In an effort to keep homeowners current, and give them some skin in the game, so-to-speak, Ocwen has just introduced their principal reduction program that they call SAM, short for Shared Appreciation Modification program. This program will aim to reduce upside down homeowners’ mortgage principal balance to 95% of market value, and in return the investor on the loan(s) being serviced will receive 25% of the appreciation/profit once the home is eventually sold or refinanced.

This is per the press release that Ocwen just released on July 26, 2011: Found Here

Here is the phone number to Ocwen Customer Service: (800) 746-2936

Upside down on your mortgage? Is it being serviced by Ocwen? Call them to find out if you qualify for this program?

Here’s our SCV Real Estate 360 video on the new Ocwen SAM program, call us if we can ever be of any assistance for any of your Santa Clarita real estate needs.

*don’t call us for help with loan modifications, we do not help or advise on such subjects, please contact your lender directly for help

Most of you have heard by now, that almost everyone needs to install a Carbon Monoxide detector, or two, or three, into their Santa Clarita home. The new California legislation went into effect July 1, 2011, for single family homes.

More specifically, if your single family home has any gas appliances (fossil fuel burning as they say), or an attached garage, or a fireplace, then this law applies to you. You must install carbon monoxide detectors that have been certified by the State Fire Marshal. The Fire Marshal must approve the detectors and the instructions that come along with them. I’m sure that all the reputable places like The Home Depot, etc, will only be selling the detectors that have been certified. Just make sure to check the brand here to see if it’s on the California Fire Marshal approved list of Carbon Monoxide Detectors.

The law basically reads (and read it for yourself), that a carbon monoxide detector must be installed outside  of each separate sleeping area, in the immediate vicinity of the bedrooms, and on every floor level, including basements (which we don’t have much or any of in CA).

This new California law, SB 183, will take effect on January 1, 2013 for duplex, apartment, and condominium units. Currently it applies to single family homes.

Whatever your opinion on the new legislation, it’s time to make sure whether or not you’re compliant. Own rental property in Santa Clarita? Have tenants? Things to think about.

Great news for Santa Clarita homeowners who are upside down on their mortgage(s). Governor Jerry Brown just signed into law SB 458, which extends the protections of SB 931 from 2010, yet goes a few steps further.

Previously, if you wanted to perform a short sale on your Santa Clarita home, you were only guaranteed that your first mortgage lien holder would not come after you for a deficiency judgment. If you had a junior lien, a second, or even a third, you weren’t protected.

SB 458 now protects you, even if those mortgages were refinanced, in other words, not purchase money loans. SB 458 extends the protections of SB 931 to junior liens. This will really help quite a few people out, in determining whether or not, they would like to perform a short sale on their Santa Clarita home. So often, our clients were left to consider, foreclosure, or short sale. Generally, the indecision, was due to their fear of deficiency judgments.

I found some chatter on the internet regarding whether or not SB 458 protects you if you received money as a result of refinancing your home (cash out), and used that money for anything other than improving the home. If you spent money on a wedding, a boat, travel, bills, it looks like you may still be open to a deficiency judgment. Here is the California SB 458 bill text. I don’t see that in there specifically, however there is a clause regarding “waste”.

If you’re underwater on your Santa Clarita home, and are thinking about short selling, then now may the time to consider it, or reconsider, especially in light of this new SB 458, California law.

Thinking about buying a home? Curious about what closing costs a homebuyer has to pay for? Below is a list of customary closing costs that a homebuyer would typically pay for. Just about everything in a real estate contract is negotiable however. Despite that, the closing costs such as a buyers home inspection, or loan fees, are almost always paid by the buyer. Likewise, the seller has customary closing costs, such as real estate commission, termite inspection, and HOA transfer fees, that are almost always a cost that they incur.

Below, a list of typical closing costs, that a homebuyer will incur in a real estate transaction:

You may be wondering, what closing costs does a homeowner have to pay for, once they sell their home. The answer is, it depends. Some closing costs are customary with respect to who pays for it, and some aren’t.

Almost everything is negotiable with regards to closing costs, for both the buyer, and the seller. It’s the customary part, that gets in the way though. A homebuyer will have some of the same, or similar closing costs as a seller, too. Such as an escrow fee. Both parties will generally pay for an escrow fee, most often splitting it, 50/50. A home warranty for example, is usually paid for by the seller, but, if the seller isn’t willing to pay for the home warranty for the buyer, then the buyer can buy it for themselves, as part of their closing costs.

Below is a list of closing costs that a seller will customarily have to pay for in a real estate transaction:

Seller Closing Costs

California State Flag

Several new California laws will go into effect on January 1, 2011, and some of them will affect the local Santa Clarita real estate market, as well as certain practices.

New laws going into effect January 1, 2011:

Senate Bill 931 (effective Jan 1, 2011): No Short Sale Deficiencies: A seller’s first trust deed lender cannot obtain a deficiency judgement against the seller after a short sale. This is great news for homeowners who, for one reason or another, must short sale their home in Santa Clarita. Santa Clarita’s real estate market inventory is comprised largely, of short sales. This bill will come to a great relief of many, that the banks will not be coming after them for a deficiency judgement once the short sale is agreed to and over. The law applies to first trust deeds secured by 1-4 residential units, but does not limit the lender from seeking damages for fraud or waste by the borrower.

Assembly Bill 1809 and California Civil Code section 2079 (effective Jan 1, 2011): Energy Audit in Home Inspection Report: A homebuyer in Santa Clarita will now be able to request an audit of the energy efficiency of a home, according to the standards of the Home Energy Rating Systems (HERS). The homebuyer would need to request this energy efficiency audit of the home they’re purchasing, to be included in their home inspection report. Realtors are now being encouraged to give their Santa Clarita homebuyers the newly released HERS booklet, which informs the homebuyer about he statewide HERS program.

Senate Bill 1137 (effective Jan 1, 2011): Loan Originator Requirements Enforcement of Mortgage: This is a good one for consumers, as it raises the bar for mortgage loan originators. High enough? Maybe not. It’s something though. Anyone acting as a mortgage loan originator (MLO) without an MLO license endorsement will be guilty of a crime punishable by 6 months imprisonment plus a $20,000 fine. This endorsement will have to be earned via tests. And a broker cannot employ or compensate a real estate licensee for MLO activities unless that licensee has a license endorsement. This new law also gives the California Dept of Real Estate  the authority to deny or revoke a MLO license endorsement or take other action.

New protections against real estate fraud:

• Expanding the foreclosure consultant law to include someone who performs a forensic audit of a residential mortgage loan (Assembly Bill 2325)
• If you’ve purchased a home before, you have probably received one of these… New requirement that any mailed solicitation which offers to provide a copy of an owner’s grant deed or other title records for a fee, to include a prominent statutory disclosure that the copy service is not associated with any governmental agency and that the homeowner can obtain such records from the county recorder (Assembly Bill 1373).
• Criminals that have made a business out of renting out homes that aren’t their own (bank owned homes, etc) to unsuspecting tenants, will now go to jail longer! Instead of six months plus a $1,000 fine, as of Jan 1, 20011, it will now be one year imprisonment plus a $2,500 fine (Assembly Bill 1800).

That’s it for the start of 2011, and new California laws that will/could have an impact on the Santa Clarita real estate market. Now, I wish someone could make a law requiring banks performing short sales, to be required to give an answer in a matter of a few weeks. Not, a few months. Regardless of how many loans are on the property. That would help unclog a lot of inventory, not just in Santa Clarita, but across the country. Pipe dream. I know.

Taking a look at how affordable homes are in the Santa Clarita Valley to first-time homebuyers, all we have to do is look at the most recent California Association of Realtors First-Time Buyers Housing Affordability Index.

The report came out on Monday, and showed that quarter over quarter, and year over year, affordability amongst first-time homebuyers in California, is up. Not a huge amount. Its been going up though, and that is what’s important.

In California, over-all, the affordability index for first-time homebuyers is at 66 percent. That means 66 percent of first-time homebuyers in California can afford to purchase an entry-level home. The report thankfully breaks down the numbers by region, and shows that in Los Angeles County, where Santa Clarita is, the affordability amongst first-time homebuyers here is at 57 percent.

Thanks in-part to dramatically lower home values, and extremely low interest rates on home loans, homebuyers need an income just under $50,000 in order to afford the entry-level home price in Los Angeles County – $297,500. Very doable for many!

What does this mean?

Many, however, won’t buy, despite this affordability. Why? We can only speculate. The first thing that comes to mind is lack of confidence in job security. The second reason that comes to mind is a fear of further price declines (or hope?). Third…no major tax credit incentives for first-time homebuyers any longer.

While many won’t buy, plenty will, still. Santa Clarita itself, is a huge draw. People considering their first home purchase in Los Angeles areas, often times start considering the jewel to the north, that is Santa Clarita. This town sells itself, and always will. Now that Santa Clarita is becoming a bit more trendy, what with that addition of The Patios to the Valencia Town Center, first-time homebuyers will only become more enamored with the prospect of making their first real estate purchase, right here in the SCV.

Are you a first-time homebuyer looking for a place to call home in the Santa Clarita Valley? If so, start your search over at the best search site on the web, for SCV real estate: TheScvAgents.com.

The Franchise Tax Board in California set the deadline to fax in your application for the first-time homebuyer tax credit, to August 15, 2010. They enough applications already, to surpass the $100 million dollar cap, allocated for the up-to $10,000 tax credit, for first-time homebuyers in California.

Listen in as Brian discusses the tax credit and the application deadline.

The lawyers and powers that be at the California Association of Realtors rolled out a new Residential Purchase Agreement (RPA) a few weeks ago. If you're buying a home, your Realtor should have you sign the new RPA, which reflects a revision date of April 2010 (it will look like 4/10 on the purchase agreement).

Why should you care? What gives?

The new RPA is loaded with changes, some great, some just ok, that seem to me, to be added protection in what is surely a very litigious state – California. The RPA hasn't been over-hauled like this since 2007. Fortunately for all of us involved in the real estate business, what was an 8 page contract, is still an 8 page contract. It's just better!

Some of the new changes include:

• Agency Disclosure Moved – The location of the Agency Disclosure is no longer found, and buried, on page 7 of 8. It's now prominently on page 1, before the buyer and their agent note what price is being offered for the home. It's important that the buyer understand the agency relationship their broker has, between themselves and the seller. This is now taken care of at the outset of the transaction's creation.
• Buyer's Initial Deposit – Now the language is provided for, that the buyer may hold onto their deposit, and within three days of their offer being accepted, they may deposit that initial deposit, at escrow. This differs from the prior Residential Purchase Contract, in that previously the buyer generally left with their agent/broker a deposit check, even though they did not know whether or not their offer would be accepted. Furthermore, the broker and real estate company no longer has to worry about the accounting of Trust books, which can get quite tedious when taking in so many initial deposit checks for different buyers.
• Buyers Be Exercised In Good Faith – We're talking about a buyers home inspection, investigation, and loan approval. The buyer must do their due-diligence with their inspections and must in good faith do their best to obtain a loan for which they have indicated they need on page 1 of their offer. This sounds like a no-brainer, but there have obviously been instances when one party tries to use the other, and essentially jerks the other party around for their own gain. Now, if a buyer is choosing to NOT remove their contingencies for items such as home inspections, loan contingencies, etc, they must make sure that they at least tried to complete the before mentioned items, in good faith. The burden to prove such a vague standard however, likely falls on the seller. The goal though is to improve the performance of the contract by both principals involved.
• Table of Contents – While it's only 8 pages to fill out in order to get your offer accepted…it can still be tricky to navigate. There will now be a Table of Contents at the beginning of the RPA, to help make it all a bit more clear, for you, the homebuyer, as well as the seller when reviewing your offer.
• FHA/VA Buyer Addendum – When using an FHA or VA loan, it's not too uncommon for your lender to require certain repairs, and or require that the seller pay for certain closing costs that the homebuyer is not allowed to pay for. This addendum will now be filled out along with a normal repair request, as an addendum to it, in order to detail whatever it is that your lender is requiring the seller to do, in order for you to get your FHA or VA home loan. Previously important language was absent in any contract generally being used. With the prominence of FHA and VA loans, especially amongst first-time homebuyers, it's fantastic that this issue gets brought out into the light and is made, a bit more clear.

Here is a Sample of the new California Association of Realtors – Residential Purchase Contract 4/2010

The California Legislature passed a bill, now on it's way for Gov. Schwarzenegger to sign, that will provide state tax relief to many Santa Clarita homeowners who performed a short sale on their home, selling it for a loss, and below what they owned on their mortgage. It will certainly help those who are contemplating performing a Short Sale in Santa Clarita as well.

Until this bill, homeowners with a recourse loan (not purchase money), have had to claim the amount of debt forgiven by a bank, as income, when it comes to their California state income taxes. While there is already a Federal Mortgage Debt Forgiveness Act, this particular California Mortgage Debt Forgiveness Act will come in handy to those who have been hit hard by home values dropping, and have had to perform a short sale.

Gov. Schwarzenegger is expected to sign the bill in the coming days. If you need to perform a short sale on your Santa Clarita home…contact us @ The Robert and Brian Team @ 661-964-1760 so we can guide you through the process.