Buying a Foreclosed Home - Some Important Things to Consider

It’s easy for some homebuyers these days. Housing prices are at their lowest in more than a decade, some inventories are high, and the government is offering two substantial tax credits where many homebuyers qualify.

But bargain buyers beware.  Buyers should educate themselves about the potential pitfalls of purchasing distressed property.  It's about the damage and source of damage and how long before that was the problem.

These 10 signs may indicate trouble with the foreclosed home purchase. 

1.  Unheated house in winter months. If the home has been properly winterized, there’s no need for heat. But if the home has not been properly winterized, pipes will burst and cause water damage.

2.  Missing sinks, toilets and other fixtures. Make sure they’ve been properly removed and not ripped from walls and floors.

3. Peeling, bubbling, and discolored paint; swelling in walls or ceilings (especially around kitchens and bathrooms) or a musty odor all indicate water damage and possible presence of moisture and mold.

4.  Fungus growth inside cabinets, behind drawers and built-ins. Fungus could mean that there has been water damage. Since water goes downward, look for the source above the mold.

5.  Blocked drains or pipes will cause future problems and may have already created sewage backups.

6. Black cobwebs, greasy gray residue on walls and/or a strong oily odor. This could point to potential soot damage or a malfunctioning furnace.

7.  An older home with extensive renovations. Check with the city for pulled permits in order to get remolding details. If asbestos is present and has been disturbed, be sure it’s been remediated by a certified specialist.

8.  Excessive painting of every nook, cranny, door and floor may mean that the seller is covering up mold.

9.  Discolored subflooring. From the basement, check the subflooring above for stains and small holes, both caused by mold.

10. Air Quality. The air quality within a home tells a lot about the home’s condition. Be sure to include air and surface testing in your home inspection. It’s a few hundred dollars well spent.

Time and technique by licensed or certified repair people are important factors for effective clean-up and preventing future problems like mold or contamination.

Ask the seller to explain how the damage was fixed.  And check out the company that performed the repairs to ensure it has industry-recommended certification.  If needed, follow-up with the seller or repairing company for specific repair details.

Good luck on your foreclosure home purchase.

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Harrison K. Long, Explore Group, Coldwell Banker Previews, Irvine, CA.  Irvine Realtor.  CA DRE #01410855.  ExploreProperties@gmail.com.

see RIS media article - 10 Trouble spots to consider when purchasing a foreclosed home - National Association of REALTORS - click here.

 

Posted via email from Explore OC Homes

California Housing Recovery - Market is on the Mend

California's housing market appears to be on the mend.  During 2009, California had 190,360 trustee deeds recorded, where the house was taken over by lender after foreclosure.  That's down 19.4% from 2008 (according to DataQuickNews.com).

 

Perhaps this decline is fueled by better loan mod systems and increase in short sales that have decreased inventory supply of homes on the market.

 

Some lenders in CA are now more willing to allow homeowners to sell at short system, when the value of the home is less than the mortgage.

 

 

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Harrison K. Long, Explore Group, Coldwell Banker Previews, Irvine, CA.  Irvine Realtor.  CA DRE #01410855.  ExploreProperties@gmail.com.

See Wall Street Journal article, Jan. 29, 2010 - California housing is healing, Can banks breathe easier? - click here.

 

 

 

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Orange County, CA, where People Are Buying and Selling Homes - a Great Places to Live

Dana Point Harbor, South Orange County, CA

 

One of the best places to live in the US - Orange County had 31,093 homes sold during 2009, which was up 14.5% from 2008  (according to DataQuickNews.com).

 

72 of the 83 OC zip code areas had number of homes sold gains 2009 vs. 2008.

 

With market demand increasing, people are selling and buying homes at Orange County.

 

________________

Harrison K. Long, Explore Group, Coldwell Banker Previews, Irvine, CA.  Irvine Realtor.  CA DRE #01410855.  ExploreProperties@gmail.com.

see article - Orange County Home price, sales up in 3 ZIPs for ‘09 - click here.

 

 

 

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Irvine Attorney Donald S. Gray Honored by the Orange County Bar Association

Friend Donald S. Gray passed away to be with the Lord last year. 

 

Don was an outstanding and respected lawyer and had served as President of the Orange County Bar Association in 1999. 

 

He was honored on January 21, 2010, by the Orange County Bar Association, which presented his family with the Franklin G. West Award as outstanding lawyer in the OC.

 

________________

Harrison K. Long, Explore Group, Coldwell Banker Previews, Irvine, CA.  Irvine Realtor.  CA DRE #01410855.  ExploreProperties@gmail.com.

 

see Orange County Bar Association article - OCBA West Award Presented to Family of the Late Donald Gray - click here.

 

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Recent Rains at Orange County Were Needed and Freshened our Skies

Orange County liked the recent rains that freshened our air and skies, temporarily removing us from the SoCal drought.

 

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Harrison K. Long, Explore Group, Coldwell Banker Previews, Irvine, CA.  Irvine Realtor.  CA DRE #01410855.  ExploreProperties@gmail.com.

see Gary Robbins article, Jan. 25, 2010, article - Storms Wash Away OC Drought - click here.

 

 

 

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HUD has Suspended its FHA 90-day Anti-Flipping Rule

Lenders who now own REO properties and investors on homes like this news.   For expansion of access to FHA mortgage insurance and to allow for the quick resale of foreclosed properties, US Dept. of Housing and Urban Development (HUD) has announced a temporary waiver of the 90-day flipping rule.   This waiver takes effect February 1, 2010, and lasts for one year, unless otherwise extended or withdrawn by HUD.
The waiver is limited to those sales that meet the following conditions:
1.	All transactions must be arms-length, with no identity of interest between the buyer and seller or any other parties participating in the sales transaction, including:
	•	Seller must hold title
	•	LLCs, Corporations and trusts must be established in accordance with state and federal law
	•	No evidence of previous flipping within 12 months
	•	Evidence that property was marketed openly, such as via MLS, auction, FSBO
	•	The waiver is limited to forward mortgages and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program
2.	If the sales price of the property is 20% or more above the seller’s acquisition cost, the waiver will apply only if the lender meets the following conditions:
	•	Significant work has been done to the home (documented by a second appraisal verifying that legitimate repairs and rehabilitation have been done to substantiate an increase of more than 20%); or,
	•	In cases where no work has been done, the appraiser must provide explanation to support the increase since the prior transfer; and,
	•	A property inspection must be provided to the buyer prior to closing. (The lender may charge the borrower for the inspection.) The inspector does not need to be FHA approved, but must have no interest in the property, must not receive compensation other than from the lender and may not be involved with the repairs recommended from inspection.
See complete text of the waiver — including what the inspection must include — on the HUD website at: http://www.hud.gov/offices/hsg/sfh/waivpropflip2010.pdf.   ________________ Harrison K. Long, Explore Group, Coldwell Banker Previews, Irvine, CA.  Irvine Realtor.  CA DRE #01410855.  ExploreProperties@gmail.com.

 

 

 

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Government Policy Should Focus and Plan for Job Creation and the Economy

Government policy ... (deliberate plan of action to guide decisions and achieve rational outcome) ... should focus on creating jobs and the economy and not on nationalized health care. 

 

We need a real shift in government policy toward private sector job creation.  The more jobs created, it's better for business and real estate. 

 

We need lots of new jobs here in the US.  More than 1 million new jobs per year are needed just to keep up with new people who enter the workforce.  That doesn't count jobs we need back for those who have lost their jobs recently.

 

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Harrison K. Long, Explore Group, Coldwell Banker Previews, Irvine, CA.  Irvine Realtor.  CA DRE #01410855.  ExploreProperties@gmail.com.

see Robert Knakal article, January 24, 2010 - The Massachusetts Election’s Potential Impact on Commercial Real Estate - click here.

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President Obama and Government Policy Should Spur the Economy and Inspire Programs for Private Industry

Government policy should always be helping the economy and inspiring programs for creation and support of jobs in the private (not public) sectors of our US and local economies.

 

What President Obama said during his State of the Union speech on January 27, 2010:

 

“Jobs must be our No. 1 focus in 2010, and that is why I am calling for a new jobs bill tonight. … I’m proposing that we take $30 billion of the money Wall Street banks have repaid and use it to help community banks give small businesses the credit they need to stay afloat. ... Let’s also eliminate all capital gains taxes on small business investment and provide a tax incentive for all businesses, large and small, to invest in new plants and equipment.” 
   

What I believe:  He was right in saying that he will expand programs for credits to small businesses, but he didn't give enough specifics about what he wanted in a jobs bill.  

 

His mistake:  Saying again that he inherited the deficit the nation is facing, and people are tired of hearing that blame it on the other guy stuff.

 

What he should do:  Stimulate private industry by cutting taxes and reduce size of government.

 

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Harrison K. Long, Explore Group, Coldwell Banker Previews, Irvine, CA.  Irvine Realtor.  CA DRE #01410855.  ExploreProperties@gmail.com.

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New Good Faith Estimate (GFE) Form Required for use by California Mortgage Lenders

As of January 1, 2010, California brokers who arrange federally-related mortgage loans (generally, loans provided by institutional lenders secured by residential one-to-four properties) are required to use the new Good Faith Estimate form in addition to the Mortgage Loan Disclosure Form (as required by California Business and Professions Code Section 10240).

Brokers in California who previously used the combined Mortgage Loan Disclosure Statement/Good Faith Estimate form, DRE Form RE 883, must now provide two separate disclosure forms to borrowers when arranging federally related mortgage loans.

 

The California DRE Form RE 882 or C.A.R. Form MS, Mortgage Loan Disclosure Statement, and the new Good Faith Estimate required by HUD will together meet the disclosure requirements of the US Real Estate Settlement and Procedures Act (RESPA) and the California Real Estate Law.

 

The disclosure forms must be provided to the borrower within 3 days of receipt of a loan application.

The California DRE is in the process of obtaining HUD’s approval for a combined Mortgage Loan Disclosure Statement/Good Faith Estimate form that can be used by brokers to comply with the state and federal disclosure requirements.  The combined form will be made available on the DRE’s Web site when approval is received from HUD.

California Brokers who arrange non-traditional mortgage loans are reminded they must provide borrowers with the Mortgage Loan Disclosure Statement/Good Faith Estimate, RE 885.

 

Brokers in California must be aware, however, that the Good Faith Estimate portion of the form is no longer sufficient to comply with the new federal requirements.  The RE 885 must also be accompanied by the new Good Faith Estimate form for all federally related non-traditional mortgage loans.

Contrary to some characterizing that HUD will delay enforcement of RESPA until April 2010,  HUD had announced a “restraint” in enforcement by its Mortgagee Review Board (MRB) staff for FHA lenders, if they can demonstrate a “good faith effort” to comply with RESPA’s new requirements.

For additional information about the Good Faith Estimate form and instructions, HUD-1 form and instructions, click here.

For a copy of the Good Faith Estimate form, click here .

For a copy of the HUD-1 form, click here . 

 

________________

Harrison K. Long, Explore Group, Coldwell Banker Previews, Irvine, CA.  Irvine Realtor.  CA DRE #01410855.  ExploreProperties@gmail.com.

see article at California Association of REALTORS web site - New good faith estimate form required by HUD - click here.

 

 

 

Posted via email from Explore OC Homes

California's Imposition of Tax System Challenged - Petitions re Ballot Initiatives Now Being Circulated for November Elections

California voters will be looking at Policy questions about how State of California imposes taxes. 

 

Three significant measures are now out for signatures on petitions and expected to qualify the ballot for November 2010 California elections.

 

California State Initiatives and Referenda for Ballot Have been Cleared for Circulation.  The Attorney General prepares a title and summary of the chief purpose and points of an initiative. Initiatives are cleared for circulation on the day the title and summary is sent to the initiative proponent(s). No petition may be circulated for signatures before it has been cleared to do so by the Attorney General.

1441. (09-0093).  Would Increase Legislative Vote Requirement to Two-Thirds for State Levies and Charges. Imposes Additional Requirement for Voters to Approve Local Levies and Charges with Limited Exceptions. Initiative Constitutional Amendment. Summary Date: 01/22/10 | Circulation Deadline: 06/21/10 | Signatures Required: 694,354.  Proponent: Allan Zaremberg c/o Steve Lucas (916) 446-6752.

Would increase legislative vote requirement to two-thirds for state levies and charges, with limited exceptions, and for certain taxes currently subject to majority vote. Changes Constitution to require voters to approve, either by two-thirds or majority, local levies and charges with limited exceptions. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local government: Potentially major decrease in state and local revenues and spending, depending upon future actions of the Legislature, local governing bodies, and local voters. (09-0093.) (Full Text)

1440. (09-0092).  Would Impose Additional Requirements for Voters to Approve Legislature's Two-Thirds Vote on State Taxes and to Approve Local Levies and Charges with Limited Exceptions. Initiative Constitutional Amendment. Summary Date: 01/22/10 | Circulation Deadline: 06/21/10 | Signatures Required: 694,354.  Proponent: Josiah Keene c/o Steve Lucas (916) 446-6752.

Would impose new requirement for voters to approve state tax measures following a two-thirds vote by the Legislature. Exempts short-term emergency taxes from voter-approval requirement. Increases legislative vote requirement to two-thirds for state levies and charges with limited exceptions, and for certain taxes currently subject to majority vote. Changes Constitution to require voters to approve, either by two-thirds or majority, local levies and charges with limited exceptions. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local government: Potentially major decrease in state and local revenues and spending, depending upon future actions of the Legislature, local governing bodies, and voters. (09-0092.) (Full Text)

1439. (09-0089). Would Impose Additional Requirements for Voters to Approve Legislature’s Two-Thirds Vote on State Taxes and to Approve Certain Local Taxes and Fees. Initiative Constitutional Amendment. Summary Date: 01/22/10.  Circulation Deadline: 06/21/10 | Signatures Required: 694,354. Proponent: Jon Coupal (916) 444-9950.

Would Impose new requirement for voters to approve state tax measures following a two-thirds vote by the Legislature. Exempts short-term emergency taxes from voter-approval requirement. Increases legislative vote requirement to two-thirds for certain fees and taxes currently subject to majority vote. Prohibits Legislature from imposing taxes, fees and assessments on real property and real property sales and transfers, and certain fines. Requires voters to approve by two-thirds vote certain additional local taxes, fees and charges. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local government: Potentially major decrease in state and local revenues and spending in the future, depending upon actions of the Legislature, local governing bodies, and voters. (09-0089.) (Full Text)

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Harrison K. Long, Explore Group, Coldwell Banker Previews, Irvine, CA.  Irvine Realtor.  CA DRE #01410855.  ExploreProperties@gmail.com.

See Secretary of State article posted at its web site - ballot measures cleared for circulation - click here.

 

 

Posted via email from Explore OC Homes

Politics Behind the US Govt Programs - TALF and PPIP and TARP

US government programs, TALF, PIP and TARP, were motivated by politics and not policy.

 

Media people don't talk much these days about toxic assets, and it looks like much of that talk during 2009 was about politics. 

 

In 2008 Paulson and Bernancke had to make a dramatic move to prove that government was doing the right thing, and they did.  TARP was designed and worked.  Other similar programs started in 2009 weren't really needed, didn't work and should be abandoned.

 

 

________________

Harrison K. Long, Explore Group, Coldwell Banker Previews, Irvine, CA.  Irvine Realtor.  CA DRE #01410855.  ExploreProperties@gmail.com.

see article - TALF, PPIP, TARP and the real politics behind them - click here.

Posted via email from Explore OC Homes

Short Listings Dominating the Orange County Home For Sale Market

35% of the 7,680 Orange County homes now listed for sale are "short listings", where owners have no equity, owe more on loan than value of the property, are trying to sell the property and get lenders to agree to reduce amount of debt to be paid, and avoid foreclosure.

 

Lenders have been very challenging for Realtors and agents to deal with in short listings, especially because they (lenders) don't like walking away from debt owed to them, which had been at one time a performing asset.

 

Some lenders for Orange County homes are recently cooperating more and allowing short sales.  Lenders have a big backlog of delinquent loans, need to satisfy the capital markets and Wall Street that they can unload the bad loans, get new capital, and move on to the business of lending money.

 

 

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Harrison K. Long, Explore Group, Coldwell Banker Previews, Irvine, CA.  Irvine Realtor.  CA DRE #01410855.  ExploreProperties@gmail.com. 

 

see OC Register article, Jan. 25, 2010 - Housing short sales are king - click here.

 

 

 

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"Free File" System is now Available for Many Income Tax Payers

"Free File" system is now available to almost all taxpayers.  The US Internal Revenue Service and its private-sector partners recently made "Free File" available.

 

Most income taxpayers can have free use of helpful tax preparation software and free electronic filing of the federal tax returns.

 

"Free File" software can make it easier for people to find credits and deductions they are due.

 

Taxpayers must go through either www.IRS.gov homepage or www.IRS.gov/freefile to access the free options.

 

 

________________

Harrison K. Long, Explore Group, Coldwell Banker Previews, Irvine, CA.  Irvine Realtor.  CA DRE #01410855.  ExploreProperties@gmail.com. 

Posted via email from Explore OC Homes

Much of Orange County's Water Supply to be Temporarily Turned Off

Turning of Orange County's water supply will be inconvenient for lots of people.

 

This is planned by Metropolitan Water District, so workers can change changing filtration system from chlorine to ozone.

 

The huge storm we had this past week will help with water conservation efforts during time when officials will shut off the taps at a plant that treats nearly half the OC's water supply.

 

Water flowing out from the treatment plant in Yorba Linda is being cut off from Jan. 25 to 31, 2010, and it will be good practice time for the South OC cities and areas effected.

 

________________

Harrison K. Long, Explore Group, Coldwell Banker Previews, Irvine, CA.  Irvine Realtor.  CA DRE #01410855.  ExploreProperties@gmail.com.  

see OC Register article, Jan. 2, 2010 -  Half of Orange County's water supply to be turned off - click here.

 

 

Posted via email from Explore OC Homes

Home Sales and Sold Prices Were Up in US During 2009 as Compared to 2008

Realtor.org - National Association of Realtors - reported that there was a rise in rate of resale home sales during last 3 months of 2009, which was inspired in part by federal tax credits to homebuyers.

 

At the same time, both sold prices and number of sales rose year-over-year in December, and total home sales grew in 2009 year as compared to year 2008.

 

________________

Harrison K. Long, Explore Group, Coldwell Banker Previews, Irvine, CA.  Irvine Realtor.  CA DRE #01410855.  ExploreProperties@gmail.com.  

 

see National Assoc. of Realtors article - December 2009 home sales were down - click here.

 

 

Posted via email from Explore OC Homes

Art and Science mixed with Wyland whaling wall displayed at San Clemente Elementary School

Orange County Register photo of Wyland's whaling wall art and interesting local article about history of the piece, which was created by the artist in 1982 and later moved and reconstructed.

 

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Harrison K. Long, Explore Group, Coldwell Banker Previews, Irvine, CA.  Irvine Realtor.  CA DRE #01410855.  ExploreProperties@gmail.com.  

 see OC Register article - Wyland's oldest existing Whaling Wall at San Clemente school - click here.

 

 

 

Posted via email from Explore OC Homes

Another Storm Moving Toward Orange County Won't Be As Big as Last Week

Another rain shower is expected over Orange County this week, but it won't be the spectacular gusher we had last week during five days.

 

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Harrison K. Long, Explore Group, Coldwell Banker Previews, Irvine, CA.  Irvine Realtor.  CA DRE #01410855.  ExploreProperties@gmail.com.  

                 

 

See OC Register article and satelite Image of Big Storm over Orange County - click here.

 

 

 

Posted via email from Explore OC Homes

HUD Announced Changes for FHA Homebuyers and Increasing Minimum Qualifications

US HUD and its FHA outlined changes coming for homebuyers.

 

Policy changes include: 

• Raising the up-front mortgage insurance premium. 
• Raising the minimum credit score requirements. 
• Reduce allowable seller concessions.

These changes will be effective this spring 2010 and make it even more challenging for FHA homebuyers.

 

________________

Harrison K. Long, Explore Group, Coldwell Banker Previews, Irvine, CA.  Irvine Realtor.  CA DRE #01410855.  ExploreProperties@gmail.com.  

                 

 

see article at California Assoc. of Realtors, January 21, 2010 - New Rules for FHA Homebuyers - click here.

 

 

Posted via email from Explore OC Homes

No Surprise Here: Newport Beach and Laguna Beach Among the CA Cities with Priciest Homes

Not surprised that Newport Beach and Laguna Beach are among the areas in CA with the priciest homes.

 

California cities with the highest median home sold price in December, 2009, according to the California Association of Realtors and MDA DataQuick.

 

________________

Harrison K. Long, Explore Group, Coldwell Banker Previews, Irvine, CA.  Irvine Realtor.  CA DRE #01410855.  ExploreProperties@gmail.com.  

                 

 

 

see OC Metro article, Jan. 22, 2010 - 2 O.C. cities rank among state's priciest areas - click here.

 

 

Posted via email from Explore OC Homes

Governor Schwarzenegger At Washington DC Looking for US Stimulus Money to Repay debt to State

California Governor is working Pres. Obama and Nation's Capital for money to repay US debt to CA.

 

We need the money in at CA and the $6.9 billion in federal aid to be returned to the state.

 

________________

Harrison K. Long, Explore Group, Coldwell Banker Previews, Irvine, CA.  Irvine Realtor.  CA DRE #01410855.  ExploreProperties@gmail.com.  

                 

 

see January 22, 2010, article - Schwarzenegger Works Washington for Fix to His Budget Crisis - click here.

 

Posted via email from Explore OC Homes