Category Archives: Changes In Real Estate

The state of real estate business in USA in 2011

The state of real estate business in USA in 2011

In 2010, the economists had predicted that they expected a real estate recovery in 2011. The
country is in fact considered to be one of the best places for real estate business and investment.
The nation had been facing stagnation due to the great recession of 2007-2009. As a result,
people are still now in huge debts and moreover they are without jobs. Thus there is the fear of
increased mortgage defaults. Though mortgage calculator can help the people to determine and
plan their home loan payments, most of the mortgages are still underwater.

Real estate business

As a result of the debt situation in the country, most of the people have been facing problems in
making their more payments too. As a result, most of the homes are getting foreclosed. This is
partly due to the resumption of the foreclosure process after the short interval in 2010 and party
due to the Adjustable Rate Mortgages or Arms that are going to the year 2004, and also the five
year ARMs from the year 2006. In addition there are also some three year ARMs from the year

So, it is expected that with the still low economic conditions of the people, the debtors are going
to default badly on these adjusting loans (specifically). As a result the real estate business is
going to suffer a lot too. Moreover, in 2010, some lending standards have been introduced and
so the lenders won’t be able to forward the home loans to all of the people with bad credit or
low affordability standards. In addition, as more and more homes will go into foreclosure, the
financial lending institutions may have no other choice but tighten the standards or lending.
This means that the borrowers will be required to show even higher credit rating and credit
scores, clear credit reports. They should be able to make bigger down payments, pay higher fees,
and pay even higher insurance premiums in order to get a home loan mortgage. And this will
definitely end up in limiting the pool of the potential home buyers.

In addition, the inventory of new houses sits low as the pace of housing construction is slow. The
market watchers are of the opinion that the housing supply within the end of this year will be low
in comparison to the previous years. With this slow pace of construction, neither the housing nor
the commercial real estate market is going to see good supply.

By Alex Stuart


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How To Lower My Property Taxes

Home values in the Santa Maria real estate market and have come down quite a bit in the last few years and many with mortgage home loans find themselves owing more than what the home is actually worth.  Not much I can do about declining values but I can give you some insight on how your property taxes work and help you in reducing your property taxes so that you pay in accordance to what your home is worth.  This is due to prop 8 and it gives you the right to pay what your home is currently valued, and you can request that the assessor re-examine the value of your property. In times of stable and rising housing prices, county assessors may raise a property’s assessed value at the rate of consumer inflation, but not more than 2% each year. Conversely, during times of property value deflation, as  we are now experiencing, county assessors are required to lower assessed values to the lesser amount of the property’s current fair market value.

The formula used by the county tax collector to set the tax due from a property owner is based on the assessed value of a property and the tax rate. The assessed value of each parcel of real estate is determined annually by the county assessor as the lesser of:

  • the parcel’s base year value on the last change of ownership, adjusted upward annually at the inflation rate limited to 2%; or

Ÿ         the fair market value on the lien date, January 1st, of each year.

By filing an application for assessment change with the county assessor, a diligent homeowner can lower his property tax when the fair market of his property has dropped below its current assessed value, a condition all too common in California.

To apply for reassessment, the owner submits the “Decline in Value” form (or its equivalent) to the county assessor of the county where his property is located. The application must be accompanied by evidence which establishes the property’s market value is lower than the current assessed value of the property, this is usually done with either an appraisal or a list of comparables that you can get from a real estate agent showing homes sold and homes pending based off of the current price. Appropriate documentation submitted with the application consists of identification and analysis of comparable properties which sold between January 1st and March 31st of the year the application is filed.

To apply for reassessment, the owner submits the “Decline in Value” form (or its equivalent) to the county assessor of the county where his property is located, if you happen to be in Santa Maria it would be the county buildings located right off of Betteravia.  The application must be accompanied by evidence which establishes the property’s market value is lower than the current assessed value of the property. Appropriate documentation submitted with the application consists of identification and analysis of comparable properties which sold between January 1st and March 31st of the year the application is filed.

On receipt of the application by the county assessor’s office, the county assessor will determine the property’s value as of January 1st. If the market value of the property, as supported by the comparable sales documentation submitted with the application, is lower than the current assessed value on the assessor’s records, then the assessed value of the property will be reduced to its current fair market value.

As a result of the lowered assessed value, taxes for the assessment year following the January 1st lien date will be lower by the same percentage as the reduction in the assessed value, saving you precious money.

For more information regarding lowering your taxes and the form you will need just go HERE.


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New Credit Scores For Home Loans

With many of the things going affecting new and potential homeowners that are trying to learn how to buy a home, one of the many hurdles is having credit to qualify for the home loan, here is an article on some of the changes taking place.


By Jeffery Marino • Dec 16th, 2010 • Category: real estate newsflash

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In a delayed knee-jerk reaction to the mortgage meltdown and sub-prime lending crisis of 2008, lenders offering access to Federal Housing Administration (FHA) -insured loans are tightening their standards above and beyond those required by the federal agency.

The FHA instituted minimum Fair Isaac Corporation (FICO) scores for the first time in October of 2010. According to the FHA, borrowers shopping for conforming loans must have a minimum FICO score of 500 while those who have a score of 580 or higher are eligible for the maximum financing benefits available. [For more information on FHA home loan regulations, see the July 2010 first tuesday article, The true costs of a default-insured mortgage.]

However, the minimums required by the FHA are much lower than those required by the underwriting standards of most lenders today. Many lenders set a minimum FICO score of 620 for their FHA-insured loans as early as 2009. While 620 remained the magic number for the Big Three (Bank of America, Wells Fargo and JPMorgan Chase) for quite some time, now the major players on the mortgage-backed bond (MBB) market will not purchase an FHA loan from the originator unless the borrower has a minimum FICO score of 640.

Considering there are roughly 6.3 million people in the United States with a credit score between 620 and 640, the 20-point increase in minimum FICO scores will exclude as much as 15% of FHA borrowers. Given the continuing decline in consumer credit scores resulting from ongoing foreclosures and a still-high unemployment rate, these increased restrictions will affect those hit hardest by the recession.

first tuesday take: Once again, the California real estate market, and the health of the economy as a whole, are being held hostage by Wall Street. Note that this is not the government, not FHA. The MBB market is apparently still reeling from the near-death blow it sustained in 2008 and the present onslaught of litigation over their having to now buy back the bad loans they previously originated and sold, which is not helping them make a loan to the prospective homebuyer with a less-than-average credit score.

We are entering a phase in this economic recovery where wage-earners are slowly beginning to accrue wealth once again – at least in California, with the exception of temporary and part-time employees (government employees). After cutting their debt-to-income (DTI) ratio in half via strategic default or bankruptcy filing, the individual who was previously held prisoner by their underwater home is now newly solvent and looking for a good value on the real estate market. [For more information on strategic default and homeowner solvency, see the September 2010 first tuesday article, The LTV tipping point: when negative equity owners strategically default.]

Unfortunately, blame for the reckless and short-sighted lending practices during the Millennium Boom is being artfully sloughed-off by the Big Three and conveniently attributed to consumer irresponsibility. Rather than restructuring underwriting methods in such a way that would create sustainable and logical lending practices that are appropriate to the current economic milieu, the Big Three are falling back on their trusty (read: outdated and over-emphasized) tool: the FICO score. [For more information on the overemphasis on FICO scores in determining creditworthiness, see the June 2010 first tuesday article, The FICO score delusion.]

Under the guise of increased lender responsibility and consumer protection, the big banks are penalizing recently foreclosed-on homeowners by raising the arbitrary bar for creditworthiness. Certainly the FICO score can be a useful tool for determining a borrower’s ability to pay back a loan. But with a growing contingent of prospective homebuyers who have increasing purchasing power and dwindling credit scores, the overemphasis on the credit score simply does not work in our recovering economy.

In spite of their proven allegiance to the banking industry (read: massive bailouts), Congress has clearly rebuffed lender arguments that the consumer was responsible for the mortgage crisis.

After a century’s worth of efforts and many defeats at the hands of big business, Congress successfully instituted the Consumer Protection Agency this year. To drive home the point they are no longer willing to let public policy be controlled by private banks, Congress granted the Federal Reserve Bank (the Fed) control of regulating rogue mortgage lenders who still seem unwilling to bend to the government’s regulatory will.

Hopefully, as a new paradigm focused on responsible lending and sustainable homeownership takes shape, real estate agents, brokers and lenders will follow suit.

Re: “Home Buying Gets Tougher as Lenders Restrict FHA Loans” from Bloomberg News


Copyright © 2010 by the first tuesday Journal Online –;
P.O. Box 20069, Riverside, CA 92516

Copyright © 2010 by first tuesday Realty Publications, Inc.  first tuesday Journal Online — P.O. Box 20069, Riverside, CA 92516.


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Finding Condos That Qualify For FHA Loans

There is going to be an estimated 2,200 condominium projects nationwide they will more than likely lose their eligibility for Federal Housing Administration-guaranteed sales and refinancing,when getting a new mortgage home loan, and some of these condo projects are right here in the Santa Maria real estate market.  The process on how to buy a home is just a bit different than buying a condo being that the complex the condo is located in also has to qualify.  The last time I looked at HUD’s site of approved condo projects all of the condo’s that were approved in the Santa Maria real estate market area were set to expired at the end of the year and that pretty much goes for a ton of condo projects nationwide due to many new changes that HUD is implementing to get a better and more secured collateral when guaranteeing a loan. So Unless condo officials take action, another 23,000 estimated residential condos with housing units numbering in the tens of thousands will lose their eligibility by spring of next year. That means that buyers of units in these buildings won’t be eligible for FHA financing, so instead of having to only put down 3.5% to get a loan to purchase condo they will have to put down much more. This was the result of an effort by the FHA to guarantee that condos and their underlying home owners associations have adequate budgets, legal documents, and other things that lead to financial stability. In 2009, the FHA spelled out tough standards that required that condo projects approved for FHA financial before 2007 have their approvals renewed by Dec. 7, 2010.  Because there were so many, the FHA extended the deadline, setting new deadlines throughout 2011. The only losers were the 2,200 projects that had the oldest approvals. The FHA urges all condominium owners to get in touch with their associations and push them to meet the revised deadlines, the reason being that if you want your condo to be marketable and retain value it needs to be a condo complex where someone can get FHA financing to buy any one of the condos in the complex, the reality is if you have to put down 10 or 20% down to purchase a condo then the prices, and values of that condo complex will have to come down to where it is more possible for the average condo buyer to put down the needed amount of funds to qualify to purchase it. For more information, or to check out the status of a condo project that you may be interested in or maybe your condo project, visit (select by state):

Here is also a  partial list of requirements for FHA certification.
At least 50 percent of units must be owner-occupied

No more than 15 percent of units can be delinquent (more than 30 days past due) in assessments.

No more than 10 percent of units can be owned by one investor. This includes a developer that may rent out vacant or unsold units.

No more than 25 percent of floor area can be commercial space.

The right of first refusal may be in the bylaws but cannot violate the Fair Housing Act.

A full budget review will take place. One important requirement is that it must show at least 10 percent of budget income applied toward reserves. Many association budgets do not meet this criteria.

After an association is FHA-certified, there are still limits on the number of units that can be mortgaged by an FHA-insured loan. Currently the cap is 50 percent of units. For complexes certified or recertified after Jan. 1, it will be 30 percent of units.


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Renting A Home Being Foreclosed On



For those of you that live in California and which includes the homes here in the Santa Maria real estate market and you happen to be renting them there will be new rules if that homeowner has his mortgage home loan going into a foreclosure.  Starting January 1, 2011 when that home is foreclosed on and there is a sale done and its has been completed there is a a new California Code of Civil procedure section 1611c that was passed and goes into effect pursuant Senate Bill 1149.  This is applies to the successor of the property of any residential foreclosure for year after the sale.  Basically even though Wells has foreclosed on the property but they have not done anything with but now plans to sell it they may want to evict you since you are not the homeowners you are the renter of the property.  So these new rules are to protect renters that get a surprised knock on the door that they have to go.   There must be a notice to the renter and explaining his rights the notice must state the following, and include the 90 days to basically get out giving the tenant time to think what they are going to do.  Now this does have an expiration date on it and hopefully by that time this foreclosure mess will be behind us, this law expires on Janurary 2013.

foreclosureNow there are exceptions to this law like anything and for example if any of these apply a notice will not be required.

(1) The tenancy is terminated pursuant to Section 1161.
(2) The successor in interest and the tenant have executed a written rental agreement or lease or a written acknowledgment of a preexisting rental agreement or lease.
(3) The tenant receiving the notice was not a tenant at the time of the foreclosure.

Item 1, if the tenant was a ware of a foreclosure and just took it upon himself to move out, is usually what happens.  Now just for an example if the bank was to rent it back to you as in item 2 then you failed to pay rent then he can give you a 3 day notice to quit or pay no longer need to provide a 90 day notice.  Item 3 if there is not a rental agreement with date and signatures then he was not a tenant at the time of the foreclosure you have to prove you were.   The law was basically put in place to protect renters from having to move out in 3 days were they have been paying the rent and clueless of what was happening although I am sure we  have all heard of renters staying as long as possible in a home and not paying anything.

Example of notice-

Notice to Any Renters Living At

[street address of the unit]

The attached notice means that your home was recently sold in foreclosure and the new owner plans to evict you.

You should talk to a lawyer NOW to see what your rights are. You may receive court papers in a few days. If your name is on the papers it may hurt your credit if you do not respond and simply move out.

Also, if you do not respond within five days of receiving the papers, even if you are not named in the papers, you will likely lose any rights you may have. In some cases, you can respond without hurting your credit. You should ask a lawyer about it.

You may have the right to stay in your home for 90 days or longer, regardless of any deadlines stated on any attached papers. In some cases and in some cities with a “just cause for eviction law,” you may not have to move at all. But you must take the proper legal steps in order to protect your rights.

[Or if notice is stated in a 90 day Notice to Quit, the preceding paragraph is to be replaced with the following:

You may have the right to stay in your home for longer than 90 days. If you have a lease that ends more than 90 days from now, the new owner must honor the lease under many circumstances. Also, in some cases and in some cities with a “just cause for eviction law,” you may not have to move at all. But you must take the proper legal steps in order to protect your rights.]

How to Get Legal Help

If you cannot afford an attorney, you may be eligible for free legal services from a nonprofit legal services program. You can locate these nonprofit groups at the California Legal Services Web site (, the California Courts Online Self-Help Center (, or by contacting your local court or county bar association.


For A FREE List Of Foreclosures & Pre Foreclosures On The Central Coast Click HERE

If you have any questions about buying or selling home as well as getting loan, I have been helping my clients for the last 15 years on the Central Coast, take a look at some of the Santa Maria homes for sale.  And Give me a call 805-448-7101 , DRE 01321588

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Important Disclaimer: Questions and answers provided on this website and by Gene Perez is to be considered general information, and is not intended to substitute for informed professional financial, tax, legal, investment, accounting, or other professional advice.

Gene Perez is Licensed Real Estate Broker for Valley Hills Realty and a mortgage broker for Greater Mortgage Solutions.

This blog and its content is copyright of Gene Perez 2010. All rights reserved. Any redistribution or reproduction of part or all of the contents in any form is prohibited other than the following: you may print or download to a local hard disk extracts for your personal and non-commercial use only. You may copy the content to individual third parties for their personal use, but only if you acknowledge Gene Perez as the source of the material You may not, except with our express written permission, distribute or commercially exploit the content. Nor may you transmit it or store it in any other website or other form of electronic retrieval system without obtaining Gene Perez’s

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