Happy New Year!

Merry Christmas

FHA Changes Borrower Guidelines

There are new and more stringent qualifications for today's most popular lending program, FHA. The new guidelines require borrowers to have more money down, higher qualifying credit scores, and lower debt-to-income ratios. Intero's CEO, Gino, goes over the details.

This Week's Realty Times Report

There continues to be good news in real estate, both nationally and locally. Our experience is that when residential real estate goes on the market in Gilroy and the surrounding areas, and is priced right, it sells. Checking in with Realty Times this morning, the national report reflects the same condition.

Realty Times reports that Lawrence Yun, NAR chief economist, said the tax credit is a significant factor. "We can't underestimate just how powerful a catalyst the first-time home buyer tax credit has been for the housing sector," he said. "It's given buyers the confidence they needed to get off the fence and take advantage of extremely affordable housing conditions. The buying conditions this year are the most favorable on record dating back to 1970, but the tax credit is allowing buyers to set aside any reservations about waiting for a better deal."

See what else Realty Times is reporting.

We're Thankful for YouTube videos

Here's one kind of YouTube Thanksgiving video:



And here's another:



Aren't you thankful for both? HAPPY THANKSGIVING

More to be Thakful For...

Thanksgiving Week brings news about the continuing recovery of the real estate market, which Team Patereau is thankful for. How about you? Read on.

Congress Passes Homebuyer Tax Credit II

The House of Representatives voted overwhelmingly to pass legislation containing an extension and expansion of the homebuyer tax credit, completing Congressional action and sending the tax credit to President Obama for his signature.

The $8,000 homebuyer tax credit for first-time buyers, due to expire in this month, will be extended through April 30 of next year and buyers will have an additional two months, until the end of June, to close. First-time buyers who are in process of making a purchase will no longer need to worry about qualifying for the $8,000 credit if they close after the November 30 deadline. The new legislation increases the income limit for couples with income up to $225,000, a nearly $55,000 increase above the level in existing law.

For the first time, the new legislation makes buyers who already own a home eligible for a credit. A $6,500 maximum credit will be available to existing homeowners who have lived in their current residence for five of the prior eight years. The legislation limits eligibility for the existing homeowner credit to homes worth $800,000 or less.

Read the full story at Real Estate Economy Watch.

Happy Halloween!

Legacy of Gilroy Statue Unveiling

This video and those that follow are from the Legacy of Gilroy Public Arts project that was unveiled on October 17th. There was two hours of video and these are edited for different audiences. Enjoy!

If you would like to embed these videos in your website, please feel free. If you would like a DVD of any or all of the parts and pieces, put your request in the comment section and Team Patereau will contact you about the small fee and where they can be picked up.

Cleaning Up the Mortgage Industry

Several new laws were recently enacted to help clean up the mortgage industry. Gino explains them in this week's Intero Insider.

New Law Permits Buyers to Choose

Good News! There's a new law indicating that Buyers of real estate are allowed to choose transaction service providers. This means that if you live in Gilroy and are buying real estate in Gilroy, the owner of the property does not have the right to force you to deal with title and escrow companies located somewhere else - like Sacramento, Irvine, or Merced (which is where our recent transactions have been directed).

Buyer's Choice has always been the case, but Sellers/Owners in recent years have said to buyers, "Take our service providers or we'll find a buyer who will." The real question is, with this new law, will they continue to say that?

Gilroy Chamber of Commerce Monthly Newsletter

The Gilroy Chamber of Commerce monthly newsletter for October is here! Just so you know, this isn't even hot off the press because it hasn't been run yet. You are seeing the electronic version FIRST. It's a great newsletter, part of a great organization.

Homebuyer Tax Credit Extension Needed

Team Patereau has helped many first-time buyers purchase homes this year and the Homebuyer Tax Credit has played a major role. We're hoping that our government will find a way to extend that credit. Here's Gino's take on the topic.

Short Sale Basic Training

We're helping a client who is facing a hardship, leading to a probable short sale, so we gathered some basic information. We thought you might benefit from knowing this, too.

Definition: A Short Sale is when a home is sold for less than the amount owed and the lender, after much negotiation, agrees to release the lien and settle for less than the full payment.

Why would a lender accept a Short Sale? A Short Sale is a form of loss mitigation, the lender is presented with a choice between a smaller loss by Short Sale or a larger loss through foreclosure, so accepting the Short Sale mitigates the loss.

The advantage of a Short Sale compared to a foreclosure is that you avoid having a debt discharged due to foreclosure on your credit record. This foreclosure mark can reduce your credit score by over 250 points and keep you from qualifying for a home loan for up to 5 years.

Short sales appear on your credit report as pre-foreclosure in redemption. With a Short Sale you can qualify for a home loan in 24 months.

Qualifications: For a Short Sale to be approved by your lender you must show a hardship. A hardship is defined as a situation that is the result of some extenuating circumstance that forces you into a position where you can no longer afford the mortgage payments. Some examples of a hardship are loss of income, unemployment, divorce, illness and job transfer.

Lenders will also allow a short sale of an investment property. Some examples of hardship include the amount of rent charged does not cover the mortgage payment and related expenses and you cannot afford to pay out-of-pocket to make up the difference. You are unable to rent the property at a price that covers all expenses. You cannot afford to fix damage to the property that keeps you from renting it out.

Timing for your next purchase: Fannie Mae's new policies for manually underwritten loans related to the time period that must elapse before borrowers can demonstrate they have reestablished an acceptable credit history after the occurrence of a short sale or foreclosure.

Short Sale - 2-year time period from completion date.

Additional Requirements: None
Note: No exceptions are permitted to the 2-year time period

Foreclosure - 5-year time period from completion date.

Additional requirements that apply after 5 years up to 7 years following completion date:

• The purchase of a principal residence is permitted with a minimum 10 percent down payment and minimum credit score of 680.
• Purchase of a second home or investment property is not permitted.

Deed-in-Lieu of Foreclosure - 4-year time period from completion date (date deed-in-lieu executed)
Additional requirements that apply after 4 years up to 7 years following completion date:

• Borrower may purchase a property secured by a principal residence, second home, or investment property with the greater of 10 percent minimum down payment or the minimum down payment required for the transaction.

Tax Considerations: On December 20, 2007 President Bush Signed H.R. 3648, The Mortgage Forgiveness Debt Relief Act of 2007.

The law applies to primary residences only and takes effect from January 1, 2007 through December 31, 2012. It provides relief to home owners by shielding them from the additional burden of potential federal income tax on any amount written off or forgiven by their lender in case of foreclosure or short sale. Consultation with an experienced tax professional to see how the law applies in your circumstance is advisable.

If you would like more information click here to be taken to IRS Guidance regarding The Mortgage Forgiveness Debt Relief Act of 2007

Getting Started: The first thing we need to do is evaluate your situation, which includes a conference call with your lender to understand your loan terms and current status. Only after discussions with both you and your lender can we determine if a Short Sale is the best solution.

If a Short Sale is the best solution for you, we will begin the process. A Comparative Market Analysis (CMA) will be done and a marketing strategy will be developed.

Short Sales normally take at least 90 days to complete. Lender approval will take up to 60 days from the time an offer is submitted. Once approved 30-45 days will be necessary to close escrow.

Charges: Real Estate commissions are paid out of the sale proceeds. Your lender has final approval as to the amount of commissions that will be paid. There are no additional costs, fees or charges because the transaction is a Short Sale.

"Foreclosure" is not always a Bad Word

This week's message from Gino, Intero's CEO, is that while foreclosures are not something we think of as a good thing, it turns out there is an upside. Read the full article.

Gilroy Today Magazine - Fall 2009

Here it is - the long-awaited new issue of Gilroy Today. This is the Fall 2009 issue, and it is the most beautifully done of all of the beautifully done issues. Take a look...

Open publication

Another GREAT job J. Chris & Larry!

Financing Woes in Today's Transactions

John Thompson, Intero Vice President, had some trouble with a recent transaction that many real estate agents, as well as home buyers are experiencing. Read all about it here.

Economic & Real Estate Forecast

Carol Rodoni, Bamboo Consulting, came to Intero Real Estate to deliver the news, good and bad, about the economy and real estate. She dynamic and interesting, and her talk was full of really sensible information. This video is the first 10 minutes, the rest of the hour is available in 10 minute segments on YouTube. Worth your time!

Positive Signs for Local Real Estate Industry

"Good news this week from mortgage giant Freddie Mac could be a positive sign for the real estate industry, and for the US Economy as a whole," states Gino Blefari, President & CEO of Intero Real Estate.

Read the details here...

Another Gilroy Pure-Gold Asset

The Gilroy Chamber of Commerce publishes an almost-monthly newspaper publication, The Gilroy Focus. Great publication! Great organization! If you're not a member, business or individual, you should be.

Open publication

The Chamber is now on Facebook and Twitter. Cooooooool!

TeamPatereau Newsletter

We have a monthly newsletter. Here's a copy, but if you want on the snail mail list, let us know!

Open publication

New Regulation Regarding License Numbers

Within the last several months, after the California Department of Real Estate issued its latest regulation regarding the placement of DRE license numbers on certain solicitation materials.

There has been a great deal of confusion regarding whether or not the DRE# is also required on listing signs, as well as open house signs. We contacted the Department of Real Estate, located in Sacramento and asked them to provide us with the correct language in this regulation. And here is what they said…

DRE LICESNSE NUMBER MUST BE ON SOLICITATION MATERIALS

The California Department of Real Estate (DRE) has recently adopted a new regulation clarifying the law that requires DRE license numbers on business cards and all other solicitation materials intended to be the first point of contact with consumers. The licensing law came into effect on July 1, 2009. Under the new section 2773 regulation adopted by the DRE, the solicitation materials that must contain the license identification number include the following items:

• Business Cards
• Stationery
• Websites owned, controlled and/or maintained by the soliciting real estate license
• Promotional and advertising flyers, brochures, email and regular mail, leaflets, and any other marketing or promotional materials designed to solicit the creation of a professional relationship between the licensee and the consumer, or intended to induce a consumer to contact the licensee about any licensed service

DRE’s new regulations also states that the following items ARE NOT SOLICITAION MATERIALS under the license number requirement:

• Advertisements in electronic media, including radio, cinema, and television ads, and the opening section of streaming video and audio
• Printed advertising in any newspaper or periodical
• FOR SALE signs placed on or around a property intended to alert the public the property is available for purchase or lease. The regulations continues with details regarding the size of type and brokers involvement.

Time's Running Out on Homebuyer Tax Credit

The Federal Homebuyer Tax Credit ends November 30, 2009. If you want to take advantage of this one-time credit, it's time to act!

Recovery Signs

Gino Blefari, CEO of Intero Real Estate, says not to start cheering yet, but there are signs of recovery in the California real estate market. Read on...

Gilroy Today Magazine

Open publication

We like it! Our friends, J. Chris and Larry Mickartz publish this beautiful magazine. They do a great job and they show off lots of good Gilroy things. If you haven't seen an issue, check it out. A new issue is due out in the next couple of weeks so watch for it, too.

Online Search for Homes for Sale - Get the Whole Picture

Gino Blefari, CEO Intero Real Estate, is very proud of the Intero website, and all the bells and whistles available to help home buyers and sellers. This article is about searching for a home through online search services. The Intero website is: http://www.interorealestate.com/.

TIME - How are You Spending Yours?

This is a really cool interactive graphic that our friend on Twitter, VaynerMedia, brought to our attention. Try it.

Loan Modificaions Just Aren't Happening

We know that loan modifications just aren't happening in our service area. Here's an article that explains everything!

Any of You Girls Want to Sell Your House?

Check this out, girls!

A recent Canadian Survey indicates that females who rent, instead of own a home, weight less!

Today Show's Real Estate Minute

We love this regular feature on the Today Show. As a matter of fact, we're working on doing one for Gilroy. Stay tuned!

Visit msnbc.com for Breaking News, World News, and News about the Economy

Gilroy is a Great Place to Live

Gilroy is a great place to live. Here’s another reason why:

The Gilroy High School Choir is led by Phil Robb.

Phil has been a part of the Gilroy Unified School System for over 20 years and is considered a community treasure by anyone who has ever met him, seen him at work, been directed by him, or knows of him.

Phil came to the Gilroy Rotary Club this week and talked about the fabulous trip he was able to organize, for this year’s choir to perform at Carnegie Hall. As always, his leadership was inspiring. He is such a humble man of such great accomplishment that it is an honor for us to know him.

When you’re looking for a place to live, pick a place where people like Phil Robb live and work!

Links to trip videos:

Choir at Carnegie Hall
Choir singing in Harlem
Choir with Composer
Choir Rehearsal for Carnegie Hall

All videos are the property of The Gilroy Dispatch – which is another reason why Gilroy is a great place to live.

Mortgage Market Update

Team Patereau's in-house mortgage agent at Intero Real Estate, Dario Liberati, brought us up to date on the mortgage market. Here's his report:

Last week mortgage bonds had their worst one day performance since October, losing an astounding 206 bps. So what happened and what's next?

The main culprit for the selloff is SUPPLY. The Treasury has literally been printing money by way of Treasury auctions to pay for the massive spending. These hundreds of Billions of dollars of new Bond supply have to be absorbed by the market. The additional supply literally weighs on the entire Bond market and drags prices lower.

Also, when you think of SUPPLY, consider all the refinancing we have been doing and that those loans have been bundled, packaged and sold on Wall Street. This additional SUPPLY has now started to hit the secondary market as those loans are now getting sold. While the Fed has been a buyer, they simply cannot buy enough to balance all the selling.

Economics 101: Anytime supply exceeds demand, prices will move lower. As prices move lower, yields rise. That rise in yield will attract new buyers as they get a higher return on their investment. This is how the market finds balance.

Mortgage bonds have lost a staggering 363 bps since last Thursday. All locked loans are getting closed at a great rate. The new market must unfold to settle at its price.

Rates are better today than at close last Friday, and are still at ALL TIME LOWS!!! Don’t give up hope. Buyers, buy your homes. Values are still in the purchase and prices may not be this affordable in the near future.

Buy-Of-The-Week in Gilroy

Looking over shrinking inventory in Gilroy, we've picked out a really good buy for just the right purchaser. This is a beautiful home that is available right away, and priced VERY attractively at $399,000. Contact Team Patereau to schedule a viewing - and do it today - at this price, and in this condition, this one is going to be gone before the week-end is here.

Here's the specifics on the home:













And here's a picture of the cute and clean kitchen:


But wait - here's the back yard:

No kidding - call or email TODAY!

Contest Entry

Team Patereau would really like to be better bloggers. We think our real estate business could benefit. We also think that you, the people we do business with and who read this already benefit from our blog, but there could be greater benefits.

One way to get better is to get educated. Hence this post. We’d like to win 2 tickets for the Social Media Success Summit 2009. Here’s what blogger Chris Garrett has to say about the summit:

All around the world people are very excited about Social Media Success Summit 2009 — the first major online event dedicated to helping you successfully market your business with sites like Twitter, Facebook and LinkedIn. More than 500 people have already registered.

Chris goes on to explain:

This event does not require any travel (no hotel, rental car or wasted time). You simply attend sessions online and meet the experts and network with peers from the comfort of your home or office. Pretty cool, eh?

We say, “Well, Yes! Pretty Cool.”

We’re following the contest entry rules: Post a blog about why we want to attend Social Media Success Summit 2009. Here it is:

We want to attend so that we can be better bloggers, and our readers can benefit from what we learn.

It just doesn’t get any simpler than that! Wish us luck!

Today there are lots of great deals in the real estate market in Gilroy, and the surrounding area. Prices are lower than they have been in many years. It's a really good time to buy!

The other side of the coin is that when you buy, you will probably need a loan. There is money to lend! It's very hard to get. Borrowers have to have sterling credit AND assured income for repayment. There's a great article about how lenders evaluate a buyer's credit, by David Compton & George Smith. Check it out.

Sign on the Dotted Line...Please

We're talking to several soon-to-be Sellers, and have found that the hardest step in selling a home is the first step.

Homeowners have a hard time disconnecting their emotional attachments to their current home. Even though people are looking forward to a new and different home, even though they have outgrown their old one, even though better things are ahead, it’s still hard to let go.

We’ve been through listing appointments that are highly emotionally charged, some with tears, some with indignation and anger. Then, when all the details are finally ironed out and we’re down to signing the listing agreement the owners sign, and, Whew! – a sense of relief comes over them. They have signed, they have released, they are ready to move on. The simple action of signing allows everyone to look forward, and stop holding on to the past.

Have a Great Lawn That's Good to the Earth

Caring for the environment means caring for a full, green lawn. Properly maintaining your lawn will produce strong grass and can help protect and conserve water resources at the same time.

To enjoy a great lawn and protect fresh water resources for generations to come, follow these lawn care tips from the experts at The Scotts Miracle-Gro Company:

• Strong, dense lawns can help reduce run off and erosion, and filter rainwater to recharge groundwater supplies. The foundation of a good lawn is rich soil, so use a mulching mower to return grass clippings to the soil where the clippings break down and recycle nutrients back into the grass.


• Generally, only new lawns require additional phosphorus for root growth. For mature lawns, choose a fertilizer that is low-phosphorus or phosphorus-free, unless a soil test shows a need for more.


• The best time to fertilize is in the spring and fall. Never fertilize when the ground is frozen.


• Use a drop spreader or rotary spreader with a side guard to keep fertilizer on the lawn.


• Sweep any grass clippings and fertilizer that land on driveways and sidewalks back on to the lawn to help keep nutrients out of waterways.


• Set your mower to its highest setting to build strong, deep grass roots that can find water and nutrients. Longer grass can also better withstand periods of heat and drought.


• If your lawn is dry, the best time to water it is in the morning. Water easily evaporates in the afternoon and watering at night can cause fungus and disease.


• When lawn problems arise, select the right product for the task. For small problems, use a spot treatment. For numerous problems throughout the yard, use a broadcast application.


• Use native plants in your landscape and garden. These plants are adapted to your area and better able to tolerate adverse conditions and resist disease.


• Avoid application when rain is in the forecast, as heavy rainfall can overwhelm soils and cause fertilizers to be washed into waterways.


• Storm sewers often lead directly into streams and lakes. Never dispose of clippings or pet waste in or around sewers or water resources, such as rivers, lakes and streams. Make it a habit to sweep up any fertilizer, grass clippings and leaves.
  

Courtesy of ARAcontent

A Little Good News

From CNBC reporter Diana Olick, an article that says there are going to be more foreclosrues. When you read it you'll know why we say, "It could be worse -- we could live in Merced."

A funny little poem

Marelli’s Fruit and Real Estate
by Raymond A. Foss

That is what the bright neon sign read
this bit of fun, this whimsy
this place Leno would love
to lampoon
poke fun

A shop, a store, with a little of this
and that selling fruit
its true
and other things too
Mickey’s Big Mouth
on the bottom rack
almost out of view
beyond the Night Train
the Red White and Blue
the Mock Turtle soup
a funny place to find this or that
behind the counter, the glass
the old dark store
I never askedabout the real estate

Buyers Welcome!

Real estate transactions are happening in Gilroy. Inventory is moving downward and neighborhoods are filling up. As an example, the last two homes in our immediate neighborhood have gone into contract.

With sales comes financing - and there is money to loan for residential purchases. The caveat is that it's not easy to qualify for it.

There's a lot of info out there about what it takes to get a residential real estate loan today, with the significant and first thing being that a buyer has to have money - a down payment. After that, buyers have to prove that they can make the payments, and that's the part that's taking a great deal of time. Very few escrows close in 30 days anymore.

Here's an article on what lenders look for nowadays.

Team Patereau has had success in guiding buyers through transactions this year. We have good lenders to refer our buyers to, and we help them every step of the way. Contact us as the first step in your journey to purchase a new home.

ONE LAST VIDEO - WE JUST CAN'T RESIST THIS

The Daily Show With Jon Stewart	M - Th 11p / 10c
Twitter Frenzy
comedycentral.com
Daily Show Full Episodes Economic Crisis Political Humor

The Second, and Last Twitter Post

We're interested, but not quite addicted to Twitter, so here's one more video. Next post will be back to Real Estate.


Watch CBS Videos Online

Tweet, Tweet, Tweedle-Dee

Visit msnbc.com for Breaking News, World News, and News about the Economy

In case you're wondering, one of TeamPatereau is on Twitter. Follow Susan at spatereau.

"New Home" Buyer Tax Credit

Obama Unveils Homeowner Affordability and Stability Plan

President Obama unveiled his plan to help stabilize the housing market and keep millions of borrowers in their homes.

The Homeowner Affordability and Stability Plan includes two initiatives to help struggling homeowners. One is a refinancing program for homeowners with less than 20% equity in their homes, or who owe more than their home is worth. The second program attempts to lower monthly payments for homeowners at risk of losing their home. In addition, the plan includes a third initiative to support low mortgage rates by strengthening confidence in Fannie Mae and Freddie Mac.

Many of the plan’s details are still being worked out and will not be announced until today, March 4, but here is an overview of the plan’s main components.

Refinancing Initiative
Under current rules, those families who own less than 20% equity in their homes have a difficult time refinancing and taking advantage of the historically low interest rates. Therefore, the refinancing initiative in the new plan provides refinancing help for homeowners with less than 20% equity in their homes or who owe more than their home is worth. This initiative is open to homeowners who have conforming loans which are guaranteed by Fannie Mae and Freddie Mac, and who owe up to 5% more than their home is worth.

According to the plan, “credit-worthy” or “responsible” homeowners can refinance their mortgage into a 30- or 15-year, fixed-rate loan based on current market rates. The refinanced loan, however, cannot include prepayment penalties or balloon payments. For many families, this low-cost refinancing may help reduce their mortgage payments by up to thousands of dollars per year.

As with the rest of the plan, details about this initiative will be released at a future date — including what, if any, credit score requirements will be included.

Stability Initiative
This initiative aims at providing help to individual families as well as entire neighborhoods by helping reduce foreclosures and stabilize home prices. It is intended to help homeowners who are struggling to afford their mortgage payments, but cannot sell their homes because prices have fallen significantly.

The goal of this initiative is simple: “reduce the amount homeowners owe per month to sustainable levels.” To accomplish this, lenders are encouraged to lower homeowners' payments to 31 percent of their income by lowering their interest rate to as low as 2% or by extending the terms of the loan. In addition, lenders can also lower the principal owed by the borrower, with Treasury sharing in the costs.
Homeowners who are current on their mortgages but are struggling can still apply for this program. As such, this is one of the few programs designed to help homeowners who may face delinquency soon, but are current at the moment.

Since the focus of this initiative is on helping families and neighborhoods, investment properties do not qualify. This initiative also includes a number of additional elements and incentives that benefit homeowners and lenders alike, including:

• Incentives to Help Borrowers Stay Current: To provide an extra incentive for borrowers to keep paying on time, the initiative will provide a monthly balance reduction payment that goes straight towards reducing the principal balance of the mortgage loan. As long as a borrower stays current on his or her loan, he or she can get up to $1,000 each year for five years.
• Reaching Borrowers Early: To keep lenders focused on reaching borrowers who are trying their best to stay current on their mortgages, an incentive payment of $500 will be paid to servicers, and an incentive payment of $1,500 will be paid to mortgage holders, if they modify at-risk loans before the borrower falls behind.
  
  Supporting Low Mortgage Rates
  As part of the Homeowner Affordability and Stability Plan, the Treasury Department is increasing its funding commitment to Fannie Mae and Freddie Mac to ensure the strength and security of the mortgage market and to help maintain mortgage affordability. This portion of the plan will use using funds already authorized in 2008 by Congress for this purpose.
  
  The increased funding will enable Fannie Mae and Freddie Mac to carry out ambitious efforts to ensure mortgage affordability for responsible homeowners, and provide forward-looking confidence in the mortgage market.
  Again, the government plans to unveil the final details of the plan on March 4, 2009. For now, you can download a sheet of common Questions and Answers produced by the government at: www.treas.gov/initiatives/eesa/homeowneraffordabilityplan/ConsumerQA.pdf.
  
  We will continue monitoring the plan as new information becomes available. If you have any questions or would like to discuss how this may specifically impact you, we’d be happy to sit down with you. Just call or email us to set up an appointment.

Realtors® Oppose MID Reduction in Administration Budget Plan

And so do we. Here's the story:

WASHINGTON (February 26, 2009) –The National Association of Realtors®, which has supported the Obama administration’s housing and stimulus plans, is opposed to the budget proposal that would reduce the mortgage interest deduction for thousands of families.

More...

Gilroy Chamber of Commerce Spice of Life Awards

Bumper Stickers Say It All

New FREE Service from Google

Have you tried GOOG-411? It's a new, and free, service from Google.

Check it out!

Another Subject

When Susan is not participating in Team Patereau projects, she goes on TV!

3 Definitions

Short Sale

Deed in Lieu of Foreclosure

Foreclosure - In California it's the Non-Judicial kind....

Thanks Nolo Press.

Happy Valentine's Day

Loan Modification Information

There's lots of talk with homeowners around Gilroy who are upside down on their mortgages and trying to figure out what to do. HUD (U.S. Department of Housing and Urban Development) has a lot of information. Here's some information from Rick Soukoulis, the President of Intero Mortgage, which is a sister company to our borkerage, Intero Real Estate Services. You may find it interesting.

...Any company offering Loan Modification services must be DRE approved. A lot of supposed Note Mod companies are springing up overnight, many not licensed, and a fair number being run by shoddy and often unethical operators.

There needs to be a Modification officer/originator involved in the process, one who is trained in Loan Mods, and one who will take responsibility for moving your case forward in a timely manner.

Next, the Loan Loss Mitigation Officer needs to be experienced and must be trained, must understand what various lenders want, what they’ll accept and what they won’t accept.

And finally, there should be an Attorney working with the company who understands all the subtleties of Loan Modifications.

Having an Attorney or law firm involved in the process does not change the fact that anyone meeting with a consumer to help with a loan modification MUST be licensed by the DRE. These “Modification Originators” must follow all the same rule as any DRE licensee.

Let’s now go into some greater detail about modification themselves.

First, who qualifies? The simple answer here is that the more dire your circumstances, the more likely you are to qualify. The six commonly acceptable reasons are

1. High loan-to-value, higher than 90%
2. Bad credit due to late payments on credit cards, mortgage, medical bills, ect.
3. Adjustable rate loan has or will adjusted in the future
4. You have a negatively amortizing loan
5. Temporary or permanent financial hardship (i.e. job loss, medical emergency, divorce, income reduction ect.)
6. High debt to income ratio’s.

What kind of modifications can the borrower expect? It could be converting the loan from adjustable to fixed, lowering the rate, extending the term from 30 years to, say, 50 years, or actually reducing the amount owed to the point where there is some equity and the borrower can afford the payments.

There can be variations and there can be combinations of the above.

Interestingly, loans mods have been going on for over a year now, and the banks are finding that the most effective way is to forgive a part of the amount owed. The borrowers who get this tend to perform better than the others.

The next big question is what the heck are the banks trying to accomplish.

As for the banks, their overriding goal is to avoid foreclosing and taking any more real estate onto their books. They’re not being nice guys necessarily. It’s just that they’ve found that their losses on Loan Mods are significantly less than foreclosing and trying to sell the property.

If you or someone you know is having difficulties with their mortgage, it’s a great time to try for a modification. To repeat myself, just make certain you go to a company with trained and knowledgeable Modification Officers and are experienced in Loss Mitigation , one who has an attorney on staff, and one that increases your odds of getting what you want and what you need.

Team Patereau can help you connect with appropriately licensed and capable loan modification companies. Please give us a call to discuss your specific needs.

FICO Scores

We all know how important FICO scores are so here are some basics to enhance your FICO knowledge.

Good borrower credit scores help make it possible to qualify at better rates. This is how FICO Scores are weighted and structured:
35% by Payment History
30% by Balances Owed
15% by Length of Credit History
10% by New Credit
10% by Types of Credit in Use

And the overall calculated ranges:
720 - 850 Excellent, A-paper credit, the "good-guy" rates available
680 - 719 Good, not much of a compromise on rates
620 - 679 OK or Fair, clearly in range for FHA consideration
580 - 619 Low, bottom of the range for FHA consideration, "alternate credit" comes heavily into play
500 - 579 Poor, truly nothing can be done without credit rehabilitation

Just for your information, FICO stands for Fair Isaac Corporation, wtih Fair and Isaac being the last names of the two men who created the corporation as well as the scoring scenario.

If you would like to discuss your FICO score or other real estate mor mortgage questions, please contact us!

Federal Stimulus Update

On Wednesday the U.S. Senate unanimously adopted an amendment to the tax portion of the stimulus package that would allow a tax credit of 10 percent of the value of new or existing residences, up to a $15,000 limit, for all purchasers, not just first-time homebuyers, in 2009 for a primary residence. Taxpayers would claim the credit on their 2008 income tax return. It also seeks to prevent misuse by only allowing purchases of a principal residence and by recapturing the credit if the home is sold within two years of purchase. The amendment would sunset the current $7,500 housing tax credit on the date of enactment.

The House-passed version of the bill continues the current $7,500 credit for first-time homebuyers and eliminates the repayment feature of the credit, but only for purchases that occur between January 1, 2009 and June 30, 2009.

The Senate legislation so far does not include the loan limit increase for FHA and GSEs, but NAR is urging its inclusion. The House-passed bill reinstates and makes permanent last year's temporary FHA and conforming loan limits of $729,750, as sought by NAR. Limits currently are $625,500.

Market Conditions

In Gilroy there are pleanty of houses for sale - still. BUT, there are a lot of properties going into contract! The other but is that the escrows are taking an extraordinary long time because lenders are scrutinizing new loans and borrowers at an unprecedented degree.

There's an odd thing going on, too. Homes owned by banks and other financial institutions are going on the market at really reasonable prices. Once on the market they are receiving multiple offers, and are ultimately going into contract at over list price. We had one buyer offer competing with 22 other offers last week. The winner went in with an over-list-price offer, and raised it even more on counter.

News on the national level includes the National Association of Realtors reporting this week that there have been pending home sale gains in the South and Midwest. The other regions saw slight declines. Here's the complete article.

Back to Gilroy - take a look around. Is there something out there for you? Call Team Patereau to talk about your wants and needs.

Groundhog Day Info

We get confused about seeing shadow and not seeing shadow and what it means. Here's the real scoop:

In traditional weather lore, if a groundhog emerges from its burrow on this day and fails to see its shadow because the weather is cloudy, winter will soon end. If the groundhog sees its
shadow because the weather is bright and clear, it will be frightened and run back into its hole, and the winter will continue for six more weeks.

You can get more info than you want to know here.

Resolve to Get in the Black in 2009

For many Americans, the only area where they may have lost weight over the holidays is their wallet. And as their credit card statements begin to arrive with the reminder—and obligation—of their holiday spending, consumers should resolve now to lower their debt in the New Year.
“Losing weight and losing debt are among the top New Year’s resolutions every year,” says Joseph Montanaro, certified financial planner with USAA, a leading financial services organization serving military members and their families. “But, unfortunately, the resolve of consumers to stick to their plans typically thaws along with the weather when spring rolls around.” His suggestions include:

• Start with a specific goal. Start small, and add incremental goals along the way. Set new goals with each milestone you reach.


• Put the plan on paper. Establish a realistic budget, and stick to it with each paycheck.


• Track progress. Continually tracking progress over time will help keep the overall goal front and center, and allow for budget adjustments as more money is freed up over time.


• Splurge…in moderation. While keeping a focus on reducing debt undoubtedly will require some sacrifice, it’s OK to splurge on a reward for a job well done from time to time.


• Save like there is a tomorrow. Spend less than is earned so there will be money left over to save. With that extra money, consider increasing contributions to a 401(k) or IRA, and start saving more for everyday expenses and emergencies by setting up a monthly automatic transfer into a savings account.

Q & A on New Law

One of our condo clients asked: I’m on the board of my Homeowner’s Association and heard there’s a new law about notifying the HOA of a foreclosure sale on a unit. Is that true?

Yes – it is true. Here’s what CAR (California Association of Realtors) has to say:

Senate Bill 1511, which amended Civil Code Section 2924b, effective January 1, 2009, permits HOAs to record a request that a trustee, or any person authorized to record a notice of default regarding any of the separate interests governed by the HOA, mail to the HOA a copy of a trustee’s deed (on any unit) within 15 business days after recordation of the trustee’s deed.

The request by the HOA must include the legal description or the assessor’s parcel number of the separate interest as well as the name and address of the association and a statement that it is an HOA. The request must be recorded before the filing of a notice of default. Note that failure of the mortgagee/lender/trustee to mail a copy of the trustee’s deed to the HOA does not affect title to the real property.

Starting Over: Real Opportunities in 2009

2008 was one of the toughest, most volatile years our financial systems have ever experienced – but we don't have to tell you that. In some way or another, everyone has felt the effects of this global financial crisis. So, let's skip the painful details. Let's avoid as well the impossible task of trying to predict the end of it, and let's try something different. Let's spend the first month of 2009 looking at solutions to the mortgage and real estate markets – actual viable solutions that you can use right now to help turn things around. If you're a homeowner or looking to be one in 2009, click this link to read the rest of the article. You'll be glad that you did.

By the way, the link leads to a newsletter provided by a great lender, and our niece, Janette Whitlock. She does business in Norfolk, Virginia. If you're in that area and need mortgage assistance, please contact her.

Foreclosure Scam

The San Jose Mercury News reported yesterday about a scam in San Diego having to do with homeowners having financial problems, and to avoid foreclosure they gave money to the scammers to buy "land patents" that would make their homes sovereign nations. The scammers led the distressed homeowners to believe that once their property was not part of the United States, authorities, including agents from their financing companies, could not legally enter their property to foreclose.

Turns out it’s not true. These poor distressed homeowners found cash money to give to the scammers, but it in no way positively affected their condition.

How does this happen?

You tell us.

January is National Soup Month

Butternut/Winter Squash Soup
This delicious, warm soup is low in calories and good for you!

Ingredients
2 1/4 lbs butternut squash
1 cup chopped onions
1 tbs grated fresh ginger
1 tbs butter
4 cups vegetable or chicken broth

Directions
Preheat oven to 450. Cut squash in half lengthwise. Scoop out seeds and place cut side down on a baking sheet. Roast the squash for 40-45 minutes or until it is very tender. Allow squash to cool. While the squash is roasting, sauté the onion and ginger in the butter over medium heat until the onion is translucent and soft. Add the broth, cover and simmer for 10 minutes. Scoop the cooled squash from the skin. Place half the squash and half the broth in a blender. Puree until smooth. Repeat with the other half of the squash and broth. If needed, add water to achieve the desired consistency. Return the soup to the sauce pan and reheat. Salt and pepper to taste. If desired, garnish each serving with a spoonful of sour cream.
Makes 4 servings.

Amount Per Serving: 195 Calories,
Total Fat 4.6g, Total Carbohydrates
34.6g, Dietary Fiber 5.6g, Protein 7.8g

January is a good time to Plant Bulbs

Live for today, but plan for a showy spring. Get outdoors and plant bulbs! It’s an easy and low cost way to add color to your yard this spring. Below is a general list of bulbs which can be planted now; to be sure, check out the links.

Agapanthus
Alstromeria (Peruvian Lily)
Calla
Canna
Eucharis Lily
Eucomis (Pineapple flower)
Gloriosa (Climbing Lily)
Hemerocallis (Day Lily)
Lilium
Lily of the Valley
Nerine (Spider Lily)

Once you have done the work, make a note on your calendar for Spring to take a picture of your garden and send it to us.

Three Ways to Save Energy on Hot Water

1. Heater Jackets: These insulation “jackets” are especially made to fit a hot water heater and are secured with special ties.



2. Pipe Insulation: By wrapping hot water pipes with pipe insulation made for this purpose, you can keep hot water hot longer, and, therefore, save fuel. A big advantage is that hot water will flow at the faucet faster—so there also is some savings on water. There are several styles of pipe insulation available.



3. Lower Thermostats: Keep the water thermostat between 110 to 140 degrees. If you run out of hot water often, the problem isn’t temperature but the small capacity of the heater. You may want to replace it with a larger model.

Ten Low-Cost Fixes to Spruce Up Your Home

Now that the holiday decorations are put away for another year (they are, aren't they!) take a look around your home. A little work here and there will make a big difference. You don't have to spend a fortune to spruce up your home. Just paying attention to some of the smaller details can make a huge impact right away. Here are 10 inexpensive tips:

1. Trim bushes so they don't block windows and cut down on light.


2. Buy a new doormat.


3. Put a pot of bright flowers (or a small evergreen in winter) on your porch.


4. Upgrade the outside lighting.


5. Polish or replace your house numbers.


6. Clean your gutters.


7. Buy new pillows for the sofa.


8. Make a centerpiece for your table with fruit or artificial flowers.


9. Replace heavy curtains with sheer ones that let in more light.


10. Clean. Everything and anything. (We started with the inside of the refrigerator!)

Let us know what you do, and how you feel when it's done. Send a picture if you can.

Federal Tax Creditsfor Energy Efficiency Extended in 2009

On October 3, 2008, President Bush signed into law the “Emergency Economic Stabilization Act of 2008” which included an extension of the residential tax credits for energy efficient improvements. The previous tax credit expired at the end of 2007. The extension is for improvements made January 1–December 31, 2009. Improvements made in 2008 are not eligible for a tax credit.

Selected Tax Credits

$300* Central air conditioner or heat pump.
$150* Furnace or boiler.
Up to $200* Windows.
Up to $500* Insulation and sealing.
Up to $2,000 Ground-source heat pump.
* Maximum of $500 total for home improvements.

What is the difference between a tax credit and tax deduction?
A tax credit reduces the tax you pay, dollar-for-dollar. Tax deductions—such as those for home mortgages and charitable giving—lower your taxable income. If you are in the highest 35-percent tax bracket, the income tax you pay is reduced by 35 percent of the value of a tax deduction. But a tax credit reduces your federal income tax by 100 percent of the amount of the credit.

What do I need to do to get the tax credit?
File IRS Form 5695 with your taxes. In addition, you will need to keep receipts proving that you purchased the improvements and a copy of the manufacturer’s certification (or the ENERGY STAR label for windows).

Visit the IRS website at http://www.irs.gov.com/ for full information.

New Year, New Laws

With the housing market taking center stage among the nation's concerns, both Congress and California's State Legislature have enacted significant new laws affecting real estate agents and real estate transactions. Topics of the new laws are below. Highlights of the new laws are summarized here. To view the full text of a California legislative bill, go to http://www.leginfo.ca.gov/.

Late 2008 Laws:

Debt Relief Income Exempt from State Income Tax
Started September 25, 2008

Tenant Victimized by Domestic Violence Can Terminate Tenancy
Started September 27, 2008

Emergency Economic Stabilization Act May Help Homeowners
Enacted on October 3, 2008

Pool Drains Must Be Properly Covered
Starting December 19, 2008

2009 Laws:

DRE Can Discipline Licensee for Inflating BPOs
Beginning on January 1, 2009

DRE Can Suspend Licensee for Acting Against Public Interest or Committing an Offense Involving Dishonesty
Commencing January 1, 2009

Duty to Disclose Agent is Arranging Financing
Starting January 1, 2009

Landlords and REO Lenders Must Take Charge of Abandoned Animals
Effective January 1, 2009

Title Company's Promotional Items and Marketing Reps Regulated
Effective January 1, 2009

No Text Messaging While Driving
Commencing January 1, 2009

Right To Farm Disclosure
Effective January 1st, 2009

DRE License Number Must Be on First-Contact Materials
Effective July 1, 2009