Category

Disclosures

Jan 23
0

Loan Fraud and Short Sale Fraud

By | Disclosures, Making Home Affordable, Short Sale, Sonoma County info | No Comments

An article in the SF Chronicle caught my attention this morning : 10 indicted in Calif. alleged real-estate scheme.

When money was cheap and pretty much everyone could get  mortgage, the so called ‘golden years’ (they were not golden by the way) some interesting schemes were going around. There were also rumors that special FBI units would go after all those who committed loan fraud in the 2004-2007 market place. Well the article above is proof that they are after the ones who did so…

Rachel Dollar has a great blog as to Mortgage Fraud: www.mortgagefraudblog.com.

Well right now we have new schemes going around, never a dull moment in real estate… I hear wild stories about short sales, interesting ones and even if half is true well it’s still illegal/fraudulent. One of them is short sale ‘flipping’ -> it is like the scheme mentioned in the article above but then with short sales. An other popular one is selling the home to a family member and not disclosing this to the bank. And at this point, in the ‘short sale flurry’ some short sales might be approved based on incorrect information -fraud-…

I discussed this with my broker and her prediction is that in a few years, when short sales are done, the banks will go back in the files and do an audit… Ask your attorney about the statue of limitations on fraud…

Please when you consider a short sale, be upfront with your real estate agent and the bank about your situation, should a real estate agent promise you a quick turn around or some other to good to be true story, be very leery and interview an other Realtor, preferably one that has the CDPE designation.

And READ the short pay approval letter: a Short Sale has to be an arm’s length transaction, you CANNOT financially benefit from the sale -except for cash for keys etc approved by the bank-, your Realtor CANNOT be a family member and there are a few more. If there is a special situation, disclose this to the bank, have their approval : for instance when you rent the house back from the person who bought the house.

And last but not least: selling the house on paper for $450,000 and on the couch selling the couch for $50,000… probably not a good idea either.

Still you can plan short sale carefully and there are many more benefits short sales offer, that is for a later post.

Have a great day, Sonoma County is beautiful this time of the year: the mustard  is starting to bloom!!!

Mirjam

Nov 28
0

I want to buy your house! But…

By | Buyers, Disclosures, Economy, Mortgage, Sellers, Sonoma County info | One Comment

Ahh the ‘buts’ or the contingencies. As a proud home seller, you received the offer and if everything goes well, you’ll close escrow  in 30 days…

99.9% of all offers are made with contingencies: Inspection contingencies and loan contingencies are the usual mile stones. While inspection contingencies are easy to negotiate, the loan contingency can be a very different story. About 5 years ago, acquiring a mortgage loan was a very easy process and just about anyone could qualify. Today, with more than 1 in 7 mortgages 60 delinquent or worse, banks have begun to tighten lending qualification requirements, making the simple loan approval a thing of the past.

What this means to buyers and sellers is a potentially longer escrow process with more challenges and hurdles to jump through along the way. Many buyers schedule the moving truck and pack their bags, only to come to a sudden and screeching halts days before closing due to additional pre closing lender conditions related to income, credit and appraisal. New last minute lender conditions have become especially prevalent with conforming loan amounts over $417,000 and Jumbo loan amounts over $655,000. Ironically in my personal experience, traditionally difficult FHA loans have become easier and quicker to close.

In our area, just about everything happens on the day of closing.  The loan gets funded on the eve of closing, the escrow closes/records, the sellers moved out and buyers move in. While that has been the traditional picture, sellers might consider a different strategy. One option to consider is to deliver possession to the buyers 1 or 2 weeks after close of escrow. This means that the seller has more latitude in coordinating their packing and moving process, with less pressure to vacate the day of the sale. While this may not be the ideal situation for all buyers and sellers, it does lessen the potential stress that could occur if there were any last minute lending or funding issues that delayed the closing date.

Of course, the above applies to a regular sale, in case of a short sale, the majority of the home owners have stopped paying their mortgage anyway so in their case it would mean that they can stay in a home ‘for free’ longer.

To keep everything in perspective, the above are just hurdles in the sales process, things to expect and opportunities to find good solutions for all parties. In the grand scheme these are minor.

Mirjam

Aug 22
0

I want the house BUT….

By | Buyers, Disclosures, Sellers, Sonoma County info | No Comments

Have you read a California purchase agreement lately? Probably not, come to think of it, when a home owner decides to sell his house, part of the homework might be to ask your realtor for a sample contract, just to familiarize your self with the important stuff. Buyers should do the same. This agreement is a legally binding agreement once signed but all parties involved.

About 99% of buyers will make an offer with what we call contingencies… what was that? Yes, I call it the ‘buts’. I’d like to buy the house but: I need a mortgage and the house needs to qualify, I want to make sure the house doesn’t have serious flaws, I want to make sure I really want to live in that neighborhood, I want to….

The list if reasons can be different for everyone. Some of you might say, wait a second, you cannot have an endless list of ‘buts’. Basically the main ones are: Financing, Inspections and Title.

Financing: the house needs to appraise and the bank needs to agree.

Inspections: buyer can do any and all inspection as to satisfy himself as to the condition of the property. This covers a wide range if subjects, even the neighborhood is involved. That’s why the list is endless: depending on property and buyer. Everyone has different priorities.

Title: once the escrow is opened,  the title company provides a preliminary title report, stating the legal owners, the liens against the property, the easements etc etc. A problem with title can severely delay the sales process.

In our area, in general,  the contingency period is 17 days. This period gives a buyer the time to have all ‘contingencies’ taken care of. Should something seriously pop up you can either ask for an extension to do more inspections, ask for money to remedy the problem, sign of on the contingencies and move forward with the sale or decide that this is not your house and cancel the dale. You can say, when inspection period is up you have to really decide (what is that expression again?).

There is a lot more to say about the subject but this is the basics to remember about the ‘buts’.

Have a great Sunday!

Mirjam

Aug 05
0

No Penalties!

By | Buyers, Disclosures, Sellers, Sonoma County info | No Comments

PMRD Logo

Great news from the Sonoma County Permit & Resource Management department!

For a limited time, permits to legalize non-permitted construction will not be subject to civil penalties and investigative fees.

Projects eligible to participate are:

Residential buildings and accessory structures  •  Construction completed prior to July 13, 2010 • ‘Self-Disclosed” construction

Eligible permit applications must be received between August 1, 2010 and February 1, 2011.

Now is the time to safe money, permitted construction always results in higher value!

Mirjam

Apr 25
0

This Old House!

By | Disclosures, Sellers | No Comments

Today I am not going to talk about HAFA or distressed properties, no something else caught my eye in the CAR newsletter I received this week.

There is something special about owning an older home. Personally, I love older homes in older neighborhoods. For that reason, I love the MacDonald area. But older homes are built in a time when building rules and products where different and there are new laws to comply with when remodeling or perhaps selling a house.

Starting today, renovations that disturb lead-based paint in older residential dwellings and child-occupied facilities must generally comply with the Lead-Based Paint Renovation Rule of the Environmental Protection Agency (EPA).

Under the newly implemented rule, renovators of target housing built before 1978 must now be trained and EPA-certified to perform safe work practices to prevent lead contamination.  Additionally, renovators must deliver EPA’s lead renovation pamphlet to an occupant within 60 days before a project begins (and, if mailed, at least seven days before a project begins).  Renovators must also obtain the occupant’s signed acknowledgment of receipt or substitute documentation as specified.

The EPA issued this rule in 2008, but delayed implementation until now.  The rule generally applies to building contractors, handymen, residential landlords, property managers, and anyone else who is paid to perform renovations or to direct workers to perform renovations as specified.  The lead renovation rule does not apply to homeowners renovating the homes they live in.  However, sellers of target housing must, among other things, disclose to their buyers any known lead-based paint and lead-based paint hazards (C.A.R. Form FLD).

Should you decide to sell your older home and are going to repaint the house, you need to keep the above in mind.

Have a beautiful day!

Mirjam