FHA Anti-Flipping Rule Waiver Extended Through 2012

In an effort to continue stabilizing home values and improve conditions in communities experiencing high foreclosure activity, Acting Federal Housing Administration (FHA) Commissioner Carol J. Galante announced an extension is now in effect through December 31, 2012. With certain exceptions, FHA regulations prohibit insuring a mortgage on a home owned by the seller for less than 90 days. In 2010, FHA temporarily waived and then extended this regulation through January 31, 2011. The new extension through 2012 will continue to allow buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. FHA's motivation is to allow properties to resell as quickly as possible, helping to stabilize real estate prices and to revitalize communities. The extension is effective through December 31, 2012, unless otherwise extended or withdrawn by FHA. The Waiver still consumer protections to prevent the predatory practice of property flipping, in which properties are quickly resold at inflated prices to unsuspecting borrowers. Sales must meet the meeting the following conditions to take advantage of the Waiver. • All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction. • If the sales price of the property is 20 percent or more above the seller’s acquisition cost, the lender is required to document the conditions creating the increase in value. For more details see the December 28th press release from the FHA.

HARP 2.0 a heavenly sound, or another sour note?

Last week we heard the good news that President Obama would order changes to the HARP program now popularly referred to as HARP 2.0. The basics are that any borrower with an LTV ratio above 80 percent is eligible for a HARP refinance, as long as the loan was sold to Fannie or Freddie prior to May 31, 2009, and the borrower is not delinquent on their payments. That Fannie/Freddie requirement tempered the joy of the announcement as many homeowners checked to find that their loans are not eligible.

But there was another provision of HARP 2.0 that did not make the top of the headlines. There are incentives for private lenders to adopt the program as well. It seems to be having a positive effect. The four largest banks (Bank of America, Wells Fargo, Chase, and Citigroup) are planning to voluntarily offer HARP 2.0 financing.

Details of the private financing options are expected to be published by early December. Could this be an unexpected holiday bonus that will make for a happy new year for those who have kept up our mortgage payments in hope of some kind of redemptive change? Well, we have seen rosy roll-outs before that turned out to nothing more long series of brake lights in a tunnel. This time, however, it genuinely looks like millions of homeowners are on the verge of getting substantial relief. Stay tuned or check in with me to find out how to see if you are eligible under the current changes, or might be in the future.

Haunted Real Estate

The archetype for a "haunted house" - an ornate Victorian home with a tower and Mansard roof - is a central icon in our celebration of Halloween. In reality such a house, if priced right, would likely draw multiple offers as the dream of restoring a "fixer" to former glory is also a well-established cultural tradition.

Before we get too much off the subject of real estate, let's note the legalities of buying or selling a haunted house. In our diverse community there are those who hold beliefs about the spirits of the deceased. It's something to be recognized and respected.

You have probably heard that a seller must disclose any death on the property within the past three years because of this. The law (Cal. Civ. Code Sec. 1710.2) actually says that a buyer cannot successfully sue a seller for failing to disclose such an event that is more than three years old. But lawyers opine that there might be exceptions if the events were notorious in a "Nightmare on Elm Street" kind of way.

The East Bay has its share noted haunts. Journalist Teresa Chin mentions several, but particularly investigates Mills College, in her article "Haunted Oakland". Ghost hunting is no longer occult; it has become a recreational sport. A web site called Ghosts of America lists ghosts by location and type. California ranks with 2,269 reports, and over 80 of them are in our two East Bay counties. San Leandro tops the list with an unlucky count of 13. Berkeley has no reports on that site, but a similar site, California's Haunted Hot Spots, reports a seriously local ghost confined to room 219 of the U.C. Berkeley Faculty Club.

Turning again to the local real estate market, the public remains spooked by foreclosures, short sales and economic uncertainty. Yet we still have high attendance at open houses, and the best properties still provoke competitive overbidding. Some markets are down, others appear to be improving. Real knowledge is the best antidote for fear, so please call me if you feel haunted by real estate worries. Let me be your personal ghost-buster.

On the lighter side, staged haunted houses are offered as holiday entertainment. Some are commercial, others are sponsored by non-profit organizations. One promoted by Fear Venue is located at the Bayfair Mall in San Leandro. A more varied list and an event map is offered at Haunted Bay. This also includes pumpkin patches and other Halloween entertainment.

Whether this season is a time for remembrance of departed loved ones, an occasion for family entertainment, or just a nuisance, I hope that you stay safe and warm as the days shorten and the seasonal rains return. As always, please call me if you have any real estate or home maintenance issues still haunting you, and I always have a spirited welcome for your referrals