First Time Buyer Tax Credit Extended

HELLO Neighbors !!!

GREAT news today!

The first time buyer tax credit is getting extended. Buyers have to be in contract by the end or April.

For us car guys, "Cash for Clunkers" was fun... but we knew it would only spur short term demand and sales volume upticks. THIS? This is how you bring the economy back!

From the Wall Street Journal:

By COREY BOLES and JOHN D. MCKINNON

WASHINGTON -- Senate negotiators reached a tentative deal to extend a tax credit for first-time home buyers, but its passage remains uncertain.

The agreement would extend the existing credit for first-time home buyers, worth up to $8,000, while offering a new credit of up to $6,500 for some existing homeowners, Senate aides said. The reduced credit would be available to all home buyers who have been in their current residence for a consecutive five-year period in the past eight years.

The new provisions are aimed at broadening availability of the credit beyond first-time buyers and giving the weakened real-estate market a bigger boost while preventing real-estate investors from benefiting.

Many property experts have cited the credit as a reason for signs of recovery in the housing market in recent months. But that recovery was somewhat undercut by the September drop in new-home sales reported Wednesday.

The credit would be extended from its current expiration date of Dec. 1 to all contracts entered into by April 30, and closed before July 1. It is expected that income limits on people claiming the credit would be increased to $125,000 for singles and $250,000 for couples, from the current $75,000 and $150,000, aides said. The credit phases out for people making more than those amounts.

.While Senate lawmakers appear to have reached a deal on the substance of the tax credit, they are still at odds over how it would be brought to the Senate floor. Senate Majority Leader Harry Reid (D., Nev.) hopes to add it to a bill currently on the Senate floor to extend federal unemployment insurance benefits. But agreement on that hasn't been finalized.

While Senate Republicans are likely to support the measure, House Democrats have raised concerns that it carries a high cost to the government. The Internal Revenue Service is examining the program for alleged abuse.


Thank you Wall Street Journal for the content!

This is wonderful and fantastic news.

- Jim

www.NeigborlyGroup.com

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

Home Values in California to RISE in 2010 !!

Hello Neighbors,

A great update from CAR (California Association of Realtors) economists!

This echoes what we've been saying (and hoping) for the last year - 2010 should be a year of recovery, although some significant unknowns still exist (bank owned homes, Fed bailout programs).

Thank you CAR for the data!

LOS ANGELES (Oct. 7) –“California’s housing market continued its strong sales rebound this year, resulting from the continued pace of distressed properties coming to market,” said C.A.R. President James Liptak. “This follows two years of double-digit sales declines in 2006 and 2007. Looking ahead, we expect sales to moderate to a more sustainable pace.”

The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) "2010 California Housing Market Forecast" will be presented this afternoon during CALIFORNIA REALTOR® EXPO 2009 (www.realtorexpo.org), running from Oct. 6-8 at the San Jose Convention Center in San Jose, Calif. The trade show is expected to attract more than 7,000 attendees and is the largest state real estate trade show in the nation.

“After experiencing its sharpest decline in history, we expect the median price to rise modestly next year,” Liptak added. “2010 will mark the beginning of the ‘new normal’ for California’s housing market. This ‘new normal’ likely will feature a steady stream of sales driven by distressed properties in the low end of the market, coupled with moderate home-price appreciation.”

The median home price in California will rise 3.3 percent to $280,000 in 2010 compared with a projected median of $271,000 this year, according to the forecast. Sales for 2010 are projected to decrease 2.3 percent to 527,500 units, compared with 540,000 units (projected) in 2009.

“Housing in California has become a tale of two markets,” Liptak said. “The low end continues to attract first-time buyers and investors, with a resulting shortage in the number of homes for sale. Sellers at the high end, however, continue to be challenged by the ability of home buyers to secure financing as well as their concerns about where prices are headed. While demand from first-time buyers for low-end properties will continue throughout next year, sales could be impacted if discretionary sellers do not return to the market by the second half of 2010.

“2009 marked a unique opportunity for first-time home buyers,” Liptak said. “Homes were more affordable than they have been in years, interest rates hovered near historic lows, and the federal tax credit helped more than 1 million people become homeowners nationwide. Now is the time for Congress to extend the federal tax credit and to expand it to all buyers, not just first-timers.”

“With distressed properties accounting for nearly one-third of the sales in 2010, inventory will be relatively lean, under six months during the off-season months, and a roughly four-month supply during the peak season,” said C.A.R. and Vice President Leslie Appleton-Young. “We expect the median price to decrease slightly through the remainder of 2009 and into next year, then rise before leveling off next summer. For the year as a whole, home prices are forecast to reach $280,000.”

“Although it appears at this time that lenders are closely monitoring the flow of distressed properties onto the market, there could be an exertion of downward pressure on home prices should a heavier than expected wave of foreclosures come to market next year,” she said.

“The wild cards for 2010 include foreclosures, loan resets, the labor market, and the California budget crisis, as well as the actions of the federal government,” Appleton-Young said.

- Jim

www.NeighborlyGroup.com

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

Neighborly Financial - now a "Tier 1" Wells Fargo Direct Lender

Hello Neighbors,

Congratulations to Neighborly Financial, John Graham, and his team.

That group is now a direct lender with Wells Fargo. Even better, they hold a "Tier 1" status - which means real dollars to clients. That status drive a further reduction in costs of at least .25%.

Nicely done Neighborly Financial!

- Jim

www.NeighborlyGroup.com

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

C.A.R. Confirms - Longer Escrow Periods Likely

Hello Neighbors,

As mentioned in a blog article from a couple of months ago, be ready for potential extensions in escrows due to changes in financing regulation.

But... don't just take our word for it, take a look at what the California Association of Realtors (CAR) just published.

THANK YOU CAR!

NEW LOAN DISCLOSURE RULES MAY POTENTIALLY AFFECT CLOSE OF ESCROW

Starting July 30, 2009, if the APR on an initial Good Faith Estimate is no longer accurate (within a 0.125% range) at close of escrow, a lender must generally provide a residential borrower with a new disclosure and a three-day right to rescind before consummating the loan. REALTORS® are forewarned that, because of this new three-day waiting period, a lender's failure to timely provide corrected disclosures has the potential of delaying funding of the loan and close of escrow.

This new requirement is part of the Mortgage Disclosure Improvement Act (MDIA) implementing new loan procedures to protect borrowers and foster greater transparency in mortgage lending. For loan applications submitted on or after July 30, 2009, the new MDIA changes to the Truth in Lending Act are generally as follows:

Applicability: The new MDIA rules pertain to federally-related mortgage loans covered under RESPA and secured by a consumer's dwelling. The rules apply to both purchase and refinance loans.

Early Disclosures: A lender must provide a borrower with an initial Good Faith Estimate within three business days of receiving the borrower's written loan application as specified. For this provision, a "business day" is generally defined as a day on which the lender's offices are open for business.

Upfront Fees Restriction: Neither a lender nor any other person may impose an upfront fee on the borrower (except for credit report) until the borrower has received the early disclosures in person or, if mailed, three business days after the early disclosures are mailed. For this rule, a "business day" is defined as all calendar days except Sundays and legal public holidays as specified.

Seven-Day Waiting Period: A lender must wait seven business days after providing the early disclosures before consummating the loan. For purposes of this waiting period, a "business day" is defined as all calendar days except Sundays and federal legal holidays as specified. A borrower may waive the waiting period in writing in case of personal financial emergency, such as an imminent foreclosure sale.

Re-disclosure Requirement: If the final Annual Percentage Rate (APR) at loan consummation varies more than 0.125% (or 1/8 of one percent) from the initial APR on the early disclosures of a regular transaction, the lender must provide the borrower with a corrected disclosure at least three business days before the loan is consummated. For purposes of this waiting period, a "business day" is defined as all calendar days except Sundays and federal legal holidays as specified.

Three-Day Waiting Period: For corrected disclosures, a lender cannot consummate a loan until three business days after the borrower receives the corrected disclosure in person. If the corrected disclosure is mailed, the borrower is deemed to have received it three business days after it is placed in the mail. A borrower may waive this waiting period in writing in case of a bona fide personal financial emergency, such as an imminent foreclosure sale.

Source: The new MDIA rules and regulations are set forth at 74 Federal Register 23,289 (May 19, 2009) (to be codified at 12 CFR 226) available at http://www.federalreserve.gov/reportforms/formsreview/RegZ_20090519_ffr.pdf.

Again, our sincere thanks to CAR for this content.

- Jim

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

www.NeighborlyGroup.com

Neighborly Financial Joins Calaveras County Search & Rescue Efforts

Hello Neighbors,

John Graham, manager of Neighborly Financial is back.

He's been gone for the last several days, helping a search and rescue effort in a neighboring county.

From John:

I went to help search for the missing deer hunter in Calaveras County, last Wednesday. We spent all day looking for the subject. We were able to track his footsteps from the truck for about 7 miles, step by step, until darkness forced us to retreat for the night. Attached is a photo of the footprint we were following during the Calaveras County search. As of Friday, his location is still unknown. I have no details on the outcome, other than he is alive.

I am a member of the Placer County Sherriff's Search and Rescue team. We are recognized as one of the largest and better trained teams in the state, and therefore we get called out to assist with searches in many other counties. We assist with both backcountry and urban searches, for missing hikers, hunters, motorcycle riders, children and Alzheimer's patients. We also assist the Sherriff with evidence searches for criminal cases. We get called out about once or twice a month. Volunteers spend many hours training and in the field on searches. We all serve as ground searchers, willing to hike in any conditions and any terrain, but also we are divided into teams with specialties in 4WD, radio communications, motorcycles, mountain rescue, horses, and canine search, to name a few.

NICE work John. Another example of supporting our local community. We love doing it, just wish it wasn't a tough story.

Our thoughts go out to this family as they continue the search,

Jim

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

www.NeighborlyGroup.com

"Shadow Inventory"

Hello Neighbors,

I attended this month’s Finance Forum (meeting) at the Sacramento Association of Realtors branch office.

Interesting stuff.

A term we’ve been hearing more and more of recently was discussed….. “Shadow Inventory”.

What is Shadow Inventory?

Homes that are in some sort of Notice of Default (NOD) or foreclosure proceedings… but haven’t yet been taken back by the banks. Meaning? Homes that are vacant – or will be soon – that aren’t yet being reported on the bank’s financial books.

How much?

I heard an estimate this morning that shocked me: 35,000 – 40,000 homes in the “Greater Sacramento area”. Now that area probably includes parts of Sacramento County, Placer County, and even El Dorado County. If those numbers are correct, it is a HUGE amount of homes that will some day come to market. If. If. If.

Impacts?

Obviously, if such numbers exist, that has huge macro-economic implications. Prices will drop. Banks will be in financial trouble. Buyers will benefit – if they can get loans. Sellers will have to hold tight for much longer, or compete with insanely low price points.

HOWEVER, there is a problem – accurate data.

No one has actually published the data we need to verify such speculation. Search MLS and you will find that there isn’t much bank owned inventory now. It’s dried up. You can search county tax records, but those tools aren’t very user friendly. It would take days and days to compile such data. One industry professional says the inventory is there… another say the Obama plans have curbed the problem.

So?

We continue to listen. Speculation runs from all ends of the spectrum. If we had the data, we could guide you in the right direction. Until then, we (all of us in this industry) continue to be reactive instead of proactive.

I’m looking forward to changing that behavior.

- Jim

www.NeighborlyGroup.com

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

Home Sales Are UP !

Hello Neighbors,

Two blog posts today....

The first one is from the NAR (National Association of Realtors) chief economist - Lawrence Yun - on the recovery underway! Thanks NAR!

The second? Direct contrast to the first. "Shadow Inventory". Stay tuned... here's the first:


Headed in the Right Direction:

Numbers Show Sales are Up and Heading in the Right Direction

Pending home sales in July reached their highest mark in two years, and closed sales also continued on an upward path. As a result, inventories are tightening; in June there were 3.8 million properties for sale nationally, compared with 4.5 million at the same time last year.

More broadly, there are other indications the economy is heading up. Durable goods orders have risen for three straight months because business inventories have been depleted. The stock market has also made a nice comeback, and exports have been rising faster than imports.

Thanks to these promising signs, we forecast higher home sales and stabilizing prices in the year ahead. But there are still some concerns.

First, although inventories are improving, it’s possible that many owners want to put their house on the market but are waiting for conditions to improve. Banks may be doing the same with their foreclosed properties. These concerns might be off the mark; in areas where housing has been recovering, we would expect to see inventories softening as ¬sellers and banks jump back in, but we haven’t been seeing that.

Beyond the housing market, there are other economic factors that could hold back recovery. The country is looking at a continuing long-term budget deficit that could translate into higher mortgage rates. We’re also looking at rising oil prices ($70 from $50 earlier this year), with that extra money shipping overseas rather than staying home. And heavy job losses make it likely foreclosures will keep rising through the remainder of the year.

Still, we have reason to be confident. With home sales heading up and inventories shrinking, prices are stabilizing. These are the key conditions needed for housing to lead the economy into growth mode. Once that happens, jobs will follow.

Thanks NAR, the recovery is more than a welcomed visitor... it's a way overdue guest.

- Jim

www.NeighborlyGroup.com

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

New Listing in Plumas Lake + No REOs !!

Hello Neighbors,

...to follow up that last "search engine helper" blog post, here is some market news.

We just went live with a listing in Plumas Lake. That's about 10 minutes south of Marysville (in Yuba County).

That is an area like Lincoln (Placer County) that was overbuilt during the boom. Plumas Lake is much smaller in scale, but experienced similar swings. ...oh, and there is no actual "lake" in Plumas Lake.


Why should you care?

a) The house we have listed is really nice - 2041 Maverick Drive

b) The market research we did before going live was fascinating. There were 51 homes on the market in the area: 50 were short sales, and 1 was an investor flip (good luck). There were NO (Zero, Zilch) bank owned or "REO" homes. None. Amazing.

To have such an area as Plumas Lake without REO homes tells us some important information... foreclosure inventory has dried up, and banks aren't releasing those homes to the marketplace.

When (if?) will those foreclosure homes come to market? We don't know. The industry experts all have different opinions. We pay attention to the data. Once the data shows a story, you'll get an update through this forum.

- Jim

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

www.NeighborlyGroup.com

1-800-960-0860

Hello Neighbors,

That's our toll free number.

This blog post isn't industry news or an update on our services... it's simply an entry to help the search engines.

Please excuse the odd use of the blog space.

It appears that a collections company in Utah (we think it's Utah) is using our number inappropriately.

We wanted to help clear this up by getting out a note to those who may be Googling the 18009600860 or 1-800-960-0860 number.


If you find this blog entry when searching for your collections agency / company... know that the number is wrong. We wish you the best of luck, but can't help you with your search. The 1.800.960.0860 number is used to provide real estate and lending services, certainly not collections! We are not related to a collections company in any way.


While we enjoy entrepreneurship, "Neighborly Collections" certainly isn't a business model we are pursuing!

Good luck.

- Jim

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

www.NeighborlyGroup.com

"Nice Guy Realty & Loans"

Maybe that's what we should be called...

Hello Neighbors,

I just spoke with a gentleman who needs a home loan - his first.

In the conversation we learned that he has great credit, makes a good living, doesn't yet have a mortgage, and would be the ideal borrower.

We also learned that he has an auto loan with Golden One Credit Union, and that he was in the military several years ago.

So?

We sent him away!

Yep. First, we told him to contact Golden One (the credit union). If he has a consumer debt instrument (car loan) with them, he may be able to combine that existing auto product with a home loan, and qualify for a greater purchase price (while keeping his overall expenditures down).

Second, we told him to call USAA (1-800-531-8722). They have loan programs and fees that are tailored specifically to veterans and service personnel.

Third? We told him to call us back if he wanted to - but that he would likely save money if he went with Options 1 or 2.


We get into conversations like this all the time. It may not help our bottom line much, but it sure helps with our karma accounts.

...problem is, karma doesn't blog.

Jim

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

www.NeighborlyGroup.com

Auburn Fire Benefits This Weekend

Hello Neighbors,

Flyers just arrived... thanks for passing our way. The flyers will be linked off of the Neighborly Realty & Neighborly Financial Facebook page if you'd like copies.

Two events this weekend to help with the Auburn Fire victims:

Saturday, September 19th and Sunday, September 20th - Pancake Breakfast at Applebee's on Bell Road! 8:00am - 10:00am $6.00 per ticket, 100% of donations going to the Auburn Disaster Relief Fund. You need to buy tickets ahead of time, and can get them at Applebee’s (along with a few other Auburn locations).

Sunday, September 20th - Benefit in the Park. Regional Park in Auburn, Noon - 7:00pm. 6 different bands, beer garden, food, inflatable rides for kids, and a bunch of other stuff. Donations are being accepted by Community First Bank. More info at www.49Fire.com

Sorry for the late notice, but we hope to see you there!

- Jim

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

www.NeighborlyGroup.com

Our Vision

Hello Neighbors,

From time to time, it's important to look at why we are here. Keeping us focused on a few fundamental beliefs means better service levels for you.

So now and then, we ask ourselves - what is Neighborly's Vision?

Where do we fit against the competition?

How do we behave, and represent the Neighborly Way every day?

Simply stated......


THE Choice

By Delivering Unequaled Customer Service, Neighborly is the Recognized Leader in Real Estate and Lending Services in Northern California - By Clients, Partners, and Industry Professionals.

Neighborly Offers a Fully Integrated Suite of Services to Meet and Exceed Client Expectations. Neighborly is THE CHOICE in Real Estate and Lending Services.

We believe it. We practice it. We welcome the opportunity to prove it to you.

- Jim

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

www.NeighborlyGroup.com

What is "The Neighborly Way"?

Hello Neighbors,

Many thanks for those of you who have helped us support the Auburn "Highway 49 Fire" relief efforts. We plan to drop off another huge batch of clothing this weekend. This is a great community, and we very much appreciate the support from everyone.

For us... This is more than propaganda. Helping the communities where we live is part of our operating philosophy we call "The Neighborly Way". Take a look at point #9:

The Neighborly Way

1) Service - NOT Sales

2) Be the Industry and Market Expert

3) Advisors, Coaches, and Teachers

4) Respect for the Client, Team Member, Partners, and Peers

5) Communicate Frequently - with Fact, Tact, and Truth

6) Integrity First, Honesty Always

7) Earn and Encourage Trust

8) Personal Earnings are Second to Client Service and Their Satisfaction

9) Repay our Communities, Promote Charity

10) Protect and Promote the Environment

11) Deliver a Single One Stop Shop Experience

12) Unwavering Belief in The American Dream

Our name was chosen very intentionally. "Neighborly" is the way we conduct ourselves. These points guide our decision making and our actions. The "Neighborly Way" is much more than a simple tagline - it's how we live.

Thanks again,

Jim

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

www.NeighborlyGroup.com

Auburn Fires - THANK YOU and Important Lessons

Hello Neighbors,

Our heart goes out to our friends and family who were impacted by the fires in Auburn on Sunday. Two of Neighborly’s own (Juli Marty’s family and mine) were impacted by the fires – although no damage.

A sincere thank you to the fire fighters and the pilots flying the 14 aircraft over our heads. An amazing job performed by these professionals.

We were told to evacuate at round 3:30pm on Sunday. ….exactly when we were getting home from a weekend out of town. There were “reverse-911” messages on our home answering machine. It took us an hour to go the last mile to our house, and we could see the smoke + fire the whole time. We were on the phone trying to get in touch with neighbors and family while driving that last mile. Our cell phones kept dropping, and we could see the 14 aircraft flying over our house. 20 minutes after getting to our house (and hearing the voice messages from the sheriff), we lost electricity.

It was nuts.

The fire never crossed over to our side of 49, but we didn’t know that until well past 11:00pm on Sunday night. We had no electricity, and only 1 battery powered 1980s style walkman radio to get news. At one point I jumped on my old Schwinn cruiser to head to the fire to get my own news. We were hearing on the radio that 84 lumber and other businesses had burned to the ground, and that our side of 49 was getting burned as well. Once I got back to the house from my bike ride, we decided we could relax a bit – but we still left the cars packed.

Since we have a 3 month old baby and a 3 year old toddler… it added about an extra million layers of challenge to the whole process… All of our neighbors were packing up and asking us what we needed for the kids. VERY KIND group of folks.

My wife was packing diapers, photo albums, baby clothes, our home movies, etc…. while I was outside running hoses and putting ladders up to the roof. My truck battery was dead – and no electricity at the house – so I was pulling batteries from other cars to try and get the truck running…. Wow. All in parallel with trying to get updates from my parents and aunt on their homes… 7 or 8 hours of pure adrenaline is enough to make a guy (a family) tired.

It taught us some important lessons, if I may share:

a) ABSOLUTELY make sure you have good battery powered radios in the house. We bought a hand-crank radio at Home Depot yesterday. We have lots of batteries for the kids toys… which meant power for flashlights too.

b) Centralize those things that you would take out in a fire. If you get the call to evacuate, you really don’t have the kind of time you think you will have…

c) Talk to your neighbors about what they would like pulled out of their houses in an emergency. We didn’t even have our neighbors cell phone numbers to do any coordination…

d) Keep those car (truck!) batteries charged. BAD mistake on my part. You can get a lot more into a full size GMC truck than a Toyota Prius.

e) News is 50% rumor, and wrong. We were told at different times that the fire was on our side of Highway 49 (it never was) and that several of the local business had burned to the ground – like 84 lumber (it did not). It’s best to be prepared for different contingencies, since the news didn’t keep up well with reality.

f) Not much else in the house matters except having clothes for your kids ready.
a.) Jenny (my wife): “I’ve got the baby stuff packed, what do you want of yours”?
b.) Jim: “I really don’t know, just get their stuff”.
c.) Jim grabs three old photo albums of his own and throws them in the Prius. That was it for Jim stuff.

Wild times.

The fire’s path is shown on this KCRA video: http://www.kcra.com/video/20665232/index.html The fire ran right to the back fence of we had listed for sale in 2006. We’ve checked with that family, and the house survived (smoke issues of course).

As I write these quick tips, my wife Jenny is collecting clothing for the families who were burned out.

IF YOU WOULD LIKE TO DONATE, CALL ME AT 916.801.3940 and I will pick up your donations in my truck… now with a working battery.

Jim

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

www.NeighborlyGroup.com

California Association of Realtors Offers Job Loss Insurance

Hello Neighbors,

This is very cool.

At a time when employment is challenging - yet buying a home is absolutely the right thing to do (and timing couldn't be better), CAR is offering "First Time Buyer Insurance". I love it.

Take a look:

C.A.R.'s Housing Affordability Fund (C.A.R.H.A.F) has committed $1 million to support the Mortgage Protection Program - and the National Association of REALTOR another $420,000 - an insurance product that kicks in when the unexpected happens: job loss.

Your first-time buyers who enroll in the program can draw upon their mortgage protection policy in the event they lose their job after purchasing their home. Under the program, first-time buyers will be eligible to receive $1,500 per month for six months in the event of a job loss; co-buyers are eligible to receive $750 per month.

To be eligible for coverage, the home must be a principle resident in California and a first-time buyer is defined as someone who has not purchased a home in the past three years. While there are no caps on the applicant's income or the purchase prices of the home, the applicants are required to use a California REALTOR in their transaction; they cannot be self-employed or older than the age of 70. Consumers can apply for the program via their REALTOR.


It's new - so we haven't tried executing on the program yet... but if you want it, call me! We'll figure it out together!

Putting 2009 in the rear view mirror... Neighborly!

- Jim

www.NeighborlyGroup.com

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

Short Sale Process Help for Realtors

Hello Neighbors,

More evidence that sanity is returning to Real Estate!

Freddie Mac has thrown its weight behind helping us in the industry.

Thank you NAR (National Association of Realtors) for posting this update.

Short Sale transactions are the hardest escrow to conclude. Even when we have a Willing buyer, and a willing Seller - the Seller's lender will do a variety of evil things to kill the process. Only 25% of escrows on Short Sales are actually making it to COE (Close of Escrow). The other 75%? Who knows. Default (foreclosure), Loan Modification, or the Seller "catching up" are the other likely outcomes.

One of our least favorite actions is when the Short Sale lender comes after our wages. We can get through the entire negotiation process, inspection period, escrow .... and then have the lender say "by the way, we are cutting your commissions to ZERO". Yep. Working for free. Or - more realistically, since we've invested a great deal of time, energy, and our own funds - we are working for a loss. Now factor in that the majority of the houses on the market are short sales. Do the math, earnings risk is pretty high concern in this profession.

Why does this Freddie Mac news help?

We can now work with less fear of "Short Sale Earnings Theft". More confidence when showing Short Sale homes to Buyers. More faith that we can operate a business as a business - not as a collections agency.

We have more assurance that the industry is recovering, and some level of logic is returning to the key principles who drive this market. Stability is around the corner!


Freddie Mac Issues Written Short Sales Commission Policy

On August 20, 2009, Freddie Mac confirmed in writing that its servicers are not allowed to renegotiate short sales commissions. According to the policy, as a condition of the servicer’s acceptance of a short sale offer, servicers cannot renegotiate the sales commission below the amount agreed to by the real estate broker and the seller/borrower. However, if the negotiated commission exceeds 6 percent, servicers are required to limit it to 6 percent. This Freddie policy is consistent with Fannie Mae’s policy.

NAR has asked Freddie to establish an appeals process for cases when servicers refuse to comply with Freddie Mac’s policy.

Links to more in depth information can be found here:

Freddie Mac Single-Family Seller/Servicer Guide Bulletin 2009-22 (August 20, 2009)

http://www.freddiemac.com/sell/guide/bulletins/pdf/bll0922.pdf

Fannie Mae Short Sales Commissions Policy and Appeals Process

http://www.realtor.org/wps/wcm/connect/4fb4f4804e824cf0a6e8e696c79aa288/government_affairs_fannie_short_sales_policy.pdf?MOD=AJPERES&CACHEID=4fb4f4804e824cf0a6e8e696c79aa288

NAR’s Short Sales Website

http://www.realtor.org/realtors/basics_short_sales

Just another sign that logic is returning (if slowly).

- Jim

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

www.NeighborlyGroup.com

Wooo Whooo !! - Home Sales Up and Steady

Hello Neighbors,

The recovery is upon us!

(Note to self though - the rumored zillions of foreclosures still to hit the market could drive things down again... but when will those homes hit the market? I've been told "next month" for 11 months now...)

Thank you NAR (National Association of Realtors) for the updates posted below!

STRONG Gain in Existing-Home Sales Maintains Uptrend

Washington, August 21, 2009

For the first time in five years, existing-home sales have increased for four months in a row, according to the National Association of Realtors®.

Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 7.2 percent to a seasonally adjusted annual rate1 of 5.24 million units in July from a level of 4.89 million in June, and are 5.0 percent above the 4.99 million-unit pace in July 2008. The last time sales rose for four consecutive months was in June 2004, and the last time sales were higher than a year earlier was November 2005.
Lawrence Yun, NAR chief economist, said he is encouraged. “The housing market has decisively turned for the better. A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to higher sales,” he said.

The monthly sales gain was the largest on record for the total existing-home sales series dating back to 1999.

“Because price-to-income ratios have fallen below historical trends, there are more all-cash offers. In some recovering markets like San Diego, Las Vegas, Phoenix, and Orlando, the demand for foreclosed and lower priced homes has spiked, and a lack of inventory is becoming a common complaint,” Yun said.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.22 percent in July from 5.42 percent in June; the rate was 6.43 percent in July 2008.

An NAR practitioner survey showed first-time buyers purchased 30 percent of homes in July, and that distressed homes accounted for 31 percent of transactions.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said the first-time buyer tax credit is working. “In addition to first-time buyers, we’re also seeing increased activity by repeat buyers. While many entry-level buyers are focused on the discounted prices of distressed homes, they’re also freeing some existing owners to sell and make a move,” he said.

“Realtors® are the best resource for consumers in these changing market conditions because the transaction process has become more complex. Since it’s now taking longer to complete a home sale, first-time buyers who want to take advantage of the $8,000 tax credit should try to make contract offers by the end of September,” McMillan said. “Otherwise, they may miss the November 30 closing deadline.”

Total housing inventory at the end of July rose 7.3 percent to 4.09 million existing homes available for sale, which represents a 9.4-month supply2 at the current sales pace, which was unchanged from June because of the strong sales gain. Raw inventory totals are 10.6 percent lower than a year ago when the number of unsold homes was at a record.

The national median existing-home price3 for all housing types was $178,400 in July, which is 15.1 percent lower than July 2008. Distressed properties continue to weigh down the median price because they typically sell for 15 to 20 percent less than traditional homes.

Single-family home sales increased 6.5 percent to a seasonally adjusted annual rate of 4.61 million in July from a pace of 4.33 million in June, and are 5.0 percent higher than the 4.39 million-unit level in July 2008. The median existing single-family home price was $178,300 in July, which is 14.6 percent below a year ago.
Existing condominium and co-op sales jumped 12.5 percent to a seasonally adjusted annual rate of 630,000 units in July from 560,000 in June, and are 5.9 percent above the 595,000-unit level a year ago. The median existing condo price4 was $178,800 in July, down 18.9 percent from July 2008.

Regionally, existing-home sales in the Northeast surged 13.4 percent to an annual pace of 930,000 in July, and are 3.3 percent higher than July 2008. The median price in the Northeast was $236,700, down 15.0 percent from a year ago.

Existing-home sales in the Midwest jumped 10.9 percent in July to a level of 1.22 million and are 8.0 percent above a year ago. The median price in the Midwest was $157,200, which is 5.9 percent less than July 2008.

In the South, existing-home sales rose 7.1 percent to an annual pace of 1.95 million in July and are 5.4 percent higher than July 2008. The median price in the South was $164,500, down 7.1 percent from a year ago.

Existing-home sales in the West slipped 1.7 percent to an annual rate of 1.13 million in July, but are 1.8 percent above a year ago. The median price in the West was $202,300, which is 28.0 percent below July 2008.

Buyers, we are getting close to the "now or never" point.

- Jim

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

www.NeighborlyGroup.com

Folsom Treehouse Update (Out of Bankruptcy)

Hello Neighbors,

Another sign that things are stabilizing a bit. You've heard about this in the local news... some of the larger foreclosures / failures are getting bought up, like the Folsom Treehouse project.

This just in from the Sac Business Journal - thank you SBJ!


Folsom Project Bought out of Foreclosure

Aug 17, 2009 - The Sacramento Business Journal

A real estate investment firm said Monday it has acquired a 25-acre residential development in Folsom through foreclosure proceedings and plans to develop the property with new homes.

PCCP LLC, which has an office in Sacramento, will resume construction at the Folsom Treehouse master-planned community, located at Prairie City and Iron Point roads, in a partnership with Signature Properties. The company acquired the project last week. The property had been in possession of the Federal Deposit Insurance Corp. and United Commercial Bank, after the original loan of $22.5 million went into default last year. PCCP acquired a discounted note from the FDIC and United Commercial in March.

The development is made up of 291 finished lots, with 99 single-family lots, 164 condominium lots and 28 constructed or partially constructed homes.
The terms of the acquisition were not disclosed.

Company vice president Jim Galovan said PCCP, which focuses on recapitalizing distressed real estate, has targeted Folsom for investment in the past due to its strong job base anchored by the 7,000-employee Intel campus. The area currently has a low inventory of new homes, he said.


- Jim

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

HUD Homes, We Got 'em !!

Hello Neighbors!

It is with great enthusiasm that we announce our affiliation with HUD! After pushing for 11 months with their subcontractor, we now have keys! Yep, we can get into any HUD home in California, help you write offers ("Bids" in the HUD world), and get you into one of these homes.

What is a HUD Home?

A HUD Home is a single family home or other type of residence that is backed by the Federal Housing Administration / FHA (through "Mortgage Insurance" aka "MIP") and is now in foreclosure. Once a home backed by the FHA goes into foreclosure, it is deeded back to HUD by the lending mortgage company. This is how HUD "forecloses" on Mortgage Insurance when the Buyer defaults.

Why is this Important?

1) It's not rocket science. As more home owners default, the amount of "inventory" HUD will take back will grow.

2) HUD doesn't use the same MLS lockbox system that 99% of the homes for sale use. They have keys to the locks on the doors, that they issue to HUD approved Real Estate companies. A regular Realtor can't get in with a lockbox to a HUD home - they need the keys! We've Got Them !!

3) The purchase offer process is different with HUD homes. They don't use the normal contracts that we use for most transactions in California. They use their own on-line systems to make offers (bids) and to let the Buyers know where they stand. Real Estate companies can't submit offers on HUD homes unless they've been pre-approved by HUD and issued a special code (called a "NAID" number". We've got a NAID number and are ready to go!

Next steps?

Take a look at the items to the right. You will see a section on HUD Homes. You can review inventory (see what is on the market).

Call us and we can help you with a HUD home!

- Jim

www.NeighborlyRealty.com

www.NeighborlyFinancial.com

Become a Fan in Facebook !!

Hello Neighbors,

Join us in Facebook!

Become a Fan of Neighborly Realty & Neighborly Financial today! We just added this within the last few minutes, so please excuse the lack of fans as we create this blog entry. We'll do better soon!

Neighborly Realty & Neighborly Financial on Facebook

Why Facebook?

It is a wonderful way to get real time information out quickly - specifically to those who want it, without intruding on your email!

Thanks Neighbors - and now fans!

- Jim

www.NeighborlyRealty.com

www.NeighborlyFinancial.com