Foreclosure Help Is Not News, Just Hard to Find

As far back as February 2008 The Los Angeles Times ran a story about how lenders are teaming up to help homeowners in trouble avoid foreclosure. Basically it is a program that encourages home owners to contact the lenders through an intermediary to assist those that are able and eligible to refinance their loans before they go bust. This is great for those who have the wherewithal to do it, but most borrowers don't have the horsepower to do it, alas!

More recently Freddie Mac came up with a plan to encourage mortgage servicers to keep owners in their homes and help them overcome whatever financial difficulties have beset them.

Avoiding Foreclosure Scams

With so many people losing their homes due to foreclosure there is no shortage of predators eager to take advantage of other people's misfortune. There never is. The Office of the Comptroller of the Currency has issued an advisory to help protect the public. There are plenty of legitimate professionals who are competent to help homeowners in trouble, but it is these unscrupulous (explicative deleted) that give a bad name to the rest of us in the industry. If you have any questions about the foreclosure process, or know anyone who would benefit from the information, I'll be happy to sit down and have a free, no obligation and completely confidential discussion of the options available. Going into foreclosure, filing bankruptcy and enduring the consequent hell is not the only option.

I used to think that it was, until I lost my home (hey, this market has been disastrous for real estate related professionals). Nothing like facing the loss of everything to make a guy wake up and look around for the coffee. I can't say that the process has been pleasant, but it is a lot better (by a long country mile) than the financial catastrophe I was allowing myself to drift into.

The dust hasn't settled yet, but I can see the way ahead. I gotta say that God is good. Just when I thought I was going down for the third time I got the totally unexpected gift of education. A good man showed me the best way to save myself, and now I can use that knowledge to save other folks as well. Nobody deserves to get tossed out on the street at gun point with nothing but the clothes on their backs, their household goods dumped on the curb, all in full view of the nosy (former) neighbors. Unless they do nothing. Passive victims deserve what they get, I'm sorry to say.

So do people who lie to themselves about what is really going on. These are the people who get scammed. We would all like to believe that we are special, that it can't happen to us, that there is an exception in our case. The scammers will come and sing that song to us. They'll sing it softly, sweetly, and it will sound so-o-o-o good. It will sound so reasonable. It will sound so persuasive. Lots of people will join in the song, relived, secure, believing all the way. Until they go over the edge of the cliff, only then (maybe!) waking up to the sick realization that they've been had. That there is now no way back. That they are going to get smashed. And worse than this, they'll realize that they should have listened to the hard truth. These people too, deserve what they get.

I was just talking to my friend Joe (he does honest loans, can you believe it?) about this on Monday. He told me the story of a couple who realized that maybe they were in trouble. They were. Joe spelled out the situation, offered a realistic solution. Not a pleasant solution, but real and workable. "No," they said, "there's got to be another way." Fast forward four months. There wasn't. At 4.30 in the afternoon of the day before the foreclosure they showed up in his office. "OK. I guess you were right. Now we're willing to follow your advice." Too late. What can you do? Just one more sad story. If you are in trouble don't let that be your story. If you know someone in trouble you have a moral obligation to point them to reality.

I'll say it again: If you have any questions about the foreclosure process, or know anyone who would benefit from the information, I'll be happy to sit down and have a free, no obligation and completely confidential discussion of the options available. In the immortal words of W.C. Fields, "Sometimes you just have to take the bull by the tail and face the situation." You don't have to face it alone. You don't have to face it blind. If you or someone you know are willing to be helped, I'm willing to help. I don't make any guarantees, other than this: I'll tell it like it is, I'll maintain absolute confidentiality, I won't take a penny from you and if we choose to work with each other and you are absolutely dead honest with me about what is happening, I will be unswervingly loyal to you.

888-692-1324 ID#5000 Toll free, leave a voice mail to initiate the conversation.
Or email me: Leo.Walker@Century21.com.

President signs Housing & Economic Recovery Act.

This morning President Bush signed the "Housing and Economic Recovery Act of 2008." For the past several years, C.A.R. and the NATIONAL ASSOCIATION OF REALTORS® have aggressively lobbied for Congress to pass numerous provisions found in this historic bill. Many of you participated in these efforts by communicating with your Members of Congress. It will aid in stabilizing our economy and help stem foreclosures, while also providing support to first-time homeowners.

The legislation will assist an estimated 400,000 homeowners facing foreclosure, many of whom reside in California, by allowing them to refinance their current mortgages with a Federal Housing Administration (FHA)-backed loan. The bill also will permanently increase FHA, Fannie Mae, and Freddie Mac loan limits in high-cost areas.

The bill permanently increases the conforming loan limit to $625,500. C.A.R. has long advocated for higher conforming loan limits. In February, the Economic Stimulus Act of 2008 was signed, temporarily raising the conforming loan limit in high-cost areas to $729,750 from $417,000 until December 31, 2008.

Although we would have liked Congress to make permanent the current $729,750 loan limit, C.A.R. is pleased with the new permanent loan limit of $625,500. It will allow California homeowners to refinance their loans into safe affordable loan products and allow first-time home buyers to enter the market.

The new loan limits for Fannie Mae and Freddie Mac are the greater of either $417,000 or 115 percent of an area’s median home price, up to $625,500. The new FHA loan limit will be the greater of $271,050 or 115 percent of an area’s median home price, up to $625,500. Both new loan limits will be effective at the expiration of the economic stimulus limits on December 31, 2008.

C.A.R. also supports the following bill provisions:

• A temporary increase in mortgage revenue bonds to refinance subprime mortgages.
• New regulator for Government Sponsored Enterprises to restore investor confidence in GSE loans and help the market and economy stabilize.
• First-time home buyer tax credit, which allows first-time home buyers to receive a tax refund worth up to 10 percent of a home’s purchase price, up to a maximum of $7,500. The refund serves as an interest-free loan and the homeowner is required to repay it in equal installments over 15 years.
• Temporary raise in the loan limit for the Veterans Affairs home loan guarantee program to the same level as the economic stimulus limits until the end of 2008.
• Adjustment to the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA), allowing sellers to provide the non-foreign affidavit to a qualified closing entity and not just the buyer.
• The setting of minimum requirements for mortgage originators, which mandates fingerprinting of loan originators and establishes a nationwide loan originator licensing and registration system. The requirements do not apply to those only performing real estate brokerage activities unless they are compensated by a lender, mortgage broker, or other loan originator. States will have the ability to implement more stringent laws.
• The creation of a National Affordable Housing Trust Fund to help cover the cost of the FHA rescue plan for the first five years and develop affordable housing in subsequent years.

Other provisions in the legislation:

• The Treasury Department’s proposal to create a federal backstop program to insure the financial well-being of Fannie Mae and Freddie Mac.
• The FHA’s inability to insure loans that utilize a seller-funded down-payment assistance program. Down-payment assistance from family, employers and other nonprofits is still allowed.
• The Community Development Block Grant Programs’ $4 billion allotment for communities to purchase and refurbish foreclosed homes.

California Members of Congress who supported the bill:

Senator Barbara Boxer, Senator Diane Feinstein, and Representatives Joe Baca, Xavier Becerra, Howard Berman, Mary Bono Mack, Ken Calvert, John Campbell, Lois Capps, Dennis Cardoza, Jim Costa, Susan Davis, David Dreier, Anna Esho, Sam Farr, Bob Filner, Elton Gallegly, Jane Harman, Mike Honda, Duncan Hunter, Barbara Lee, Jerry Lewis, Zoe Lofgren, Dan Lungren, Doris Matsui, Howard "Buck" McKeon, Jerry McNerney, Gary Miller, George Miller, Grace Napolitano, Nancy Pelosi, Laura Richardson, Lucille Roybal-Allard, Linda Sanchez, Loretta Sanchez, Adam Schiff, Brad Sherman, Hilda Solis, Jackie Speier, Pete Stark, Ellen Tausher, Mike Thompson, Maxine Waters, Diane Watson, Henry Waxman and Lynn Woolsey.

IndyMac Goes on Life Support

This afternoon after the close of business, federal regulators seized IndyMac Bank. The bank had laid off a substantial portion of it's work force earlier this week and closed it's loan department. This is big news for the Arroyo Seco, as IndyMac is headquartered in Pasadena. The bank will re-open it's doors on Monday under FDIC control.

Not only does it impact the thousands of workers directly affected, but it impacts the whole lending and real estate market. Home loans will be harder to find (banks all over are discontinuing loan programs, making them more difficult to get), and as a direct result, more expensive as well.

IndyMac today, and tomorrow? My money says Countrywide is next.

Update: IndyMac was pulling it together, it seems, and actually stood a chance until an elected official voiced his concerns in public sparking a panic. Here's the story.

Getting Started

A lot is going on in the real estate market around the Arroyo Seco, and I'm here to tell you about it.

At the moment things look grim. The prices of real estate, having shot to astonishing highs, have, on average, plummeted 27% in the last year. Interest rates are up from historical lows. Foreclosures are about double what they were a few years ago. Congress has gotten into the act, which always scares me. Freddie Mac and Fannie Mae are on the chopping block, which would have HUGE implications for the housing market all over the country. The economy is soft, fuel prices are through the roof, inventories are 'way up and sales are 'way down.

But that's not all. Some of what Congress has done has been, to my vast surprise, helpful. falling housing prices are making home ownership available to thousands of people who had been priced out of the market. Interest rates remain less than 1.5 points above historical lows, which means that by historical standards, they are still very low. At the best of times foreclosures were running a little less than 1%, now it's about 2%, hardly the universal catastrophe it has been made out to be. FHA loans, once scorned in favor of the kinds of loan programs that got us into this mess in the first place, are back in full force, allowing home buyers to own their own home for as little as 3% down. The FBI is rounding up and jailing hundreds of real estate agents and loan brokers on charges relating to unscrupulous practices, and about damn time, too.

I hope that this blog will provide a forum to discuss these and many other related issues. I invite questions and comments from my readers (as soon as I have any). What are your questions and concerns? What would you like to know more about in regards to life and the housing market in the Arroyo Seco area of Los Angeles County?