AdhiSchools Blog

Real estate market analysis

Undisclosed Short Sale Payments May Be Illegal

Short sale sign on top of for sale sign outside of home

Just got this email from CAR. Glad our industry is keeping an eye on things. UNDISCLOSED SHORT SALE PAYMENTS MAY BE ILLEGAL Undisclosed payments in short sale transactions, especially those paid Read more...

Just got this email from CAR. Glad our industry is keeping an eye on things. UNDISCLOSED SHORT SALE PAYMENTS MAY BE ILLEGAL Undisclosed payments in short sale transactions, especially those paid outside of escrow, may violate the law, including RESPA, laws against loan fraud, and licensing laws. Short sale agents have increasingly reported to C.A.R. about requests for agents and their clients to pay junior lienholders and others, oftentimes outside of escrow. One common scenario is when a short sale seller's senior lender authorizes a payment of $3,000, for example, to extinguish a junior lien, but the junior lender demands that the buyer pays an additional $9,000 outside of escrow. Not only would it be risky for a buyer to pay outside of escrow, but concealing this additional payment from a federally-insured senior lender may constitute loan fraud, which is a crime punishable by 30 years imprisonment plus a $1 million fine (18 U.S.C. section 1014). Furthermore, omitting from the HUD-1 Statement any charges paid at settlement by either a buyer or seller may violate the Real Estate Settlement Procedures Act (RESPA) (Appendix A to 24 C.F.R. Part 3500). Depending on the specific circumstances, carrying out these payment requests may also violate other laws and regulations, and an agent's participation in the scheme may be subject to license revocation by the Bureau of Real Estate or other disciplinary action. Agents and their clients are encouraged to file any complaints regarding fraudulent activities to the proper authorities, including the following agencies: Attorney General's Office California Department of Justice 800-952-5225 Phone https://ag.ca.gov/consumers/mailform.htm Department of Housing and Urban Development (HUD) HUD Office of Inspector General Hotline (GFI) 800-347-3735 Phone http://www.hud.gov/offices/oig/hotline Federal Bureau of Investigation (FBI) 202-324-3000 Phone https://tips.fbi.gov

By Kartik Subramaniam

March 16, 2010

Real estate market analysis

Can't refinance? You're not alone.

Home owner making calculations for refinancing mortgage

A recent article I read in the Wall Street Journal talks about a common problem homeowners face when attempting to refinance their homes.Today, bankrate.com shows an average 30 year mortgage rate of 5.03%. Read more...

A recent article I read in the Wall Street Journal talks about a common problem homeowners face when attempting to refinance their homes.Today, bankrate.com shows an average 30 year mortgage rate of 5.03%. Pretty killer deal, right? This is likely much lower than the current rate on your home loan and you may be tempted to refinance.The issue that at least a quarter of all homeowners will have in attempting to refinance is a lack of equity due to declining home values. This isn't such a big surprise - everyone knows real estate values have dropped and many owe more on their homes than they are worth.But what I liked about this article is that it shed light on the fact that if people were actually able to refinance it would have a positive impact on the economy. The following is the chain of logic I had while I was reading this article.If people can refinance their home, it becomes more affordable.If more people can afford their homes, there are less foreclosures.If there are less foreclosures property values will stabilize.If property values stabilize, this could stabilize other facets of our economy.If other facets of our economy stabilize, our country may recover faster.This is kind of a chicken-and-the-egg scenario. You can't refinance because your home value has dropped, but if banks refinanced borrowers this may stabilize home values.Of course, the problem of declining home values isn't something that appeared out of thin air. It's a purge of the gluttony that the real estate industry partook in from 2003-2006. The Wall Street Journal article closed by reporting that the Obama administration is looking into whether or not FHA can help refinance homeowners that don't meet the traditional loan-to-value requirements necessary to refinance.

By Kartik Subramaniam

March 03, 2010

Real estate market analysis

$8,000 first time homebuyers tax credit - vote - email received

Hundred dollar bills

I just got this email from our Government Affairs Director. Subject: IMPORTANT Message from NAR President Charles McMillan From: NAR_xxxxx_xxxxxxxx@realtors.org Date: Tue, 27 Oct 2009 12:24:19 -0400 TO: Read more...

I just got this email from our Government Affairs Director. Subject: IMPORTANT Message from NAR President Charles McMillan From: NAR_xxxxx_xxxxxxxx@realtors.org Date: Tue, 27 Oct 2009 12:24:19 -0400 TO: State and Local Association Presidents, Executive Officers, Government Affairs Directors, Communications Directors FROM: NAR President Charles McMillan, NAR Government Affairs Senior Vice President Jerry Giovaniello DATE: 27 October 2009 RE: Tax Credit Extension and Expansion The United States Senate is expected to vote, later today, on a bill to extend Unemployment Insurance benefits. This bill will contain the Dodd - Lieberman - Isakson Amendment to Extend and Expand the $8,000 First Time Homebuyer Tax Credit. The Extended and Expanded Tax Credit will contain the following provisions: Amount: $8,000 Eligibility: ALL HOME BUYERS (Step-up buyers will have to have lived in their current home for SEVEN* years to be eligible) Income Limits: $125,000 for single filers/$225,000 for joint filers Time Frame: December 1, 2009 to April 30, 2010 plus 60 Day extension if binding contract is in place by April 30, 2010 *The 7 year ownership requirement is designed to lower the "score" or cost of the tax credit. This is still open to change. The Congressional Budget Office is going to "score" the cost of 3 year and 5 year requirements. We are continuing to push for step-up buyers to be required be in their current home for three year period. NAR will be monitoring the progress and any potential changes to the bill. NAR will send out a notice when the legislation is voted on tonight--regardless of how late into the night or early into the morning the debate continues.********************Let's keep our fingers crossed that this passes! Would definitely help!

By Kartik Subramaniam

October 27, 2009

Real estate market analysis

Renting versus buying

Red and white for rent sign on sidewalk in front of irvine home

Owning a home is a big piece of the puzzle known as the American Dream. Despite this, there is a group of people who believe that owning a home is a bad decision no matter what the market is doing or Read more...

Owning a home is a big piece of the puzzle known as the American Dream. Despite this, there is a group of people who believe that owning a home is a bad decision no matter what the market is doing or no matter who you are.I had an agent that I used to work with that was consistently making over $300,000 per year and - rumor had it - didn't own a single piece of real estate. Not even his principal residence.People that maintain this position typically point to the fact that renters don't have to make repairs to a home and are free to move whenever they want. They also note that the responsibilty for paying for utilities, property taxes and insurance rests with the owner not the tenant.All this would be fine except for one fundamental point - control. When I first got into the real estate business my broker gave me an article about a woman that had been living in Newport Beach for years. Her rent started at $400.00 per month or thereabout. Over the years she found herself in a position where her rent had jumped up so much that she could no longer afford to live there. She was forced to move out of an area that she had planted roots in for much of her life. The irony of this story is that if she would have just bought the property - my recollection about this story is that she was in a position to do so at some point during her tenancy - it would have been completely paid off. Life changing decisions like "Should I rent or buy?" should not be taken lightly. I get that. I also understand that there is no one size fits all solution to anything.I just think it's tragic when we get in our own way.

By Kartik Subramaniam

September 17, 2009

Real estate market analysis

Is the real estate market still strong?!

For sale sign in front of white and brown bungalow house

As some of you may know, I don't just teach the real estate courses. I am a real estate broker that has actively bought/sold/represented over the last 6+ years. The president of a large real estate company Read more...

As some of you may know, I don't just teach the real estate courses. I am a real estate broker that has actively bought/sold/represented over the last 6+ years. The president of a large real estate company called me up about 6 weeks ago with the following situation:"I have access to an REO portfolio with the opportunity to buy properties directly from asset managers. I need to know what price I should pay to make money and insulate myself from further market fluctuations."He gave me a list of properties and asked for my opinion on pricing. I told him what I thought and he ended up buying one of the properties at the recommended price and I relisted it for him. The property ended up selling within two days for almost full price! I went there today to see if the utilities were on and I found fifteen cards there from real estate agents! FIFTEEN people came and saw the property either with their buyers or previewed them for their buyer. It is in escrow now for 98% of list price and the buyer is putting 50% down! There is hope yet!

By Kartik Subramaniam

October 06, 2008
 

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