In case you haven’t been following the news lately, there is a lot of real estate-related news making headlines right now. Here are some of the big stories:

1.  Underwater homeowner refinancing to include non-Fannie and Freddie backed loans? Many people are aware that the new version of HARP will reach out to help homeowners who are underwater (see the previous blog), but still many more have been asking whether they will be able to seek similar refinancing possibilities if they do NOT have a loan backed by Fannie and Freddie. There have been rumblings about this, and last week I saw a few articles on this topic. HARP2, which is expected to roll out in a few weeks, is expected to open up the refinancing option to many homeowners who are underwater. Once that ball gets rolling, look for more information on applying similar relief to those who are underwater but do not have loans backed by Fannie and Freddie. This could change the housing situation and prevent many future foreclosures.

2. Home purchasing is the most affordable in decades. According to an article published last week by CNN, the National Association of Home Builders/Wells Fargo Housing Opportunity Index, housing price declines and low mortgage rates have created a rare opportunity for those who earn national median salaries – 75.9% of all new and existing homes for sale fell within that affordability range during the last quarter of 2011. The number has not been this high in the 20 year history of the index. Of course, whether one can afford a home versus whether one can actually buy one are not one and the same – obtaining loans are still tricky for many borrowers.

3. Distressed inventory is keeping California home prices low. Despite the increase in housing inventory last month, prices in California remain low due to the number of distressed inventory on the market, according to the California Association of Realtors. The Association reported that the median price of a single family detached home dropped 6.7% in January from December, and that compared to January of 2011, the median dropped 3.9%. With inventory rising and heading into the Spring sales season, it will be interesting to see what happens to prices, as some areas seem to be on the upswing.

4. Delinquency rate is dropping (but is that telling?). The rate of delinquencies has been dropping, as reported by the Mortgage Bankers Association, and is currently at only 7.6% of all mortgages. Still, about 44% of all homes in the U.S. are currently in foreclosure proceedings, which doesn’t really make the first figure sound too promising. Although California is ahead in clearing it’s backlog of distressed inventory quicker than many other states, now that the robo signing lawsuits have been settled we may see more properties go into foreclosure – a large percentage of these were waiting in the wings while the settlements were being negotiated. Also, we need to factor in HARP2, which will come into play in a few weeks – this could also have a big effect on preventing foreclosures, especially if the administration extends it to non-Fannie and Freddie backed loans, as planned. So, stay tuned – it will be an interesting year for distressed inventory.

5.  Property valuation fraud increases. The recently released Mortgage Fraud Risk Report indicated that property valuation fraud increased 8% in the fourth quarter of 2011. Arizona was ranked the riskiest state for fraud, with Nevada in close second. California ranked fourth. The report studies four specific types of fraud risk: property valuation, occupancy, identity and employment/income.

One of the biggest problems with the state of housing ownership is that one in four homeowners in the U.S. are underwater, meaning that they owe more on their mortgage than the current market value of their homes. In many situations this leads to foreclosure or other options like short sales or deeds in lieu of foreclosure. But what about the homeowners who are not delinquent, have been making their payments, maintaining their credit and doing the right thing, despite the drastic drop in value of their homes? Help is on the way…

The new HARP2 (Home Affordable Refinance Program, version 2) debuts March 15. This new revised version of the program hints at helping those who could not qualify under the original program because they were not delinquent. Here are the differences:

Proposed program: The new HARP guidelines, which will be released next month and have been extended until December 31, 2013, will enable underwater homeowners who are not delinquent to refinance their homes. This program will allow refinances, like HARP,  for underwater homeowner regardless of whether your loan is with Fannie or Freddie. Here are the requirements:

1. Loans must be current, with a good 12 month payment history – no late payments in the last 6 months and only one is allowed in the last 12 months

2. Loan to value limits will be eliminated, so homeowners will be able to refinance regardless of how far the values of their homes have dropped (under the current HARP, the loan to value limit was set at 125%, so many homeowners did not qualify).

3.  No appraisals or underwriting will be required, making the refinancing process easier. There will likely be a home inspection, just to make sure the home is in decent condition, but not a formal appraisal.

4.  The loan must be backed by either Fannie Mae or Freddie Mac. To find out if your loan qualifies, you can visit http://www.fanniemae.com/loanlookup/ and http://www.freddiemac.com/corporate/.

There has been some talk of a similar program to HARP that will help those who do not have loans backed by Fannie or Freddie. Hopefully in the future we will see such a program.

The new HARP will undoubtedly help many people stuck in that gray area – where they are not delinquent but feel trapped under a mortgage that exceeds current value and an interest rate that is much higher than current rates. Contact your mortgage broker to discuss whether you can qualify for the new HARP. For more information on HARP, go to http://www.makinghomeaffordable.gov or call (888) 995-HOPE (the number for HopeNow, a government-sponsored counseling organization that is a wonderful resource).

If you have ever considered a short sale, or would like to learn more about how they work, I have the seminar for you…and it’s free! Shortsaleopedia and I have collaborated to hold monthly seminars to help homeowners in San Diego, and the first one is this Wednesday, February 15, from 6:00-8:00 p.m. at the Encinitas Community Center in Encinitas.

I have put together a phenomenal panel of experts – from real estate and credit attorneys to a CPA, short sale bank negotiator, mortgage professional, escrow and title professionals and of course Realtors who specialize and are trained in short sales. We will teach you all about the intricacies and ramifications (legal, credit and tax) of short sales, programs that may be available to help you, and how current and upcoming laws could make your sale easier or more challenging.

Please join me and my wonderful expert panel this Wednesday. You can sign up here: http://shortsaleopedia.com/events/event/event-expert-panel-san-diego-az-2012-02-15/. The Community Center is located at 1140 Oakcrest Park Drive in Encinitas. If you are investigating options for distressed property, this event will be valuable.

Well, as surprised as I am, Chase has been kicked from the number one spot on my least favorite short sale lender list (but it is still a close second), making room for the new #1: Wells Fargo.

I work with many short sale buyers and sellers – some say I’m nuts to do so, but I think that you have to embrace reality, so that is what I do. I also thoroughly enjoy getting these sales closed, because it feels so good to accomplish a difficult task AND to know that I helped someone.

Along with working short sales comes frustration, mostly where the lenders are concerned. As a short sale agent, I and others keep hoping that one of these days these sales will become more uniform, easier to work and quicker. But, alas, sometimes they seem to be getting more challenging. The latest news is important for anyone who holds a loan with Wells Fargo, OR if Wells Fargo is the investor on your loan. Now this latter part is key, because some people have no idea who the investor (the one who actually holds the note) is on their loan(s).

Wells Fargo recently decided, in all it’s wisdom, to require agents to submit short sale offers 30 days prior to the auction date. This was not made public. While there could still be a chance that an offer submitted sooner might get approved for short sale, I implore you to not risk it. Wells sold a short sale listing of mine at auction this week, despite the fact that we had a well qualified buyer and had submitted a contract.

Please do not let this happen to you. It is a terrible feeling, and I am disgusted with Wells Fargo – so much so that I am considering pulling all my accounts with them. I have banked there for many years, but this leaves a very nasty taste in my mouth. While other lenders are trying to embrace short sales, Wells gets the stick for being uncooperative, uncaring, and plain ridiculous.

With short sale lenders constantly changing rules, it is very difficult to keep track of everything. If you are considering a short sale, make sure you find out who your investor is, as it is often not the same as the service provider.

If you are looking for a home that is bright, clean, close to the beach and has been recently upgraded to the hilt, I have the home for you! My new listing at 1477 Sapphire Drive in Carlsbad is in the wonderful gated community of Mar Brisa, just moments from the beach, dining, shopping, walking trails and in the wonderful Carlsbad school district.

Here are some of the amenities this home offers:

•4 bedroom plus optional bedroom downstairs (or den/office), 2336 square feet, great floorplan

•  Granite kitchen counters

•  New Travertine flooring downstairs with decorative inlays

•  New custom stone floor-to-ceiling fireplace in family room

•  New hardwood flooring in master bedroom – which has ocean peek-a-boo views and plenty of closet space

•  New carpeting upstairs

•  Surround sound system downstairs with recessed speakers, and the family room is wired for Apple TV

•  3 car garage with built-in storage

• Private, nicely landscaped backyard with fire pit

• Newer kitchen appliances, and refrigerator, washer and dryer convey with sale

• Gated community with community pool, two spas, tot lot and exercise lot

If you would like to schedule a showing for this home, please call me at 760-310-9466. For more information and to view more photos and see the virtual tour, please click here.

The numbers are in! Below are the home sale statistics for San Diego in 2011. If you would like a .pdf copy of the entire chart, please email me at Rachel@LaMarRealEstate.org and I will be happy to send them to you. Thank you to title rep extraordinaire, Roxanne Kelemen with Advantage Title for this data.

If you don’t listen to the news and do not know about SOPA and PIPA, especially if you are in the real estate industry or are a buyer or seller, you need to understand what it is and how it might effect you.

SOPA, the Stop Online Piracy Act, and PIPA , Protect IP Act, threaten the entire internet, and will have a big impact on how we use it. The bills, backed by the entertainment and music industry, as well as other big companies, will allow for the control of content on the internet, in order to prevent piracy. If you have a website and you post copyrighted content on your site, your site could be SHUT DOWN! It could be something as simple as posting a family photo on Facebook, where there is something in the background that is copyrighted, or posting a video on YouTube, where a copyrighted song is playing in the background – Facebook and YouTube could be shut down.

For Realtors, who rely on content sharing daily through multiple listing services, as well as photos and videos, this could be bad news. It would effect the consumer’s ability to search for homes, see videos and photos, and visit real estate websites. I have no doubt that the majority of real estate blog sites would be shut down under this new legislation, as well as millions of other blog sites. I know that to go through the hundreds of blogs and photos on my own blog site would be an exhausting task, and that there is a chance I might miss something that is copyrighted. Could I afford to have my website and blogsites shut down? NO!! I would likely have to find a new career.

Many websites and blogsites went black today in protest.

SOPA and PIPA are scheduled to be voted on by Congress on January 24. I urge you to call, email and write your local Congresspeople to tell them you are against these bills. The entire internet is at risk.

I have had several clients recently ask how to purchase a foreclosure property, and it is a great question. Oftentimes buyers do not differentiate between the purchase of a foreclosure, a pre-foreclosure, and a post-foreclosure. Let’s take a look at the different ways to purchase property in various stages of foreclosure:

1. Auction (the one true way to “buy a foreclosure”). If you want to buy a foreclosure this is the typical way to do so. Auctions are definitely tricky and you need to understand the process and what you may be getting into. There are several things you really need to understand before going to auction – for explanation read this article. I usually do not recommend auctions to my clients, as there are some caveats (oftentimes you cannot inspect the property first, you do not receive any disclosures, you may be bidding against experienced auction-goers, etc.) If you do decide to go to an auction make sure you are well prepared.

2. Short sales (aka pre-foreclosures). A large percentage of foreclosure-related sales are sold via short sales or lender owned listings. Purchasing a short sale can be a good way to get a better price on a home, but the buyer has to have no aversion to waiting to close escrow – sometimes as long as 3-6 months. The good thing about a short sale is that you will get to inspect the property, and usually you will be provided with disclosures from the owner. For more information on short sales and how they work, you can visit the short sale information tab on my website. I have also written numerous blogs about short sales.

3. Lender-owned/REO (aka post-foreclosures). REO (real estate owned) properties are those that are owned by the lenders who hold the note. They have already gone through the foreclosure process and are now active in the market. Most often, these properties are priced below comparable sold homes, and often the price is reduced every so often if the property has not sold. Post foreclosure properties can also be owned by “flippers,” who purchased the property at auction, did some work, and are reselling it for profit.

The good news then is that many of these homes can be purchased at a savings. The not so good news is that buyers will not likely receive disclosures, as the bank obviously never lived in the property. However, the purchase process is like that of a normal sale – buyers are able to view the property, obtain inspections and reports, and exercise due diligence to their satisfaction with the property condition.

What about all those foreclosure websites? Foreclosure websites can be helpful, but honestly if you have an experienced agent s/he can do the research for you, saving you money in subscriptions. If you are focusing on a particular neighborhood, your agent can research the neighborhood via the public records, and find out who is delinquent, and which properties have notices of default or auction dates filed. If the property is not yet listed as a short sale your agent can see if the owner is open to doing so, allowing you to write an offer and have it presented to the bank. You can also find out auction dates (which often get postponed – the new dates do not necessarily list on the public records, but your agent can do further research). If you are a skilled auction attendee and purchase a lot of foreclosed properties this way, subscribing to one of these sites is a good idea.

There is no magic bullet that will get you a screaming deal on any of these properties. But if you do your homework you can likely acquire nice home at a savings. If you are not afraid of the challenge these can all be great ways to buy your next home. Make sure you have an experienced agent to help you if you are buying a short sale or REO property. If you have any questions about foreclosure please do not hesitate to post them in the comment section below, or email me at Rachel@LaMarRealEstate.org.

There is a lot of news out there in the real estate market, and much of it is very positive in pointing toward a market recovery. I am not putting a spin on things – this is what is going on now and the news looks good.

Mortgage Delinquencies Down. The number of mortgage delinquencies is lower than it was back in January of 2010 – 25% lower, according to LPS (Lender Processing Services). What does this mean? Many say this means the market is starting to recover, and they are predicting a decent year for housing. With less delinquencies there will be fewer foreclosures. The states with the highest percentage of non-current loans are Florida, Mississippi, Nevada, New Jersey and Illinois. Those with the lowest percentage of non-current loans are North Dakota, Arkansas, Wyoming, South Dakota and Montana. You can read the entire report here.

Mortgage Applications Rise 4.5%. Continuing on with the premise that the market is recovering, mortgage applications are on the rise, according the the Mortgage Bankers Association. Refinancing also rose, and with low interest rates continuing it could be a boom to the Spring home buying season. Click here to read the entire story posted by Housing Wire.

Lowest Reported Lender Owned Inventory Since 2007. Lender owned inventory, or REO properties, has dropped 34% since 2010, and is at the lowest rate since 2007, according to a year-end report by Realty Trac. 804,423 homes were repossessed by lenders in 2011.

Fannie Mae Extends Mortgage Forbearance Program for Unemployed Borrowers. Fannie Mae just released new guidelines to help unemployed borrowers. The servicer will reduce or suspend mortgage payments to those who qualify, for a specified period of up to 6 months if requirements are met. At the end of the period the servicer will evaluate to see if the borrower is eligible for up to another 6 month extension. No foreclosures will be filed during these forbearance periods. The program is slated to begin March 1, but servicers are being encouraged to begin helping borrowers right away.

And some California real estate news…

Keep Your Home California Program Adds More Lenders. Keep Your Home California, the program dedicated to helping borrowers avoid foreclosure, has added more lenders to the program roster, bringing the total to 55 servicers who have pledged to assist struggling homeowners. According to a Union Tribune article, the servicers are amongst the biggest names in the mortgage industry, holding 90% of all California home loans. For more information on the program you can visit the website.

Mello Roos Taxes No Longer Deductible. A new tax law will create more tax liability for homeowners with mello roos taxes. Until now, a homeowner was able to deduct his entire property tax bill, including mello roos assessments, from his state income tax. Starting with the 2012 tax bill, the Franchise Tax Board will require property tax bills to be divided into deductible and non-deductible portions. Mello roos taxes will be non-deductible. Since the 2012 taxes are not due for over a year there are groups that will be fighting this tax increase, citing a bad move on behalf of the state in difficult financial times. If the law sticks it could create problems in selling homes with mello roos taxes, leading to losses in property values. We will have to wait and see if the FTB reverses this one.

With a new year there are new laws, so here is my annual list of some of the new real estate laws you may want to be aware of going into this new year:

Landlord Right to Prohibit Smoking. California Senate Bill 332 gives landlords the right to prohibit smoking in their residential rental properties, including outside areas. The non-smoking areas of the property must be designated in the lease agreement. Existing tenants must be provided 30 days notice if a landlord wishes to impose these restrictions on current leases. Law effective January 1.

Foreclosure Postponement Notice Requirement. Senate Bill 4 requires specified notices of how to postpone a foreclosure sale be provided to owners who receive foreclosure notices. Lenders seeking foreclosure are required to make a good faith effort to provide such information to those who seek it. Law effective April 1, 2012.

Owners Right to Rent Condominium. Senate Bill 150 allows an owner of a unit in a common interest development to rent or lease out the property despite homeowner rules to the contrary, as long as the rules were not in effect before the owner took title. Law effective January 1.

HOA Restrictions Against Excessive Fees. Senate Bill 771 requires HOAs (home owner associations) to limit the costs of preparing and delivering HOA documents and disclosures. Once the HOA estimates a fee for doing so, and the fee is paid, it cannot tack on unreasonable fees beyond the estimate, nor can it threaten to withhold release of the information to sellers until extra fees are paid. Law effective Januart 1.

Restricting Actions of HOA Boards. Senate bill 563 requires HOA boards to provide at least 2 days notice to owners for HOA meetings, with the exception of emergency meetings. Boards are not permitted to take action on any business items outside of a meeting, with the exception of those that have been delegated to managing personnel or others. Law effective January 1.

School Residency Attendance Can Be Established Via Parent Workplace. Under Senate bill 381, residency requirements for specific school districts may now be established by parent workplace, if at least one parent/legal guardian of the pupil is “physically employed within the boundaries of that district at least 10 hours per school week.” This is determined by the district, and “may” be allowed should the district choose to do so. This law was already in place, but is now extended through July 1, 2017.

Small Claims Court Judgment Increase. Under Senate bill 221, small claims judgments are now increased from $7500 to $10,000 if the claim was brought by a natural person (if brought by a corporation the limit is still $5,000). Law effective January 1.

Real Estate Agent Licensing/Discipline Changes. There are numerous changes to discipline in regards to real estate agents, including those related to license suspension for failure to pay taxes, and the requirement to report any disciplinary actions and escrow activities to the DRE. Senate Bills 53, 706. Laws effective January 1.

For a complete list of all new 2012 laws go to www.leginfo.ca.gov for California laws or http://www.gpo.gov/fdsys/ for federal laws.