7 Home Improvement Projects for $1,000 (or Less)

By: Lisa Kaplan Gordon Published: November 1, 2011

Americans still think buying a home is one of the best decisions they’ve ever made. Here are some ways to increase your home’s value and comfort for less than $1,000.

We knew reports of the death of American home ownership were greatly exaggerated (nod to Mark Twain), and now we’ve got the numbers to prove it.

A just-released survey by the Meredith Corp., which publishes Better Homes and Gardens magazine, says the vast majority of people polled believe owning a home is a smart financial move and a source of pride.

Here are some results of the 2,500 people surveyed online:

• 86% of home owners still feel owning a home is a good investment.

• 85% feel "owning a home is one of their proudest accomplishments."

• 69% of Americans who don’t currently own a home agree with the statement, "No matter what happens in the U.S. housing market, owning a home is still an important goal in my life."

• 68% of Americans plan to spend money on their homes in the next six months, with roughly half (49%) expecting to pay up to $1,000.

A thousand bucks may not seem like a lot, but it goes long way toward improving the value and comfort of your home. Here are some projects we recommend:

1. Add a new entry door. Spruce up your curb appeal and save energy by upgrading your exterior door. Steel doors, which can mimic many types of wood, typically run for $400 at big-box stores and offer the strongest barrier against intruders.

2. Get organized. Decluttering and maximizing storage space are inexpensive ways to transform a home. Add space to kids’ rooms by installing platform or bunk beds ($400-$600); neaten piles of shoes with shoe organizers ($20), which can do double duty as catch-all organizers in family room closets and kitchen pantries; extend bookshelves to the ceiling, creating storage in otherwise dead space.

3. Save with a programmable thermostat. Switching from a manual to a programmable thermostat (less than $500) can save you up to $180 a year in energy costs. The latest models offer remote programming via the Internet.

4. Replace cabinet hardware. If you’ve got traditional knobs and pulls, try contemporary; change from staid to whimsical. Big-box retailers often have huge selections for budget prices. (10-pack for $20).

5. Update bathroom flooring. Give bathrooms a quick facelift by replacing old tile with vinyl flooring or ceramic tile, which can cost as little as $3 per square foot for material and installation.

6. Create luxury with a shower panel. Turn you bathroom into a spa with a programmable shower panel with adjustable spray jets, fog-free mirror, and multifunctional shower head. Most systems easily attach to existing plumbing. Panels typically sell for $360.

7. Turn a mudroom into a garden room. Bring nature inside by recasting your drab mudroom into a flower-filled garden room. (If you already have a utility sink, you’re halfway there. If not, it will cost you $200 to $350 to tap into existing, nearby plumbing, and $80 for a plastic tub.) Repurpose an old wood table into a potting bench. And hang your basket collection from J-hooks attached to a forged iron curtain rod ($100).

www.KeyCaliforniaHomes.com

Need a Real Estate Expert! Call Laura Key today! Caring and professional! 

Foreclosed Home Owners Become New Crop of Buyers

Foreclosed Home Owners Become New Crop of Buyers

DAILY REAL ESTATE NEWS | WEDNESDAY, JANUARY 16, 2013

Home owners who faced foreclosure a few years ago are back, and they increasingly want to buy a home again, mortgage brokers report.

The Federal Housing Administration allows people who have lost their home to foreclosure to purchase a home again three years following a foreclosure.

"It's an interesting phenomenon because, three or four years ago, these people were losing their homes. Now they're out shopping for a new home,” says Chris Apodaca, a California mortgage broker. “It wasn't swift and sweeping legislation that did it, simply a matter of perseverance. These folks waited three years and now they can buy again.”

About 1 million families enter foreclosure every year, according to the Mortgage Bankers Association of America.

Source: Broadview Mortgage

www.KeyCalifonriaHomes.com

Great HUD Condo in Culver City! $277,000

Great HUD Condo in Culver City! $277,000! Don't Miss Out! http://ow.ly/fio7Z

Leimert Park

One thing about relocation is you get to explore all the wonderful new areas around you.  When you get settled into a place you become a bit blind to the things around you that tourists make it a point to see, so I am taking advantage of all the wonderful new history and soaking it into my spirit.

In my research of interesting areas in Los Angeles, I stumbled upon a section of town that I now look upon with wonder and excitement.  Leimer Park!  Where on earth have I been since moving here?  This is an area I should have found first!

The area is rich in "African-American" history.  It's rooted in the arts and community.  Now that is what I am talking about!  Known as a hub of jazz, this is one place I will be spending the majority to my time.  Ray Charles and Ella Fitzgerald were once residences here!

There have also been many well-known films that were shot in Leimert Park such as John Singleton's "Baby Boy" and the filmed directed by Martin Lawrence "A Thin Line Between Love and Hate".  Not to mention several success shows!

The Real Estate has a history of its own. Touting mansions among the average Joe.  The average price range in the area is around $350,000 but they contain so much more living space than the more "ooo la la" neighborhoods of Los Angeles.  A treasure within a treasure....Leimert Park, here I come.

To learn more about the historical area check out http://en.wikipedia.org/wiki/Leimert_Park,_Los_Angeles

Follow me on Twitter, Facebook, Yelp, Google+ and Foursquare! Maybe we can share some laughs and smiles along the way.

How to Buy a Short Sale

Are you considering buying a short sale? More and more homes listed for sale these days are short sales and buying one can save you 20 percent or more. However, there are some major differences about short sales that you should know before you make an offer.  Short sales are way for homeowners who are in financial trouble to get out of their mortgage obligations and get on with their lives. They lose their homes and they suffer nearly as much damage to their credit as if they go through a foreclosure. However, short sales are faster today than foreclosures, which can take a year or more. That's a major reason more and more owners are choosing foreclosures. The average foreclosure now takes 587 days from the time the owner defaults until the property is re-sold. It's no wonder families facing foreclosure want an alternative. In the past two years, short sale volume has tripled and they are expected to increase by another 25 percent in 2011.

Short sales make sense when owners owe more on their home than it is worth and they are 90 days or more delinquent on their mortgage. Under those conditions, lenders are willing to take a loss on the sale of the home.

For buyers, getting your offer accepted and then closing on a short sale can be more complicated and takes longer than a normal transaction. The more prepared you are for dealing with a short sale, the more successful you will be.

Buyers need patience, patience, patience. Though they are faster than foreclosures today they are not speedy. Short sales can take six months or longer. When short sales became popular several years ago, most lenders were neither staffed or prepared to handle them. Many lenders dragged their feet because they would prefer not to take the loss, or to delay putting in on their books as long as they can. The greatest problem many short sales run into is the fact that most mortgages today are securitized—bundled with mortgages and sold as securities to investors around the world. Getting approval for a short sale from the actual owners can be mind boggling.

If you're a buyer considering entering into a short sale, don't even think about going it alone. Consult a real estate professional who can answer your questions and help you navigate the process. In recent years, thousands of real estate professionals have obtained special training on short sales. New software platforms help them manage the short sale process, which can be like herding cats.

If you're ready for the challenge, here are six important steps you can take to significantly save time and improve your chances of landing a short sale.

1. Get your credit in order before you start looking at houses. If you're bidding on bargain you'll be bidding competitively, possibly against investors paying all cash. That's tough because when lenders see all cash they also see no risk. Do everything you can to reduce the risk factor by having your credit in tip top shape, putting down as much as you can muster and getting a Pre-Qual Plus letter. DON'T buy anything expensive on credit or be late on a credit payment by even a day until the deal is done.

2. When you make an offer, make a strong one and . Many first-time home buyers put down an earnest money deposit of $1,000, but an amount between 1 percent and 3 percent of the sales price puts you way above the crowd. The minimum down payment for FHA loans is 3.5 percent of the purchase price, and the earnest money is part of that down payment. Some real estate contracts call for the earnest money deposit to be placed into a trust account upon short sale approval. Sellers like to see that buyers are ready to put their money where their mouths are, because it shows that those buyers are committed to the transaction.

3. Do your homework on pricing. Check comparable sales on Realtor.com. Some short sale listings are deliberately priced under market value to attract eager buyers, but it doesn't mean the home will sell at that price. However, many banks will approve a short sale that is priced between 5% and 10% under market. Call the listing agent to find out if there are other offers. If the agent has already received a number of offers, your offer may need to be priced much higher than list price. If the seller has already accepted an offer and sent that offer to the bank, you may be wasting your time trying to buy that home.

4. Shorten your contingency period for inspections. In most states standard purchase contracts give buyers from 14 to 30 days to conduct inspections without jeopardizing their deposits. That means the home is basically off the market while the buyer does due diligence, and the house is not considered solid until that contingency period ends. You will speed up the process and gain a competitive edge if you can line up two or three inspectors in advance and cut your contingency period in half in your offer.

5. Communicate patience. If you're not willing to be patient, don't get into a short sale. It's not enough to be patient, you must also communicate the fact that you are willing to wait on the bank for the short sale approval process. Although it is possible to receive short sale approval within 3 to 4 weeks, many banks take at least 6 to 8 weeks, and sometimes longer, to approve or reject short sales. Be prepared to wait 120 days and to act immediately if approval arrives earlier. The biggest problem short sale listing agents and their sellers face is buyers who walk away. No short sale listing agent wants to work on a transaction for several months only to find out the buyer whose offer was accepted has vanished upon short sale approval.

At the end of the short sale rainbow lies a great deal on a home that would have cost you thousands more if it were not a short sale. Though you may have to wait months to close, your new home will probably be in better shape that it would be if it were a foreclosure and sat vacant for a year or more.

Source: By Steve Cook Real Estate Economy Watch

Ready to purchase your home? A little home education will help you enjoy the journey!  Contact Laura Key for a schedule of Home Buying Classes! Laura.A.Key@gmail.com www.KeyCaliforniaHomes.com

Risks of Leasing a Home with an Option to Purchase

I get a "TON" of questions about Rent to Own properties.  I am not saying NONE of them work but I can speak of experience to say, I have never had anyone who tried to participate in one come out on top.  Buyers....beware...if it looks too good to be true, it is.  Call me, let me help you get what you need so you can buy the "right" way. In today’s economy, many people are looking to rent a home or an apartment instead of purchasing a home due to financial hardship.  Renting is an excellent alternative for anyone not able to afford a home today and needs to get their lives settled before taking the leap to home ownership once again.

Today, when searching for rentals, many have found themselves coming across the term “lease-option.”  Before considering entering into a lease with option to purchase, one must do two things first:  1.) research it heavily to make sure it’s the right choice for you, and 2.) consult areal estate attorney.

The initial information below is a good place to start in realizing some general risks involved with a lease-option.  This is strictly informational purposes only, not legal advise.  You are strongly urged to seek legal counsel if you have any legal or financial questions with regards tolease-options.

What Is a Lease Option?

A lease-option agreement is an alternative to purchasing a home where the home is leased to a household that may not be able to qualify for a mortgage.  A right to purchase the home may be exercised after a certain amount of time.  The lease-option may lock in a sales price and preserve the property until the Buyer obtains a mortgage.  The Buyer can receive credit towards the purchase price for the rentals the Buyer pays to the Seller.  If the Buyer decides not to purchase the property, the Buyer can walk way without exercising the option to purchase.

Disadvantages of a Lease Option

LEASE PAYMENTS ARE HIGHER:  In a lease-option, the monthly payments are typically higher than the current going market rent rate.  This is normally to compensate the Seller in return for locking the home in a lease instead of being able to offer the property for sale to the public. The difference between the going rate and actual lease payment rate can go toward the future down payment if the option is exercised, depending on the contractual terms of the lease-option.

FORFEITURE OF PAYMENTS:  In a lease-option, the Buyer forfeits everything paid to the Seller if the Seller cancels the lease due to things such as late payments and canceled insurance.  The Buyer will also forfeit all payments that have been made if Buyer does not complete the purchase. The “option” as well (lump sum paid at the execution of the agreement) is normally forfeited (per contractual lease-agreement terms). CURRENT MORTGAGE MAY PROHIBIT SUCH A TRANSACTION: If there is an existing mortgage on the property, the current mortgage may prohibit the owner from entering into a lease-option agreement.  The lender may have the right to demand the entire amount of the loan if the owner sells or enters into a long-term lease.  Your rights may be cut off by the lender unless you or the seller has the ability to immediately pay off the underlying loan. NO PROTECTION FROM ACTS OF SELLER:

• Judgments Against Seller - The Seller may not be able to deliver a clear title when the right to purchase is exercised.  Judgments obtained against the seller may attach to the property if a notice of option right is not recorded.  If an option is recorded, however, the lender may elect to enforce the due on sale clause and demand immediate payment of the note. Unless the buyer or the seller can pay off the underlying mortgage loan balance, all rights may be cut off by the lender.
• Bankruptcy of the Seller - If the seller files bankruptcy, your rights may end.  Even if you have paid on the lease-purchase for several years, you may find yourself with no rights and no legal recourse against the seller.
• Death of Seller - If the Seller dies before Buyer obtains legal title, the Buyer may not be able to get clear title unless the Seller's estate is probated.  If estate has little or no money there may be little incentive to probate the estate.
• Unscrupulous Seller - An unscrupulous Seller may transfer title to another Buyer or borrow money against the house creating an additional mortgage.  Since a lease-purchase typically not recorded, another buyer would have no notice of your property interest.  The new buyer may take title to the property, free and clear,cutting off the original Buyers' rights.  The only way for Buyers to protect themselves against claims against their title is to record the lease purchase agreement at the courthouse.  ..... Sellers usually do not want Buyers to record lease-option agreement, because recording may trigger a due-on-sale clause.  Recording a lease-purchase agreement may also put a cloud on the title of the Seller, limiting what they can do with the property.  

HOMEOWNERS INSURANCE POLICY: the Seller usually requires the Buyer to pay for insurance and taxes on the property.  If the Seller carries a standard homeowner’s insurance policy, the lease-option agreement may terminate the coverage of the policy.  ... If the policy is changed to permit the lease, the insurance company will send a new copy of the insurance policy to the lender, potentially violating the due-on-sale clause.  If the policy is not changed, the Buyer and Seller runs the risks that there is not a valid insurance policy covering the property and that the mortgage will be violated since there is no a valid insurance policy on the property.   ....If something were to happen to the property, and the property is insured properly, the Seller will collect proceeds.  The amount the Buyer pays the Seller for the house will not be reduced. IMPROVEMENTS MADE BECOME THE PROPERTY OF THE SELLER: Until the Buyer pays for the property in full, any improvements to the property (e.g. new kitchen cabinets) by the Buyer will be the Seller's property.  The Seller does not have to reimburse the Buyer for costs associated with improvements even if the Seller evicts the Buyer. Ways to Protect Yourself from Lease Option Risks

Examine the options available to you before you decide to enter into any type of agreement.

• Have an attorney review your agreement.
• Buyers should have a professional home inspector inspect the property, especially if agreement states the property is in "as is" condition.  
• Take photos and video tape the entire property for current condition upon taking possession.
• Make sure the initial lease-option inspection/walk thru paperwork is signed by both yourself, and the Seller/Landlord.
• Obtain title insurance.  The title company can insure that there are no existing judgments or liens against the property when the lease-optionis entered into.  It will not protect the Buyer against any judgments filed against the Seller after the date the lease-option is entered into.
• Record a Memorandum of Option.  This gives notice that an option to purchase the property exists and may protect the buyer against judgments filed against the Seller after the date the lease-option is entered into.  WARNING:  The recording of a Memorandum of Option may trigger a due-on-sale clause.

Buyer Beware

Please visit these resources for more information on lease-options, the current trends, scams and risks involved:

Risk of Lease Option - High Failure Rate

Risk of Lease Option - Losing Your Option

Risk of Lease Option - Can Turn into Disaster

Lease Option - Q&A

THE LEASE OPTION - General Information

A lease option is the abbreviated form of the appropriate term “Lease With the Option to Purchase.” It is a type of contract used in both residential and commercial real estate. Commercial real estate can get pretty complex so we are going to stick with residential.

The contract is typically between two parties: the tenant (also called the lessee), and the landlord (lessor), who owns or has the right to lease or dispose of the property.

As the name lease with an option to purchase says there are two events and one is not mandatory. In order to have a valid option the tenant/buyer must provide valuable consideration for the option. In other words buy the right to purchase at a later date at an agreed amount of money.

The lease option only binds the seller to sell, it does not bind the buyer to buy. That is why consideration is important. Valuable consideration is approximately 1-3% but there is no rule.

The basic elements are

1. Buyer purchases the option, the parties agree to what the cost of the option is.

2. The parties agree to a purchase price. It can be decided that the price will be appraised value at the time the option is exercised.

3. The length in residential real estate is typically 1-3 years and may start to get longer because of the current credit conditions (spring 2010)

4. How much the monthly lease payment is, whether any of the lease payment is to be credited towards the purchase price reducing the purchase amount.

5. Whether the tenant/buyer will occupy the property or whether the tenant/buyer has the right to sub lease or the right to sell the option.

6. An investor may acquire a distressed property with a lease option and make improvements to the property. Then the investor can sell the option to a buyer that is willing to pay the new market value for a profit. It is a common financing technique with investors.

6.a An example of this. Seller has a property that needs considerable amount of work.Retail buyers typically cannot get financing or have too much to choose from to bother with physically distressed properties. Investor enters into a lease option agreement for let’s say $100,000, rehabs the property with about $20,000 and now the market value is approximately $135,000 the investor can sell the right to purchase for $35,000 and the new buyer would close with the original seller for $100,000

6.b Another example of this would be a buyer buys the same property and uses their own money to rehab and may use their rehab money towards the down payment. This allows the buyer to NOT have to come with a large down payment and rehab money.

Everything functions like a lease except there is a schedule when the buyer can decide to purchase the property.

The terms of the lease have to be negotiated also. The responsibilities of maintenance, utilities, taxes, pets, how many occupants, what type of insurance...

During the term of the lease option, the tenant makes lease payments to the landlord for the use of the property with the terms mutually agreed. At the end of the contract, the tenant has the option to purchase the property outright; the tenant would typically obtain the money to do this using a mortgage.

Excess credit may also be applied towards the eventual purchase of the property, or towards the down payment for a mortgage (CAUTION, the buyer and seller can agree to whatever they want, but when the buyer goes to get permanent financing the bank has guidelines to what can be applied towards the down payment or the purchase. Typically a banks only allow an amount that is above and beyond market rent to be considered for a down payment) In that case, the lease option works as an automatic savings plan for the tenant. This down payment is applied as part of the "option consideration fee"; in the arena of lease option purchasing this is a fee charged for the right to purchase the property.

Reasons for using a lease option

1. Buyer is relocating and may need to sell a property in another area before the buyer can qualify to purchase the new home.

2. Buyer may have had some credit issues that have since been resolved and can afford the payment but needs to time to get permanent financing.

3. Buyer may have started a new business and otherwise qualifies and can afford the payments.

The lease option may carry less risk for the landlord than a mortgage would for the lender. In the event of non-payment, it may be possible to remove the tenants through eviction, which is likely to be cheaper than foreclosure on a mortgaged property. The lease option may also require less money up front, while a mortgage might require a substantial down payment from the tenant.

If the tenant does not exercise the option to purchase the property by the end of the lease, then any up front option money along with any monies that the tenant paid in addition to the market rental rate for this option may be retained by the owner depending on the agreement. This might occur if the tenant no longer wishes to purchase the property, or if the tenant wishes to purchase the property but is unable to obtain the financing required to do so.

Advantages to the seller. Allow the seller to sell a property that they may not have otherwise been able to sell. Most cases a seller can net more money when offering terms to a buyer.

There is an expression, “Price or Terms, Pick One” Usually you get one over the other. So for a seller to get a better price they can offer terms that favor the buyer and the opposite is true. For the buyer to get a favorable price the terms usually have to favor the seller.

Default if the buyer defaults and the contracts are drafted properly then there is an automatic tenant landlord relationship. All valuable considerations are typically surrendered and then it would be an eviction.

Some forms of lease option have been criticized as predatory, if a lease option is sold to a tenant who cannot realistically expect to ever exercise the option. These types are usually but not always advertised as “rent to own”. Owner Carry, Seller Financing, Owner will Carry, Owner Carryback are all terms that can be used for Lease Option purchases.

Default if the buyer defaults and the contracts are drafted properly then there is an automatic tenant landlord relationship. All valuable considerations are typically surrendered and then it would be an eviction.

Some forms of lease option have been criticized as predatory, if a lease option is sold to a tenant who cannot realistically expect to ever exercise the option. These types are usually but not always advertised as “rent to own”. Owner Carry, Seller Financing, Owner will Carry, Owner Carryback are all terms that can be used for Lease Option purchases.

When Will the Housing Supply Normalize?

"Realty Goddess" note: I hate predictions, they depend on who is the person with the prediction.  The real estate market changes every single day and those of  us in the trenches are fighting the good fight, but I thought this one was worth sharing"

The housing supply is expected to normalize in two to four years, Barclays Capital projects, assuming that household formation rates increase to 1.1 million and construction remains slightly above 2011 levels.

Household formation–which is a reflection of population growth and housing affordability–has drastically dropped since 2007, reaching about 300,000 to 500,000 per year. Historically, the rate is about 1.25 million.

Home prices will likely see a 1 percent appreciation this year (that’s after falling 3 to 4 percent through March), Barclays Capital estimates. It is also projecting a 1 percent price appreciation in 2013, followed by 2 percent to 3 percent appreciation levels.

But to reach those goals, the housing supply needs to continue to shrink first. Our region in the Sierra Foothills of Placerville, California is experiencing a low supply in the under $300,000. price range. This is the primary market for first time home buyers and cash investors. So we’re off to a supply, demand race for the spring market?

Source: “Barclays: Housing Supply Could Normalize in 2014,” HousingWire (3/2/12) by Bud Zeller

Levitated Mass Moves to LACMA

Love it or Hate it  the "ROCK" is here!  After a long and slow 105 mile journey the new attraction has arrived at its destination!  The 340 ton boulder from a riverside quarry will be the star attraction for the "Levitated Mass." attraction!

As I write, I am looking outside our 29th story window at the massive attraction and have a few mixed feelings.  I love art, it's pretty cool to see it hanging from the truck it was pulled in on however what true purpose does it serve the community.  I guess I have "limbo thoughts" just as it hangs in limbo from the massive chains awaiting its final placement.  

I do love being in the middle of it all!  If you love being in the thick of the action, there are many homes available in this area for you to pick from.  Please call me with any questions you may have.  As always, I am "Making Miracles Happen from the Miracle Mile"

Underwater Sellers, what are your Options? Cash to Short Sell? Cash for Keys? Foreclosure?

We get these questions and would like to share our thoughts about this dilemma.  Some home owners who are underwater may not know their alternatives. The “Cash for Keys” is a program that banks do for some home owners. The “new twist” you’ll be hearing more about is “Cash to Short Sale”. Lenders are figuring out that if there is anything they can do to make a deal happen, they need to do it. This apparently is what is starting to take place with people that are trying to “short sale” their homes. Instead of “Cash for Keys” to homeowners that lose their homes to foreclosure. This was not offered to home owners who were trying to short sale their home. Often the banks would basically give them a certain time to complete the short sale until they foreclosed.

Now because of tight lending practices, new buyers would take so long to qualify, it is often “too little, too late” to close escrow before foreclosure.  When that happens it seems everybody loses. The lenders lost a willing & able buyer and the seller because, now, not only did they lose their home to a foreclosure, but also because a foreclosure was now on their credit report instead of a short sale. (It may be better to have a short sale than a foreclosure on a credit report?) Plus, the buyer may or may not wait until the home came back on the market at a later date.

Source:  http://realtyworld-sierraproperties.com by Douglas Zeller

The U.S. Foreclosure Crisis, Beverly Hills-Style

The dynamics of the residential real estate collapse are very different in elite neighborhoods

The careworn house not far from Santa Monica Boulevard resembles millions of other homes that have been foreclosed on since the calamitous U.S. housing crash four years ago.

Garbage spews from trash bags behind the property. A smashed television leans against broken furniture. A filthy toy dog lies on its side, an ear draped across its face. The garden is overgrown. The house needs a paint job.

Yet the property on North Rexford Drive, Beverly Hills, California, is no ordinary foreclosure.

A sprawling, Spanish-style estate, fringed by majestic pine trees and located near the boutiques of Santa Monica Boulevard, its former owners were served with a default notice in 2010; they were $205,000 behind in their payments on mortgages totaling $6.9 million.

Welcome to foreclosure Beverly Hills-style.

Some 180 houses in Beverly Hills, the storied Los Angeles enclave rich with Hollywood stars and music moguls, have been foreclosed on by lenders, scheduled for auction, or served with a default notice, the highest level since the 2008 financial crash, according to a Reuters analysis of figures compiled by RealtyTrac, which tracks foreclosures nationwide.

As in the default-ravaged suburban subdivisions of Phoenix, Arizona, and Tampa, Florida, plunging realestate prices are the root of the problem in Beverly Hills.

But the dynamics of the residential real estate collapse are very different in elite neighborhoods such as this. The majority of delinquent homeowners here owe more than $1 million. Many are walking away not because they can't pay, but because they judge it would be foolish to keep doing so.

"It's a business decision, not an emotional one which it is for normal people," said Deborah Bremner, owner of the Bremner Group at Coldwell Banker, which specializes in high-end properties in the Los Angeles area. "I go to cocktail parties and all people are talking about is whether it is time to walk away, although they will never be quoted in the real world."

She said she had seen in Beverly Hills a big increase in "strategic defaults," in which owners who can still afford to make their monthly mortgage payment choose not to because the property is now worth so much less than the giant loan used to buy it during the housing bubble.

Strategic default is an especially appealing option in California, one of only a handful of U.S. states where primary mortgages made by banks are "non-recourse" loans. That means the loan is secured solely by the property, and banks cannot go after a delinquent owner's wages or other assets if they default.

Bremner said she helped a client buy a Beverly Hills mansion last year that the prior owner had bought for over $4 million. He decided to stop paying his $3 million mortgage - even though he could easily afford it - when the value of the property had dropped to $2.5 million.

"They were able to comfortably cover the loan," Bremner said. "They were just no longer willing to see the value of the property drop."

A huge "shadow inventory" is building of elite homes that are in default but have not been put on the market. Of the 180 distressed properties in Beverly Hills, only 12 are up for sale.

The backlog reflects the pent-up flood of foreclosed properties of all price ranges that are expected to hit the U.S. market this year, especially after five major banks reached a $25 billion settlement last week with the U.S. over fraudulent foreclosure practices.

'Jumbo' loans Across the United States, the largest increase in foreclosures and delinquencies, compared with 2008 levels, is with "jumbo" mortgages - loans too large to be insured by Fannie Mae and Freddie Mac, the government controlled mortgage finance providers. Foreclosures on jumbo loans are up 579 percent since 2008, greater than any other form of loan, according to a report last month by Lender Processing Services, Inc.

Strategic defaults are now more likely among jumbo loan-holders than any other type of borrower, according to a report issued late last year by JPMorgan Chase & Co. Nearly 40 percent of delinquencies among non-governmental mortgages, which are mostly jumbo loans, are strategic defaults, the report said.

"Now that these homeowners with jumbo loans are finding out you can do this, more and more are doing strategic foreclosures," said Jon Maddux the CEO of YouWalkAway.com, which advises homeowners who are "underwater," the term for those whose loans exceed the value of their home.

Nathaniel J. Friedman, a Beverly Hills lawyer, insists he is not a strategic defaulter - that he never missed a mortgage payment in his life. But he stopped making payments on his five-bedroom, six-bathroom Beverly Hills house on Schuyler Road three years ago.

Friedman, who had mortgages totaling $3 million with the now-defunct Countrywide Home Loans, returned home one evening in January 2009 to find a letter from Countrywide freezing his $150,000 line of credit, which was linked to his second $900,000 loan. His primary loan was $2.1 million. The property is worth about $2 million today.

Friedman says he decided to stop paying out of a sense of vengeance from the moment he received that letter. He has been in negotiations for months with Bank of America, which took over Countrywide after its collapse, to modify the loan.

"I thought to hell with it," he told Reuters. "Why should I keep feeding a dead horse if the bank has no confidence in me?"

"I was able to maneuver things my way because of the inertia of the banking sector," Friedman said. He believes the bank will blink first, and eventually modify his loan.

Source:   Thomson Reuters, www.msnbc.msn.com/id/46411361/ns/business-real_estate/#.Tz1aT8VSSKY

Mortgage-Audit Firm -- Surprise! -- Finds Lots of Errors in Foreclosures

A study of California foreclosures released late yesterday found that 99% of the files examined had some sort of irregularity and 84% of them had “one or more clear violations of law.” The study provides fresh evidence, to some, that the $26 billion foreclosure settlement withBank of America and other big lenders was just a down payment on their ultimate liability for “robosigning” and other illegal acts.

But let’s look at the report, and who wrote it. It’s byAequitas Compliance Solutions, a Newport Beach, Calif. firm that says it specializes in “complex litigation, investigation and internal audit issues” for regulators, investors and homeowners. In other words, Aequitas earns its keep by finding errors in mortgage paperwork for lawyers and regulators. It also has a unit that does court- or regulat0r-appointed compliance monitoring of lending institutions — a growing business as regulators crack down on mortgage servicers and get them to sign settlements that require continuing oversight by outside entities. Under the national foreclosure settlement, banks agreed to hire North Carolina’s former banking commissioner, Joseph Smith, as an independent monitor .

There’s nothing wrong with this, and I’m not suggesting Aequitas was biased or found irregularities that weren’t there. But readers should always consider the source. And once again, while the report found extensive errors, they were almost entirely upstream of the homeowners who were failing to make their payments on time. The closest thing to an error that directly affected a borrower was the failure to properly give notice of default “in person or by telephone.” In 6% of the foreclosures, Aequitas found no affidavit attesting to compliance with this requirement under California law. Does that mean that notice wasn’t given, or that the affidavit was missing? And does it mean that any of the 6% were not in default, and only found out they were going to be foreclosed when a sheriff walked up their driveway? The report doesn’t say, but I doubt it.

What Aequitas did find was a laundry list of technical violations in how the paperwork accompanying a foreclosure was processed. Seventy-five percent of the foreclosures had an error in the assignment of the deed of trust, meaning the handoff between one lender and another was botched in some way. This would be of concern to investors who own the underlying notes — but has there been a single case of an investor suing because the collateral ended up in the wrong hands? Aequitas found that in 27% of the foreclosures a trustee or servicer signed an assignment of the deed of trust, instead of the original owner of the note, for example. That couldmean that somebody snuck into the courthouse and stole a deed of trust that actually belonged to somebody else. Has it happened? Does it affect in any way the rights of the homeowner who isn’t paying his mortgage? The only way I can think of is if the homeowner wants to delay the foreclosure by asserting legal errors in the process.

The firm also found a number of foreclosure sales that occurred less than 20 days after the Notice of Trustees sale, casting doubt on the legitimacy of the title transfer to the new owner. That would be a problem for whoever buys the house from the bank. And there’s a thing called title insurance to cover that, I believe. (Though in Massachusetts, it could be a problem.) But no matter, it is a problem, and the banks could be liable for the damage it causes.

Aequitas also found widespread problems relating to MERS, the nationwide database for mortgages that lenders use to streamline foreclosures. In 58% of the sales, the beneficiary listed in the Trustees Deed Upon Sale conflicted with the investor information in the MERS database, the firm found. The report doesn’t explain how the discrepancy could cause a homeowner to be illegally sold out of his house.

Aequitas notes in the introduction that bankers complain “inadvertent violations should not provide windfall benefits to reckless borrowers.” That ignores the important role of California law as a last line of protection for borrowers against abusive practices by lenders, Aequitas notes. California, like many other states, allows banks to include clauses in mortgages allowing for non-judicial foreclosures with less court oversight. That comes at a cost, Aequitas notes — as would requiring every mortgage to allow only judicial foreclosure. Foreclosures in New York City have virtually ground to a halt as judges question the paperwork and require lawyers to personally attest to its accuracy.

Conservatives typically are accused of elevating legal process above substance, of looking only at whether the courts followed the rules and not whether the outcome was just. In this case, the roles are reversed. As the Aequitas report shows, the foreclosure process was “utterly broken,” with missed handoffs and improper documentation nearly every step of the way. Homeowner advocates want to use those errors to slow down foreclosures, distribute $1,500 checks to people who already lost their homes, and impose tougher regulations on lenders. As Aequitas puts it:

What’s at stake here is more than merely fairness and minimal due process. Foreclosures impact not only homeowners, but also entire communities and housing markets. The integrity of California’s record title system is also at stake because the validity of title for subsequent purchasers is dependent on those that precede it.

It’s the conservatives who are saying wait: Despite the errors who was actually hurt? The law makes for ironic role reversals.

Source: Daniel Fisher, Forbes Staff www.forbes.com

A List of My Favorite LA Things ... AND ... Not So Favorite

It's been six months now since my move to Los Angeles.  Every day brings a new adventure and new things that take may take me a little time to get use to.  I know every city has pro's and con's but I thought as a new resident I would share some of my list with you.

First let's discuss just a few of the PRO's.

1. LA has some of the most amazing sunsets! I work on the 29th floor and every evening when I am not out with clients I get to see the sky light up in the most amazing sky show ever.  I once read a bumper sticker that read "God Does Good Lighting".  I must agree.
2. LA has warm winters!  I tend to be on the "chilly side" of life but all in all, we do not have snow and the most we need is a light coat to get through December and January.  It's now February and it's 74°F!  Gotta love that you need sunscreen all year!
3. You never sit and twiddle your thumbs and ask yourself "What is there to do today?" you sit and throw a dart at a list of things and say "THAT ONE".  There is NEVER a lack of activity going on in Los Angeles.  Shopping, shows, beach walks, walking in the sun, basketball games, Dodgers games, etc, etc, etc.  The list never ends!
4. Diversity in culture!  I am a people watcher and sometime just sitting in the park and watching people can be the best afternoon entertainment.  Red and Yellow, Black and White, it's so precious to see this sight!  The languages intrigue me and I love it.
5. FOOD - GOD HELP ME....The food is endless!  Thai town, Korea Town, China Town, Sunset Strip, Melrose, Santa Monica.  You can't take two steps without finding a new place to temp your taste buds! I have yet to try the famous Roscoe’s Waffle and Chicken but that’s next on my list. Which leads me to the perfect realization that I will need a GYM soon and there seems to be one on every corner as well!
6. As I have posted earlier in my blogs…the La Brea Tar Pits.  It’s a childhood dream of mine and now I walk through the park almost daily.  Ah, the fresh smell of tar in the morning.  Nuf said!

There is so much more I can add to this list, but I will save those as we walk through this blog journey together.  So, how you liking the journey so far?

Let’s NOW discuss just a few things from my CON list.

1. The sidewalks are nasty and dirty and I hate to even walk in my own house after being outside.  I guess when you live in a place that has over 3,792,600 people (according to the US Census) it’s a little hard to keep a city sparking clean 24 hours a day.
2. I know this is not my home state of Kentucky, but I hate that people don’t really smile at you. I am use to looking people in the eyes and smiling and saying hello.  I don’t always get that back.  Oh well…that won’t stop me.
3. Traffic…OMG…I don’t think I need to say much more than that.  If you think a drive should take 20 minutes, you better count on an hour!  No logic for traffic at any time a day.  It could be midnight and you can sit in traffic! Being a Real Estate Agent this can be a “LOO LOO” for appointments.  It’s giving me the shivers as I type this.

So now you see at this point I have WAY more items on my PRO list than on my CON list.  All in all I’d say I am a happy California girl!

Follow me on Twitter, Facebook, Yelp, Google+ and Foursquare! Maybe we can share some laughs and smiles along the way.

Great West Hills Home 4 Bed 1.5 Bath

HUD HOME - WEST HILLS CALIFONRIA

$410,000

4 Bedrooms 1.5 Baths

Click Photo for Virtual Tour!

Banks Pay Homeowners to Avoid Foreclosures

"This is no joke! Our office just closed a short sale and the owner was paid $30,000" You have to fit into the "box" but if you do it's a great incentive against foreclosure!

Banks, accelerating efforts to move troubled mortgages off their books, are offering as much as $35,000 or more in cash to delinquent homeowners to sell their properties for less than they owe.

Lenders have routinely delayed or blocked such transactions, known as short sales, in which they accept less from a buyer than the seller’s outstanding loan. Now banks have decided the deals are faster and less costly than foreclosures, which have slowed in response to regulatory probes of abusive practices. Banks are nudging potential sellers by pre-approving deals, streamlining the closing process, forgoing their right to pursue unpaid debt and in some cases providing large cash incentives, said Bill Fricke, senior credit officer for Moody’s Investors Service in New York.

Losses for lenders are about 15 percent lower on the sales than on foreclosures, which can take years to complete while taxes and legal, maintenance and other costs accumulate, according to Moody’s. The deals accounted for 33 percent of financially distressed transactions in November, up from 24 percent a year earlier, said CoreLogic Inc., aSanta Ana, California-based real estate information company.

Karen Farley hadn’t made a mortgage payment in a year when she got what looked like a form letter from her lender.

“You could sell your home, owe nothing more on your mortgage and get $30,000,” JPMorgan Chase & Co. (JPM) said in the Aug. 17 letter obtained by Bloomberg News.

$200,000 Short

Farley, whose home construction lending business dried up after the housing crash, said the New York-based bank agreed to let her sell her San Marcos, California, home for $592,000 -- about $200,000 less than what she owes. The $30,000 will cover moving costs and the rental deposit for her next home. Farley, who is also approved for an additional $3,000 through a federal incentive program, is scheduled to close the deal Feb. 10.

“I wondered, why would they offer me something, and why wouldn’t they just give me the boot?” Farley, 65, said in a telephone interview. “Instead, I’m getting money.”

Tom Kelly, a JPMorgan spokesman, declined to comment on the company’s incentives.

“When a modification is not possible, a short sale produces a better and faster result for the homeowner, the investor and the community than a foreclosure,” he said in an e-mail.

A mountain of pending repossessions is holding back a recovery in thehousing market, where prices have fallen for six straight years, and damping economic growth. Owners of more than 14 million homes are in foreclosure, behind on their mortgages or owe more than their properties are worth, said RealtyTrac Inc., a property-data company inIrvine, California.

Foreclosure Holdouts

Short sales represented 9 percent of all U.S. residential transactions in November, the most recent month for which data is available, up from 2 percent in January 2008, according to Corelogic. Bank-owned foreclosures and short sales sold at a discount of 34 percent to non-distressed properties in the third quarter, according to RealtyTrac.

As lenders shift their focus to sales, they are finding that some borrowers would rather risk repossession while they wait for a loan modification, according to Guy Cecala, publisher of Inside Mortgage Finance, a trade journal. In a loan modification, the monthly payment, and sometimes principal, is reduced to help prevent seizure. Homeowners facing foreclosure may live rent-free for years before they are forced out.

“That’s why the banks have got to pay the big bucks,” Cecala said. “The real question is why is the bribe so big? Is that what it takes to get somebody out of their home?”

Multiple Banks

Banks also pay a few thousand dollars to the owners of second liens, whose loans can be wiped out by a short sale, to encourage them not to block the deals.

While JPMorgan is giving the largest incentive payments, other banks and mortgage investors are also offering them, according to interviews with 12 real estate agents in Arizona, California, Florida, New York and Washington. Lenders also provide incentives on loans they service and don’t own when the mortgage investor, such as a hedge fund, requests it.

JPMorgan, the biggest U.S. bank, approves about 5,000 short sales a month. It generally offers $10,000 to $35,000 in cash payments at settlement, real estate agents said. Not all of the sales include incentives.

Borrowers also can receive payments from the federal government’s Home Affordable Foreclosure Alternatives program, which in 2010 began offering as much as $1,500 to servicers, $2,000 to investors and $3,000 to homeowners who complete short sales.

Quicker Resolution

For banks, approving a sale for less than is owed on the home can cut a year or more off the time it takes to unload a property. From listing to sale, the transactions took about 123 days on average at the end of last year, according to the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey.

Lenders spend an average of 348 days to foreclose in the U.S. and an additional 175 days to sell the property, according to RealtyTrac. In New York, a state that requires court approval for repossessions, it takes about four years to foreclose on a home and then resell it, the company said.

Lenders can often afford to forgive debt, offer the incentive and still make a profit because they purchased the loan from another bank at a discount, said Trent Chapman, a Realtor who trains brokers and attorneys to negotiate with banks for short sales.

Chapman, who also writes a blog on TheShortSaleGenius.com, said he’s heard about 50 homeowners who have received incentives from lenders including JPMorgan, Wells Fargo & Co., Citigroup Inc. and Ally Financial Inc.

Wells Fargo

“My guess is they want to get rid of bad loans,” Chapman said. “If they short sale these types of loans, they have less of a headache and have some goodwill with the homeowner.”

Wells Fargo, based in San Francisco, offers relocation assistance of as much as $20,000 for borrowers who complete short sales or agree to transfer title through a deed in lieu of foreclosure “in certain states with extended foreclosure timelines, including Florida,” Veronica Clemons, a spokeswoman, said in an e-mail.

Bank of America Corp. sent letters to 20,000 Florida homeowners as part of a pilot program, offering incentives of as much as $20,000, or 5 percent of the unpaid loan balance, Jumana Bauwens, a spokeswoman, said in an e-mail. The program expired in December and theCharlotte, North Carolina-based bank hasn’t decided whether to introduce it in other states, she said. About 15 percent of the homeowners agreed to participate in the program, she said.

Citigroup Offers

“The bank is pleased with the response,” Bauwens wrote. “The state is experiencing higher foreclosure rates than other parts of the country and is therefore seen as a viable market to gauge incremental short-sale response and completion rates when presenting homeowners with relocation assistance at closing.”

Citigroup offers $3,000 to most borrowers who qualify for its program, but the “amount may increase based on the circumstances of each individual case,” Mark Rodgers, a spokesman for the New York-based bank, said in an e-mail. “Investor programs have different guidelines for relocation incentives, which we honor.”

Susan Fitzpatrick, a spokeswoman for Detroit-based Ally, didn’t comment specifically on incentives when asked about them.

Borrowers typically can’t negotiate the incentives, which arrive by mail, Chapman, the Realtor, said.

Tap on Shoulder

“It’s not really easy to identify the guidelines because Chase doesn’t tell you, they kind of tap you on the shoulder,” he said. “When I first saw it in January 2011, I thought it was a joke or a typo. I was convinced it must say $3,000, not $30,000.”

Offering enough for the homeowner to put down a deposit on a rental apartment is reasonable, said Sean O’Toole, chief executive officer of ForeclosureRadar.com, which tracks sales of foreclosed properties. Giving tens of thousands of dollars to delinquent homeowners sends the wrong message, particularly if they got into trouble by running up home-equity loans during the housing boom, he said.

“It may make sense for people to walk away, it doesn’t make sense for them to get rewarded for doing it,” O’Toole said. “It’s not the homeowner’s fault that house prices dropped so dramatically, but they have already received months of free rent, if not cash out.”

Cecala of Inside Mortgage Finance said he wonders whether lenders are making big payments on properties with underlying title problems. Evan Berlin, managing partner of Berlin Patten, a real estate law firm in Sarasota, Florida, said representatives of a large bank told him the incentives are primarily given to borrowers when it doesn’t have the proper paperwork needed to win its foreclosure case. He declined to name the bank for publication.

Incentive Disconnect

State attorneys general across the U.S. began investigating foreclosure practices in October 2010 following allegations that the nation’s top mortgage servicers were using faulty documents to repossess homes.

Berlin said his office negotiated about 400 short sales in the past year and about a quarter included an incentive, ranging from $3,000 to $48,000. In some cases, the payments aren’t incentives at all because they’re offered after the borrower has almost completed the short sale, he said.

“The idea is that this is relocation assistance,” Berlin said. “But when you’re offering $48,000, obviously it doesn’t cost $48,000 to relocate.”

Cooperation Sought

The size of the payment may have little to do with sales price. JPMorgan gave one Phoenix homeowner $20,000 after she sold her property in June for $32,000, according to Royce Hauger, the real estate agent who represented the seller and shared a copy of the settlement sheet with Bloomberg News. The bank also agreed to forgive more than $70,000 in debt, she said.

Kelly, the JPMorgan spokesman, declined to comment on the payment.

The homeowners are getting the money in exchange for their cooperation, said Kris Pilles, a Riverhead, New York-based real estate broker who represents banks, servicers and hedge funds that own distressed housing debt.

Pilles is frequently dispatched to the homes of delinquent borrowers to explain the benefits of avoiding foreclosure, he said. His clients have paid as much as $92,500. In return, the lenders expect the seller to clean the house before showings, and trim the grass.

“Money talks,” Pilles said. “From the bank side, it’s anything to initiate a conversation with someone who may not be listening to them.”

SOURCE: By Prashant Gopal

http://www.bloomberg.com/news/2012-02-07/banks-paying-homeowners-a-bonus-to-avoid-foreclosures-mortgages.html

3 Ways Homebuyers Kill Their Own Real Estate Deals

Here are three ways homebuyers are defeating their own deals in today's market:

1. House hunting too long. As many as 60 percent of the homes for sale in some markets are short sales. Many other listings are bank-owned (also known as real estate owned or REO) properties, and those homes tend toward two extremes: terrible condition, or so nice at such a low price they receive multiple offers.

Even the nicer, nondistressed homes on the market can end up in and out of contract over and over again due to appraisal or other lending-related issues.

As a result, it is not at all bizarre to hear homebuyers today say they've been house hunting for a year, 18 months, even two or three years. When you house hunt that long, you become susceptible to house hunt fatigue, which causes irrationally extreme overbidding out of sheer exhaustion.

Alternatively, it can cause you to settle for whatever house you can get, even if it doesn't actually meet your needs -- then spend the next 10 years obsessively spending to upgrade, improve, repair and furnish the place to try to make it more like the home you actually wanted. 

Both of these outcomes negate and deactivate the bargain you stood to score. 

To avoid house hunting too long, it's uber-important to get and stay clear on the differences between what you want and what you need, and to work with a local real estate professional you trust.

Look to your agent to get and keep your expectations centered in reality, so you can make more strategic decisions throughout your entire house hunt, like house hunting in a price range where you're likely to both find homes that will work for your life and be successful in your efforts to obtain one.

2. Making lowball offers way too low. Overbidding seems like an obvious way to cancel out the bargain potential of your deal. But making excessively low offers -- offers sellers couldn't afford to take if they wanted to -- can have the very same result.

Buyers who think they can operate strictly on the basis of buyer's market dynamics -- without realizing that most sellers will need to make enough to pay off their mortgage or at least receive the fair market value for their home -- are cutting off their own noses to spite their faces, all in the name of trying to score an amazing deal. 

Note to "lowballers": If you don't actually secure the home, the superlow price you offered is no deal at all.

3. Freak-outs, stress, drama and mayhem. Once was, it was mostly the buyers uneducated about the homebuying process who tended to freak out and stress the most, especially at the top of the market. These were the folks who found themselves defeated at every turn by buyers who knew what they were up against and were prepared to make their best offer on their first offer.

Fast forward, and now the norm is for buyers to spend much more time reading up on what to expect, but the inundation of information can create brand new mindset management challenges.

Almost every buyer is stressed about whether they can qualify for a loan, and about buying into a down market. Some buyers try to apply national headlines about home prices being depressed to the superlocal dynamics of their neighborhood market.

This is unwise if you happen to be, for example, trying to buy a home in the boomtown real estate markets of Silicon Valley. Others go the opposite direction and deny that the basic truths about, say, buying a short-sale listing will actually apply to them (attention homebuyers: buying a short sale usually takes a long, long time). 

The emotional freak-outs that result from having your expectations shattered, sometimes brutally, in the course of buying a home often lead to panic-based and fear-based decisions, which can be costly in the short and long term. Additionally, the stress itself can take a toll on your ability to be productive at work, and can even impair your relationship with your mate, neither of which are worth any deal you think you stand to strike. 

Again, managing your expectations by working with a trusted broker or agent you feel comfortable relying on to understand the market in your neck of the woods and the type of transaction you want to pull off is essential to downgrading the role emotion plays in your real estate decision-making.

Call Laura Key today to schedule a one on one appointment to learn more!  310.866.8422 or email Laura.A.Key@gmail.com

Source: http://lowes.inman.com/newsletter/2012/02/02/news/175752 by Tara-Nicholle Nelson 

The Most Important Short Sale Facts!!!

Do educate yourself. This is THE most important thing you can do.  Short sales can be complicated. You need every bit of information you can get when you jump into the short sale process.

Don’t wait until it’s too late. If you drag your feet and hide from the fact that you’ve stopped making mortgage payments, it will cost your credit rating and it will put any chances of a short sale in risk.

Do be diligent. There have been very closable short sales that fail because the homeowners either stop responding to their agents, stop returning paperwork, stop returning phone calls, stop caring, etc. It can be a difficult process, but at the end of it you will be free of the mortgage, the upside-down house and your financial future will have a better foundation.

Don’t stop taking care of your home. Yes, you will be moving, but if you stop mowing the lawn or keeping the place tidy, that unkemptness will discourage any potential buyers.

Do keep paying your HOA dues! Any unpaid HOA dues will need to be settled either before or at the close of a short sale escrow. Sometimes the buyer or the first lien mortgage bank will contribute to these outstanding bills, but not every time. And Home Owner Associations will send your defaulted HOA bill to a collection lawyer who will slap you and your property with their own outrageous charges.

Don’t rent your home out. In these economic times there are unsavory renters, many of them lost their own homes, that don’t mind giving you the first month’s rent and a security deposit, only to never pay you another payment. You lose the house to foreclosure, but they live rent free for the foreseeable future.

Do your homework when choosing a real estate agent or broker when you go to list your house for a short sale. The wrong short sale agent can ruin your chances of avoiding foreclosure.  Short sales require diligence, confidence and an unmatched work ethic. Find that short sale REALTOR that knows her stuff, knows how to work and knows exactly what the banks want to approve your short sale.

Don’t think that you need a real estate agent that knows your neighborhood to short sale your home. In a short sale transaction, it’s about the short sale negotiation and working relationship with your lender(s), not that your home’s location is special compared to the listing around the corner. Out-of-area agents easily price properties using a Comparative Market Analysis (CMA). In fact, banks regularly pay agents and real estate brokers a minimal fee, usually $50 or $75, to price out-of-area properties for them. Your local neighborhood real estate agent may not be the right person. You need a tough and knowledgeable short sale specialist.

Do expect to move soon, or not for months. When your home receives an offer that is just the start for your short sale transaction. But the bank could decide to approve your short sale right away, which means you may only have 30 to 45 days to relocate. But, the approval process could take up to three to six months!

Don’t move prematurely. It makes no sense to pay rent while your home sits empty. Communicate with your agent and keep updated on where the short sale process is.

Don’t stop paying your water bills, sewer bills or trash bills! Any unpaid bills may slow down or stop the short sale process.

Do consult your tax man or even a tax attorney when considering a short sale. Even the best short sale agents are not legally allowed to advise on tax implications of your particular situation, and the best short sale real estate agents don’t. A tax accountant CPA or real estate attorney has a better understanding and the legal right to advise you on such matters.

Don’t think that you must have a real estate attorney to execute your short sale. Most times these lawyers don’t understand real estate or the short sale process as well as an experienced short sale agent does. In fact, many if not most of these lawyers offering short sales require an upfront fee to process your short sale.  real estate agents and brokers only collect commissions from the proceeds of the sale, which comes out of the bank’s pocket, not yours.

Do let your real estate agent put a yard sign in the yard. Yard signs tell buyers trolling streets looking at neighborhoods and houses that yours is a possible candidate.

Don’t make viewing appointments unavailable and hard on buyers and their agents. The more potential buyers that see your home the better chance of short selling it and avoiding foreclosure. Make that home as available to buyers as possible!

Do yourself a favor and remember that millions of Americans are going though their own short sale, or unfortunate foreclosure. This economy is dreadful, and many are experiencing financial hardships and your particular situation is nothing to be ashamed of.

Don’t apply for a home equity line of credit or any other type of credit. If you own other properties that have equity, refrain from pulling money out of any of them during a short sale approval. Your bank and any of your bank’s back-end investors will dig deep into your credit history and find this activity. This kind of action says you are just out for your own financial bottom line, and yes, they will take offense to that.

Do a quick pick up of toys, laundry and any other items lying around when a buyer’s showing appointment is scheduled. Buyers will criticize your messiness like your mother-in-law, and worse, it could affect their offer which in turn could affect your short sale!

Don’t make the mistake of thinking a foreclosure is not much worse than a short sale. It is. A foreclosure will decimate your credit; it will keep you from owning another home for years and it will be a part of your financial incompetence far more than you hope it won’t.

Do keep your hardship letter short and sweet. Explain your situation as-matter-of-factly as possible. Then your bank will look at your finances, tax filings and other documents to verify and support your story. But DO NOT include in your hardship that you bought your home for more than it’s worth. The bank does not care your home is underwater. The bank is losing money too.

Don’t strip the house of its fixtures or other potentially valuable assets. Taking the pool system, or the ceiling fans or the beloved touch-action faucets will degrade your home’s marketability, and for what? A few hundred bucks will not make the financial blow of foreclosure any softer.

Do all your paperwork and return to your real estate agent in a timely matter.  Short sales can die if the proper paperwork is not supplied. It’s a silly way to screw your short sale, but it happens all the time.

Don’t use a short sale negotiating company. They will charge you large upfront fees that they don’t have to return to you even if they do not complete the short sale. And these companies aren’t held up to the same Department of Real Estate code of ethics that real estate agents and REALTORs are. In fact, some banks will not work with them!

Do call and communicate with your bank(s) and let them know you are attempting a short sale. They have thousands of mortgages defaulting, and if they don’t know you are pursuing a short sale, your property may automatically be classified as a pre-foreclosure. Not keeping your mortgage holder informed of the status of your short sale can help expedite your house to foreclosure which will not help your short sale.

Don’t violate the bank’s At Arm’s Length requirement for the short sale. The Arm’s length agreement required from the short sale lender prevents you from “renting the house back”. To avoid any fraud or risk that can result in the bank coming back at you for the balance of your loan. Do it by the book and follow the rules. The risk is not worth it.

Do know that credit card companies may decide to pull your credit due to foreclosure. When a foreclosure shows up on your credit, it says that you are in financial distress and your credit risk increases dramatically.

Don’t think you can’t short sale if you own other properties. This is a common mistake many multiple property owners make. A bank will more than consider a short sale even if you own two or more homes.

Do clean the home and property when you move out. Remove any trash, debris and take or dispose of any of your personal property. The condition of the property before transfer can have a negative effect on the buyer and their desire to own the home, and give them a reason to back out. Cleanliness is next to Godliness, and Sold Short Sales!

Don’t assume the information about short sales you read on the internet is always correct. There are many real estate professionals, and many not-so-professional individuals, giving advice regarding short sales. Some do not have a clue how to handle a short sale, let alone give advice on the subject. Your best bet is to call and talk to any prospective short sale experts. Get a feel of their knowledge base and real estate confidence, and above all else only hire a real estate short sale agent with experience.

DO CALL Laura Key at 310.866.8422!  I am a Short Sale Expert! HAFA, Making Home Affordable, and many more programs, just give me a call, I will  help you through this difficult time!

Follow me on twitter, facebook, yelp, google+ and foursquare! Maybe we can share some laughs and smiles along the way.

Source:  Garrigus Real Estate Blog

California State Senate Votes to Extend Mortgage Protections

California lawmakers voted Monday to extend a law passed during the peak of the mortgage crisis that provides added protections for property owners, renters and neighbors of foreclosed properties.

The law passed in 2008 says foreclosure proceedings can’t begin until the lender has tried for 30 days to work out alternatives with the delinquent homeowner.

Lenders also must notify renters that they are beginning foreclosure proceedings. And they must give renters 60 days’ notice before evicting them from a foreclosed property.

They also are required to maintain vacant foreclosed houses or risk fines up to $1,000 a day.

The law was set to expire after this year, but senators voted to extend it another five years, through 2017.

“Unfortunately, foreclosures remain a major problem throughout the state. This legislation continues important protections for homeowners and renters that have proved tremendously helpful in this trying time,” Sen. Ellen Corbett, D-San Leandro, said in a statement after her SB708 passed on a 32-1 vote.

Senators unanimously approved a second bill, this one designed to prevent the California Housing Finance Agency from foreclosing on certain borrowers who rent out their homes.

The prohibition is limited to homeowners who are current on their mortgage payments, but rent out their homes because they owe more than their house is worth. The bill’s author, Sen. Mark DeSaulnier, D-Concord, said it is designed to help property owners who find themselves in financial trouble because of circumstances like a lost job or growing family, and is not aimed at helping housing market speculators.

Housing agency officials previously said they believed they were required to foreclose if the property was no longer the borrower’s primary residence. The agency suspended those foreclosures in October at the urging of DeSaulnier and Senate President Pro Tem Darrell Steinberg, D-Sacramento.

The agency’s board is scheduled to consider the policy at its meeting in March. DeSaulnier said his SB447 would give the agency the statutory authority to change its policy.

There was no opposition and no debate on either bill. Both bills now go to the state Assembly.

Follow me on twitter, facebook, yelp, google+ and foursquare! Maybe we can share some laughs and smiles along the way.

By DON THOMPSON, Associated Press

The Miracle Mile is Back, Baby

In its latest issue, the Los Angeles Business Journal, which calls 5700 Wilshire home, highlights the frenzied activity the Miracle Mile’s seen in the past few years on the back of the office space boom in the area. The neighborhood had slowed down starting in the sixties, although it never fell on truly hard times. Still, thanks to giant mixed-use projects, like developer BRE’s derided asshat at 5600 Wilshire and Legacy Partners’s much better-liked 5550 Wilshire building(and in a few years, BRE’s giant Wilshire/La Brea project), the neighborhood is lately seeing a fresh influx of young residents and trendy burger places like The Counter (and Umami and Five Guys). Revamped offices spaces and comparatively low rents have attracted music and media companies (notably Oprah’s OWN) from Hollywood and Beverly Hills, while new hotels and luxury car dealerships are opening. Send a thank you note to Michael Govan, the director of LACMA, who’s helped double the museum’s attendance, extended the campus, helped attract a movie museum, and helped make the whole vicinity more desirable. Though some storefronts remain empty and certain retail is less than upscale (Ono Hawaiian BBQ, the Gold for Cash store, etc.), optimism is strong, especially since two subway stations, and maybe a trolley, are on their way.

Monday, January 23, 2012, by Neal Broverman www.LACurbed.com

Preserved in Tar, Relics From Long Before Freeways

Enjoy this article! Ever since I was a little girl I wanted to visit the La Brea Tar Pits and now I work right beside it.  LOVE IT!

LOS ANGELES — No one expects to stumble across a cache of Picasso’s works in the middle of a desert. So who would think that just off bustling Wilshire Boulevard, tucked between the Los Angeles County Museum of Art and the national headquarters of the Screen Actors Guild, lie buried some of the most exquisitely preserved fossils in the world?

The fossils of the La Brea Tar Pits are just that. They were first discovered in Maj. Henry Hancock’s asphalt mine in the 1870s, when Los Angeles was but a village. Since the early 20th century, more than one million bones have been excavated from the pits; when reassembled, they provide an extraordinary time capsule of the creatures that roamed Southern California 10,000 to 40,000 years ago.

Interest in these animals today, however, is more than a matter of prehistoric curiosity. Many of the species found at La Brea disappeared altogether as the planet warmed at the end of the last ice age. The reasons for their demise are not yet fully understood, but may be especially pertinent to understanding the effects of climate change on animal populations today.

The tar pits have so many fossils precisely because of the tar, which one can still see bubbling to the surface in spots throughout Hancock Park. The gooey asphalt that trapped and entombed the animals turns out to be a great preservative. Thousands of perfect skulls and nearly complete skeletons representing more than 200 vertebrate species have been retrieved from the death trap.

Among them are many giant beasts, including mammoths, mastodons and the short-faced bear. (Only its snout was short; the bear stood more than 11 feet tall, much larger than today’s grizzly, polar and brown bears.) There are two species of bison — one of them with seven-foot horns — and some animals not typically associated with North America, including camels that stood taller than modern dromedaries.

Big cats, too, are well represented. Most famous is Smilodon fatalis, better known (but misleadingly so) as the saber-toothed tiger, a powerful predator named for its protruding seven-inch canines. More than 2,000 of them have been extracted from the tar pits.

And there was an even larger predator, the American lion, 25 percent bigger than the modern African lion. Imagine meeting one while jogging in Malibu.

These big animals and their relatively recent demise raise some big questions. How did they get here? What are their relationships to living species? And why did they all go extinct, and so close together in time?

One key to unraveling the mysteries is understanding just how different North America was at various times in the past. For example, during the last ice age, the maximum extent of glaciation was reached about 18,000 years ago. Glaciers covered all of Canada, the Great Lakes and New England. So much water was bound up in ice that sea levels were about 400 feet lower than they are today.

The lower sea levels exposed an enormous land bridge across the Bering Sea, known as Beringia. Thanks to light snowfall and winds coming off the Pacific Ocean, Beringia included largely snow- and ice-free grasslands that extended several hundred miles into each continent, and connected present-day Alaska and eastern Siberia. Animals could simply walk from one continent to the other.

Indeed, Beringia has served as a wildlife corridor at many times in the past — when sea levels allowed. That is how North American ancestors of today’s Arabian camel reached Eurasia about seven million years ago.

La Brea’s cats, on the other hand, are descendants of immigrants from Asia. The timing of their arrival and the identification of their ancestors are being deciphered not merely by the inspection of their bones, but also by analysis of the DNA within.

For example, it has not been clear from the fossil record alone whether the American lion is more closely related to the living African lion or to the extinct cave lion, whose bones have been found in Siberia, Alaska and western Canada. By analyzing DNA from many specimens of all three types of lions, Ross Barnett of Oxford University in England, Alan Cooper of the University of Adelaide in Australia, and numerous colleagues from the United States, Britain, Germany, Russia and Canada have determined that the American lion was more closely related to the cave lion than to the African lion. The American form appears to have evolved from a population that split off from a Beringian group and became isolated 200,000 to 300,000 years ago.

Analyses of ancient DNA by the same scientists have also helped resolve some uncertainty about the relationship of the saber-toothed Smilodon to other felines. It turns out that the name “tiger” is mistaken: Smilodon is not at all closely related to tigers or, indeed, to any living cat.

Instead, it belongs to an ancient lineage that broke off from the main line of cat evolution more than 11 million years ago. As for modern tigers, DNA analysis indicates that their closest living relatives are leopards and the African lion.

But the greatest remaining mystery about these magnificent ice age mammals is why so many of them disappeared. Fifty thousand years ago, the planet was populated with more than 150 genera of large mammals (weighing more than 100 pounds). By 10,000 years ago, nearly 100 had vanished.

Many ideas have been put forward to explain their disappearance, including climate change at the end of the ice age, or the impact or airburst of a comet. Evidence for the latter has been disputed, but one strong suspicion is that humans played a contributing role, at least for some mammals in some regions.

Archaeological and genetic evidence strongly indicates that humans first came to North America late in the last ice age, either overland via Beringia or by water along a coastal route. Whatever their mode of entry, the arrival of humans and the disappearance of large mammals have long appeared to be more than coincidence. There is concrete evidence of widespread hunting, including that of at least two species that became extinct.

But the pronounced changes in the environment that marked the end of the last ice age occurred at the same time, including abrupt warming of the planet, rapid retreat of the glaciers and widespread changes in vegetation. In that light, the La Brea fossils offer far more than a window into the past. They alert us to the catastrophic potential of combining climate change and human activity — a combination that is all too familiar today.

The La Brea Tar Pits, which still bubble with simmering asphalt, can be visited year round in Hancock Park in downtown Los Angeles. Ice age fossils are on display at the Page Museum (5801 Wilshire Boulevard; tarpits.org; (323) 934-7243), open from 9:30 a.m. to 5 p.m. every day but Independence Day, Thanksgiving, Christmas and New Year’s Day.

A version of this article appeared in print on January 24, 2012, on pageD2 of the New York edition with the headline: Preserved in Tar, Relics From Long Before Freeways

Your Home and the Chinese New Year

The Year of the Dragon should bring wealth and power. It begins on January 23, 2012 and ends on February 9, 2013.  You have an Astrological sign and so does your home.  Let's take a break from all the real estate numbers and statistics and have a little fun. 

So which homes are going to enjoy a prosperous and stress free 2012?

Goat: 2012 will be a wonderful year to remodel or relandscape.  If you can’t afford either, simply declutter, and reorganize, perhaps paint a room or two.  Home improvements made this year will be hassle free.

Monkey:   2012 will be a wonderful year for Monkey homes and these homes will be filled with love.   Plan on having a Valentine’s dinner, an anniversary party or a baby or bridal shower at your home this year.

Rabbit:  Rabbit homeowners have it made this year!  Inviting the boss to dinner?  You’ve got the raise AND the promotion.   Entertaining?  It will be the best party ever!  Selling your home?  The open houses and showings will be perfection!

Rat:  Rat homes are often ostentatious.  Rat homeowners should keep in mind “less is more”.  Declutter your home and closets. Donate your abundance, there are plenty who will enjoy your excess.

Tiger:  If you have been thinking of selling your Tiger home, 2012 will be an excellent year for you to sell at the highest possible price.  Tiger homeowners hoping to earn a little extra money should consider renting their homes to the studios in 2012.

And which just so-so?

Dragon:  Dragon homes typically open well to the outdoors.  To avoid disaster during the next Santa Ana winds it is critical that Dragon homeowners should have their trees trimmed.  Dragon homeowners who plant fruit trees this year will reap a bountiful harvest.

Horse:  Horse homeowners need to avoid waste in 2012.  Do not overbuy at the grocery store (the produce will go bad).  2012 is the ideal year for Horse homeowners to start a garden.

Pig:  Pig homes are susceptible to break-ins this year.  To avoid theft it is critical that  Pig homeowners take security precautions: dogs, alarms….. Something!

Ram:. 2012 can bring peace to those who reside in Ram homes.  Marital problems?  If you live in a Ram home they should be resolved this year.

Rooster:  It is critical that Rooster homeowners keep up with routine maintenance.  Prevention this year is key!  Contact a reputable termite company and have your home inspected for termites.

Snake:  2012 is going to be a year filled with jealousy and suspicion.  Snake homeowners need to find a way to not partake is these vices.  Sincerely compliment your neighbors and allow their home to outshine yours. 

And which homes will be be susceptible to misfortune?

Dog:  2012 could bring much discontent in these homes.  In order for dog homeowners to have a happy 2012 it is imperative, that they start each day counting their blessings. 

Ox:  Ox homes are sturdy and well built, but the people living in these homes are often poor communicators.  Ox homeowners need to have weekly family meetings in 2012.

Follow me on twitter, facebook, yelp, google+ and foursquare! Maybe we can share some laughs and smiles along the way.

Los Angeles Real Estate Blog published a new post entitled "What does the Chinese New Year have in store for your home?" Published on 1/10/2012 1:41:00 AM, written by Phyllis Harb.