Let’s Add Pro Bono Work to NAR Code of Ethics
November 12th, 2008 Categories: Carlsbad Real Estate, San Diego Communities, San Diego Real Estate
by Roberta Murphy
Joe Ferrara is a man with many hats and one very big heart. He’s a real estate attorney in New York, a real estate broker, a premier real estate blogger–and someone who just might convince the National Association of Realtors (NAR) to add a pro bono clause to the NAR Code of Ethics.
Joe’s must-read blog article about this pro bono proposal is one that should inspire all real estate professionals to reach out to their communities and try to help people stay in their homes, even if they are not paid for their efforts. Why? some might ask–especially when times are tough for almost everyone?
Why?
Because, so many of us have the knowledge and expertise to help guide others through these treacherous financial waters. Because we are all weathering this storm together. Because someday real estate markets will stabilize. And because….
It sometimes just feels good to do good.
Thanks for this morning’s inspiration, Joe!
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5 Tips for Renting a Home in San Diego
September 22nd, 2008 Categories: Real Estate News, San Diego Communities, San Diego Real Estate
by Roberta Murphy
Great San Diego Rental
Renting a home in the San Diego area can be a real challenge–especially if you are new to the area. Most likely, you are seeking a home near employment, and may also be concerned about local schools and neighborhood safety.
Here are some tips for finding that perfect San Diego rental.
1. Whether you are searching for a San Diego home from afar, or are doing so locally, there is much you can do online and by phone. For starters, I would check out San Diego communities and neighborhoods at City-Data where you can check prices, crime statistics and area demographics
2. Generally, the safest way to locate a potential home to rent is to do so through a Realtor or licensed property management company. These professionals are in a position to check ownership and to make sure the home is not is some state of foreclosure. Use Craig’s List and classified ads at your own risk. If you do find a property to lease through one of these advertising sources, you may still want to call a San Diego Realtor and ask if he or she can volunteer to check ownership records for you (and please remember this helpful real estate professional when you decide to buy:-)
3. Before signing a lease, make sure the lessor is the owner of record. There have been many cases where crooks offer leases on vacant homes, take the deposit and rental money–and run. Additionally, you will want to make sure the home in not in some state of foreclosure in San Diego. You could end up relocating again–and sooner than you wish.
4. Once you have found your San Diego rental, you should definitely acquire rental insurance for your belongings. Fewer than half of all tenants bother doing this, and leave themselves at risk for great loss in the event of fire, flood, theft–or someone tripping over a stool in your kitchen and suing you. These policies are relatively inexpensive and are likely available through your auto insurance carrier.
5. Take photos of the interior prior to move in, and be sure to note in writing to the Lessor or leasing agent any defects to the property. This will help protect your security deposit when moving out.
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Revisiting An Appeal for Credit Amnesty
September 8th, 2008 Categories: Real Estate News, San Diego Communities, San Diego Foreclosures, San Diego Real Estate
by Roberta Murphy
I wrote this article a year ago for Luxury Home Digest, and thought it might be time to revisit the idea (see below)–especially since this past weekend’s announcement that the Feds are rescuing Fannie Mae and Freddie Mac.
If those organizations get a reprieve (at the expense of common stockholders and the American taxpayer), why not San Diego’s battered homeowners?
Since publication of this original article, home values in the San Diego real estate market have plummeted (some neighborhoods more than others, of course). And just a couple of months ago, San Diego’s City Attorney Michael Aguirre grandstanded pushed to make San Diego a foreclosure sanctuary, and has sued Bank of America, trying to stop them from exercising that right.
Instead, some wonder, why not provide some protection to homeowners who have fallen victim to short sales and foreclosures in San Diego?
The original article:
There is a tsunami of wrecked credit that has only begun to hit the credit reporting bureaus.
Many of the victims are those whose FICO and credit scores have been demolished by short sales and foreclosures. With the short sales, or short pays as they are sometimes called, the mortgage lender has agreed to accept less than what is owed on the home–and where more is owed on the home than what it is worth. In the case of foreclosure, the home is auctioned off for non-payment. In both scenarios, credit scores of the former homeowners are generally ruined, which will likely prohibit them from purchasing another home anytime in the near future–or perhaps for years to come.
Many will argue against the idea, but perhaps it is time to consider credit amnesty for those who have lost their homes to foreclosure and short sales. Sure, there were those homeowners who were greedy, who used their homes as ATM machines, who foolishly thought the crazed real estate market would continue forever–or at least until they managed to sell at the top of the market.
We have even met a few of those people. They are among the legions who followed real estate flipping shows and late night television gurus. They followed the promises of big and easy money.
But most of the defaulted clients we counsel have a history of home ownership, pay their bills on time, and were lured into mortgage financing that was so easy to obtain and which offered irresistible terms. Most relied on the counsel of a loan broker or real estate agent (often one person who wore both hats), who assured them of the wisdom of such loans.
It was a diabolical match: Gullible and sometimes greedy homeowners paired with greedy and sometimes crooked mortgage and real estate professionals.
The finger pointing can go on for years, but very soon there will be tens of thousands of people who will no longer be able to purchase homes. Add these numbers to the huge pool of buyers who are already afraid to enter the burgeoning real estate market and we have an economic problem of near-Biblical proportions.
I’m not sure how the details of a credit amnesty plan might work (and the devil always lurks in the details), but something need to be done quickly to help bolster buyer capability in this market. To disenfranchise such a large group of home buyers will only magnify the expanding real estate market glut and lengthen its recovery.
And as with any amnesty plan, there will be a percentage of borderline criminals who are more deserving of jail than being forgiven.
But with tougher mortgage loan underwriting, better oversight and raising the bar on real estate and mortgage lending professional standards, the rotten borrowers would be weeded out. This would also encourage the discouraged to stay current with their other debt obligations instead of giving up entirely on their FICO scores and future home buying opportunities.
It might be a solution that could help our markets recover–and credit amnesty just might offer hope to the hopeless. Might not the rewards outweigh the costs?
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San Diego Loan Fraud: Kickbacks and Consequences
December 6th, 2007 Categories: Carlsbad Real Estate, Coronado, La Jolla, Market Trends, Mortgage News, Real Estate News, San Diego, San Diego Communities, San Marcos
Opportunities for real estate fraud couldnt have been more ripe than in 2005 and 2006, when real estate prices started to quietly soften especially in fertile markets like San Diego, Phoenix, Las Vegas and Miami.
Home prices in these areas had rocketed to unsustainable levels, and some of the micro markets within these areas had already started to stall as early as 2005. By 2006, market time and days on market for San Diego real estate had begun to climb, to the discomfort of many sellers.
Many had listed their properties, hoping their homes could sell for at least as much as the recent neighborhood comparable sales or their own refinance appraisal and perhaps even more. Some of these sellers were more motivated than others, and reduced their listing prices substantially to attract more buyers.
The stars were perfectly aligned for the real estate crooks:
- The San Diego housing market was declining, and there was general confusion in pricing;
- Mortgage money was easy, especially with stated income loans.
- Many of these shady real estate agents also wore the hats of loan brokers and vice versa. This allowed better control of the transaction.
For example, we had an Imperial Beach home listed at close to $500,000, based on the owners 2005 refinance appraisal. Because the property needed so much work, the motivated absentee seller agreed to reduce the price to $399,000 and sell the home in as-is condition. Almost immediately, we had an offer for $500,000 (100 percent financing) with $120,000 to be credited back to the purchaser at close of escrow. The South Bay agent assured us the buyer was approved by their crooked in-house lending operation.
We presented the offer to the seller, and advised to him reject it outright. It was an obvious case of loan fraud.
A few months later, we had another fraudulent purchase attempt on a home we had listed in Carlsbad. It was a lovely listing in Rancho Carrillo that had also had a substantial reduction in price. We received a verbal offer from an out-of-area contractor who had never seen the property. His loan broker called from Northern California, and explained that their offer (100 percent financing again) required over $100,000 back because of all the work this contractor would have to do. They wanted me to write the offer, believing perhaps that if I double-ended the deal, I would be more cooperative.
No dice.
We shot back a quick rejection. This newer home, by the way, was already in pristine condition and was sold shortly thereafter to very qualified buyers.
This time, though, I called the San Diego office for the FBI, and reported all the information I had regarding this attempted fraudulent purchase. I provided names, telephone numbers and email addresses and never heard anything more.
Since then, we have seen countless cases where San Diego County homes were sold at highly inflated prices in 2005 or 2006 with 100 percent financing. That can be an immediate red flag for either buyer and borrower misrepresentation or possible loan fraud.
There is also the technique of hiding a kickback in inflated commission, because lenders arent privy to real estate commissions paid. Though not exactly illegal, it is a practice that should be examined. I am inclined to think commission kickbacks should be considered a lender disclosure issue.
The untallied costs of these real estate and lending crimes and schemes have contributed enormously to the current real estate crisis.
In the meantime, the US Department of Justice (DOJ) has wasted huge amounts of time and resources the past few years pursuing the National Association of Realtors (NAR) over ownership of MLS data and other obscurities. Their time, I believe, would have been far better spent pursuing organized and fraudulent real estate practitioners. Had they, the FBI and other law enforcement agencies been more aggressive in this arena, the real estate market might be in a different position today.
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San Diego Real Estate on Par with Detroit?
November 28th, 2007 Categories: Real Estate Juice, Real Estate News, San Diego, San Diego Communities
Say what?
In 2004, San Diego real estate was ranked as the least affordable in the United States. Thousands of San Diegans, priced out of the coastal market, moved to Temecula, Murietta and other outlying and inland areas where homes were more affordable.
These days, according to the National Association of Homebuilders, San Diego has slipped to 16th place in California, with an improved 10.1 percent affordability for median income earners. That is just a whisper above San Bernardino-Riverside and Ontario Counties’ 10.2 percent.
This is phenomenal news, because San Bernardino County has traditionally been home to some of the most affordable real estate in California–and few might have imagined that coastal San Diego would approach the Inland Empire’s affordability levels.
In searching for a market bottom, San Diego has now tied with Detroit in ranking third in the nation for dropping home prices, sharing a staggering 9.6 percent drop in pricing during the past year. This is according to a recent Standard & Poor/Case-Schiller study just reported in the San Diego Union Tribune.
All of this might lead one to think that the San Diego economy is in the same tank as Detroit, or that it has lost its perfect balmy climate and turned into a windy high desert.
But that just ain’t so….
And I don’t know of any period in recent history when San Diego real estate has been compared to Detroit’s.
By my calculations, something is maladjusted when San Diego real estate has nearly the same affordability level as that in San Bernardino or Riverside Counties–and has the same drop in home prices as depressed Detroit. This occurs despite San Diego’s strong economy, low unemployment, and being a premier destination for tourists and affluent international retirees.
Bubble bloggers and others may take aim at me for this prediction, but I believe the bottom of the San Diego real estate market is near.
After all, when San Diego gets thrown into the same tub with Detroit and San Bernardino, we just might have a perfect example of the baby being thrown out with the bathwater.
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