Response to Igor Korosec regarding his support for permanently increasing the conforming loan limit
Dear Mr. Korosec:
Thank you for contacting me to express your support for permanently increasing the conforming loan limit. I appreciate the time you took to write and agree with you.
The Federal Housing Administration (FHA) plays an important role in insuring home mortgages for those in underserved communities. It is critical that FHA programs be modernized to provide more homebuyers and borrowers looking to refinance with the opportunity to obtain an FHA loan. This remains especially important in California where the cost of housing remains high. For homebuyers faced with so-called “jumbo loans” subject to higher interest rates, raising the government-sponsored enterprise (GSE) conforming loan limit will bring more liquidity to the market and lower interest rates.
On February 13, 2008, the President signed the Economic Stimulus Act of 2008 (H.R. 5140) into law. As the bill was being developed, I sent a letter to Senator Majority Leader Harry Reid (D-NV) expressing strong support for increasing the previous GSE conforming loan limit of $417,000 and the FHA loan limit of $362,790 to $729,750. While I am pleased that a temporary increase was included in the bill, the new loan limits will expire on December 31, 2008.
On July 11, 2008, the Senate passed the “Foreclosure Prevention Act of 2008,” (H.R. 3221) introduced by Senators Christopher J. Dodd (D-CT) and Richard C. Shelby (R-AL). Prior to Senate consideration of the bill, I urged Senators Dodd and Shelby to keep the FHA loan limit and GSE conforming loan limits at the current level of $729,750. The Senate passed its version of H.R. 3221 on July 11, 2008. While the Senate-passed version of the bill would only raise the loan limits to $625,500, the House-passed version would keep them at their current level. On July 11, 2008, I joined 52 members of the California Congressional delegation in sending a letter to leaders of the Senate and House leadership urging them to retain the $729,750 limits in the final version of this important bill.
I fully support the higher limit and will continue to push to make it permanent.
Thanks for writing.
Sincerely yours,
Dianne Feinstein
United States Senator
FORECLOSURE RELIEF BILL BECOMES LAW
Friday, July 11, 2008
Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS®
This week, the State Legislature enacted foreclosure reform law to address the adverse effects of high foreclosure rates in California. The new law requires lenders to contact homeowners to explore options for avoiding foreclosure at least 30 days before filing a notice of default. It also requires owners acquiring property through foreclosure to maintain the exterior of vacant residential properties. The new law also extends from 30 to 60 days the time for residential tenants to move out of properties that have been foreclosed upon, unless other laws apply. These requirements will remain in effect until January 1, 2013. The full text of Senate Bill 1137 (Perata) is available at www.leginfo.ca.gov.
Highlights of the new law are as follows:
Contact Between Lender and Borrower
Effective on or about September 8, 2008, a lender, trustee, or authorized agent may not file a notice of default until 30 days after contacting a borrower to assess the borrower’s financial situation and explore options for avoiding foreclosure. A lender must generally contact the borrower in person or by telephone, or satisfy due diligence requirements for contacting a borrower. During the initial contact, the lender must inform the borrower of the right to request a meeting with the lender within 14 days. The lender must also give the borrower the toll-free number for finding a HUD-certified housing counseling agency. A subsequent notice of default must include the lender’s declaration that it has contacted the borrower, tried with due diligence to contact the borrower, or the borrower has surrendered the property. A lender who had already filed a notice of default before the enactment of this law must include a similar declaration in the notice of sale. This requirement to contact borrowers applies to loans secured by owner-occupied residences made from 2003 to 2007. Certain exemptions apply if the borrower has filed for bankruptcy, surrendered the property, or contracted with a person or entity whose primary business is advising people, who have decided to leave their homes, on how to extend the foreclosure process and avoid their contractual obligations.
Maintenance of Vacant Properties
Effective July 8, 2008, anyone who acquires property through foreclosure must maintain the exterior of vacant residential property. Violations of this law include permitting excessive foliage growth that diminishes the value of surrounding properties, failing to take action against trespassers or squatters, failing to take action to prevent mosquitoes from breeding in standing water, or other public nuisances. This law authorizes a governmental entity to impose a civil fine up to $1,000 per day for any violation, as long as the owner has been given notice and an opportunity to remedy the violation. A violator must be given at least 14 days to begin, and 30 days to complete, such remediation before a fine can be assessed.
60-Day Notice to Terminate Tenants
Effective July 8, 2008, a tenant or subtenant in possession of a rental housing unit that has been sold through foreclosure is generally entitled to a 60-day written notice to quit, not just 30 days. However, a borrower who remains on the property after foreclosure may be served a three-day notice to terminate. This law does not affect, among other things, rent-controlled properties with just-cause evictions. Effective on or about September 8, 2008, the lender, trustee, or authorized agent posting a notice of sale must also post and mail a specified notice of a tenant’s right to a 60-day eviction notice from the new owner, unless other laws apply. This requirement to notify tenants of their rights applies to loans secured by residential real property where the borrower has a different billing address than the property address.
THE MORTGAGE MARKET GUIDE
“VERY NICE. IT’S A LITTLE GREASY…BUT VERY NICE. CRUMBLE SOME CRACKERS INTO IT SHELL, THAT WILL HELP TO ABSORB THE GREASE…” Peter Falk’s line from the 1979 classic movie “The In-Laws” is good advice about soup…but doesn’t help us much when it comes to absorbing the high price of oil, a greasy topic that continues to permeate financial headlines.
And last week was no exception, with oil prices continuing to march ever higher, despite an announcement early last week by OPEC member Saudi Arabia that they will increase oil production in the near future. They are concerned that the high price of oil will lead to lower demand and a turn toward alternative energy sources. And Friday’s news didn’t help, with a strike at a Chevron plant in war-torn Nigeria, Africa’s largest oil producing nation. Additionally, Israel conducted a military operation for preparedness in case of a potential strike against Iran’s nuclear plants – which all served to push oil prices higher still. High oil prices are inflationary – so if the march higher in oil prices continues, both the Stock and Bond markets will suffer…and even crumbled crackers won’t help sop up the mess.
But Bonds did manage to find some improvement last week, helping home loan rates get better by about .125%. Negative economic news, including soft housing numbers, weakness from the manufacturing sector and more write-downs announced by financial giant Citigroup all played a hand – causing money to flow out of Stocks and over into Bonds, which helped prices improve.
WANT TO HELP YOUR CAR’S MAINTENANCE BUDGET IMPROVE? YOU MIGHT BE SURPRISED TO LEARN HOW MUCH YOU CAN SAVE…READ THIS WEEK’S MORTGAGE MARKET VIEW!
Forecast for the Week
The coming week is chock full of economic reports that will likely have a big influence on the financial markets. We start off on Tuesday with a report on Consumer Confidence, and also the beginning of Fed meetings which will culminate in a Rate Decision and Policy Statement on Wednesday afternoon at 2:15pm ET. It is widely believed that the Fed will keep the Fed Funds Rate at 2%…but what will be most interesting is the wording of their carefully crafted Policy Statement. If it gives hints of their intent to hike rates in the near future to help fight inflation, it could actually be good news for Bonds and home loan rates.
A look at sales numbers in the new and existing housing markets will come Wednesday and Thursday, and Friday will wrap up the week with a bang as the Fed’s favorite gauge of inflation, the Core PCE (Personal Consumption Expenditure) data will be released. Since this will be following the Fed’s announcement on Wednesday – will the Fed look smart if they’ve held rates steady, or perhaps come under criticism if the inflation numbers are super-heated? Could be a greasy few days for the Fed, so stay tuned.
Remember that when Bond pricing moves higher, home loan rates move lower – and then take a look at the chart below. You can see how in recent days, Bonds have moved higher, but are now battling an overhead “ceiling” of technical resistance. If Bonds and home loan rates are to improve in the near future, it will take some very Bond-friendly news to help crash through the ceiling that has stopped progress in its tracks for the time being.
The Mortgage Market View…
TIME FOR A CHANGE…OR NOT?
The rising cost of crude oil has everyone talking about gas prices at the pump… but what about the actual oil in your engine? Are you spending too much on oil by changing it too often?
Most of us probably think a car’s oil needs to be changed every 3,000 miles. But that’s an old mechanics tale these days. Did you know that many car manuals now actually recommend changing the oil every 5,000, 7,500 or even 10,000 miles? That means you may be changing your oil twice or even three times as often as you need to! In fact, a recent study in California indicated that 73 percent of Californians change their oil more frequently than recommended by the manufacturers.
So how often should you change your oil?
The fact is, oil changes should be determined by what, how, and where you drive. If you have a newer car with little or no engine wear, you can probably go 7,500 miles between oil changes. And even if you have a slightly older car, but drive under ideal conditions such as predominantly highway, you can go a similar distance before changing.
Of course, many of us actually don’t drive under “ideal” conditions…if you make many short trips, endure lots of stop-and-go traffic, drive on gravel or dusty roads – then you might need to change your oil more frequently. So how do you know – and take advantage of saving money by only changing oil when it’s really needed?
Technology to the rescue
There are a few ways you can actually eliminate the guesswork. If you have a newer car, it may have a built-in sensor that estimates oil life based on engine running time, miles driven, outside temperature, coolant temperature and other operating conditions. When the indicator light comes on, it’s time to change the oil. It’s that simple.
Another idea is to purchase an oil monitoring sensor, such as the IntelliStick. These sensors are used in place of your car’s original dipstick and provide you with real-time, accurate information about the true condition of your oil. Better still, these sensors often have a transponder built into them so you can quickly and easily check the condition of your oil at any time using a cell phone, PDA or computer with Bluetooth connectivity…now that’s really going high tech.
Bottom line – dollars spent on oil changes add up fast. Especially with the increasing price of oil, it pays to be smart, check the manufacturer’s recommendations…and not let too-frequent oil changes cost you!
Ernest Tepman
President
The OCD Group Inc.
Los Angeles: 800-963-4623
San Diego: 877-863-4623
E-Mail: marketupdate@theocdgroup.com
Property Tax SAVINGS
GOOD NEWS…. For anyone that purchased property between July 1, 2004 and June 30, 2007. Los Angeles County will be sending a letter to homeowners a value reduction for their properties and taxes….
Los Angeles County Assessor Rick Auerbach today announced completion of a decline in value review of homes in Los Angeles County. Auerbach said that due to the declining real estate market, it was his responsibility to review values to make sure homes are properly assessed.
“We looked at homes and condominiums that were purchased between July 1, 2004 and June 30, 2007, based on our analysis of market trends in Los Angeles County,” Auerbach said. “The review included 318,000 homes and condos. Our analysis will result in lower assessments on 128,000 homes and condos and will be reflected on the tax bills to be issued in October.”
The average reduction in assessed value is about $73,000, he added, amounting to an average property tax savings of approximately $750.
“In addition, this review will eliminate the need for many taxpayers to go through the formal appeal process,” Auerbach said. The 128,000 homeowners who will be receiving a value reduction will be notified in writing by June 30 of this year. If they disagree with the amount of the reduction they should contact the nearest Assessor’s District Office and discuss the results. If owners still disagree with the value, they may file an appeal with the county’s Assessment Appeals Board. The deadline for filing an assessment appeal is November 30.
Homeowners who purchased their properties outside of the time period for the review (July 1, 2004 to June 30, 2007) and believe that their property is assessed above its actual value as of January 1, 2008, should file the simple, one-page Decline-in-Value application. The form can be downloaded from the Assessor’s Website at http://assessor.lacounty.gov or an application can be requested by calling 888-807-2111.
have a WONDERFUL day
Louise Oshiro
Cal Counties Title Nation
New Email: louise@louise4title.com
(818) 439-7008
(310) 490-0003
Legislation to help homeowners avoid foreclosure
The U.S. Senate said it has agreed on legislation to help homeowners avoid foreclosure by creating an affordable housing fund that will enable Fannie Mae and Freddie Mac to offer about $500 billion in foreclosure rescue funding in the program’s first year. Observers expressed optimism that the Bush administration will support the effort because it does not involve direct funding by taxpayers. The Senate proposal would tighten regulation of Fannie Mae and Freddie Mac and create a new regulator, the Federal Housing Finance Agency, which would be empowered to take action in the event the two quasi-government companies experience future liquidity problems.
MAKING SENSE OF THE STORY FOR CONSUMERS
Earlier this month, the House approved a similar bill. Under both plans, lenders would be allowed to limit their foreclosure losses by reducing the principal balance of loans to homeowners at risk of default and foreclosure. The primary beneficiaries would be homeowners with certain kinds of high-cost adjustable rate mortgages, who would be allowed to refinance to a more stable fixed-rate mortgage insured by the Federal Housing Administration.
Under the House bill, it is estimated that as many as 500,000 mortgages may be refinanced over the next five years at a cost to taxpayers of $2.7 billion. The Senate version, which would help the same number of borrowers, shortens the plan to three years and reduces the cost to about $500 million, with costs to come from a new Affordable Housing Fund that would collect about half a cent on every dollar in mortgages purchased in the secondary market by Fannie Mae and Freddie Mac.
The bill also would set a new Fannie Mae/Freddie Mac conforming loan limit of approximately $550,000 in high-cost markets, up from the current $417,000 limit. The limit has been temporarily increased to $729,250 in the most expensive markets as part of February’s economic stimulus package.
To read the full story, please click here:
http://www.nytimes.com/2008/05/20/business/20housing.html?_r=1&th&emc=th&oref=slogin
New Cellular Phone Laws that Go Into Effect July 1, 2008
Two new laws dealing with the use of wireless telephones while driving go into effect July 1, 2008. Below is a video concerning these new laws. Or if you prefer to read it please click on the title of this blog post.
Cellular Phone Laws Video made by DMV:
