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

Oakland Condo Prices Hitting Bottom?

There continues to be a lot of confusion and disappointment in the buying public in the bay area as we hear of record lows in values across the country but competing offers for properties here. Asking prices sometimes seem random, but closed sales, even though they might be over asking, tell the real story. Those closed prices continue to trend down when compared to similar closed sales last year. It is the wide variation in asking prices that is frustrating buyers. It's like the difference between settlement demands and jury verdicts. Both provide sets of numbers, but only one provides real guidance about the value of a case.
I just generated two charts for some of my buyer clients. They track closed sales prices, meaning real value, only; not the asking prices which are really only marketing ideas. The charts show the trend of median prices for condos in zip codes 94610, 94611, and 94612 (basically the areas Piedmont Ave., Grand Ave., Adams Point, Lake Merritt, and down town). The point of these charts is not the values because it includes all condos, but the change over time. On the two year trend we see an 18% decline, but the one year trend is basically flat with no decline between April 2008 and April 2009.
I can't predict what will happen next month or next year, but these charts might be the first pictures of the bottom of this market. E mail me and I will be happy to share these charts, or create others that pinpoint your particular interests.

$8,000 Federal Tax Credit

Some Additional Protection for Abandoned Animals

A new law went in to effect on the first of this year requiring that abandoned animals discovered at a property that has been taken back by way of foreclosure, eviction, or termination of a lease, be turned over to the local animal care and control agency. People aren't the only ones left homeless by this crisis.

This actually happened to me a few years ago in Maxwell Park. My clients finally had to evict the non-paying tenants from their elderly parents home. They needed to sell it in order to pay for expenses of the assisted living facility where the parents were living. They gave me a set of keys so that I could enter and assess the situation as soon as the tenants were out. The place was a mess, as expected, but the worst of it was the frightened pit bull I encountered when I walked down in to the basement laundry room. The dog, as it turned out, had been there for a few days without food or water. Although it growled at us, a neighbor assisted me with putting out some kibble and water for it while we waited for animal care & control to take the dog to the shelter. I hope the dog eventually found a home better than his last situation.

Preventing Foreclosure Blight

There are two recent developments that might help to reduce the number of vacant and vandalized homes that have been through the foreclosure process.
Fannie Mae has developed a rental policy on its own foreclosure properties. It will offer new month to month leases for qualified tenants. http://www.fanniemae.com/index.jhtml

Appealing to a smaller and exclusive segment of the market, Designer HomeTending is offering a new wrinkle on house-sitting. Pre-qualified renters with the high end home furnishings are allowed to occupy otherwise vacant properties. They have to agree to keep the house in tip-top showing condition, get out of the way when the property is being shown, take care of the utility bills to keep the lights on, and leave when the property is sold. I don't expect this to have a big impact on the real estate market, but every little bit helps. I certainly shows creativity and "win-win" thinking. http://www.designerhometending.comt

When Things Fall Apart

An article in the March 2009 issues of REALTOR Magazine (The 11th-Hour Back Out by Robert Freedman) recounts a phenomenon that many of us in the profession are dealing with: transactions that fall apart before closing. Freedman cites statistics showing a increasing gap between "pending" deals and "closed" sales. What's happening? The article points to two major issues: failure to obtain financing and the high number of short sales that are never consummated, but instead proceed to foreclosure. Locally we rarely see a loan fail to go through due to the property not appraising, but standards are tightening and I just encountered on this week. Loans more often fail due to stricter credit requirements by lenders. While this is generally a good thing for everyone, it presents a serious problem for the parties and professionals involved when the standards change between the time an offer is accepted and the expected close of escrow. Other incidents that I have seen recently and locally reflect the overall problems in the economy: the buyer loses a job, the buyers line of credit on another property is cancelled or reduced, the sale of the buyer's other property failed to close, and the buyer found another property while waiting several months for a short sale to be approved. Our office recently experienced a situation where the failure of one transaction in New York resulted in four other deals falling out as each was dependent on the other and the transactions tumbled down like dominoes in a row. The moral of the story: be very attentive to your contingency clauses and keep them in effect for as long as possible.