Beware Of Preliminary Title Reports

The shakiest thing besides an earthquake is a preliminary title report. You can rely on these as much as winning the lottery with one dollar. These reports simply do not reveal encumbrances and liens that may be attached to the property, also they do not represent condition of title.A title insurer is not liable for inaccuracies a preliminary title report fails to uncover. In California a prelim title report is no more than an offer to issue a title insurance policy based on the contents of the prelim title report and any modifications made by the title company before the policy is issued. A prelim title report discloses special taxes, assessments, bonds, covenants, conditions, restrictions, easements, rights of way, liens and, any interest of others which may be reflected on public record as affecting title, collectively called encumbrances. Escrow will use prelim title reports to detect any defects that might affect title. The escrow officer will review the title report. They are responsible for advising the seller to eliminate any encumbrances on title that would disrupt closing of escrow. There is a written statement called an Abstract Of Title that is more reliable than a prelim title report. The Abstract title is a statement of facts gathered together from public records. An abstract of title is not an insurance policy. This is separate from title insurance. Title insurance is required before the close of escrow. Bottom-line: The prelim title report is simply an offer by a title company to offer title insurance. It is subject to change prior to issuing the policy of title insurance. Whenever you need a title report request a Abstract of Title before a prelim title report. It will save you the headache..

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Get A Home Inspection Or Home Rejection

I can’t over emphasize the importance of a Home Inspection Report. For sellers this report should be included in your listing package, for buyers this will provide a clear view of any defects the home might have. Home sellers this report should be attached to your TDS (Transfer Disclosure Statement), on receipt of the report, the seller act to eliminate some or all of the deficiencies noted in the home inspection report. . When you bring any defects to code a new report should be ordered immediately. Home sellers will be protected down the road, by demands to correct defects or to adjust the sales price in order to close escrow. The listing agent should order this report on the seller’s behalf. The listing agent will lose control over the marketing and closing process, and expose himself to claims of misrepresentation, when the buyer or the buyer’s agent orders the report first. Home Inspectors are generally your Contractors, Structural pest control operators, architects and registered engineers. When hiring a home inspector you should look for these qualifications. Educational training in home inspection related reports, length in time in inspection employment, errors and omissions insurance, and professional and client references; and membership in the California Real Estate Inspection Association. A listing agent requesting a home inspection report should advise the home inspector that the seller, broker and all prospective buyers of the property will be relying on the report. This disclosure will avoid later (unenforceable) claims by the home inspector that the report was intended for sole use of the seller, broker, or buyer who signed the home inspector’s contract. Here is a South Bay area home inspection company http://www.southbayhomeinspections.com/ they specialize in enhanced home inspections, pool and spa inspection, lead testing, and air sampling and mold. This company stress the need for continual training of their inspectors, they also posses membership of highly professional accreditations. .

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Shame on the Media

As a realtor in today’s market, my job has been hampered by the “bad market” cliché. Everyone seems to have the Chicken Little “the sky is falling” mentality. I definitely agree that lenders have tightened their lending criteria. However, there are still transactions being conducted on a daily occurrence. . When I prospect for clients the first question they ask me is “Is the market as bad as the experts say?” My reply is yes and no. Yes, because where foreclosures are high in numbers usually results in vacancies and short sales plunging the market south in depreciation. No, because there are markets that are high in demand and home appreciation is on the rise. Think about it, the two things that the United States government endorses is small business and home ownership. Lending across the board is tough now. Legislation is proposing new laws that will definitely make lending a problem. The media plays a significant role in the public mindset. The information from television, radio, and the Internet can be very misleading.
Case in point, I overheard a television network weighing in on the real estate market situation. They commented on how much our market (Los Angeles area) has depreciated, however the comparables were disparately different. The comparables used were between a one bedroom, one bathroom townhouse compared to a single-family house three bedroom, two bathrooms. Every realtor knows not to make such a comparison. It is like comparing apples to oranges.
Today’s headlines are filled with predatory lending accusations, realtor misrepresentation, and misconduct. Without a doubt this is sabotaging our market. It will make home sellers and homebuyers gun shy to pull the trigger on a deal. You can enlighten one or two but the media can poison 10 or 20 at the same time. The ordinary homebuyer and home seller will get mix signals about the market. It is common today for everyone not in the industry to try and educate the realtor, so being knowledgeable in your real estate market is the name of the game. Without the expertise and knowledge of a realtor consumers will be picking and guessing when to sell or when to buy. I constantly educate my clients with the latest and “correct updates” in the industry and put to rest any misconceptions about the market.
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Trust Your Knowledge Know Your Trust Deed.

When you sign a promissory note and record a trust deed, it becomes an acknowledgment of debt. A trust deed is used as the security device of preference to impose a lien on real estate. Your trust deed and notes are comprised in your loan doc's, they explain your interest rate, if your loan is fixed or adjustable, and the life and terms of your loan. A trust deed contains elements and characterizations that identifies all three parties in the trust deed. The parties in the trust deed are the owner, called the trustor (who voluntarily imposes the Trust Deed Lien on his property), the middleman, called the trustee, (who has power of sale over the property), and the lender or carryback seller, called the beneficiary (for whose benefit the trust deed lien encumbers the property). There are arrangements a trust deed lien carries. It carries the borrowers signature and notary acknowledgement, all three parties and legal description of property, and a promissory note and terms of the encumbrances. The trustor, is usually the borrower of money or buyer of credit. An owner can hold a fractional co-ownership or leasehold interest. Other interests besides the fee and leasehold include life estates, beneficial interests in existing trust deeds, as well as equitable ownership rights under land sales contracts and purchase rights under options to buy. The trustee’s role in a trust deed works likes this. The trustee’s responsibilities are to auction the property at a private sale on notice from the lender of a default or election to sell. The trustee also reconveys title to the owner and releases the lender’s lien on proper instructions from the beneficiary or the trustor. The beneficiary is the lienholder they hold a security interest in the property, called a lien. There are three ways to extinguish a trust deed relationship.

1. Foreclosure-by using a trustee’s deed or sheriff deed.
2. Full Repayment-by reconveyancing.
3. Mutual Agreement-by a deed-in-lieu of foreclosure.
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Evictions It’s The Law And Pretty Much The Last Call

What can be more depressing, frightening, and confusing when a foreclosure ends with an eviction? Here in California foreclosures has been growing steadily and with that comes an increase in evictions.There are certain ramifications that come with an eviction. For example, if you are a tenant occupying a property that has been foreclosed there may be a different set of rules. Let's say you reside in a area that is rent-controlled. You can’t be evicted because the bank will have to sell the property as a occupied. If you are the original borrower there is no escape from the inevitable. The eviction attorney will file what is called a Notice To Quit. These generally expire after thirty days. The Summons and Compliant will follow next leading to a Hearing Date. Once a Judgment of possession has been granted counsel will then send what is called a Writ to your local sheriff dept. The sheriff will post the eviction notice at the residence of record. On the day of the actual lock out the realtor that was hired by the bank along with the sheriff will team together to coordinate a lock out. That means a physical removal from the house. The realtor will then re-key the house and the is lock out completed. Some borrowers try to seek refuge by filing chapter 13. Now if this happens prior to sale then Bankruptcy proceedings will follow. Once that clears then the eviction process will begin. Bankruptcy filings after sale are different because counsel will file what is called a Motion For Relief and the eviction process will begin then. Bottom Line- Bankruptcy filings no longer protect a home owner today like they use to in the past and to add more not only will you have a foreclosure added to your credit profile an eviction will be added as well.

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Credit Crunch No Sweat. FHA Is The Way To Go

FHA was established in 1934 and is a part of the US DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD). A loan can be Conventional, FHA or VA.
Meaning who is insuring the loan. Conventional loans are insured by PMI (private mi companies), FHA is insured by HUD, VA loans are insured by the Veterans Administration.

FHA was established to make home purchasing easier to qualify than conventional. FHA ARE FULL DOCUMENTATIN LOANS. With the changing in underwriting for Subprime Loans, FHA is a valuable option.
For the following reasons:
. 1. FHA loans are not FICO DRIVEN. The client can have a FICO score under 600, or no score or no credit.
2. FHA loans allow down payment assistance from other programs as seconds
3. FHA has a 3% down requirement (REGARDLES IF IT IS 1 – 4 UNIT BLDG)
4. You do not have to be A FIRST TIME BUYER, If you own 3 units, you can purchase a SFR
5. No counseling required, No Income Restrictions, No Property Location Restrictions
6. The entire down can be a GIFT
7. Seller can pay of to 6% of ALL CLOSING COSTS INCLUDING TAXES, INSURANCE OR INTEREST
8. FHA ALLOWS UP TO 85% LTV CASH OUT ON REFINANCES AND 100% ON NO CASH OUT
9. FHA allows clients to buy if it has been 3 years since a Foreclosure, and 2 years since a chapter 7 and 1 yr while in a chapter 13 (if all payments were made on time)
10. FHA allows a STREAMLINE REFI, for existing FHA borrowers, low costs,
No appraisal, No Proof of Income only Mortgage Rating, No Cash Out, No Credit Check


FHA LIMITS as of September, 07 (SUBJECT TO INCREASE SHORTLY))

Los Angeles, Long beach, Glendale One Family $362,790, Two Family $464,449
Three Family $561,441 and Four Family $697,696 (Orange and Riverside Counties will be different)

The limits change throughout the US.

**THE SELLER IS NOT REQUIRED TO PAY BUYER FEES, FHA CHARGES A 1.5% UPFRONT MIP WHICH WILL BE FINANCED IN THE LOAN AND A PORTION REFUNDED UPON THE REFINANCE OR SALE OF PROPERTY.
NO PREPAYMENT PENALTY (WHEN THE LOAN IS PAID OFF FHA WILL CHARGE INTEREST TO THE END OF THE MONTH).



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Foreclosure 911 Help!!!

In case you have been living underneath a rock the mortgage industry has been getting hammered by the subprime fallout. Adjustable Rate Mortgages has been on the rise and homeowners have not been able to keep pace with their increased interest rates. So what’s next you have not made a mortgage payment in the last three or four months your lender files a NOD (Notice Of Default) it can be devastating news, but don’t throw in the towel yet. Here are some viable options to consider . 1 Refinance- Obtain a new loan to pay off the one in default
2 Foreclosure Consultant- Seek the services of a Financial Advisor or investment counselor. For a fee they will prevent lienholders from enforcing or accelerating the note, or help reinstate the, or get an extension or last but least arrange a loan or advance for funds for the owner.
3 Deed-In-Lieu- You can deed the property to directly to the lender in exchange for canceling the secured debt.
4 Litigate- You can dispute the validity of the foreclosure by filing an action, restraining and enjoining the foreclosure.
5 Bankruptcy- You can file chapter 13
6 Sale- Owner sales property before Trustee Sale
7 Walk- You can just simply vacate all together when lender completes foreclosure.


Here is a website I encourage taking a look at www.foreclosureuniversity.com It goes into in-depth details about foreclosures and the information is free. It contains a foreclosure flow chart, explains short sale, and foreclosure laws
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Shorten your mortgage by paying a little extra each month

Mortgagors have an agreed date for payment each month with their lender with a grace period of a few days. Some mortgagors would prefer to pay half of their monthly payment 15 days prior and the remainder on the due date. Your lender says this can done, but through a third party company, which will charge you a sign up fee for several hundreds of dollars plus a monthly fee. There are third party companies for a fee that will deduct from your checking or saving account half of your regular principal and interest payment every two weeks. This will equate to 13 monthly payments for 12 months, thus shortening your note by at least 7 years and saving a huge amount of money. Here’s the catch you can do this yourself at not extra charge. Simply divide your monthly mortgage principal and interest by 12 and add that amount to your monthly mortgage payment. Example your mortgage payment is $2400 a month divide that amount by 12 resulting in $200.00 this is the amount you will pay to shorten your note. Your lender will have to accept your payment as well and this is how you can shorten your mortgage.

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CA Gov Schwarzenegger Signs Mortgage Related Bills

CA Governor Schwarzenegger sign three mortgage related bills aimed at protecting homeowners and increase affordable housing. Foreclosures in CA hit 17.408 for the three months ended June 30 up 799% from the same period last year, according to DataQuick Information Services, a La Jolla firm One of the three bills signed would permit state agencies to adopt emergency regulations to ensure that all mortgage lenders and brokers are subject to federal guidelines on non-traditional mortgages. Those guidelines, aimed at reducing the number of loans to people who can’t afford them, apply to national banks but not to state-licensed lenders. The second bill would make it a crime for appraisers to become involved in valuing properties for transactions in which their compensation is tied to the final price generated by the appraisal. This is to stop appraisers from overvaluing properties to increase their fees. The Third bill will raise the debt limit applied to the California Housing Finance Agency by $2 Billion. That presumably would increase the amount of affordable housing. .



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American Agent Online Chatting Community

Finally, a site that both buyers/sellers and Realtors can chat about anything real estate. For Realtors, American Agent Online is a unique way to communicate with buyers and sellers. The setup is simple, easy, and FREE. You get one free zip code to work with any additional zip codes are $5 apiece. This is how it works you login, I suggest minimizing your screen. You will here a sound that will alert you that a person wants to chat with you. Now this person is located in a zip code you have chosen. It is a great way to network especially with potential clients. I say try it out. What do you have to lose? I give it two thumbs up. It’s free to sign up depending on the zip code you choose. There may be a surplus of buyer and sellers that need your expertise in real estate.

For consumers (both buyers and sellers) the first step you need to do is enter your zip code or list of zip codes that you might be interested in chatting with a Realtor about real estate. If a Realtor is online in one of the zip codes you chosen, you can engage in a chat about all real estate affairs. www.americanagentonline.com is the way of the future I strongly endorse this site. There’s no pressure at all and your identity is confidential.

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Why Can't I Get a Loan?

Your credit score, (also known as your FICO score) is extremely important. Your credit score determines what you can or cannot purchase and how much it will cost you. For example, you qualify for a home loan but your qualifying interest rate is through the roof. This is because your FICO score from Experian, TransUnion, and Equifax suggest that your rate should be higher due to poor credit history.


Wait did you check you FICO score before applying for that home loan? This should be the first step before applying for a loan. The second step is to order your credit report from the three credit reporting agencies. Your FICO (Fair Isaac Corporation) score determines the amount of interest that you would pay on a particular loan. It is safe to say that you need to know your FICO score and determining factors that makeup your credit score to make sound financial decisions.

The factors that make up your FICO score are paying your bills on time, how much you owe, types of credit, and the number of new credit applications a person has applied for. Obviously paying your bills on time is very important. No lender wants to lend their money to someone who is unable to pay their bills on time. How much you owe is factored against how much you make. If you make $50,000 a year and you are $30,000 in debt, then this will hurt your credit score. The types of credit are also critical when your credit score is determined. Secured credit cards and home loans are definitely better than unsecured credit cards and other types of credit of this nature. Lastly, the amount of new credit applications can cause harm to your FICO score. When you apply for so much new credit, a lender may see this as sign that you may be going through financial hardships and thus acquiring credit to help the situation.

Let me share one of my experiences with you. Eight years ago I had a somewhat of a decent credit score between 670-690, yet I was being denied credit. I could not figure out what was going on. After doing some research I found out my problem. Although I paid a collection bill about 10 months earlier the damage was done. The account reflected as paid but it was recent and it affected my credit score tremendously.

The best remedy for a better FICO/credit score is consistency. Paying your bills on time will raise your credit/FICO score. It makes a world of difference between buying and renting a home. An example of this is two people applying for a 30yr mortgage. A person with a FICO score of 600 will have an average interest rate of 9.422%. Another person with an FICO score of 750 will get an average rate of 6.195% on a 30yr mortgage loan. That is close to $300.00 a month difference on a $216,000 loan.
From my experience in selling homes and buying homes for my clients, in today’s market you would benefit immensely from having a FICO score as high as possible. It could be the difference of calling yourself a homeowner or a renter.

Please respond if you have any questions or comments or other helpful information that I may include with this topic.

For more information, visit the websites below.
www.myfico.com
www.freecreditreport.com



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