Usually, yes.  Generally, a bank may take money from your deposit account to make a payment on a separate debt that you owe to the bank, such as a car loan, if you are not paying that loan on time.  This is called the right of offset.

In some situations, the bank can exercise the right of offset without letting a customer know in advance that it is going to do it.

However, federal law limits what a bank can do in some cases.  For example, federal law won’t allow a bank to offset your deposit account to pay off your consumer credit card account.

Via Bob Hertzog (Summit Home Consultants):

Right of Offset..Yet Another Trick Up The Lenders Sleeve

Folks, this is scary stuff.  Yesterday, I received a call from one of my clients, telling me that her bank recently withdrew money out of her account to pay part of her missed mortgage payments.  We are in the middle of the short sale process, and she happens to bank at the same institution that holds her 1st Mortgage.

Banks have what is called a “right of offset“, which allows them to take money out of your account, without your prior approval or knowledge.  The Comptroller of the Currency Administrator of National Banks says the following:

Generally, a bank may take money from your deposit account to make a payment on a separate debt that you owe to the bank, such as a car loan, if you are not paying that loan on time.  This is called the right of offset.

In some situations, the bank can exercise the right of offset without letting a customer know in advance that it is going to do it.

However, federal law limits what a bank can do in some cases.  For example, federal law won’t allow a bank to offset your deposit account to pay off your consumer credit card account.

But the cause was right so when the local YMCA approached my for a ‘Dancing with the Stars’ event to celebrate their 10th anniversary – I couldn’t say no. Starting last week I’ve begun rigorous training with my professional partner – the charming Marisa, learning ‘The Rhumba’. Yeah, that dance! What is commonly referred to as ‘The Dance of Romance’ will be performed as the Baby Elephant Rhumba by yours truly.

Between now and October 2nd, I’ll have a couple lessons a week and. amazingly, I’m making progress. And Marisa still has both feet intact and manages to stifle the occasional urge to snicker. Well why not? She gets paid and I’m probably not THE WORST dancer she has ever seen – although she’s young and will no doubt carry the vivid memories of this for the remainder of her life.

So if you happen to be looking for a good time on October 2nd, come on out to Wilson Creek Winery and help the YMCA celebrate a decade of service to our community. A good time will be had by all. After all, it’s not everyday you get to see Dan Stephenson waltz, or Roger Ziemer do the Hokey-Pokey (last time I saw Z he couldn’t even remember what dance he was supposed to be doing – I feel better). And you certainly will never again have the opportunity to see yours truly Rhumba (if your luck holds). Plus they have an open bar – that should help make my movements more ‘fluid’. It will be a thing of beauty and a sight to behold.

Now if I could only get my hips to move like the sweet Marisa, I might be a contender.  I’m gonna go practice. Shut your eyes.

“Locational privacy is the ability of an individual to move in public space with the expectation that under normal circumstances their location will not be systematically and secretly recorded for later use.”

Many of us are justifiably concerned about the intrusion of government and other entities into our privacy. We sue cities over infringement by stoplight enforcement cameras. We worry about electronic swipe cards and FastTrack cards that chart our location and that our GPS cell phones can be monitored to disclose our location. We fret that Google will track our searches and that free WiFi locations will steal our identities and that the US Census will give the IRS omnipotence over our lives.

So I’m amazed at how willingly some of my friends are just giving up their privacy. I guess it’s the ‘cool technology’ part of it that sucks us in – as though we denizens of the internet have a shred of privacy left to begin with. I’m talking about those of you who are taking the Twitter compulsion to a whole new level with apps like FourSqare and FaceBook Places and Yelp and the host of other new programs that allow you, nay, encourage you, to let everybody know where you are anytime, anyplace complete with a map and photos.

I recently read a great blog on ActiveRain about a guy who organized a little impromptu after work gathering at a bar. He posted it on a couple of the check-in sites and as his friends showed up he noted who had arrived. He was amazed when at least half his friends were less than thrilled to have their whereabouts disclosed without their approval. One friend was righteously pissed off because he had told his wife he had to work a little late and was going to have ’some splaining to do’ when he got home.

But this is just the tip of the iceberg.

I had a little fun with a friend of mine over the weekend (well, fun for me anyway). He’s new onto FourSquare and feels the need to let everybody know where he is, what he’s doing and map his every move and he posts the results to FaceBook. Saturday night he posted a map of where he and his wife were dining. Now ‘Bob” lives in a different city than I do but the same county – not that it matters, and I did not know where he lived. I jumped onto one of three sites I have that will give me people’s home addresses and looked him up. Two of these sites are Realtor-centric (i.e. title company or mls sites) the third is the public records tax database from the county recorder available to anyone. I use these although WhoWhere, 411.com and a host of others will give the average Joe much of the same info.

In less than 2 minutes I had Bob’s home address and posted a comment on his FaceBook update – “Bob. Thanks for letting us all know where you & Jenn are going to be for the next couple hours. Check your email.” On a private email I sent the following – “Bob, just pulled your home address from a public website . You know I’m too lazy to drive over to your house tonight but somebody else might be in the neighborhood and glad to know you’ll be gone for the next couple hours. Hope the TV is still there when you get home. Check out PleaseRobMe.com for more info.”

They didn’t cut their dinner short but they also didn’t order desert and they did call the babysitter three times. He was of mixed mind whether to thank me or be pissed at me. But I noticed he either didn’t go anywhere Sunday or at least he wasn’t posting a map of where and when he was.

Like most people, they didn’t realize how easy it is for almost anybody to access your public information on-line and find your address in the blink of an eye. That’s childs play these days. But most people either don’t know or don’t think it will apply to them. I know I’m guilty too – posting when I travel to NAR or on vacation. I feel a little safer because I live in a gated, guarded community and my house is registered under a corporation – but I probably should think twice anyway.

Electronic media has forever changed the way we do business and the way we conduct our personal lives. As our personal privacy dwindles, we might want to think twice about abdicating the few remaining areas we can protect. After all, the IRS already knows where Bob & Jenn had dinner and what they ate and how much they drank. They know if they drank too much to be driving safely, if they went to a movie afterwards or dancing or had more drinks. If they wanted to they could track exactly the route they drove to and from their location, if they drove too fast, ran any stoplights, and, if they were in New York, they could use facial recognition software to track them walking down the street via the overhead mounted cameras.

Maybe with all that level of intrusion it’s just paranoid to worry about giving up my location to any thug with a laptop. Of course just because I’m paranoid doesn’t mean they’re really not after me. I value my privacy please.

Lenders are expected to try to negotiate more than 400,000 short sales this year – triple the amount they had to work with just two years ago. Do you really think that tripling their workload will result in decreased transaction time? I bet you bought that whole ‘hopey-changey’ thing too, didn’t you?

ServiceLink, the national lender platform for origination, loss mitigation and default servicing for Fidelity National Finance, recently reported that its improved loss mitigation business model has shown dramatic decreases in the amount of approval and closing timelines for short sales. ServiceLink now boasts that a streamlined short sale will take less than 74 days. A usual short sale can take over five months. (source – Housingwire)

Some recent stats as released by the Virgina Association of Realtors… (thanks to Lenn Harley)

The Quickest: GMAC with an averge of 6 months to approve.

The next Fastest: CitiMorrgage with an average of 7.5 months to approve.

The next-next Fastest: Wells Fargo with an average of 8 months to approve.

LAST PLACE (SLOWEST) goes to Countywide (Bank of America) with an averge of 13 months to approve.

NAR President Vicki Cox-Golder recently held a meeting with B of A exec’s wherein they committed to getting transaction time down from 117 days to 57 days. From the looks of it, 117 days would be a worthwhile target from the current average of 390 days.

Short sale indeed.

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As if businesses aren’t already drowning in regulation, red tape and taxes, here’s another little extra you probably haven’t heard about yet courtesy of the Obama Healthcare Bill.

You’ve all heard about the additional 3% tax on homeowners that’s buried deep inside the bowels of this bill – yet that will impact less than 5% of homeowners, only under very precise circumstances and only those at the very top of the food chain.

Here’s one that will impact a far greater number of you – and not just Realtors® but businesses across the country . Just another little ‘thank you’ to small businesses from our friend in the White House.

Buried in Section 9006 of the healthcare bill is a provision requiring you to file a 1099 on any business, vendor or supplier that you pay more than $600 dollars a year to. This provision won’t become effective until January of 2012 and you can believe NAR, the Chamber of Commerce and a variety of other business groups are fighting to get it out of there – but for now it’s there and the administration apparently has every intent to keep it there.

What does it mean? Well, some of you are probably already doing it for some things – like if you have a lawn maintenance person or somebody re-habbing your REO’s – you probably already 1099 them unless the bank pays for it or reimburses you.

But now it’s down to $600. If you buy $600 worth of supplies from any single company, $600 worth of coffee & donuts for your office meetings, catered lunch for your broker/owner/manager meetings – anything you spend more than $600 dollars a year on with a single vendor for your business, you need to 1099 that business. Spend a week at a business meeting in Sacramento – 1099 the hotel. Take a group of clients out for a nice dinner? 1099 the restaurant. Pay a guy $50 a month to cut your grass at home? 1099 him.

Think it’s a pain in the butt for you? Try being the small business on the receiving end who now has a mountain of 1099’s to deal with at tax time. It adds another whole layer of cost and accountability to their business, meaning it costs them more to do business, meaning they either take a cut in profit (if they’re making any to begin with), or they raise the prices to off-set it. Guess which one it’s gonna be.

The theory was the provision would help small businesses obtain more affordable health insurance plans. Not exactly sure of the nexus there but that was the ostensible working theory.

In reality the government is worried about ‘the tax gap’. They’re concerned businesses (like you) may not be paying all the taxes they’re supposed to. IRS Commissioner Doug Shulman cut to the chase when he recently stated “The information we receive is an important window into under-reporting. It can also help us better understand tax compliance and trends in different industry segments”. It cuts both ways – businesses that may have been underreporting income will now have a 1099 trail to the IRS. Businesses that have been over-reporting expenses (not any of you) will now have to document where that money was spent. Yeah, that has a lot to do with healthcare.

Well, whether you believe the government’s (Administration) reasoning or the government’s (IRS) reasoning, you and every other small business owner in this country is gonna be the one getting the shaft again come January 1, 2012. As one administration aide characterized it – ‘this provision is a ‘voluntary’ way of increasing tax revenue without increasing taxes.’ Right.

So you can get ready for more paperwork, higher costs and more business failures thanks to Section 9006 of the Patient Protection and Affordable Care Act and the Health Care Reconciliation Act of 2010.

UNLESS you support the groups fighting against this.

Did you really believe them when they told you they could do all that without raising your taxes? Sucker.

But as Dr. Alan Greenspan told us at the NAR conference a couple years back, you’ve got to pay attention to the ‘first rule of economists. For every economist there is an equal and opposite economist. Rule #2 – they’re both wrong’. Zandi’s just the one getting quoted today.

But the more serious underlying tone of the seminar is that for the first time in 70 years, housing is on the table – especially the heretofore sacrosanct mortgage interest deduction. Panelists questioned the ‘value of home ownership’ and floated the theory that the government ’spent’ $230 Billion to promote home ownership last year, the biggest chunk – $80 Billion – on the mortgage interest deduction. And they’re just not sure what return that’s producing for the government.

Excuse me? They’re spending $80 Billion on the mortgage interest deduction? That’s a bald faced LIE! They don’t ’spend’ a nickel on the MID. The fact is for them, it’s simply a missed opportunity to tax us on yet another area of our lives. And since when was the purpose of homeownership  to provide a revenue generating tool for the government?

Let’s take their argument one step further – is the $80 Billion they claim they’re spending on homeowners really going to make a dent in the national debt, which is approaching $10 Trillion dollars? Is it Mark? So it’s OK to continue to funds all the pork and earmarks, bridges to nowhere, the arts, auto bail-outs, bank bail-outs, welfare for illegals, a trillion dollar healthcare bill, Fannie & Freddie not to menton the lifetime benefits accorded those who serve in Congress. But that $80 Billion a year for MID is breaking us? Is that really the best you can come up with?

And remember, it’s not $80 Billion they’re spending – it’s $80 Billion of OUR OWN MONEY they’re letting us keep.

And why did they seem to focus on the $80 Billion in MID and ignore the remaining $150 Billion spent on housing stimulus last year including the first time homebuyer tax credit? Maybe it’s because the tax credit was backed by this administration so they didn’t want to bite the hand that invited them to the conference.

But probably it’s because of a theory floated by another administration sycophant claiming that studies show the MID primarily benefits the wealthy. People making less than $40,000/year only benefit $91 while those making $250,000 benefit $5,459. Look out people, here’s another salvo at those damn ‘wealthy’ people. We need to redistribute that wealth.  Somehow we need to level the playing field so that people who work hard and do well get dinged more, or maybe they need to subsidize bigger houses for the people making less so those people can get bigger tax write-offs. It’s a shame to waste $80 billion on homeowners when you so many more undeserving groups you could fritter it away on.

Regardless of his fallacious math, the bottom-line is he has just redefined ANYBODY who owns a home as wealthy because they are getting benefits from the federal government that non-homeowners aren’t. So if you’re one of the people only benefitting $91/year, don’t get too smug because according to these folks you’re wealthy too and you won’t escape the axe.

That’s just wrong. Never mind we’re not collecting welfare or food stamps or ADC  or all the other give-aways our government has devised. The paltry $80 Billion ’spent’ on homeowners is simply not providing a big enough ‘return’ to the government, according to these flacks.

I’m sick of this. I’m sick of paying ever increasing taxes so the unmotivated and unproductive can maintain a lifestyle. I’m sick of this talk of re-distributing the wealth. I’m sick of the constant attacks by this administration on the hard-working, productive members of this country. I’m sick of attacks on real estate and private property rights and on people who have been fortunate or industrious enough to own a home or several homes or invest in real estate. Mostly I’m sick of sycophants who, when faced with a problem, point the finger at every aspect of our society except toward the one segment where the blame truly rests – our country has a huge freakin’ spending problem and we can no longer afford OUR GOVERNMENT.

Well, that’s just my opinion – I could be wrong.

]]> http://gadblog.srcar.org/2010/08/19/white-house-housing-conference-debates-value-of-homeownership/feed/ 0 http://gadblog.srcar.org/2010/08/16/californias-vince-malta-to-represent-nar-at-the-white-houses-conference-on-the-future-of-housing-finance/ http://gadblog.srcar.org/2010/08/16/californias-vince-malta-to-represent-nar-at-the-white-houses-conference-on-the-future-of-housing-finance/#comments Mon, 16 Aug 2010 18:37:29 +0000 Gene Wunderlich http://gadblog.srcar.org/?p=1561 On Tuesday, August 17th, Vince Malta, NAR’s Vice President for Government Affairs, will represent NAR at the “Conference on the Future of Housing Finance” sponsored by the White House. The conference will feature panels moderated by Treasury Secretary Tim Geithner and HUD Secretary Shaun Donovan, as well as break-out sessions that focus on topics from the “Role of the Private Sector and the Government” in a reformed housing finance system to “Managing the Process of Transition” to a new financial sysytem.

Mr. Malta will continue NAR’s effort to share recommendations regarding the future of the GSEs, Fannie Mae and Freddie Mac, as crafted by the GSE Presidential Advisory Group (see link below), as well as emphasize the importance of using caution when deciding to make changes to the current housing finance system while the housing recovery is on-going.

Lastly, for those interested in watching the proceedings, the Conference’s “opening remarks” and panel discussions, host by Secretaries Geithner and Donovan, will be streamed live via the U.S. Department of Treasury website (www.treasury.gov).

NAR’s Recommendations for Restructuring the GSEs

HUD Press Release
HUD Mortgagee Letter 2010-23, FHA Refinance of Borrowers in Negative Equity Positions

Posted: 13 Aug 2010 06:57 AM PDT

It is late on a Sunday night and I am getting ready to go to sleep.  My daughter, Caite, is still at work, so we are “leaving the light on” so that she can find her way into the house.

Our house is the only home she has ever really known.  My wife Susan and I built it before she was born.  It has been the kind of home that was always “open.”  Everyone is welcome.  It has been a place where our family has witnessed and been an active part of life’s challenges, of life’s successes, and of life’s celebrations.  We are about 300 feet from Greenwich Bay, which opens into Narragansett Bay and, ultimately, the Atlantic Ocean.  It is in a place where the water and the land meet and embrace.  It is a fitting place for our home.

It has been a permanent place for our family.  It has been the primary location of most family celebrations: holidays, birthdays, and (on occasions) tragedies.  It is unique, as it is designed to look old and blend into a neighborhood where most houses were built between 1870 and 1910.  It also has seven star bursts.  There are seven wood fans that represent the rising and setting sun.  Every morning and every evening – seven days a week, every month, year after year – no matter where we are, it is our home.

We have stayed a long time in our family home.  For Susan, it is partly because she is a first generation American.  This house represents the deep routes of a person transplanted to the soil of this great country.  For me, it is about counter balance to my childhood:  almost every two years we moved…usually quite far.

I was born in San Francisco in the Haight and my parents’ first house – mine too – was near the beach by Golden Gate Park.  A short time later, we were off on a new adventure.  Next stop Santa Clara, California;  Portland, Oregon;  Placentia, California;  Government Camp, Oregon; Vancouver, Washington;  Kansas City, Missouri;  East Greenwich Rhode Island and then Warwick, Rhode Island.  At 18, I left for college in Worcester, Massachusetts.  Ironically, I can remember each of the houses in which we lived with surprising clarity.  It is where my parents, brother and sisters engaged life.

What is also true is that my grandparents’ houses, in the Bay area, were the constant homes I knew as child.  Every summer we would return “home.”  My mother’s parents lived at 167 King Street in Redwood City, California.  It was a great home full of great music and great mentoring.  I met my first REALTOR^® there.  He was my grandfather, John J. Brophy.  My father’s parents lived at 1735 Parrot Drive, San Mateo, California.  It, too, was a special place of great memories and great food.  These were the homes of life’s photographs and memories.

Life’s lesson was clear for me:  Home maybe where the heart is; but it is great to always have a place called “home.”  — Ron Phipps, 2010 NAR First Vice President

The health care legislation enacted earlier this year included a controversial and burdensome new requirement, effective in 2012, that would require all businesses to provide IRS 1099 information returns to any vendor (and to the IRS) when the business makes payments of more than $600 to the vendor in any calendar year. This 1099 reporting provision came out of nowhere in the final days of the health care debate.

No sooner was the ink dry on the bill itself than efforts began to repeal the new 1099 rule. Many REALTOR organizations are aware that ASAE is among the groups opposing the new rule. NAR has signed on to the ASAE letter to signal its opposition to the 1099 reporting requirement.

When Congress reconvenes in mid-September, among the pending bills is a small business bill (HR 5297) that includes a modest tax title. (The bill has several non-tax provisions that NAR fully supports.) HR 5297 is expected to be brought up some time during the week of September 13.

When the Senate considers HR 5297, there will be a two-part amendment procedure related to the 1099 requirement. The first part will be an amendment that would completely repeal the 1099 requirement. That effort is expected to fail. The second will be an amendment offered by Majority Leader Reid (D-NV) and Finance Chairman Baucus (D-MT) and others. That amendment would limit the application of the 1099 reporting requirement so that only employers with more than 25 employees would be subject to the 1099 reporting requirement. Further, only payments of more than $5000 would have to be reported. That amendment is expected to pass.

While the full repeal has broad support among ASAE members and in the small business community, we would anticipate that the 25 employee threshold would mean that most local boards and many state associations would be exempt from the reporting requirement. Similarly, the 25 employees threshold should provide adequate relief for most of our members. (Real estate sales agents are independent contractors, and so would not be included as employees of their respective brokers.) The $5000 threshold for reporting will also provide substantial relief to members and to associations.

At such time as HR 5297 (with some sort of 1099 amendment) achieves final passage in the Senate, it will have to go back to the House. The House version of the bill is substantially different from the Senate version. The House will then have two choices: It may simply pass the Senate version of the bill and send it on to the President, or it may request a conference between the House and Senate to reconcile their different versions of the bill. (Note that a conference would involve at least 4 different committees, so could be a cumbersome process.) We presently have no prediction of which option the House would choose. Congress plans to adjourn for the election on October 8. A post-election lame duck session has already been announced, so this 1099 issue may remain unresolved for a few months.

Note that the IRS has made public statements that it does not have adequate capacity to process all of the 1099s that would be filed if the health care bill’s reporting requirement remains in the law as originally enacted. The IRS public statement should bolster the effort to eliminate or significantly narrow the application of the new reporting provision before it comes into effect in 2012.

Contacts: John DiBiase, 202-383-1037 ]]> http://gadblog.srcar.org/2010/08/13/update-on-irs-1099-reporting-requirement/feed/ 0 http://gadblog.srcar.org/2010/08/12/nar-vp-moe-viessi-takes-on-housing-critics/ http://gadblog.srcar.org/2010/08/12/nar-vp-moe-viessi-takes-on-housing-critics/#comments Thu, 12 Aug 2010 17:35:50 +0000 Gene Wunderlich http://gadblog.srcar.org/?p=1547 I have been reading a different philosophical bent on the housing market of late, and it just plain makes me mad.  No, it’s not about volume or pricing or foreclosures; it’s what some people have been saying about housing in America.

I’ve read that some of these pundits believe the worth of the home purchase isn’t what it once was, and may never be a valuable asset. I’ve read that, in an uncertain economy, these brainiacs think buying a house is too much of an anchor on an individual or families mobility. Not a long term valuable assets? Too much of an anchor? What in the heck are these folks smoking? Are they nuts?!

These “chicken littles” are the same “sky is falling” addicts that would have you believe that:

1)The millions of folks that came here to settle America had no interest in private property ownership,

2)A home or piece of land they could own was not only worthless but also not a primary reason for their migration here away from home and family,

3) The millions of new citizens that continue to come here from every part of the world work and slave so they can…what?… raise their kids in a palatial rental?

Give me a break! Owning a home of their own, maybe not for some, but for the vast majority has been a benchmark of success and stability in their lives and that of their children as well.

Let me tell you a story about the real value of homeownership. My dad met my mom and they always had the dream of owning their own home. He bought my mom the home of her dreams as a gift of his love with the belief that it was better to pay off something that he owned with his wife and raise his kids there than to rent.

That home was purchased in the 1960s for $16,000, with a few hundred dollars down, an FHA-backed loan, and an interest rate of 5 percent. The real value today is about $275,000. You do the math on an investment of a few hundred dollars and tell me if housing isn’t worth the risk.

In spite of everything that housing has gone through the past couple of years – and I’ll admit it’s been a tough time – housing still remains the best way to build long-term wealth. Nothing else compares. Doesn’t even come close.

Yep, we take a risk when we buy home. But I’ll bet you a dollar to a donut that the risk remains one of the best ones you’ll ever take in your life. There is good risk and bad risk. Bad risk is unintelligent investment, banking on unrealistic expectations bolstered by uncertain outcomes. Good risk is knowing as much about the investment as possible, consulting with folks who commit to your intelligent purchase.  When you are working with an experienced REALTOR® who can identify the pitfalls and the multiple future benefits, housing becomes as good a risk you can take.

There are so many other values housing provides. It’s not just the peace of mind offered by owning something that is yours, but also can provide the foundation on which your life will be built. When my Dad bought my Mom that house, it created their home, and it built their life, mine and my sister’s too.  – Moe Veissi, 2010 NAR First Vice President

Please note, this mailbox is for data collection purposes only and not all submissions will receive a response. You may send an e-mail detailing your experiences to HAFA@realtors.org.

NAR’s Short Sale Web Page (including the new email address)

Effective December 31, 2010 – Changes to license renewal include:

• Multiple choice questions required – no more true or false.
• 30-40% increase in material to be covered.
• Education cost increase due to the required changes in material and exams.
• DRE license fees and renewal fees to increase as the number of new licensees has dropped 90% and renewals have dropped 44%.
• 70% correct on exams required as of 2010 and able to take only 15 units per day (of 45 total).
• Agents & Brokers should know they can take continuing education anytime in the 4 years prior to renewal but can’t actually renew with the DRE until 90 days prior to their license expiration date. It is suggested that anyone with a license due to expire by December 30, 2010 or sooner, do their continuing education now and avoid the tougher exams and higher prices.

For the best prices in on-line license renewal education, go to www.srcar.org; Click on “Education”, then “Continuing Education” and the “Online Ed logo”. If you have any questions contact Leslie, SRCAR Education at (951) 894-2571

Well, I know we’ve all had smoke blown up our nether regions repeatedly by the big banks about releasing REO’s,  loan mod’s and short sales, (to name but a few) but maybe – just maybe, we are making some progress. Our leaders are meeting, or have met, with B of A, Chase, Wells Fargo and two more, who slip my mind right now. Maybe as a result of these meetings – or maybe just because they felt like it, both B of A and Chase have recently released guidelines that Realtors® will find  helpful to comply with each banks HAFA programs.

Will they work and will the process be as easy-cheesy, lemon squeezy as they claim? Only your Realtor® will know for sure – but it’s a start.

Click here for the 10 page B of A ‘Home Affordable Foreclosure Alternative (HAFA)  Short Sale Program & Guide for Agents

Or click here for a one page synopsis of Chase Bank Home Affordable Foreclosure Alternatives (HAFA) Program.

Good riddance… or not.

Many (myself included) would argue that we desperately need this bond to pass so we can start to address the chronic water problems that plague this state. And when I say ‘desperately need’ to do this, I’m not just whistling Dixie. The construction of additional storage damns is critical, the implementation of an alternative conveyance method (i.e. peripheral canal) should have been done 14 years ago. The water issue will have greater long term consequences on this state than unemployment and Prop 32 combined.

But sensing, probably with more prescience than he has exhibited for a long time, that this proposition would go down to defeat at the hands of voters this fall, Gov. Arnold requested that the vote be delayed for 2 years and placed on the ballot again in 2012 when, apparently, all the state’s other ills will have been resolved and voters will be in a better mood to pass this bill.

That’s a stretch. Facing another $19 billion budget deficit this year and the very real prospect of higher taxes to cover it, it was probably an accurate assumption that we wouldn’t be in the proper frame of mind to pony up to another $11 billion bond. But since our budget deficit seems to have become an integral part of our state’s dysfunction, what’s the likelihood that in two short years we will have licked that problem?

Every year the budget impasse seems to get worse. We’ve resolved past years budgets by raising a few taxes, cutting a few costs and simply kicking the can further down the road. Those defrayed bills will be coming due soon, if they haven’t already. Unemployment shows no sign of letting up, housing and tech aren’t going to rebound fast enough to save us, our Democratic legislators continue to chase jobs away at prodigious rates while ramping up hiring in the public sector – why should 2012 be so much rosier than 2010?

Then there’s the bill itself. What should have been a $6 or $7 billion proposal got larded up to $11 billion by the time it hit the floor. Why? Because to insure the votes needed to pass both houses and qualify for the ballot, deals were made. Everybody with an interest in the outcome, from our legislators to the Sierra Club to the public unions and water commission insisted on plugging in their pet project to insure their acquiescence. A few million over here for Delta research, a few million over there for the Salton Sea, a few more for endangered species, pretty soon you’re talking real money – another $4 or $5 billion of real money. Don’t think for a minute that the bills opponents would have let you forget that during the run up to the election.

And aside from my concern that our water crisis is still not being resolved, as passage of this bill might have at least initiated, I’m concerned about what it will cost us to pull it off the table. The report I read stated, “After some intense late-night vote wrangling, AB1260 and AB1265, the two bills necessary to pull the water bond off the ballot, passed the Senate relatively easily but ran into heavy opposition in the Assembly”. I’m not sure if ‘heavy opposition’ is a shot at Assembly Leader John  Perez’ weight but Perez made sure everybody knew he was using this as a bargaining chip to solidify his none-too-subtle agenda. Perez, as you may be aware, is the newly anointed leader of the Assembly and thus far has exhibited all the tact and finesse of a bull at Pamplona. Be assured this marks a victory of some sort for him and if some new fee or tax emerges unopposed, you’ll know the price for Perez’ vote.

So another ‘teachable moment’ emerges from Sacramento. A badly needed solution to our state’s water crisis starts it’s humble journey only to have mountains of pork piled on it’s flanks by the greedheads charged with making it work. What may have been at least a beginning to resolving water issues has now become a victim of the same greedheads charged with making it work because they couldn’t get their acts together on the rest of their job (running our state). As one legislator put it – ‘Maybe we need to roll up our sleeves and work on a bond with more chance of success.’ I’m betting that if this bill does manage to be resuscitate in 2012, the cost will have bloated to $15 billion or more. And not one penny more will have anything to do with water. Welcome to California.

One of the more interesting segments of our recent GAD Institute was an update by former NAR Chief Economist John Tuccillo. Tuccillo, who last served NAR in 1997, is one of those rare birds – an economist with a natural sense of humor. He quickly retitled his discussion with us from ‘Economies of the Housing Market’ to ‘The Economies There & I Don’t Care’. Much better.

He quickly put to rest any idea of a double dip. There won’t be one according to Tuccillo. But we are in for a long, slow recovery. A very long, slow recovery. He believes that foreclosures and distressed properties will be around for a long, long time – will actually be a factor for most real estate practitioners for the rest of their careers – not so much for financial or economic reasons but for strategic reasons. Default has entered the lexicon as a perceived financial strategy and, as such, will remain part of the real estate landscape even after foreclosures return to their customary 1% share of a ‘normal’ market.

He pointed out three major potholes in the road to recovery:

1. Employment – there is no engine of growth on the national scene. During past downturns there has been an angel in the wings ready to propel the economy forward. Housing built us out of the tech bust, tech pulled us out of the aerospace bust, aerospace flew us out of the S & L bust, etc. This time there is no apparent growth engine yet. The public sector is the only area of growth but the private sector, that creator of jobs and stability, is lacking. Not only that we may have ‘technologized’ our way out of jobs. We are finding ways to produce more with less which means many of today’s jobs will never return.  What’s the answer? Green? Maybe but unlikely. More tech? Not this time. Housing? Not in time.
2. Real estate – remains a pothole due to uncertainty. The ‘what-if’ factor is hurting us. People don’t know if they’ll have a job, don’t know if we’ve reached the bottom of the market, don’t know if more bank failures are imminent, don’t know if housing is the answer at all. There is a high level debate in our nations capitol regarding the inherent value of home ownership right now that has people concerned long-term.
3. The financial sector – people believe the financial sector is broken. The financial reform bill has been passed but the perception is that while the barn door may have been securely locked, the horses are romping merrily about the fields. The financial sector is no longer unhealthy but merely disfunctional. There is a surplus of money and profits but no lending.

Tuccillo doesn’t pretend to have answers for all these questions but he does suggest some alternatives:

1. Focus on local jobs. He encouraged us all to get more involved in the local economic development process. An economic angel may appear but the most likely source of immediate new jobs is with local new or expanding businesses developing niche products or services based on current economic realities. Things nobody yet has thought of in an evolutionary process to replace outdated or irrelevant products and services. Insofar as possible, effect the creation of jobs at a state and local level and don’t look to the federal government for all the solutions.
2. Focus on the ‘complete environment’ that will make our members most successful. Learn to play by the new rules of financial regulation, understand new technology – beyond websites and email, develop effective social media channels to supplant or replace older media channels, understand the post-boomer market. The greatest economic engine of a generation is exiting stage left (not always gracefully) creating marketing opportunities as it goes as well as creating a vacuum for new opportunities yet to be explored.
3. Understand that Wall Street ALWAYS trumps Washington. They an hire smarter people, pay way more and offer entrepreneurial opportunity Washington can’t begin to match. Whatever solutions or impediments Washington puts in place, Wall Street will find a way around, over or through within a brief window of opportunity. As long as you understand that you will never be disappointed.

His prognostication for 2010-2011:

• Growth – 2% – 2.5%
• Inflation – 2% – 2.5%
• 1 million + new jobs added (we need 150,000 new jobs/month just to break even with population growth so 1 million this year is almost break even – not real progress).
• Home sales – 10% – 15% increase
• Home prices – flat
• Shift our perception of median price. Median price only measures the composite of what has sold – not the true measure of market value. It can be very deceptive and unduly negative. Tuccillo argues that unit sales are the only true measure of a market’s strength. Price is secondary to whether homes are actually selling. If homes aren’t selling but median prices remain high, is that really a stronger market than one where the median has fallen but homes are selling like hotcakes? Which market would you rather be part of?

If you have an opportunity to hear John Tuccillo speak, I encourage you to take it. He understands our business but he has enough separation that you don’t get that rosy glow that sometimes accompanies current NAR economists. The presentation at NAR two years ago featuring Tuccillo and Stefan Swanepoel was one of the best I’ve ever seen. The more you know, the better prepared you are to grow your own business.