by Daniel Kodam, Esq.

As the housing crisis continues to loom and foreclosures remain an unfortunate reality, families may find themselves at a loss when it comes to keeping their homes.  A stumbling economy coupled with mounting mortgage payments can make it difficult for people to remain current and even keep their home in the long run.  For those who find themselves in this unfortunate situation, a loan modification is an option worth exploring.

A loan modification is a permanent change in the terms of one’s mortgage that allows the homeowner to become current and results in an affordable payment as well. The first key to securing a loan modification is communication.  Communicate with your lender, whether it be by your own personal contact, a loan modification company or through an attorney.  Most commonly, lenders are not willing to negotiate until the homeowner has defaulted on their payments, but if you feel you are headed in that direction, it is best to be proactive by notifying your lender of your situation.

First be aware that initial contact itself can take numerous attempts. Following this initial communication, the negotiating process will begin in which you may propose changes in the terms of your mortgage, such as the amount of interest rate or the period of repayment.   Additionally, your lender will want proof of income, employment and the like to show that you are able to make such proposed payments.  A loan modification package will then be submitted to the lender and the lender will then decide whether to accept the offer of the new terms.   After the terms are accepted, a new agreement will be made and the loan modification will go into effect. 

Overall the process can take anywhere from 30 days to six months. Throughout the process, it is important to document all conversations and proposals in order to reference different terms previously discussed so that negotiations are always moving forward.   While it can be a lengthy and overwhelming process, a representative company or attorney can be of great assistance in completing the transaction.  In either case, a loan modification is well worth the effort for those individuals who want to maintain the security and stability of their home as our country moves forward through this difficult time. 

Daniel Kodam is with Daniel Kodam and Associates at 41880 Kalmia Street, Suite 130, Murrieta, CA.  For more information on this article or other questions, please call (951)445-4905.

 

by Gene Wunderlich

I recently had an opportunity to participate in an hour long conference call with FHA Commissioner Dave Stevens, courtesy of the National Association of Realtors. Long-time readers know I'm a fan of Stevens, a Realtor himself. I even got a nice comment from him on a blog I wrote last fall following his address at NAR. I think it's a good thing to have somebody in his position who actually knows real estate, knows what it takes to sell a house, get a mortgage, work a short sale, etc. When it seems most of politicians are in way over their heads on most topics, it's refreshing to have someone who knows our industry helping formulate policy.

Stevens started his talk saying these are 'unprecedented times' in the housing industry. 'The good news is that the housing industry has never received this much attention. The bad news is that the housing industry has never received this much attention.' The housing industry brought the U.S. economy to its knees and nearly took the world economy with it.  We had a severe hiccup when people lost sight of housing as shelter and started viewing it as an investment strategy. 

He then ran through some of the stats that most of us are aware of. Exotic mortgages nearly wiped out the FHA base. With their 3% down, 30 year fixed mortgages FHA was too boring, couldn't complete with '0' down, no interest, no doc loans - they were irrelevant and shrank to less than 3% of the market. Today they are back up to 30+% and growing. They originate 50% of loans to Blacks, 45% of loans to Hispanics and 80% of loans to 1st time homebuyers. 

He also talked about some of the changes FHA has made to protect their base things like increasing the down payment amount for some buyers and decreasing the amount of seller contributions. He noted those things are vital to protect FHA and he quoted numerous studies showing the rise in failure rates between buyers getting 3% seller contributions and those getting 6%. He also talked about the SAFE Act, which he believes will go a long ways toward eliminating the type of 'rogue' lender that contributed so much to questionable lending. He sees this as a good step toward rebuilding consumer confidence in the market. 

He also stated that, in hindsight, it's clear that everybody should not have become homeowners, as was the mantra for the first half of the decade. And through their policies they intend to make sure everybody doesn't become a homeowner going forward - only those who should be, who can demonstrate the fiscal ability to meet the responsibility they are undertaking. He realizes that some of the policies sound harsh and that some innocent people will be hurt, but in the interest in returning credibility, confidence and integrity to the market, these are steps that need to be taken. And with 95% (his figure, not mine) of the financial market under the control of the Federal Government, they are in a position to set those rules. 

And for the most part I find myself in agreement with what Stevens said - up to a point. He started losing me when he said that the belief in Washington is that THEY need to act to restore confidence in the market because WE failed. WE collectively built this market - all of us, according to Stevens, but it is the Obama administration that now sees the mandate to ride to the rescue. He credits this administration with stabilizing the market at a time it was in free-fall. He believes the HAMP & HARP and other programs have been resounding successes and that without them the crisis would have gotten much worse.

That's all partially true but it strikes me that in some respects Dave has been drinking the Kool-Aid. And that's OK - I mean he works for the administration and his job depends on toeing the company line on this kind of stuff - just don't expect everybody else to believe it without question. But we were all too polite to question it on the call. 

I just sent out my monthly newsletter in which I pretty much said the same thing Stevens did about it being a unique market and that the government has their finger in darn near every aspect of the market. Where we diverge is that while Stevens thinks more government intervention and manipulation is a good thing, I think it has artificially propped the market up and has kept us from a true stabilization, reaching a real bottom and starting a sustainable recovery. We simply don't know what the government is going to do next - and that creates instability - especially when the majority of us don't have much confidence in that government to begin with.  

As Ben Bernanke recently commented to the Dallas Regional Chamber, "We have yet to see evidence of a sustained recovery for the housing market. Mortgage delinquencies for both prime and sub-prime loans continue to rise as do foreclosures." It's cyclical. The market would never have peaked as high or as boisterously as it did without government intervention. When Barney Frank and Bill Clinton decided everybody who could fog a mirror should buy a house, the die was cast. When the financial markets responded with vigor and with increasingly exotic products and Barney Frank and George W. encouraged it, we were toast and didn't know it. So when Stevens said WE built this market, he should have expanded his collective WE to include all the federal cronies who are now charged with straightening out the mess they helped create in the first place. Dave didn't mention that. 

Oh well,. As always, we at the street level are left to deal with what plops in steaming piles from the bowels of Congress. Thus it has always been. Obama didn't create the mess and he sure as heck ain't cleaning it up, though when the cycle ultimately turns you can bet he'll be leading the parade to take credit for it. The rest of us will just keep working and trying to eke out a living and stashing as much as we can before higher taxes and interest rates take it. That's the fun part. As Dave Stevens closed he quoted that thing that makes each of us get up in the morning and do what we do - "We still own the American Dream business."

Well, at least the part the administration doesn't lay claim to. 

Gene Wunderlich is the Government Affairs Director for the Southwest Riverside Association of Realtors.  You can direct your questions and comments to This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

We’ve just returned from our 526th Directors Session for the California Association of Realtors in San Jose (The California Association was founded in 1905). We spent a week mastering new tech tools, social media, dissecting ‘wins’ & ‘losses’ in this current legislative session and formulating our legislative agenda for 2010. Many of our concerns mirror your own about housing, jobs, revenue and housing. (We like housing)

One of the highlights of our fall session is an economic update & forecast with our Chief Economist Leslie Appleton-Young. She provided a fascinating look back at how we got here and a thoughtful look forward to where we’ll be this time next year. (You can view the entire presentation here: http://www.car.org/media/pdf/ econpdf/10-07-09Forecastexpo-FINAL.pdf.)

She begins with summaries of such indices as the Consumer Price Index, Consumer Confidence Index, unemployment, retail sales, monetary policy and mortgage interest rates. If you’re not an economist it probably won’t keep you on the edge of your seat but it does provide some background on where we’ve been the past couple decades.In the housing section of the report she shows graphically how housing sales in California bottomed out in 2007 and has rebounded in each of the past two years. During previous bust cycles it took 5 years for sales to decline by 61% between 1978 and 1982, another 5 years from 1988 to 1992 to decline 25% but just 2 years, 2006 & 2007 to drop 44%. In both those previous cycles it took another five years to stabilize and post modest growth, this time around our growth has been much more robust almost bouncing off the bottom.

Interestingly, while sales plummeted, our median price level remained strong until well into 2007 but has been in free-fall ever since. But there’s several reasons for that. Conceptually we understand that the great influx of bank-owned homes contributed to this. There was a period during early 2007 when local inventories of homes for sale was well over a year. Too few buyers chasing too many homes – simple supply and demand. Prices finally headed down in an attempt to find the level where buyers would be motivated to re-enter the market and have only recently shown some signs of stabilizing.

But a larger factor contributing to the precipitous decline was the credit freeze in August 2007. Charting this process clearly shows a major divergence in home buying practices where the sales of moderately priced homes, those under $500,000 increased from about 45% of the market to nearly 90%. Meanwhile sales of homes over $500,000 dropped from about 46% to just over 10%. By January 2009 homes over $1 million declined to virtually ‘0’ as the availability of Jumbo loans dried up. Backing those properties, which typically carry a higher median price, out of the equation skews the numbers dramatically toward the lower end of the pricing spectrum.

Both of these sectors have shown very modest increase the past 3 months but until the financial markets get back to lending money, you won’t see a significant increase. However, there is a pent-up demand for these upper-end homes, especially among move-up buyers. Once that market returns it will have a very immediate and positive impact on median prices across our market.

One final note on housing inventory. As I’ve mentioned here before a ‘healthy’ inventory of homes available for sale is in the 5 – 7 month range. Locally our inventory had fallen into a moderately unhealthy range of 2-3 months. In September that number dipped below 2 months across the region to a low of 1.1 months in Lake Elsinore (from a peak of 33.2 months in 9/07). Temecula and Murrieta check in at about 1.5 months each and Canyon Lake posted the highest inventory at just 1.9 months (from a peak of 35.8 in 9/07). Even with the promise of foreclosures continuing to impact out market for another couple years, it’s unlikely you’ll see further price declines of any significance in our area.

For those of you who may be frustrated by the home-buying experience right now, all I can say is keep trying. The stories you hear about homes receiving 10 or 20 or more offers is absolutely true. But with housing affordability in California at an all-time high and interest rates bumping their all-time low this is an unprecedented opportunity for residents and investors. If you give up now, a year from now prices and interest rates will be on the rise, affordability will be on the decline and once again your hindsight will look more favorable than your foresight. Gene Wunderlich is Government Affairs Director for the Southwest Riverside County Association of Realtors.

You can direct your questions and comments to This e-mail address is being protected from spambots. You need JavaScript enabled to view it Gene Wunderlich is Government Affairs Director for the Southwest California Association of Realtors. The opinions expressed are strictly that of the author. Share your opinion with This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

As temperatures cool down, Southern California Gas Co. (The Gas Company) is advising customers to inspect their home-
heating appliances and perform any

needed maintenance necessary to avoid any health or safety hazards. “Now is the right time to perform any maintenance on your home-heating appliances to ensure safe and efficient operation,” said Richard M. Morrow, vice president of customer service for The Gas Company.

“Customers are beginning to turn on their furnaces for the first time in months. If they think their heating appliances are not functioning properly, they should call a licensed heating contractor, plumber or The Gas Company.”

Failure to perform annual maintenance on gas appliances may result in exposure to carbon monoxide, which can cause nausea, drowsiness, flu-like symptoms, and even death.

Since home heating typically accounts for more than half of the monthly winter gas bill, the best way to keep bills lower–and ensure appliances are operating safely–is to get gas appliances serviced, Morrow said.

The Gas Company offers customers the following tips to ensure the safe and efficient operation of their natural gas furnace:

• Have gas furnaces checked at least once a year by The Gas Company, a licensed heating contractor or plumber.
• Vacuum and clean regularly around the furnace, particularly around the burner compartment to prevent a build-up of dust and lint.
• Never store items in, on or around the appliance that can obstruct airflow.
• Most forced-air units have a filter that cleans the air before heating and circulating it throughout the home. The filter should be checked monthly for lint build-up during periods of furnace use and cleaned or replaced, if necessary.

For more information on furnace safety or to schedule a service appointment, please visit The Gas Company’s Web site at www.socalgas.com.

As the country continues to rebound from our recent economic woes, California lawmakers have taken a significant step toward helping homebuyer’s and owners alike through the mortgage crisis. Just earlier this week, California Governor Schwarzenegger signed into law several bills that tighten the rules on the lending process and those who issue mortgages.

At the top of the list is Assembly Bill 260, sponsored by Assemblyman Ted Lieu (D-Torrance). AB 260 calls for tighter restrictions on mortgage brokers by preventing them from steering borrowers to high interest loans when borrowers actually qualify for lower risk loans. The law also forbids negative amortization loans, which caused inflated balances on principals because the mortgage payments were set too low. Overall, the law provides for more responsible lending and higher respect for borrowers, which will in turn make for a better market. This law goes into effect January 1, 2010.

Other significant bills include Assembly Bill’s 329 and 1160, and Senate Bill’s 239 and 94. AB 329, by Assemblyman Mike Feuer (D-Agora Hills), mandates that reverse mortgages come with stricter guidelines so that elderly borrowers are not mislead. Certain disclosures are now required to inform the borrower of the risks of a reverse mortgage, offering a much greater protection to seniors who may not fully be aware of the consequences of this type of mortgage.

AB 1160, by Assemblyman Paul Fong (D-Cupertino), requires that mortgage loan documents are written in the same language as the verbal negotiations were in. SB 239, by Senator Fran Pavley (D-Agoura Hills), now makes it a felony to commit mortgage fraud, whereas before the penalty was only a misdemeanor.

SB 94, by Senator Ron Calderon, (D-Montebello), which goes into effect immediately, takes clear aim at loan modification companies that have taken advantage of innocent citizens attempting to save their homes. This law now makes it illegal to demand up front payments for any fees or compensation before services are actually rendered in attempting to secure a loan modification.The law applies to foreclosure consultants, loan modification firms and attorneys who specialize in loan modifications.

All together, the new slate of mortgage laws offer a lot of promise to the people of California as they struggle to protect their homes in the current market. Hopefully with these new laws in place, our great state is well on its way to an accountable system and a stable housing market that will benefit everyone.

Nicole A. Silveira, Esq. is with KODAM & ASSOCIATES, PC, 41880 Kalmia Street, Suite 130, Murrieta, CA 92562. She can be contacted at (951) 445-4905. ext. 29 or at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

 

It’s late at night and you are home in bed when you suddenly hear the sounds of broken glass and the splintering of wood. The sound of footsteps rapidly approach your bedroom door. With no time to call the police, what will your response be? Your life and the lives of your family can change forever in an instant. No matter how you feel philosophically about the use of a firearm for personal safety, no one can argue that in the above scenario you are your first line of defense against violent criminals.

When it comes to using a firearm to defend oneself and others during a highstress, heart racing and life-threatening encounter with an intruder; a calm mind, focus, a steady hand, and proper weapon manipulation skills engrained in the memory is what it takes to become a victor rather than a victim during the mere seconds that the vast majority of armed confrontations take place in. While you might own a firearm, do you have the knowledge and skill it takes to successfully defend yourself and others in the dark against one or more home intruders. Planning, preparation, safety, proper weapons handling and use are the objectives of a new firearms training program offered locally by the Temecula law enforcement and forensic CSI consulting firm of Martinelli & Associates, Inc.

Since January of this year firearms sales nationally and in the Inland Empire are 300% higher than in 2008. While local gun stores have been inundated by people purchasing firearms and ammunition, relatively few of these people have proper training in the use of a firearm for personal protection. “Plinking” at cans and paper targets that don’t shoot back is an ineffective method of training someone to use their weapon to engage a violent attacker at close range in a high-stress encounter.

The Street Safe Defense Firearms Training Program provides instruction in all of the components of firearms safety and handling including state and national self-defense laws, weapon familiarization and safe weapons handling, weapon manipulation and close quarter shooting under stress.

You will find all of our instructors to be very patient and supportive when working with women, senior citizens and those with a variety of disabilities. Classes are small with plenty of one-toone personal instruction.

The Street Safe Defense Firearms Program provides for an excellent variety of beginning, intermediate and advanced level handgun classes, as well as a home defense shotgun course. The program stresses participant convenience, with all classes being produced in the village of Rainbow, which is just south of Temecula, off of Highway 15.

Morning classroom activity is conducted at the Rainbow Valley Grange, with afternoon shooting practice conducted at the Rainbow Range & Shooting Club. Course tuition covers instruction, range fees, eye and hearing protection, targets and related training equipment.

Call Martinelli & Associates office at (951) 719-1450 or visit www.streetsafedefense. com for more information on the courses or the company.

If you are thinking about a divorce, and you own a home, you need to know that you have a growing network of highly trained professionals
available to you with a whole new list of actions for you. No longer can you just rely on an appraisal to really understand your home’s value. No longer can you just agree to split and one take the house. No longer can you avoid big losses without taking new steps to protect yourself (not your spouse, YOU!).

Right now, you are probably asking: “What new list of actions? Doesn’t my lawyer know the right steps?

The answer to those questions are: 1.
There is a new breed of Real Estate agents trained and certified as Real Estate Collaborative Specialists – Divorce (RCS-D™) who have an arsenal of tools ready to help you through this tough time in your life. Look for their ad in this newspaper.
2. Many lawyers know about the RCS-D designation and all that it means. Be sure to ask your lawyer if he or she has been trained in this emerging knowledge base. There are continuing education credits available that are already approved by most Bar Associations. If you need more help, contact Kelly Bennett, President of the local Bar Association. She is also an expert family divorce mediator who could help you immensely.

But this article is about home inspections, right? Among the long list of actions you will be counseled to take, a comprehensive home inspection is one of the most important.

Why? Imagine – you have an appraiser over and you get a market value. But the appraiser does not have the training to do a real home inspection. To learn about a REAL inspection, go to www.sshi.net

Here is a true story – a woman involved in a divorce kept the house after getting an appraisal. 2 years later she decided to sell it. The buyer’s home inspector found major water damage that cost $30,000 to repair. Did her spouse pay any? NO – the divorce was FINAL – she paid it all.

Please don’t let that happen to you.

To view Kurt’s web site, go to www. ifimissitifixit.com or call him at (951) 296-3611.

Local Realtors and home inspectors who are interested in further information visit www.divorcethishouse.com

Remember when we were kids and all the cartoons about the future had flying cars? Well, we’re still waiting for the flying cars, but there is one
futuristic vision flying around that is fast becoming a reality.

Unified communications, also called unified communications and collaboration, is the convergence of multiple communications technologies on a unified platform.

You’ve seen this portrayed in movies and TV for years, but until recently it’s been mostly the stuff of science fiction. A typical example is where you see people talking to people on big screens, or computers, and seamlessly passing documents and information across town, the country, or around the world.

Today, people, and more importantly companies, are actually using unified communications systems and saving lots of time and money. That said, it is still a complex proposition.

Unified communications typically includes Internet Protocol telephony, email, instant messaging, audio and video conferencing, presence and more. It allows users in multiple locations to converse using multiple communications platforms in real time.

Think telecommuting on steroids. Multiple offices working as if they were in one building. Staff and team meetings taking place online. Sales calls and demonstrations for clients in another city, county or country. And, all face-to-face in real time just like you’re in the same room.

I mentioned that it can be complex.It involves multiple vendors and equipment and an information technology platform that supports Voice Over Internet Protocol (VoIP), soft-phones and video equipment, and a stack of servers. Definitely a “cap ex” investment.

But, like all technology it gets better, faster and cheaper as it evolves. And, there are companies that specialize in the network integration that make it all work. One such integrator, Nexus IS, has an office in Murrieta.

According to Nexus IS, 86 percent of companies using unified communications report significant productivity gains, and more than 60 percent reported savings of three or more hours per week for each “mobile worker.”

And, according to Forrester, Inc. a leading research and analysis group, “integration of communication and collaboration applications provides business agility not previously possible.”

So, the future of business communications is in the cloud. Cloud computing that is, which has me thinking. Now that we can communicate and share information so easily without going anywhere, maybe we don’t need flying cars!

Herb Torrens is the principal of Herb Torrens Media Communications providing small-to-medium size businesses with Web, video and multimedia services. He can be reached at htorrens@ verizon.net. Profile available at Linkedin. com, or contact him on Twitter @ zmediaman.

I’ve been telling people for awhile now that it’s a great time to buy a home in Southwest California. Prices are at their most affordable level since 2001. And with interest rates still hovering near record lows and a variety of government stimulus programs available, people who have been frozen out of the market by upward spiraling prices should be taking advantage of this market in record numbers–and they are. Prices across our region have been relatively stable since the end of 2008 and in some markets have even starting to tick upward.
An even more positive market indicator is that some experts and media pundits are voicing cautious optimism about the economy in general and housing in particular. Folks, by the time the media figures out we’re out of the slump you’ll already be a day late and $2 short to the market.
But as good a time as it is to buy–it’s also a terrific time to SELL! Yeah, you heard me. It is an absolutely great time to be a seller in this market too. Now before you accuse me of drinking on the job, let me explain. Obviously it’s not a great market for all sellers but for some of you the timing may be just right. Our inventory–that is, the number of homes on the market actively for sale–is at record lows. A year ago it was not unusual to have 10 or 11 or even 14 months inventory available. That was a lot of homes for buyers to choose from, literally thousands across the Inland Empire. Then came a huge buyer surge that peaked across the region in Sep/ Oct 2008. 1st quarter sales this year were 2–3 times what they were a year ago. What happened? Inventory was depleted to the point where now many of our cities only have an active file of 2 months or less.
And there’s still a lot of buyers out there. Ask any Realtor® and they’ll tell you–the biggest problem with our market today is lack of inventory to meet ready, willing and able buyer’s demand. Any listing worth looking at is generating 20–40–90 offers, many for cash, many in excess of the listed price. And these are mostly for bank-owned homes that need work, or short sale homes that may take months to work through.
Imagine what a buyer would do for your well-cared-for ‘regular sale’ home.
As a Seller, you might be pleasantly surpr i sed at what your home would bring today. Oh I know, it’s nowhere near what it was worth a couple years ago but that was then–this is now. It could be 10 years before you see that price level again, and there are some that claim you never will (I don’t believe them–this is Southern California after all).
But if you have equity in your home and want to sell, there’s a good chance by this time next week you could have 53 offers, 21 for cash, 14 over your asking price. If you recently watched ‘Shark Week’ on TV, you’ll recognize the feeding frenzy.
So if you’ve been thinking about moving up but were waiting for the price of your home to bump up a little –DON’T wait. By the time you gain $10,000 on your home, the place you had your eye on will gain $15,000 and interest rates will be .5% higher. The longer you wait, the behinder you get.
The bottom line in real estate is that it’s always a good market for somebody. Right now it’s a good market for Buyers –but frustrating. Many Buyers are submitting offers on 10 or more homes hoping to get selected for one after jumping through all the hoops the banks hold up. Your hassle-free, well-maintained home would be an oasis. That makes it a strong Sellers market for a select group of homeowners in a position to take advantage of the opportunity.
Few of us were able to peg the absolute top of the market reliably–otherwise you wouldn’t be thinking about selling today. But even fewer of us may be able to peg the absolute bottom of this market. If you’d like to look into what you might expect as a Seller in today’s market, contact your favorite Realtor®. Don’t let this be another one of those ‘Man I wish I woulda…’ moments in your life. Make your house your home, not an investment vehicle.
Anyway, that’s just my opinion… I could be wrong.

Gene Wunderlich is Government Affairs Director for the Southwest California Association of Realtors. The opinions expressed are strictly that of the author. Share your opinion with This e-mail address is being protected from spambots. You need JavaScript enabled to view it .