CNBC- The Housing Market- One Year Later.  Guests are Dr. Susan Wachter, Wharton Business School Real Estate education, Spencer Rascoff, Zillow and Armando Falcon, Galcon Captial Advisors.  Conclusions:  The market will have an “L” shaped recovery.  The real estate rate of decline is slowing.  When will it be normal again?

Below is a link which I found on You Tube. For your entertainment take a peek

Posted By: Adam Weinstein on Monday, August 24, 2009

Anna Ramirez had a tough day by any standard. First, there was the knock at her door by police. Then the forcible ejection of her husband, daughter and grandchildren from the property, and the scattering of their furniture across the front lawn. The chaining shut of her house’s front door. The humiliating realization of her own instant homelessness.

Then there was the acknowledgment by her mortgage lender that it was all a big mistake.

“This came out of nowhere,” said Ramirez – whose house, ironically, is nestled south of Miami in a onetime Florida boomtown called Homestead. “The bank took the house from right under my feet.”
Authorities say the woman’s lender, Washington Mutual – now part of J.P. Morgan Chase – foreclosed on her house while she was refinancing it, then auctioned it to a new owner. Then, after WaMu realized the mistake and reversed the sale, a Miami-Dade county court clerk failed to notify the home’s new owner – who chucked Ramirez and all her stuff off the property.
“This shouldn’t be happening, you know, because we did the right thing,” she said. “We went step by step.”
Doing the right thing is mattering less and less today. According to the data provider RealtyTrac, one of every 355 houses in the nation received a notice of default or foreclosure in July – 360,149 homes in all, a 7 percent jump since June and a 32 percent jump over the same time last year. Growing defaults mean overworked mortgage lenders, servicers, investors, attorneys and courts are making more mistakes – transposing social security numbers, mixing up names and losing payments. And increasingly, the victims of those mistakes are innocent homeowners who are up to date on their loans.
“This story really calls attention to just how inefficient and over-stressed the systems and people who process foreclosures are,” Rick Sharga, a RealtyTrac senior vice president said of Ramirez’ case. “We hear from people who find their homes listed as foreclosures on our website due only to errors from lenders in processing: entering the wrong address, the wrong loan document, sometimes even the wrong owner.”
Ramirez could have had it worse. Staff Sgt. Gerald Thitchener and his wife Katrina temporarily left their Las Vegas condo for his Air National Guard assignment as a fighter-jet mechanic in Tucson, Arizona. When his work was done, they returned to the home at 2981 Country Manor Lane, unit # 118. They found that Countrywide Financial had foreclosed on it, auctioned it and destroyed their belongings – including Katrina’s wedding dress and a photo of Gerald meeting President George H.W. Bush during the first Gulf War.
But Countrywide was supposed to foreclose on unit #10.
It turned out a contracted inspector mixed up the units, and Countrywide sent a locksmith and a Realtor to inspect the Thitcheners’ apartment. He decided it had been abandoned and told the landlord to “trash out” their condo.
Warren and Norma Becker of Studio City, California, didn’t let events go that far when they started getting junk mail from attorneys who noted that their “home is involved in a foreclosure processing.” They poked around and discovered that a private publisher of foreclosure lists had mistakenly put out a notice of default in their names.
That publisher, Ronald M. Frumkin of Redloc Information Services, said such mistakes were inevitable in Southern California, where he deals with 20,000 similar notices in a month. “A clerk may look up the wrong deed of trust, the legal description may be copied wrong, the legal description may be matched with the wrong parcel or an error in entering all this information into the computer may occur,” he said.
In Ramirez’ home state of Florida, the foreclosure courts have gotten so glutted up with filings that they’re seeking help from the private sector. A panel set up by the state Supreme Court recommended this week that most foreclosure proceedings be sent to contracted mediators for resolution.
The task force didn’t even bother asking to hire more judges and clerks. “Given Florida’s financial situation, it would be a foolish exercise… in the absence of any realistic expectation that such recommendations could be funded,” the court said.
But the courts may be giving themselves more work in the long run. If private mediators don’t cut down on the false foreclosure rate, more angry homeowners may sue their overly exuberant servicers and lenders.
That’s what the Thitcheners ultimately did. They took Countrywide to court over its treatment of them. Some of Gerald Thitchener’s detractors didn’t like the fact that he wore his Air Force uniform to court appearances; that was grandstanding, they argued.
He replied that he’d had no choice: His last dress suit had been thrown out by creditors in the foreclosure.
The courts awarded him and his wife $2.2 million in damages.
Sharga said such cases are the exception to the rule, and he defended mortgage servicers. “We’re dealing with an unbelievably complex situation: 51 sets of foreclosure laws (all 50 states plus DC) being executed by 3,140 county administrators, executed by multiple trustees who are dealing with different contracts from dozens of lenders and trying to address 3 million individual loans,” he said. “That’s a recipe for dysfunction.”
Maybe so, but lenders and servicers need to face the consequences of ousting innocent people from their houses, said John L. Smith, a columnist for the Las Vegas Review-Journal who championed the Thitcheners’ case.
“What do you suppose would happen to you if you inappropriately seized someone’s home, contacted a Realtor, had it sold and pocketed the profit?” he asked. “After you made bail, I mean.”

In California Assembly Bill 957 is under consideration and needs your help. Below is an article by the author about the bill.  In essence if this passes, California REO buyers will have the ability to choose their own escrow and title company. It will not be the lender’s choice.  Write your assemblyperson.  Click here to find them.

Galgiani’s Bill (AB 957) “The Buyers Choice Act” Passes First Hurdle in Assembly Banking and Finance Committee

AB 957 will ensure that homebuyers can use local escrow services to provide better service at lesser cost in the purchase of Bank Owned houses.

SACRAMENTO - Assemblymember Cathleen Galgiani (D- Livingston) guided “The Buyers Choice Act” through the Assembly Banking and Finance committee on Monday by a near unanimous vote of 8 to 1.  AB 957 would mandate that buyers of bank-owned properties (foreclosed homes) would have the choice of using a local escrow office to handle the transaction.

“Local escrow companies, which can offer the best resources and service in the current housing crisis, are being shut out of the Bank Owned (foreclosed) housing market”, according to Galgiani.  “Instead of local businesses assisting homeowners and expediting the transfer of foreclosed properties to purchasers, they’re literally locked out of the market.  Excluding local businesses from competition for services also eliminates local jobs that further harms the local economy and eliminates competition.”

Since the last major bout of foreclosures during the downturn of the 1990’s, a practice has developed in the foreclosure market that is having significant consequences to home buyers, their realtors and local escrow offices.  Banks and other large lenders that have taken possession of foreclosed homes are increasingly requiring that buyers of those properties use escrow companies with which they have contracts regardless of who pays for the service. This practice causes local homebuyers to pay up to twice as much in escrow fees to escrow offices out of the area that provide inadequate service to the buyer.

Currently, federal law called the Real Estate Settlement Procedures Act (RESPA) prohibits a seller of residential property from requiring or influencing a buyer to purchase title insurance from a company chosen by the seller.  Assembly Bill 957 seeks to do the same with escrow services which are often joined with Title Insurance.

Assemblymember Galgiani was alerted to the problem by Central Valley industry professionals.  Atwater realtor Andy Krotik, Merced mortgage lender Rick Seymore and Tim Eagan of The Escrow Institute of California presented first hand testimony at the Banking and Finance Committee hearing in the Capitol on Monday afternoon.

Realtor Andy Krotik, and Escrow Officer Tami Fournier whom are spearheading the local grass roots movement were very pleased with The Assembly Banking Committee’s broad bi partiscian  (8-1) approval.   ”The fact that support came from both sides of the isle is a demonstration that both parties recognize the injustice to not only home buyers, but small businesses must end,” said Krotik.  “We are hearing from interested parties across the state, over 1000 letters of support in a short 4 day period. The out pouring of support for Asemblymember Galgiani’s Bill is a testament to the bill’s merit.  We applaud Cathleen for her leadership on the importance of this bill.

AB 957, “The Buyer’s Choice Act”, would prohibit a seller of residential property from requiring the buyer to use an escrow service company or purchase title insurance chosen by the seller and would also prohibit a seller of residential property from, without good cause, disapproving the use of a title or escrow company chosen by a buyer. A seller who violates these provisions would be liable to the buyer for a civil penalty.  AB 957 now heads to the Assembly Judiciary Committee.

Geithner says that there is a recovery in the housing market just as he is selling and when BusinessWeek and LA Times are reporting that the real crash is just beginning

Under the bill called  The Neighborhood Preservation Act congress approved that banks may now lease back to the homeowner ,the  house which they have taken back by foreclosure or deed-in-lieu. Homeowners  may lease for up to 5 years.  It is hoped this will protect the mortgage lenders and banks from the worst effects of foreclosure. Rent-to-own options are also encouraged under this measure, which would apply only to leases signed in the next two years.

Advocates say this particular measure removes legal obstacles to a practice that could benefit lenders and borrowers alike.  Distressed homeowners stay where they are and ultimately regain their deeds. My question is what is going to make these borrowers suddenly be able to pay for the property they are losing?

Dr. Dean Baker, co-director of the Center for Economic and Policy Research in Washington is an early advocate of “right to rent” policies as a foreclosure solution. He said that while renting is an alien notion to many mortgage banks, more lenders should find it in their bottom-line interest to lease REO homes. So now lenders are being encouraged to act as realtors and landlords?  What’s wrong with this picture in your eyes?

According to FDIC Chairwoman Sheila Bair, banks have been able to raise capital without having to sell bad assets through the Legacy Loan Program.  This reflects renewed investor confidence in our banking system,

Even though banks haven’t shown a greater willingness to mark down the values of their loans and assume big losses since June, the Legacy Loan program is going forward with a trial offering of residential mortgage loans currently in receivership. Federal  Authorities can more easily require banks to lower prices on these assets, since they are held in a government-sponsored bankruptcy.

The loans must be currently serviced in accordance with either the FDIC’s loan modification program or government Home Affordable Modification Program (HAMP) guidelines.
The loans will be transferred to a limited liability corporation in exchange for interest in the LLC.. Authorities will then sell equity to investors for cash or leverage.

“The FDIC will analyze the results of this sale. Skeptics say there are many flaws in the program, including a fundamental disconnect between banks and potential sellers and buyers of the assets.

“Even with a reasonable degree of disclosure, the selling banks will still know more about their assets than the buyers,” say economists Simon Johnson and James Kwak, who run the economic Web site baselinescenario.com.
“The banks will be trying to dump their most toxic assets (their lemons); the buyers, fearing exactly this behavior, will reduce all their bids accordingly.”

With thanks to David Letterman for his many top 10 lists. Here are some I would like to suggest for Real Estate Investors who deal with REOs.

11.  Your sense of smell is impaired.

10.  You’re willing to buy ‘AS IS’ - Oh, the surprises in store.

9.  Home Improvement projects thrill you.

8.  Making things clean and pretty gives you great joy

7. It’s become the chic thing to do -at least in NY according to Gabriella for Island Advantage

Realty, LLC

6.  You want your house NOW!  Yet, you are willing to close in 10 days

5.  You love traipsing all over town to look at an REO only to find the key is gone from the lock

box.

4. You love to work with people especially realtors, escrow officers, City officials like code

enforcement officers and best of all, contractors

3 The ‘rush of the hunt’ excites you while looking for carpet, paint, tile etc.

2.  ‘Wheeling and dealing’   for the best buy stimulates you.

1. When you buy LOW, there is room for the unexpected. You WILL make money!

This gorgeous house is in Draper, Utah.  Where?  Draper, Utah. That’s about 25 miles south of Salt Lake City.

Watch the video below to see one magnificent home.

You can find all the particulars for this 5 bedroom, 3.5 bath, 3 car garage house by clicking here.

To make an offer on this property, please contact me or Alex.

The California Housing Finance Agency received $200 million to offer below market rate loans to first time homebuyers. Governor Schwarzenegger announced this will help from 800-1,000 folks purchase their first home. If you would like to live in any of the places listed below, now is the time to run for your house. All zip codes listed below in the counties from Contra Costa to Stanislaus are eligible. Only certain zips from Alameda and Los Angeles counties are eligible.

Contra Costa
Kern
Merced
Monterey
Riverside
Sacramento
San Benito
San Bernardino
San Joaquin
Stanislaus

Alameda
94601 94602 94603 94605
94606 94607 94608 94609
94610 94611 94612 94618
94619 94621
Los Angeles
90008 90043
93535 93550

Gov. Schwarzenegger said in a press release on the program, “We have taken a number of actions to help prevent foreclosures, but we also want to address the many already-foreclosed-on homes that sit vacant in our neighborhoods today. This program will not only make it easier for families to purchase their first home, but will also help stabilize neighborhoods that have homes sitting empty. No one single effort can solve our nationwide housing crisis, but together these measures make an important difference in California’s neighborhoods.”
The other catch is these homes must be owned by Wells Fargo, HomeEq, CitiMortgage or Fannie Mae. These institutions have agreed to price the properties 12% below market value.
For more information on this program, visit www.calhfa.ca.gov. Then look for Community Stabilization Home Loan Program.