Category Archives: Real Estate

Real Estate

Regulators Propose Tighter Rules For Mortgage Backed Securities

On Tuesday, U.S. bank regulators submitted a proposal that would require lenders to originate mortgages with at least a 20 percent down payment if they want to repackage the loan to sell to other investors without keeping some of the risk on their books.  The bank regulators say this would create strong incentives for responsible lending and borrowing.

  • The Federal Deposit Insurance Corp. board and the Federal Reserve agreed to seek public comment on the proposal.  However, the rule is expected to have little near-term effect because loans sold to Fannie Mae, Freddie Mac and FHA and VA loans would be exempt.  The U.S. government currently backs nearly 90 percent of home mortgages.
  • The CALIFORNIA ASSOCIATION OF REALTORS® and the NATIONAL ASSOCIATION OF REALTORS® oppose the proposal because the 20 percent down payment requirement is too high and would make it difficult for many people to purchase homes, causing further deceleration in the housing market.  Strong evidence shows that responsible lending standards and ensuring a borrower’s ability to repay have the greatest impact on reducing lender risk.
  • “We need to strike a balance between reducing investor risk and providing affordable mortgage credit,” said NAR President Ron Phipps.  “Better underwriting and credit quality standards have greatly reduced risk. Adding unnecessarily high minimum down payment requirements will only exclude hundreds of thousands of buyers from home ownership, despite their creditworthiness and proven ability to afford the monthly payment, because of the dramatic increase in the wealth required to purchase a home.”
  • Saving the necessary down payment has always been the principal obstacle to buyers seeking to purchase their first home. Proposals requiring high down payments will only drive more borrowers to FHA, increase costs for borrowers by raising interest rates and fees, and effectively price many eligible borrowers out of the housing market,” added Phipps.

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Real Estate

Russian Investor Paids $100 Million for Home in Silicon Valley

The $100 million sale of a Los Altos Hills, Calif., home shows how some luxury properties are insulated from the U.S. housing slump.
The $100 million sale of a Los Altos Hills, Calif., home shows how some luxury properties are insulated from the U.S. housing slump.

A Russian investor paid $100 million for a 25,500-square-foot home in Los Altos Hills, Calif., which marks the highest price paid for a single-family home in the U.S.

Billionaire Yuri Milner, 49, who heads Digital Sky Technologies and whose investments include Facebook Inc., Groupon Inc., and Zynga Inc., has no immediate plans to move into the French chateau-style mansion and has a primary residence in Moscow.

The $100-million home features views of the San Francisco Bay, indoor and outdoor pools, a ballroom, and a wine cellar.

The high-price purchase is another sign in the growing strength of the luxury real estate market. Sales volume of homes more than $1 million increased nearly 4 percent in February year over year, the National Association of REALTORS® reports. Meanwhile, sales volumes for homes priced between $100,000 and $250,000 have dropped nearly 8 percent.

This marks the highest known price anyone has paid for a single-family home. Investor Ron Baron in 2007 paid $103 million for 40 acres of vacant land in East Hampton, N.Y.

Source: “Home Brings $100 Million,” The Wall Street Journal (March 31, 2011)

For all your real estate needs, call or Email:
John J. O’Dell
Real Estate Broker
O’Dell Realty
(530) 263-1091
Email John at jodell@nevadacounty.com

DRE# 00669941

Real Estate

Chase Bank Accused of Breaking and Entering

A couple is accusing banking giant Chase of locking them out of their home and removing their personal property before a foreclosure was finalized.

Banks across the country have faced similar accusations. Lenders have argued they have the right to “secure” vacant properties they’ll soon own, but lawyers say it’s trespassing or breaking and entering when home owners still own the title of the property and the banks don’t yet.

In this most recent case, the Florida couple says they arrived home one night to find the locks had been changed and a sign posted on the window that said the home was being managed by Chase Home LLC. The couple, who said the house was to be sold in a foreclosure sale in a few weeks, say the bank didn’t give them a warning or notice of eviction.

The couple has accused the company’s representatives of removing the home’s appliances and the air conditioning unit as well as some of their personal belongings. Chase says the stove, refrigerator, and air conditioning unit were already missing when their representatives entered the house.

The couple’s mortgage has been in default since 2007, but court cases have prolonged the foreclosure since the couple filed for Chapter 7 bankruptcy in 2009.

Chase spokeswoman Nancy Norris says that Chase authorized “a vendor” to change the locks on the home after it “determined” the house was vacant.

“Before the property was secured we confirmed that the home was empty,” Norris told the Miami Daily Business Review. “The utilities were turned off … we took photographs on the day we secured the property and the home was in disarray.”

Source: “Chase Accused of ‘Breaking and Entering’ Couple’s Home; Banks Claim They Have Duty to ‘Secure’ Collateral,” Miami Daily Business Review (March 24, 2011)

For all your real estate needs, call or email:

John J. O’Dell
Real Estate Broker
O’Dell Realty
(530) 263-1091
Email John at jodell@nevadacounty.com

Real Estate

Buyers, Sellers Optimistic About Housing

70 percent of buyers and sellers say they believe the housing market and property values will recover in the next year or two, according to a new survey by Prudential Real Estate and Relocation Services Inc.

What’s more, 86 percent of the more than 1,000 buyers and sellers surveyed believe real estate is still a good investment despite the souring market conditions in many areas the past few years.

Those surveyed said they also are ready to buy: Six in 10 respondents say they are more interested in buying real estate and 59 percent say they are optimistic about buying now with recent momentum from the economic recovery. They also believe they can get a better deal now because of lower prices.

But many survey respondents said that buying a home relies on them being able to sell their existing home. About 67 percent respondent said they are concerned about getting a fair price for their existing home.

“This survey clearly demonstrates that Americans continue to be optimistic about the real estate market and believe that home prices will rise,” says James Mallozzi, chief executive officer of Prudential Real Estate and Relocation Services. “A key take away from the survey is although consumers recognize that it is a good time to buy, they are concerned about their ability to sell their homes. This is one of the reasons the market is still struggling to recover.”

Source: “Americans Confident in Recovery of Real Estate Market,” RISMedia (March 14, 2011)

For all your real estate needs, write or email:
John J. O’Dell
Real Estate Broker
O’Dell Realty
(530) 263-1091
Email John at jodell@nevadacounty.com

DRE# 00669941

 

Real Estate

Home Prices Drop In February


Following three months of sales gains, California home sales posted a weaker-than-expected performance and declined in February, according to data from the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).  The statewide median price of an existing, single-family detached home sold in California also declined in February.

  • Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 497,660 in February, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide.
  • February’s sales were down 9 percent from January’s revised pace of 547,080 units, and down 4 percent from the 518,390 sales pace recorded in February 2010.  The statewide sales figure represents what would be the total number of homes sold during 2011 if sales maintained the February pace throughout the year.  It is adjusted to account for seasonal factors that typically influence home sales.
  • The median price of an existing, single-family detached home sold in California in February declined 2.8 percent to $271,320, from a revised $279,140 in January, and was down 2.5 percent from the $278,190 median price recorded for February 2010.  The February 2011 median price was the lowest since May 2009, when it was $263,440.
  • “The market pulled back in February, following three months of sales gains, when the ramifications of the robo-signing delays from last fall pushed sales into the period from November of last year to January,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young.  “February’s sales drop indicates the effects of the foreclosure freeze are diminishing, and the market is returning to a more moderate sales pace.”
  • C.A.R. has posted median prices, unsold inventory stats, sales figures, time on market data, and more by county and region.  To view this information, click here

Read the full story

For all your real estate needs, call or write:

John J. O’Dell
Real Estate Broker
O’Dell Realty
(530) 263-1091
Email John at jodell@nevadacounty.com

DRE#00669941

Real Estate

The Frustrations of Short Sales in Dealing With Banks

Photo courtesy of Around Hawaii

The California Association of REALTORS® has put full page ads in numerous papers throughout California regarding the frustration of dealing with banks in trying to do short sales with them. A short sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property’s. It often occurs when a borrower cannot pay the mortgage loan on their property, but the lender decides that selling the property at a moderate loss is better than pressing the borrower. Both parties consent to the short sale process, because it allows them to avoid foreclosure, which involves hefty fees for the bank and poorer credit report outcomes for the borrowers. This agreement, however, does not necessarily release the borrower from the obligation to pay the remaining balance of the loan, known as the deficiency

Having had numerous short sales fall through, I fully understand the frustration of buyers and sellers in trying to work with banks in doing short sales.  I don’t know what their problem is. They seem to be extremely great at finding ways to tack on fees for every dealing you do with them, but complete disregard for completing what should be a smooth sale of real estate property of which they have an interest in.

I have two short sales going right now that have been in the works since November of last year. One of the banks, after five months has finally reviewed all the paper work on one of the short sales,  (a simple offer to purchase property) and assigned a negotiator to deal with the purchase contract.  This by no means says that the bank will accept the offer that was made.  I’ve had banks come back after an offer was made and demand $30,000 more than the property was worth. This resulted in the property not being sold in a short sale, foreclosed and the banks losing thousands of dollars because they refused to go along with the short sale.

Here’s a press release from C.A.R. further explaining the frustrations of short sales:

Banks drag feet on short sales, survey finds
The CALIFORNIA ASSOCIATION OF REALTOR® (C.A.R.) published its findings of a survey this week, which show that tedious lender requirements and poor communication hamper short sales.

  • Fewer than three of five short sales close in California, illustrating the complexity and difficulty of navigating lenders’ and servicers’ short sale procedures, according to C.A.R.’s survey, which gauged REALTORS®’ experience in working with short sale transactions – transactions in which the lender or lenders agree to accept less than the mortgage amount owed by the current homeowner.
  • Although not every homeowner or mortgage is eligible for a short sale, those who are able to finalize a short sale avoid a foreclosure on their credit record and can move on with their lives.
  • Banks are taking much longer to respond to short sale offers than those specified in government guidelines for banks.  Nearly two-thirds of survey respondents said banks took longer than 60 days to respond to short sale offers.  Often, this results in buyers walking away from the transaction.
  • “Increasing the number of successful short sale transactions is one important way we can help California families avoid foreclosure and move our economy closer to recovery,” said C.A.R. President Beth L. Peerce.
  • C.A.R. is asking government agencies, such as the U.S. Dept. of the Treasury, to force banks to complete all short sales following HAFA guidelines and to comply with the program’s time frames.

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Real Estate

Condominium Associations can Receive Assistance With Obtaining FHA Approval


Loans funded by the Federal Housing Administration (FHA) account for a significant percentage of new mortgages, and with many of today’s buyers only able to purchase a home with an FHA loan, it is essential that REALTORS® understand which condominium and townhome properties are eligible for FHA loans.

Eligibility Check provides members with the only real-time source for checking condominium FHA loan eligibility and approval status by property address.  C.A.R. members receive up to a 25 percent discount off the standard Eligibility Check pricing.

Clarus FHA Approval™ also offers Approval Services to assist condominium associations in obtaining FHA approval.  Discounts are provided to condominium associations referred by a REALTOR®.  Failure to be approved for FHA loan eligibility will almost certainly impact the marketability of a condominium.  Encourage the condominium homeowners associations in your market area to seek approval for FHA loans now!

Approval Services is available by calling (818) 338-6588.

More info on Eligibility Check and Approval Services: www.clarusfhaapproval.com.

For all your real estate needs call or write:

John J. O’Dell
Real Estate Broker
O’Dell Realty
(530) 263-1091

Real Estate

Five Signs That Say Now is the Time to “Buy”


Home buyers sitting on the fence wondering if now is the right time to buy should consider five factors when making this decision: Jobs, recent sales activity, construction, mortgage availability, and anecdotal evidence.  Each of these issues can help consumers make the best choice for their situation and financial circumstance.

  • Jobs: Although many areas of the country were deeply impacted by the recession, some areas were less affected by job loss.  If employment stability is a concern, prospective buyers should review job-growth data from the U.S. Bureau of Labor Statistics at www.bls.gov.  The data provided by the Bureau is approximately one month old and shows the direction of the local economy.
  • Recent Sales Activity: Housing inventory and sales volume should be taken into consideration while house hunting.  A large inventory of homes with few actual transactions can be a negative indicator.  On the other hand, if inventory is falling and transactions are rising, that is a good sign.  In January, the CALIFORNIA ASSOCIATION OF REALTORS®’ Unsold Inventory Index stood at 6.7 months, up from 5 months in December 2010, but down from 5.7 months in January 2010.  The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.
  • Construction: Staying up-to-date on the number of building permits issued for local builders is useful for gauging builder sentiment and the future of housing activity.  The California Building Industry Association recently announced that California home builders pulled 2,920 total housing permits in January, registering a 5-percent decline compared with a year ago and a 56-percent decline compared with December.  However, the Construction Industry Research Board is projecting 62,000 total permits will be pulled in 2011, an increase of 38 percent compared with 2010’s total of 44,893 permits.
  • Mortgage Availability: Home buyers hoping to be approved for a mortgage should monitor local lending patterns.  Following the financial crisis, most national banks tightened lending standards; however, some local banks haven’t been impacted as much as large lenders and are more willing to lend, even for higher-priced homes.
  • Anecdotal Evidence: Although buyers can access home listings online, one of the best ways to monitor the local housing market is to work with a REALTOR® and gather intelligence using their expertise and guidance.

Read the full story

For all your real estate needs write or call:

John J. O’Dell
Real Estate Broker
(530) 263-1091
Email John at jodell@nevadacounty.com

Visit my other website www.johnodellrealty.com

DRE# 00669941

Real Estate

Banks Push Home Buyers to Put Down More Cash

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Many economists and housing analysts blame lax lending standards – including no-down payment, no-document loans – for contributing to the challenges in the current real estate cycle.  As a result, most lending institutions have increased minimum down payment requirements.  Now, a new proposal by the Obama administration calls for gradually raising down payments to a minimum of 10 percent on conventional loans – those that can be bought or guaranteed by Fannie Mae and Freddie Mac.

MAKING SENSE OF THE STORY

  • Banks have found that larger down payments discourage delinquencies by increasing the buyers’ exposure to loss and reducing the impact of declining prices.  According to a study by the Federal Reserve Bank of St. Louis, buyers who made smaller down payments were more likely to default during “unfavorable economic circumstances, such as a housing market slowdown or job loss.”
  • A recent analysis showed the median down payment in nine major U.S. cities rose to 22 percent last year on properties purchased with conventional mortgages.  That percentage doubled in three years and represents the highest median down payment since the data were first tracked in 1997.
  • Higher borrowing costs and larger down payments could cause housing prices to decline further, analysts say.  For now, borrowers who can’t afford such amounts are turning to alternative programs, such as loans for veterans or those backed by the Federal Housing Administration.  Some industry experts say this has created a nonconventional mortgage market for riskier borrowers and those who don’t qualify for conventional loans.

Read the full story

For all your real estate needs Call
John J. O’Dell
Real Estate Broker
(530) 263-1091
Email jodell@nevadacounty.com

DRE# 00669941