democrat (there’s a shocker for ya), says there’s just too darn much free parking. It encourages people to drive instead of walking, riding a bike or taking a bus. All that driving caused by free parking is contributing to traffic jams, pollution and, of course, the ever-present bogeyman of global warming. “Free parking has significant social, economic and environmental costs,” according to Lowenthal. “It increases congestion and greenhouse gas emissions.”

Want to decrease greenhouse gas emissions Al? Try shutting your pie-hole. Meanwhile I’ll try to explain to people living in Southwest California why they should be riding their bikes or walking 70 miles to work in your city. (We’ve got no buses.) And why you feel their employers should eliminate free parking if the lazy schmucks do feel the continued need to drive their car to work.

Dumb Ass. And all your Democrat colleagues who voted for this too. Dumb asses.

#2 – Even Obama figured this one out but it’ll apparently take a 2X4 to the side of the head to get the attention of the jack asses in our state senate. One headline in todays paper – datelined Washington DC – ‘Healthcare Bill is on Life Support’. You know it, everybody else in the country knows it… BUT, in an adjacent article datelined Sacramento – ‘California Senate OK’s single payer healthcare plan’. They don’t know it.

Sen Christine Kehoe, a Democrat (there’s another shocker for ya), says “If it’s not to be done at the national level, let’s take the lead in California.” The proposal by Sen. Mark Leno, a Democrat (yet another shocker), establishes a commission (ooooh, we need more of them) and will give them $1 million to decide how to pay for this ‘plan’. Well, what’s another million against the $20+ billion we’re already in the dumper, eh Mark?

Let me put on my ‘Carnac the Magnificent’ hat for a minute a see if I can predict the future. After burning through the initial million, and needing several more before the end of the year, the commission will determine we need to a) increase taxes on the wealthy, and b) increase ‘fees’ on everybody else. The commission will still be draining money from our state budget in 2099.

Republican Sen. George Runner says “This plan is to the left and more radical of what wouldn’t get out of Washington,” A spokeshole for the Gov. sums it up “… they are clearly out of touch with what the voters need and deserve.”

Yeah but I’ll bet they all get re-elected in November. Who’s the dumb asses now?


Posted in Economic Outlook, Gino's Rants, Light Comedy. Tagged with , , , .

By Gene Wunderlich
January 29, 2010

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Murrieta’s General Plan Review – Get Involved.

Hard to believe it’s been 5 years since Murrieta went through the last General Plan Review. It was my great good fortune to Chair the review committee that time around. Three of our committee members, Rick Gibbs,  Randon Lane and Gary Thomasian, now sit on the City Council while I sit here and blog about it. I think I got the best end of that deal.

The General Plan, initially adopted in 1994, is the document that shapes public and private development within the community. It is reflective of the communities vision of ourselves and, as Rick Gibbs says – ‘who we want to be when we grow up.’ The General Plan is updated every five years to reflect changes to the city, to evaluate:

  • Murrieta’s Vision
  • Land Use
  • Housing
  • Economic Development
  • Circulation
  • Conservation
  • Ar Quality
  • Noise
  • Recreation & Open Space
  • Infrastructure
  • Safety
  • Healthy Community

This time around economic development is going to be a primary focus to form the basis for policy issues that will create and expand Murrieta’s future economic prosperity.

ALL citizens should be involved in this process as it affects city policy for the next decade. If you don’t stand up now you give up the right to bitch about it later. The City will be hosting a number of community workshops to solicit your vision, your experiences and your desires for this city. The first one will be held this evening at 6:30 at Murrieta Mesa High School. There will also be one Saturday morning at 9.

I encourage you to stay informed, stay involved – be a part of our community. For more information visit www.MurrietaPlan.info.

mgp

.


Posted in Announcement, Economic Outlook, Good News You Can Use. Tagged with , , , .

By Gene Wunderlich
January 28, 2010

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Jeffries AB 1672 – Good Medicine for an Ailing State

When asked if she was concerned about the adverse impact her committees recommendations would have on jobs in the state, California Air Resources Board Chair Mary Nichols responded that ‘if I had to worry about running for election I would, but I don’t.’ SWEET!

If 66th Assemblyman Kevin Jeffries has anything to say about it,  Ms. Nichols might soon be trying to figure out how to get a job of her own. Jeffries has authored AB 1672 in an effort to reign in the powerful, yet completely unaccountable California Air Resources Board changing it from an appointed board to an elected body. Jeffries believe this would increase voter oversight and accountability and allow greater participation from taxpayers on the rules they write.

The CARB has been under fire recently for some of the ludicrous proposals they have made to enforce compliance with AB 32, the Global Warming Solutions Act of 2006. I recently wrote on one such proposal (Jail Time For Under-Inflated Tires) which sought to fine and/or imprison people driving around with under-inflated tires. The CARB would like to enforce routine checks every time you get an auto service (and there’s some debate about whether just stopping for gas might qualify), you would be required, at some undetermined cost, to let the servicer check your tires with an approved tire gauge. If you are under-inflated by as little as one (!) pound per square inch (PSI) under the manufacturers recommendation, they will have to insist that you immediately inflate them to the proper poundage or, if you promise to get it done, you can do it yourself within seven (7) days but then you have to get certified that your tires have been brought into compliance or you face the possibility of fines and/or incarceration.

This followed on the heels of an earlier AB32 compliance ruling that would have mandated all diesel trucks operating on state highways retrofit their trucks with as yet un-invented anti-pollution technology, or install new engines. This effectively would have put long-haul trucking into California out of business – good for truckers & good for the state no doubt. This particular proposal was based on a flawed study by an ARB ‘engineer’ who got a PhD from an on-line diploma mill. When it was discovered, Nichols claimed the study was still valid and the ‘engineer’ still works for the ARB. The diesel proposal is on the back burner for now.

Bottom line – these people are part of what’s driving our state to the poorhouse right now. Look at the backgrounds of the people who serve on these boards and committees. They are either career politicians, including many former legislators, who have found comfy new jobs  paying top dollar for little work, or political hacks with agendas like Nichols. Nichols is an environmental attorney who first chaired the CARB under Jerry Brown over 30 years ago. In the interim she has not held a single private sector position, working instead in academia and for ‘think tanks’ to advance her self-admittedly left-of-mainstream agenda on environmental causes.

It’s way past time these people were put on notice. If we in the private sector did things that were bad for our employer, if we falsified data and based recommendations on provably flawed information, if we advocated extreme measures to resolve minor issues and got an attitude when confronted, and if we consistently ignored the will of the people who gave us the job – we’d be out of a job in no time at all. It’s time the Mary Nichols’ of the world were held to the same standards of any other employee.

Kevin’s bill will probably never see the light of day, much like his ACA 8 – the sunshine bill which would shined a light on backroom deals. That bill has been held up in a backroom for 2 years now but hope springs eternal. One day the citizens will wake up and smell the coffee. Here’s hoping that day doesn’t come too late.

Of course that’s just my opinion – I could be wrong.

Posted in Economic Outlook, Gino's Rants, Legislative Updates. Tagged with , , .

By Gene Wunderlich
January 28, 2010

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Murrieta Business Roundtable – Helping Your Business Grow

The City of Murrieta has launched a new group called the Murrieta Business Roundtable. The forum is sponsored by the Murrieta Economic Development Department in cooperation with SCORE, counselors for America’s small business. The group plans to meet the 3rd Wednesday of the month at 7:30 am in the Murrieta Public Library in the Town Square.

The meetings are open to all businesses and offer an opportunity to ask questions, discover resources and share experiences with other business owners throughout the Valley. For example, at the first meeting the founder of a custom bridal shop asked about the best way to do press releases. Numerous other participants offered a variety of ideas ranging from hiring a PR firm to simply calling the media and learning about their format and requirements so you can do it yourself.

From there the conversation drifted into a discussion on social media, how to best use it to promote and grow your business, which sites are best to target which potential customers and how to use it to drive customers to your own website profitably.

Attendees at the inaugural Roundtable included a mix of new and established businesses, small and large businesses across a spectrum of ‘blue’ and ‘white’ collar jobs including tech and green companies.

Mark your calendar for February 17 to find out how others can help your business grow – and how you can help others. There will be coffee & pastries and both the Roundtable and the parking are free.

murrieta business

Posted in Announcement, Good News You Can Use, Q & A. Tagged with , , , .

By Gene Wunderlich
January 27, 2010

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Check Your Title Company for FIRPTA Compliance

CERTAIN COMPANIES REFUSE TO ACT AS FIRPTA QUALIFIED SUBSTITUTES

Some settlement companies, such as Fidelity National Title Insurance Company, have refused to complete a Qualified Substitute affidavit to assist their buyer-clients in complying with FIRPTA (Foreign Investment in Real Property Tax Act), according to reports from C.A.R. members.  Such refusal generally forces a buyer seeking to comply with FIRPTA to obtain a Seller’s Affidavit of Nonforeign Status (C.A.R. Form AS or equivalent) containing the seller’s social security number, or withhold 10 percent of the sales price to remit to the IRS, as further explained below.

Despite certain companies’ refusal to act as qualified substitutes, C.A.R. has verbally confirmed that title giant First American Title Insurance Company, among other companies, will continue to provide Qualified Substitute affidavits and other FIRPTA compliance services.  Before selecting escrow and title companies for a transaction, REALTORS® and their clients are strongly encouraged to check whether the settlement agent provides FIRPTA qualified substitute services, if such services are desired.  Be aware that companies refusing to provide qualified substitute services may also attempt to disavow responsibility under FIRPTA by getting their buyer-clients to sign liability waivers.

To help REALTORS® keep track of qualified substitutes, C.A.R.’s Legal Department will create a FIRPTA Qualified Substitute Services webpage to post member-generated lists of settlement companies that will, and those that will not, provide FIRPTA qualified substitute services.  REALTORS® with first-hand knowledge of a particular escrow or title insurance company that will or will not provide FIRPTA qualified substitute services may email that information to C.A.R. at candicem@car.org.  Be sure you provide all of the following information for posting on C.A.R.’s FIRPTA Qualified Substitute Services webpage:

  • Name of the escrow or title insurance company;
  • Address of the escrow or title insurance company;
  • Whether the company will or will not complete and sign a Qualified Substitute Declaration of Possession of Transferor’s Affidavit of Nonforeign Status (C.A.R. Form QS or equivalent);
  • Your name; and
  • Your C.A.R. member number.

As background on FIRPTA compliance, when a foreign person sells real property in the U.S., the buyer is generally obligated to deduct and withhold 10 percent of the sales price to remit to the IRS.  However, no federal withholding is required if, among other things, the seller furnishes the buyer with a Seller’s Affidavit of Nonforeign Status (C.A.R. Form AS or equivalent) containing the seller’s social security number or taxpayer ID number.  Some sellers, however, do not want to disclose their social security numbers to their buyers.  Responding to REALTORS®’s concerns, C.A.R. sponsored federal legislation for a FIRPTA fix which took effect in July 2008.  As a new alternative, no federal withholding is required if the seller furnishes Form AS to a “qualified substitute,” who in turn, furnishes to the buyer a Qualified Substitute Declaration of Possession of Transferor’s Affidavit of Nonforeign Status (C.A.R. Form QS or equivalent).  A “qualified substitute” is a person responsible for closing the transaction, such as an escrow company, title insurance company, or the buyer’s agent (but not the seller’s agent).  For more information, refer to C.A.R.’s legal article entitled Federal Withholding: FIRPTA.  For legal guidelines on selecting escrow or title insurance companies, refer to C.A.R.’s legal article entitled Referral Fees.
Realegal® is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide.

Edited by: Stella Ling, stellal@car.org

Posted in Announcement, Association Updates, Good News You Can Use, Q & A. Tagged with , , , , .

By Gene Wunderlich
January 26, 2010

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New FHA Guidlines
FHA Announces Policy Enhancements to Better Manage Risk
On January 20, 2010, the Federal Housing Administration (FHA) announced major changes to ensure its long-term financial soundness. NAR has met with the FHA Commissioner on several occasions to discuss the state of the housing market and to underscore FHA’s invaluable role. By all accounts the new changes are a victory for home buyers. FHA has carefully balanced the need to make financial reforms with the need to keep FHA available to a large segment of consumers. This is evident by retaining the 3.5 percent minimum down payment requirement and allowing the upfront mortgage insurance premium to be financed.

FHA announced changes in the following areas: 1) The upfront mortgage insurance premium (UFMIP) will increase but may be financed; 2) Borrowers with a credit score below 580 will be required to have at least a 10 percent down payment, however, the minimum down payment will remain at 3.5 percent for all other borrowers; 3) FHA will seek legislative authority to increase the annual premium (currently capped at .55 percent); and 4) Seller concessions will be reduced to 3 percent from 6 percent.

On January 21, 2010, FHA released Mortgagee Letter 2010-02 and 2010-03, which provide details on the UFMIP increase and new procedures for terminating lenders underwriting authority for FHA insured mortgages. The UFMIP increased to 2.25 percent up from 1.75 percent for purchase mortgages and streamline refinances. ML 2010-03 states that HUD will review defaults and claims of approved lenders every 3 months. Lenders will be evaluated based on their default rate within the geographic area served by a HUD office and a default rate that also exceeds the national rate.

NAR Regulatory Issues Brief >
HUD Announcement on Policy Changes to Address Risk and Strengthen Finances >
Mortgagee Letter 2010-02: Increase in Upfront Premium for FHA Mortgage Insurance >
Mortgagee Letter 2010-03: Extended Procedures for Terminating Underwriting Authority >

Contacts: Jerome Nagy, 202-383-1233

Contacts: Megan Booth, 202-383-1222

Posted in Announcement, Economic Outlook, Good News You Can Use. Tagged with , , .

By Gene Wunderlich
January 25, 2010

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Flush Twice – The Flowers Need Water

The California Building Standards Commission has released new standards for ‘gray water’ usage for California homeowners effective January 12. The commission had been expected to release new standards sometime next year but recently adopted the regulations on an ‘emergency’ basis due to the ongoing drought. (That was before this weeks rains).

According to the Commission, the average home generates about 160 gallons of gray water a day, 60,000 gallons a year, mostly from shower run-off, washing machines, bath tubs and bathroom sinks. If even 1/3 of that water could be diverted to watering lawns and trees it could have a significant impact on water conservation, not to mention our ever increasing water bills.

Having just purchased a new semi-custom home, I was amazed that more efforts weren’t included to address this issue. Now the floodgates have been opened but the onus has been placed on homeowners to permit and install these systems. There are an estimated 1.7 million gray water systems installed statewide right now but experts have no way of verifying that figure because most of the systems are home-made, do-it-yourself systems installed without permits.

While a simple home-made system can be built for around $200, permits and inspection can easily double that cost so most homeowners have just avoided it. Not to mention the permitting process prior to this new regulation could be quite cumbersome. The new reg’s provide a simple and cost effective guideline and. while local governments can add their own restrictions on top of the new state reg, most cities aren’t planning to.

The new rules, according to the Department of Housing & Community Development, include definitions of gray water, appropriate installation and usage, rules for discharge and specific prohibitions. There are 14 pages in the final release but most of the rules are common sense kinds of things. You can’t use toilet water, don’t water your vegetable garden with gray water,  you can’t use gray water to make a pond, don’t channel gray water to a misting system around your patio – things a normal person doesn’t need to be told but then we’re California.

graywater oasisFor more information you can read the full regulation at: Ca.gov/graywater regulations

For a more user friendly description and info on creating your own gray water oasis: Oasisdesign/graywater central

Posted in Announcement, Economic Outlook, Good News You Can Use. Tagged with .

By Gene Wunderlich
January 22, 2010

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Realtors Can Help Haiti

The devastating effects of the earthquake that hit Haiti last week are overwhelming and painful to see.  As many as 200,000 people have died and another 1.5 million are homeless, not to mention the scores of children who are now orphaned.  If you haven’t already found a way to help, you can pool your donation with other REALTORS® through the REALTORS® Relief Foundation.  The money you donate will go to the Clinton Bush Haiti Fund and also help fellow REALTOR® and 2007 Good Neighbor Award winner Patrick Moore’s “The Harvest of Haiti” outreach program.  Please click here for more information and to donate: http://www.realtor.org/press_room/news_releases/2010/01/donate_haiti.

Posted in Announcement, Good News You Can Use, Q & A. Tagged with , , .

By Gene Wunderlich
January 22, 2010

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90 Day FHA Anti-flipping waiver in place 2/1/2010

hud

HUD TAKES ACTION TO SPEED RESALE OF FORECLOSED PROPERTIES TO NEW OWNERS

Measure to help bring stability to home values and accelerate sale of vacant properties

WASHINGTON – In an effort to stabilize home values and improve conditions in communities where foreclosure activity is high, HUD Secretary Shaun Donovan today announced a temporary policy that will expand access to FHA mortgage insurance and allow for the quick resale of foreclosed properties. The announcement is part of the Obama administration commitment to addressing foreclosure. Just yesterday, Secretary Donovan announced $2 billion in Neighborhood Stabilization Program grants to local communities and nonprofit housing developers to combat the effects of vacant and abandoned homes.

“As a result of the tightened credit market, FHA-insured mortgage financing is often the only means of financing available to potential homebuyers,” said Donovan. “FHA has an unprecedented opportunity to fulfill its mission by helping many homebuyers find affordable housing while contributing to neighborhood stabilization.”

With certain exceptions, FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. This temporary waiver will give FHA borrowers access to a broader array of recently foreclosed properties.

“This change in policy is temporary and will have very strict conditions and guidelines to assure that predatory practices are not allowed,” Donovan said.

In today’s market, FHA research finds that acquiring, rehabilitating and the reselling these properties to prospective homeowners often takes less than 90 days. Prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition adversely impacts the willingness of sellers to allow contracts from potential FHA buyers because they must consider holding costs and the risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time.

The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. This will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.

“FHA borrowers, because of the restrictions we are now lifting, have often been shut out from buying affordable properties,” said FHA Commissioner David H. Stevens. “This action will enable our borrowers, especially first-time buyers, to take advantage of this opportunity.”

The waiver will take effect on February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. To protect FHA borrowers against predatory practices of “flipping” where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those sales meeting the following general conditions:

  • All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
  • In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the waiver will only apply if the lender meets specific conditions.
  • The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

Specific conditions and other details of this new temporary policy are in the text of the waiver, available on HUD’s website.

Posted in Announcement, Economic Outlook, Good News You Can Use, Legislative Updates. Tagged with , , .

By Gene Wunderlich
January 18, 2010

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Help for HVCC in 2010 Congress?

Home Valuation Code of Conduct (HVCC) — Currently an amendment is attached to H.R. 4173, the “Wall Street Reform and Consumer Protection Act of 2009″, which will ultimately sunset the HVCC. While this bill has passed the House Financial Services Committee, there is agreement in Congress to work on the amendment language to incorporate the appraisal provisions from H.R. 1728, the “Mortgage Reform and Anti-Predatory Lending Act.” These amendments provide enhancements to protect appraiser independence and regulate AMCs. NAR is supporting this amendment and we will work with Congress to support incorporating the appraisal provisions from HR 1728 into the CFPA legislation.

Posted in Announcement, Association Updates, Good News You Can Use, Legislative Updates. Tagged with , , .

By Gene Wunderlich
January 15, 2010

5 comments

Property Rights – California’s Newest Endangered Species

‘Property rights are rapidly becoming the newest endangered species in Ventura County’, according to a recent article in the Pacific Coast Business Times. A new fight is brewing for builders at a time when our decimated building industry can scarcely afford the battle. This one is being waged in LA and Ventura County over new storm water regulations.  According to  another article in the PCBT, while ‘the new regulations were approved last May, officials are just now trying to figure out how to implement them.’

Well how California is that? Let’s pass this mother and then figure out what we did and how to enforce it. Ready, fire, aim.

According to representatives of the Building Industry as well as private and public sector agencies, the regulatins as written would add million of dollars to the cost of projects on everything from housing to roads, schools, hospitals – you name it.In many cases these costs would produce very little, if any, tangible public benefit.

The reg’s would require anywhere from 75% to 90% of rainwater run-off to be captured on-site either through catch-basins or cisterns, on-site treatment facilities or having enough green space to allow for full evaporation with no run-off. If property owners can’t meet those requirements they would either pay a fee (ala cap & trade) or have to do similar work off-site. Builders, including many operating in the public sector, say these reg’s are simply another ‘nail in the coffin’ for developers.

To make matters worse, although the ordinance has been passed in Ventura for nearly a year, regulators are just now putting together a ‘guidance manual’ for builders. This has left builders in limbo since last May trying to figure out what the reg says and how to comply. As one builder put it, “I’ve simply had to stop all my projects for 6 months or more until they figure this out so I don’t risk being out of compliance.” Another, a builder of public roadways puts it more simply. “The notion that I could be fined if so much as a single Dixie cup of water gets into the harbor from the miles of roadways and ditches I build is very scary.”

Yes it is. But unfortunately not out of character for the talking heads in Sacramento who authored the legislation that allows local authorities to implement their own rules and mandates without benefit of oversight. As a BIA rep put it, ‘there’s a lot of unknowns for factories or anything with a big footprint that might have impervious surfaces like roofs or parking lots. Auto dealers, schools, even public utilities run the risk of being unable to comply without some potentially cost prohibitive measures. In today’s world of development, there is no margin so it doesn’t take much for something to become infeasible – so projects, including some much needed and long planned projects, will simply die.’

Well isn’t that the agenda? They’ve succeeded in shutting off the water tap to Southern California to benefit the Delta Smelt. We have chased our once-thriving furniture manufacturing industry to neighboring states – there’s only one left here today. Our last automobile manufacturer is pulling up stakes. Our industrial employers are decamping for greener pastures – literally greener pastures with fewer onerous regulations. Our high tech industries are moving to neighboring states that don’t boast about being the highest tax states in the country. And now what’s left of our building industry and development community that hasn’t already been laid to waste by the economy or unemployment are being targeted by additional shortsighted environmental regulation.

Did I mention they’re also threatening to fine us or put us in jail for simply having under-inflated tires? Yeah, I just wrote about that.

The lunatics have taken over the asylum – or in this case, the liberals have taken over the state. Same difference.

Of course that’s just my opinon. I could be wrong.

Posted in Economic Outlook, Gino's Rants, Legislative Updates. Tagged with , , .

By Gene Wunderlich
January 15, 2010

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