Here We Go Again With The Lending

Intercepted from inter-office emails:

Great News,
We are now offering Fannie’s new HomePath loan program! Let your clients know these improved loan terms to generate new business. Essentially, the program has the clients using Fannie loans to buy foreclosed properties owned by Fannie, therefore Fannie gives improved loan terms to the buyer.
-97% FINANCING WITH NO MORTGAGE INSURANCE ( That’s a lower monthly payment and lower closing costs)
-NO APPRAISAL REQUIRED SAVING YOUR CLIENT TIME AND MONEY (Value is selling price determined by listing bank)

Email or call me with client loan scenario’s that can benefit from this awesome program.

Successfully [not Sincerely],

[Loan Guy]

It seems we’ve heard this before?

Dark Thoughts For A Friday: Stock Guy On Real Estate

So we gave you Deep Thoughts already today, but deep thoughts are usually followed by dark thoughts, so why not give you some of them too.

From a stock guy to us investors (in stocks):

About the market:

My primary thesis is that we are now into one of the primary home selling months, May, and as June and July unfold, that the numbers of existing and new homes sold will come in well below expectations. Further, home building starts and permits just rocked the market as they came in at a record low, the day after the home builder sentiment index rallied the market, due to its second month upturn. The rise in sentiment did not correlate with the reality.

I expect similar difficult conditions going into the primary home selling season. Then I anticipate even greater challenges as the number of foreclosure increases. If RealtyTrac is correct and the shadow foreclosure market is really over 600,000 homes nationally that have already been foreclosed on but have not yet been put on the market, and in markets like Sacramento, may be as much as 5,000 homes, when the total homes on the market is 6,600, then I feel that their estimate of another 30-40% down on home prices from their current 30-40% down in CA, may be quite likely. Should this happen, according to Gary Shilling’s Insight’s newsletter [sorry, don’t have it for you], you could see another 15% drop in housing prices. According to Shilling, this would result in roughly 25 million of the 51 million home owners with mortgages being upside down. The portion of these upside down home owners that are on the verge of handing in their keys, are what I refer to as the “finger nail market.” That is, many of these people are the ones holding on by their finger nails to their homes. Although some programs are aimed at writing down the loss on these home owners loans to current market prices, one program that he notes was expected to help 400,000 home owners. As of his May newsletter writing, there had only been 51 mortgages restructured.

After the June and July “hopes” for a recovery in the housing market fade, I am afraid that the economic challenges the country and world are facing may seriously weigh on the market. These are the primary market “driving forces” that lead me to reduce my scenario ratings on the first tick down on the market. The risk of a sovereign default (Brittan) and the fact that we are now entering the two big housing sales months, June and July, and my expectation that new and existing sales will come in well below expectations, and many of those people in the “finger nail market” will turn in their keys later this year, lead me to change my market expectations again.

Don’t shoot the messenger, but discuss at your leisure.

18 Offers On That!!!?

It might not be your cup of tea, but 18 buyers showed up to the recent tea party at 274 De Long (4 bed, 2 bath, Single Family in the “Outer Mission”…as pertains to the SFAR Districts Map…think more Crocker Amazon/Oceanview), and 17 of them will go home empty handed and hungry.



We know what you’re thinking, “Eighteen offers on that!?”

Yeah, we’re thinking the same thing.

Asking price: $336,600, and since we know you’re going to ask, last recorded sale in MLS, 1996 at $185,000.

274 De Long [ listing detail page]

4,000 Football Fields Worth Of Foreclosures

From our friends at “Every home for sale… (Well almost…)” We bring you their future blog post (how nice of them to let us post it first).

Roost muscled through a large number of public sources of information and found well over one thousand towns/cities across the US that have more square feet tied up in various states of foreclosure than there are currently available for sale in their respective real estate markets. From that group, they identified the above 10 cities and towns with significantly more square footage in various states of “foreclosure” than “for sale” inventory.

Noteworthy findings:
-Those 10 markets alone have over 220 million square feet of residential real estate in foreclosure – almost 4,000 football fields (Kurt Warner could handle it).
-Hialeah Florida, just outside Miami, has almost three times as much existing home footprint in foreclosure compared to what is for sale (Where the hell is Hialeah?).
-There are almost 60 million square feet of living area in foreclosure in Las Vegas (How’s that compare to litres of alcohol consumed?)
-Nine out of the ten cities above are located in areas where new home construction was booming during the heyday of 2000-2005. Only Detroit was exempt from the huge new construction build-up (But Kid Rock had a hit single!)

Thanks folks at Roost! Much appreciated. We’d be really curios to see San Francisco in specific, so if you got it, send it our way.

So how many football fields for the whole lot?

Obama Wants to Jump in on the Real Estate Crisis. Which Way should He Jump?


You might have already read Alex Clark’s article on the Bush plan to help homeowners, named optimistically “Hope for Homeowners.” Commenters on that post were less optimistic. Seems a lot of lenders won’t touch the program, though that might be because the program itself is new and everyone is so gun-shy right now.

That leaves President-elect Obama (Hi, Obama, if you’re reading!) in a tough place. He wants to act immediately on this issue, but has multiple, and conflicting voices to listen to as he plans a methodology. I feel for the guy. We want someone to bail us out of a clusterf*** that is 8 years in the making, and we want him to do it yesterday.

Sunday’s Chron outlines the issues Obama will draw from in taking action:

“Unlike his opponent, Sen. John McCain, he did not urge the government to buy up bad home loans and reduce them to the homes’ new values, putting taxpayers on the hook for the difference. But some of Obama’s proposed $10 billion fund would help homeowners who are facing foreclosure ‘through no fault of their own’ by letting them refinance mortgages through the Federal Housing Administration, Fannie Mae or Freddie Mac.

What Obama accomplishes depends, in part, on what the Bush administration does about housing in its waning days.”

Well, that admin is credited with the Hope for Homeowners program, to which $300 billion dollars was allocated. Other moves under consideration:

  1. a proposal by the Federal Deposit Insurance Corp. similar to what it is doing to modify IndyMac mortgages. The FDIC plan would use $50 billion from the $700 billion bailout bill to modify mortgages.
  2. a mortgage-industry proposal to split losses on modified mortgages with the government. Treasury has not confirmed these reports.
  3. In recent weeks, some large lenders including Bank of America and JPMorgan Chase have announced their own mortgage-modification plans.
  4. Rick Harper, director of housing at the Consumer Credit Counseling Service of San Francisco, says it’s becoming much easier for borrowers to get a mortgage modification.

In his address to the nation last Friday, Obama said: “It’s ‘absolutely critical that the Treasury work closely with the FDIC, HUD and other government agencies to use the substantial authority they already have to help families avoid foreclosure and stay in their homes.”

To do that though is not going to be an easy task. That’s why I want to ask the experts out there what Obama, in case he’s reading (and if you are, Obama: Hi!) what he should do first. And then second. And third.

Some conflicting advice and ideas he’s already getting:

  • Dean Baker, co-director of the Center for Economic and Policy Research, says the most expedient thing Obama could do would be changing the law so Bankruptcy Court judges can modify mortgages on primary residences. These judges already can change the terms of other debts, including commercial loans and loans on second homes. On the opposite side of that argument: “Allowing judges to reduce mortgage balances on primary residences ‘will destabilize the market exactly at a time when we should provide stability,’ says Steve O’Connor, senior vice president with the Mortgage Bankers Association. “
  •  a 90-day moratorium on foreclosures (but what would come after that?)
  •  a $10 billion foreclosure-prevention fund
  •  a mortgage tax credit of up to $800 a year for homeowners who don’t itemize  their deductions, but some experts say “the tax credit would do little to stimulate housing because it would mainly benefit people who have owned homes for many years”

It’s all enough to make a President run off to Camp David–only we need this President on the job. How can he maybe do it well?



Bay Area Home Prices: a la San Francisco Chronicle

From the Chronicle: Home prices down in 90% of Bay Area Zip codes. A bold statement indeed, and thank God we don’t live in 90% of the Bay Area, but what’s this?

One of the few standouts was the 94114 ZIP in San Francisco, home of Noe Valley, where houses go for well over a million dollars, designer strollers clog the sidewalks, posh shops peddle handmade ethnic tchotchkes, and the Google bus regularly cruises the streets.

But even that ZIP didn’t enjoy the double-digit appreciation that became de rigueur during the real estate boom. Instead Noe Valley prices were up 6.8 percent year over year, from $893 a square foot to $954.

We know full well SF is not entirely immune to the forces of the economy, but the mere fact that we are weathering this storm better than any metropolitan area we can think of, deserves to be noted. The fact that some areas of San Francisco are seeing price appreciation (however small) while other areas of the Bay Area (literally within 50 miles) are seeing price drops upwards of 70% is astonishing.

And apparently, Carolyn hadn’t seen this post, or she’d know a statement like, “Noe Valley, where houses go for well over a million dollars, designer strollers clog the sidewalks, posh shops peddle handmade ethnic tchotchkes, and the Google bus regularly cruises the streets” is sure to cause a stir. We’re prepared to let it slide, are you?

Just noticed something else on that map…does it show most of SF as a “Zip code with fewer than 20 sales”?

Comment du Jour: The People in Noe Valley Have a Fully Realized Liberal Fantasy []

With the Bad Comes the More Bad: Foreclosure Scams on the Rise

Since we’re members of the California Association of Realtors and our goal is to educate the public as much as possible, we thought we’d share this article about how to protect yourself from the recent rise in foreclosure scams.  This article was written by the C.A.R.  All credit goes to them.


REALTORS® commonly consider the filing of a notice of default as the beginning of the foreclosure process.  However, it may also be the start of something sinister.  The public recording of a notice of default can act as a beacon to unscrupulous people who, under the guise of offering assistance, seek to take advantage of homeowners in distress.  To protect homeowners in foreclosure, California’s foreclosure consultant law strictly regulates the activities of people who perform foreclosure-related services, including real estate agents to a limited extent.

This legal article discusses the issues surrounding foreclosure-related scams, with special attention given to the ways that REALTORS® and their clients can distinguish between legitimate and illegal enterprises.  This article also provides REALTORS® with legal and practical guidelines for complying with the foreclosure consultant law.


Q 1.  What is a foreclosure-related scam?

A  A foreclosure-related scam is a loose term for fraud, deceit, or trickery perpetrated against homeowners facing foreclosure or others involved in the foreclosure process.  With the rise in foreclosures in the mid-2000s, foreclosure-related scams have exploded onto the real estate scene.  Some con artists offer to help homeowners in foreclosure, but in truth, merely intend to dupe the distressed homeowners out of their money or property (see, more specifically, Question 5).  Other scams target real estate agents, investors, buyers, lenders, tenants, or other people involved in the foreclosure process.

Notice To Begin Foreclosure Proceedings: Sincerely, Your Bank

Ever wondered what a letter from a lender to a homeowner would read when they’re about to foreclose your house? Wonder no more. This came to us via the intertubes (re-typed for privacy…of course).

From Wells Fargo Home Mortgage to Homeowners


The above loan file has been referred to our attorney with instructions to begin foreclosure proceedings.

You are hereby notified that, due to the default under the terms of the mortgage or deed of trust, the entire balance is due and payable.

If you have any questions, please contact our attorney listed below:
Jane, Attorney at Law

In the event you are experiencing an involuntary inability to pay and wish to explore an opportunity to reinstate, or need assistance in selling your property, please contact our offices at (800) 555-5555 and request to speak to one of our Borrower Counseling Representatives.

If you received a discharge in bankruptcy from personal liability for this mortgage loan, you should be aware that the mortgage or deed of trust remains as a valid lien against the property and will be foreclosed. Please be advised that in the event of foreclosure, you would not be personally liable for any part of the debt, but you will lose your interest in and right to the property.

Foreclosure Department

Thanks for sending, sorry to hear about the foreclosure, and a quick reminder to other readers to send us your tips, so this site stays fresh.

What to do when your BFF Forecloses

From “S”:

What do you do when you go to visit some close friends or extended family (people you really care about) and for convenience, meet in a restaurant. They announce they are packing and moving. You Zillow/Trulia them, and sure enough, the house just foreclosed.

It’s the family house they’ve owned for many, many years, and they took a very reasonable amount of equity out. The foreclosure amount being for the amount of the loan…they lost everything.

What do you do?
a. Tell them you know about the foreclosure
b. Pick up 100% of the evening tab which is in a fair priced restaurant
c. Offer some help. What kind?
d. Simply respect their loss and say nothing, avoiding to be too cheery
e. Act as if nothing happened
f. ??

Sounds like a bit of a tricky little situation. At last check we didn’t know to Zillow or Trulia was a verb like to “Google” something, but we’re sure those companies would be flattered.

As for what to do…at the very least you gotta pick up the tab even if it’s Aqua or Gary Danko!