TheDawgByte

     If you are faced with selling your home due to an unforeseen change in your financial well-being and you expect the total amount you owe on your mortgage will be more than the selling price you can get for your home in the current real estate market in your area, you may be looking at a Short Sale situation.  A Short Sale is one where the net proceeds from the sale of your home will not cover your total mortgage obligation and closing costs AND you don't have any other sources of money to cover the deficiency.  What can you do?  What are your options?

     STEP 1.  Consider a Loan Modification:  Contact your mortgage lender and ask them if they offer any programs to help you stay in your home.  They may be willing to refinance your existing mortgage at a lower interest rate; they may agree to a modified payment plan to help you get caught up; they may offer a forbearance period, if your distressed financial situation is temporary.  Should a loan modification still not be enough for your distressed financial situation then a Short Sale might be your best option.

     STEP 2.  Contact a Real Estate Professional:  Short Sales seem to have a life all their own!  Every week seems to bring a new Federal regulation and guideline, lenders vary in their ability to cope with the increasing numbers of Short Sales seeking approval, and not all real estate agents are experienced in dealing with Short Sales.  You want to work with a real estate professional who has strong negotiating skills, a working knowledge of the Short Sale process and a track record of success in getting Short Sales approved and closed.

     STEP 3.  Gather Your Documentation:  Your lender will provide you with a list of documents they will require to consider a Short Sale.  This "Short Sale Package" typically will include:

                    .  A hardship letter detailing your financial distress
                    .  Proof of income and assets
                    .  Copy of purchase contract and listing agreement
                    .  Copies of your federal income tax returns for previous two years.

     STEP 4.  Wait:  Short Sales are anything but short!  Even the most organized and complete Short Sale Package will take time for the lender's review.  It can and it will take from several weeks to several months for this review.  If you only have one mortgage, this step can take up to two months.  If you have a first and a second mortgage, expect this step to take up to three months.  When the lender does finally respond, it can be with a written Short Sale approval, a counter-offer or a denial.

     STEP 5.  Lower Your Expectations:  Even if your Short Sale is approved in writing by your lender, it may not be the end of your financial concerns.  You lender may request that you sign a promissory note agreeing to pay back the amount of your loan that wasn't paid off by the Short Sale.  While the 2007 Mortgage Forgiveness Debt Relief Act and Debt Cancellation Act provides that homeowners can exclude debt forgiveness on their federal tax returns from income for loans discharged in calendar years 2007 through 2012, this real estate professional strongly encourages you to consult with a real estate attorney and tax adviser to see if you qualify.  Short Sales do impact your credit score.  However, a Short Sale tends to impact your credit score less than a foreclosure or bankruptcy.

It can be easy for homebuyers to overlook home insurance costs. Most buyers tend to focus on factors such as quality of neighborhood, property taxes, school districts and available recreational and cultural outlets. But the seemingly mundane detail of home insurance can add up to a big investment. The size, location, construction and overall condition of a house can affect insurance cost, choice and availability, according to the Insurance Information Institute. When looking at prospective homes, the Institute recommends that homebuyers consider the following:

 •  Where is the nearest fire department? Houses located near a fire station usually cost less to insure.

 •  Are the plumbing and electrical systems in good condition? Poorly maintained, unsafe and/or outdated systems are more costly to insure than well-maintained ones.

•   Is the home vulnerable to wind damage? A beach home may be more susceptible to wind damage and can be more costly to insure than homes located inland.

•   Is the home at risk for flooding or located in a flood zone? Most standard homeowners' insurance policies do not cover floods, so you may need a separate policy, which you can get through the National Flood Insurance Program, which is serviced by private carriers, or from a few specialty insurers.

•   Is the home located in an earthquake-prone area? If so, earthquake insurance requires an endorsement or a separate policy.

•   Is the house well constructed and well maintained? Homes built with disaster-resistant materials and designed to meet current building codes are more likely to withstand natural disasters.

Your home is your biggest investment.  Make sure you protect it with the right type of homeowners' insurance policy.

     One of the most frequently asked questions that we receive at Altus Realty Solutions is "What is the real estate market doing?"  While that is a good question, perhaps a better question would be "How is the local real estate market doing?"  So many times, the real estate market information provided on television and in print media reflects a generalized national view.  So how best to address both a national and local perspective when seeking information about the real estate market?

     I'd like to invite our readers to the Housing Trends eNewsletter.  This eNewsletter is specially designed to give the reader both national and local market information to use when they are considering the purchase of a home, putting their home on the market, or seeking out issues of interest to homeowners.

     From timely press releases with charts and videos to key market indicators...from real estate sales and price statistics to local neighborhood information...from mortgage rates to informative consumer articles, our Housing Trends eNewsletter is there for you each month.  There's even a link to the "Home Evaluator" that gives you the opportunity to determine the value of your home with a free evaluation report.

     Please click on the following link to view our May-2010 Housing Trends eNewsletter:
http://scottrhinehart.housingtrendsenewsletter.com?Newsletter_ID248&Period_ID=185

     The Banking, Finance and Insurance committee in the California State Senate is considering  Senate Bill 1000 (Correa)  sponsored by the California Association of Realtors that would require lenders to accept an appraisal, even if that appraisal had been obtained and paid for by the buyer's previous lender.  Senate Bill 1000 would make appraisals "portable" if a buyer must change lenders.  As you would expect, the big banks are opposing this bill with full force and strong lobbying efforts.

     The big banks have a financial incentive to oppose Senate Bill 1000.  Many lenders have spun off Appraisal Management Companies (AMCs) and these AMCs have become a good income stream for the big banks.  Current law permits, but does not require, the big banks to use an appraisal ordered by a different lender...so most require a second appraisal, even though the buyer has already paid for an appraisal on the subject property.

     Senate Bill 1000 would change that loophole and require that an existing appraisal on a subject property be honored, with no further cost to the buyer.  FHA already requires that appraisals be "portable" as of January 1, 2010...meaning an FHA approved lender accept an appraisal completed by another FHA approved lender, when the borrower switches from one lender to another.

    Senate Bill 1000 is coming up for a vote in the California Senate Banking, Finance and Insurance committee on May 5, 2010.  I encourage all readers in California to call Senator Ron Calderon at 1-800-672-3135 and enter the number 179535555 to express your support for this bill.

    Appraisals cost between $200 and $500 and I believe it is unfair and unnecessary to force a buyer to purchase another appraisal on the same property if they must switch lenders.  It is not just the additional cost to the buyer.  The additional delay in getting that second appraisal can mean additional hardship for the buyer also.  Please call Senator Ron Calderon at the number above to express your support for Senate Bill 1000.

     It's hard to imagine the approach of Spring, when you're currently shoveling a foot or more of snow off your driveway or stacking another row of sandbags against the base of the hillside in your backyard.  Yet, Spring will be here and soon.  Ah, Spring, blooming flowers, green leaves on trees, warmer days and nights and that yearly ritual of cleaning.  Not just any regular cleaning...the big one: Spring Cleaning!

     For many, Spring Cleaning may entail some minor and major repairs of damages caused by Winter's hold: broken pipes, flooded basements, leaking roofs and more.  That being the case, I thought it might be helpful to go over a few tips that our State's Contractor License Board compiled for consumers needing the services of a contractor.

1.    Hire only licensed contractors.

2.    Check a contractors' license number. (Easily done online in many states or by phone in those not online.)

3.    Get three references, review past work.

4.    Get at least three bids. 

5.    Get a written contract and DO NOT sign anything until you completely understand the terms.

6.    Never pay more than 10% down or $1,000, whichever is less.


7.    Don't let your payments get ahead of the contractor's work.  Keep records of all payments.

8.    Don't make a final payment until you're satisfied with the job.


9.    Don't pay cash!

10.  Keep a job file of all papers relating to your project.

     These 10 tips are from the California State License Board.  Your state may have other suggestions, so be sure to check with them. 

     I've considered blogging on this topic for several months. Each time I put fingers to keyboard, I felt that my words failed to express my utter disgust for the big banks in this country: on the professional side, it's the mess known as Short Sales and Loan Modifications...on the personal side, it's having my personal and business credit card interest rates raised when I haven't missed a payment or been late.

     Like many, I've cursed the heavens because I felt helpless to do anything.  Recently, I discovered that I do have some power and some control.  The power is pure genius in its simplicity and impact.  Move Your Money from the giant financial beasts that devour your dignity and your deposits like some raging monster destroying Tokyo.  Forget this notion of "too big to fail"!  Put the giant monsters on a diet.  Move Your Money from them to your local credit union or community bank.

     But wait a minute!  What about the convenience of their nationwide ATM machines?  If I go to a smaller bank that doesn't have that national ATM chain, I'll be hit with withdrawal fees.  That's true!  And that is part of their master-plan to keep us all under their thumbs so they can bleed us dry with all sorts of new fees.  Here is my answer to that:  Move Your Money to a community bank or credit union and when you need some quick cash from an ATM take your new ATM card into a nearby store or gas station and buy some gum or beef jerky and then get cash back.  Sure, there will be some inconveniences, but imagine how you'll feel knowing that the financial beasts are not picking your pockets any more.

     It's time to give the big financial beasts a shot across the bow of their greed and arrogance.  It's time to pull our wallets from between their gluttonous and insolent fangs.  It's time to make them "lean enough to fail" .  The American people pulled their butts back from disaster once...never again.  Do I sound mad and angry?  Well, I am.  Remember the great scene from the movie "Network" when he raises the window and screams out into the world, "I'm mad as hell and I'm not going to take it anymore!". 

     The people in this country need to open their windows and tell their neighbors and their friends to "move your money".  We all should be mad as hell at the giant banks for their greed and arrogance and we should be mad at ourselves for feeling helpless to do anything about it as we watch more and more fees being attached to our credit cards, checking accounts and savings accounts.  Still not convinced?  Go to www.MoveYourMoney.info for more informatin.

"We cannot defend freedom abroad by deserting it at home."  -- Edward R. Murrow

     The National Association of Realtors' educational program, At Home With Diversity, is an excellent program for those in our profession looking to enhance and improve their skills and abilities when working with diverse cultures.  It does, however, have a significant piece missing.

     The National Association of Realtor' Code of Ethics states:

 1.   Realtors shall not deny equal professional services to any person for reasons of race, color, religion, sex, handicap, familial status, or national origin.  Realtors shall not be parties to any plan or agreement to discriminate against a person or persons on the basis of race, color, religion, sex, handicap, familial status, or national origin. (Amended 1/90)

 2.   Realtors, in their real estate employment practices, shall not discriminate against any person or persons on the basis of race, color, religion, sex, handicap, familial status, or national origin.  (Amended 1/00)

      I encourage the National Association of Realtors to include in their Code of Ethics the term "sexual orientation".  This protection for the LGBT community (Lesbian, Gay, Bi-sexual and Transgender community) isn't the major leap that many in our profession might think it is.  The phrase "sexual orientation" is already included in The One America Principles referenced in the At Home With Diversity educational course.

      I decided to write this blog entry on the 4^th of July because I believe in Life, Liberty and the Pursuit of Happiness for all in this country.  What better day to encourage the National Association of Realtors to include "sexual orientation" in their Code of Ethics than the day that celebrates our nation's commitment to freedom for all.

     Lately, I am hearing and reading about what real estate agents will and won't do when it comes to returning phone call, responding to emails, being available for clients and other agents.  In a word: sad.

      Some have indicated that they won't return calls after hours.  Maybe I'm just old, but when did real estate have hours like banks and retail stores?  Some have said that they differentiate between calls, emails, and questions of clients from those of other agents.  Maybe I am just old, but when did the other agent in a transaction not become our client, too?  Some have written that they only have 24 hours in their day.  Maybe I'm just old, but when did a day have anything but 24 hours?

     It got me thinking...all these blog entries and social networking comments about real estate and what some real estate agents will or won't do when it comes to returning calls, responding to emails and being available for clients and other agents.  No maybe about it...I am old.  To quote the wonderfully funny, Moms Mabley, when asked about old age, "You just wake up one morning, and you got it!"

      I love being a Realtor.  I enjoy seeing people achieve the goal of homeownership.  I am proud of my small role in helping that to happen.  It touches deep inside me when a five year old gets to romp in a big back yard after spending his or her first four years in an apartment with only a patio for outside playtime.  I feel honored that a senior citizen selected me to help them downsize from their large two-story home into a more accessible one-story senior condo.

      It costs me nothing to return an agent or client call at 9:00 pm.  It doesn't prevent me from going to one of my grandkids' school events to respond to an agent or client email on my fancy wireless do-dad phone, before I take my seat in the front row.  It doesn't impact my vacation to respond to a concerned agent or a nervous first-time home-buyer when I'm camping or traveling Tuscany.  It's the nature of the beast and I freely decided to ride it.

      So one day I just woke up in the morning and realized I'm old...old school when it comes to real estate.  I believe strongly in professional courtesy between agents and brokers.  I believe in being client-centered.  And I believe you can do all of this without sacrificing time with family or friends.  So here's my blog post and now I am going to go pickup two of my grand-daughters that live near me and we are going to go see a movie titled "UP" and we are going to have popcorn, soda and candy.  The tickets are cheaper for the early movies, you know.  Family time doesn't have to cost an arm and a leg.

     Housing and Urban Development Secretary Donovan announced on May 29, 2009 to a meeting of homebuilders that the Federal Housing Administration will allow qualifying "first-time" homebuyers to use the previously announced $8,000 tax credit towards the purchase costs of a FHA insured home.  So what does that mean to the qualifying "first-time" homebuyer?

      The homebuyer can only access the $8,000 tax credit after filing their tax returns with the Internal Revenue Service.  FHA guidelines require a homebuyer to make a minimum 3.5 percent down payment, so the end result is that the $8,000 tax credit can be used as additional down payment or for other closing costs.  This could help the homebuyer get a lower interest rate.

      As with all government programs, there are a great number of conditions and so it is critical for real estate professionals and their clients to understand the program and the process.  A good jumping off point is to get more information on this HUD program by going to http://www.hud.gov/news/release.cfm?CONTENT=pr09-072.cfm   Another resource for real estate professionals and their clients is the HUD Mortgagee Letter 2009-15 at http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/09-15ml.doc which goes into greater program details.

      As with all government efforts so far, this is not a silver bullet to cure all the ills of our housing market.  It is, however, another step in correcting the failures of the past.  As Secretary of Housing and Urban Development Donovan told the homebuilders, "What we are doing today will not only help families to purchase their first home but will present an enormous benefit for communities struggling to deal with an oversupply of housing."

     I feel very fortunate to live and work in a city that is one of my strongest marketing tools as a Real Estate Broker.   So many prospective home buyers from other states and Canada email or call me after reading on our website that Mission Viejo has been ranked one of the country's safest cities for the past several years.  The CQ Press report, based on FBI crime statistics, has Mission Viejo ranked the 2^nd Safest City in the United States for 2008, while the Uniform Crime Report for 2008 ranks Mission Viejo as "America's Safest City."  In 2007 all crime reports ranked Mission Viejo as "America's Safest City."

     Mission Viejo offers home buyers the grand troika of Southern California's wonderful lifestyle: sun, surf and safety.  Established in 1968 as one of the first master planned communities in the country, Mission Viejo's success is in feeling more like a city than a master planned community.  It has that hometown feel that seems to be missing in so many other master planned developments.

     Mission Viejo offers everything under the sun for outdoor enthusiasts, from fishing and boating on beautiful Lake Mission Viejo to hiking on our many trails. Did I mention the surf?  Mission Viejo is only minutes from the restful and romantic waves and beaches of the Pacific Ocean.  People tend to ponder such things when shoveling five feet of snow from their driveways. And safety!  Mission Viejo is ranked as one of this country's safest cities. 

     As a Real Estate Broker in Mission Viejo, I feel fortunate to live and work in a city that has so much to offer home buyers looking for a great place to live.  It certainly makes marketing a property exciting and fresh.