Effective July 8, 2010, a LA city ordinance will help building inspectors identify the banks that own vacant homes and pass out fines if they aren’t kept clean and safe.

As more vacant homes pop up in our neighborhoods and potentially create a public hazard, the city is encouraging residents to call the 311 hotline and report problem properties to ensure lenders are held accountable for safety and clean up.

This ordinance, which affects more than 27,000 homes in LA County, allows the city to levy fines of up to $100,000 against lenders and  financial institutions that seize homes and allow them to fall into disrepair.

Often during the foreclosure process, properties sit in limbo between when the lender issues a mortgage default notice and when the title transfers to the lender. In the past, banks didn’t consider the properties their responsibility until after they repossess the title, but now the City of Los Angeles holds them responsible as soon as they issue a default notice.

As of July 8th, banks must register their inventory of homes in default with the city, which will allow inspectors to easily identify owners when neighbors call in to complain about a property.

The ordinance also allows the city to fine bank owners $1,000 a day per code violation.

You can check out the official ordinance below:

New city of Los Angeles Ordinance effective 7/8/2010

On May 24, 2010 the City of Los Angeles enacted Ordinance 181185 commonly known as the City of Los Angeles Foreclosure Registry Program. The Ordinance takes effect 7/8/2010. The Ordinance is more than a “Vacant Property Registration Act” rather it requires registration of all properties that have a Notice of Default recorded against it. Within 30 days of July 8, 2010 (“effective date”), all properties that have a Notice of Default recorded against it must register with the City.

This requires registration of properties that currently have a Notice of Default registered against it and all properties where a Notice of Default is recorded after the effective date.

The Ordinance requires the lenders and foreclosing beneficiaries to inspect and maintain properties in foreclosure to ensure that they are free from debris, rubbish, trash, and overgrown vegetation, amongst other things. If the property is found to be vacant, or if the property becomes vacant after the Trustee’s Sale, the beneficiary must inspect the property weekly and continue to maintain the property in good condition according to the terms of the ordinance.

If the Property is found to be occupied at any point of the foreclosure process, the beneficiary must inspect the property on a monthly basis. Non-compliance will result in a fine of $1,000.00 per day of non-compliance, not to exceed $100,000.00.

Registration of the property costs $155 per year. A fine of $250.00 per day will be imposed on properties which are not timely registered; the lender or beneficiary is responsible for paying these fines, even if the foreclosed borrower is in possession of the property.

A copy of the ordinance can be downloaded at: http://clkrep.lacity.org/onlinedocs/2009/09-0365_ord_181185.pdf

http://lahd.lacity.org/lahdinternet/ForeclosureInformation/tabid/418/Default.aspx

If you have more questions about Los Angeles’ new Foreclosure Ordinance, feel free to contact me @ 562-364-9505 or mark@shandrowgroup.com

One Less Foreclosure.

Sincerely,

Mark Shandrow
Real Estate Broker
office 562-364-9505 ext 100
mark@shandrowgroup.com
Shandrow Group
3970 Atlantic Ave., 210
Long Beach, CA  90807
follow my story at http://markshandrow.com

This new legislation, passed by congress last week, will allow thousands of new homebuyers to take advantage of the $8,000 and $6,500 tax credits that expired on June 30^th, 2010.

The new extension gives first time homebuyers who entered into a purchase agreement before April 30^th, 2010 until September 30^th, 2010 to close the deals on their homes.

Please note: Only the deadline has changed. The same income restrictions and rules apply for the new extension.

Who is Eligible for the First Time Homebuyer’s Tax Credit Deadline Extension?

You are only eligible if you are a first time homebuyer who entered a purchase agreement before April 30^th, 2010. A first-time homebuyer is a person who not owned a principal residence during the 3-year period prior to the home purchase. For married couples, the law tests the home ownership history of both the homebuyer and their spouse.

So, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time homebuyer tax credit. If you have only owned a vacation home or rental property not used as a principal residence this will not disqualify you as a first-time homebuyer.

Why Did They Extend the First Time Homebuyer’s Tax Credit?

Originally, the tax credit was available to those who entered into a purchase agreement prior to April 30^th, 2010 and who closed on their home before June 30^th, but due to the large number of distressed home sales, many borrowers had difficulty closing on their homes prior to the deadline.

The National Association of Realtors (NAR) has estimated that up to 180,000 homebuyers entered into purchase agreements before April 30^th, but missed the June 30th deadline, and are still eligible for the tax credit.

By my estimation, that means banks and lenders will need to close over 2,700 transactions every business day until September 30^th.

Wow.

If you have more questions about the First Time Buyer Tax Credit, or the deadline extention, feel free to contact me @ 562-364-9505 or mark@shandrowgroup.com

One Less Foreclosure.

Sincerely,

Mark Shandrow
Real Estate Broker
office 562-364-9505 ext 100
mark@shandrowgroup.com
Shandrow Group
3970 Atlantic Ave., 210
Long Beach, CA  90807
follow my story at http://markshandrow.com

If you read the news last week, you’ve probably heard that the Obama administration has extended the Home-buyer Tax Credit from its original expiration date of November 30, 2009 to March 30, 2010. The government also added a provision for current homeowners that would allow them to sell their current homes and receive a $6,500 tax credit when they purchase their next home.

In California, one of the hardest-hit and most expensive housing markets, it may be too early to tell how this extension will affect us in the coming months. Some analysts argue that the tax credit’s impact has generally been overstated and that its impact going forward is likely to be uneven, but the psychological effects for new home buyers could give the economy a greatly needed boost.

But is the Psychological Value Enough to Support the Current Housing Market?

It is estimated that the first-time home buyer tax credit, worth up to $8,000, could cost around $43,000 per home buyer, or around $15 billion for the estimated 350,000 home buyers who wouldn’t otherwise have purchased a home without the tax credit. And around 5% of all sales through mid-October wouldn’t have been possible without the tax credit.

So while the tax credit hasn’t created the huge boost for first-time buyer home sales that was predicted back in March, it has bolstered consumer psychology and positive outlook about the current housing market.

And lending analysts predict that the expanded income limits in the new credit, which went into effect on Saturday and gives existing home buyers a $6,500 credit, could translate into another $150,000 in purchasing power for future home-buyers.

More credits, more buyers, more hope.

Will Looming Shadow Inventory Destroy any Positive Effect The Tax Credit Might Create?

The California housing market accounted for 250,000 new foreclosure filings in the last quarter. And increased Pay Option ARM rates are only going to produce more distressed homeowners and in turn, increase the foreclosure rate across the country, as California already accounts for 25% of the nation’s foreclosure activity.

With this in mind, 5% of home buyers using the tax credit isn’t something to get excited about when the next wave of foreclosed homes reaching the market could be even larger than the first.

But we won’t know what will happen until we reach the end of the deadline and lenders start releasing more bank-owned properties to the market.

We can only hope that this is enough to increase buyer interest and start us on the road to recovery.

If you are you interested in getting in on the ground level with your REO news, just sign-up for my Real-Time REO reports list right here on my home page.

Sincerely,

Mark Shandrow
REO Broker-Associate
Shandrow Group
shandrowgroup.com

So, what is the Mortgage Disclosure Improvement Act? Basically, the federal government has put forth a legislation that replaces the 3-day waiting period for initial disclosure with a 7-day waiting period that does not include Sundays or holidays.

Also, before the borrower can close on a transaction, they must receive the initial Good Faith Estimate (GFE), and the initial Truth in Lending (TIL) statements quoting the final Annual Percentage Rate (APR) seven days prior to closing. Lenders cannot collect fees for appraisals, loan applications or other services until the buyer accepts the transaction. If the APR fluctuates by more than 1/8^th (.125%) in increase or decrease before the 7-day period is over, the process must start all over again.

How does the MDIA help home buyers?

1. You have plenty of time to check over the documents and ensure your mortgage rate matches your initial quote. This is especially helpful if you find you are charged more than the original estimate, perhaps because the title company had to do additional research on the sale property. For instance, a closing fee item estimated at $250 could end up costing you $500. With this new rule in place, you have time to find money to cover any difference in your fees.
2. Fluctuations in the APR could let you to lock into a better rate. An annual percentage rate on a mortgage depends on several factors, including the size of the loan, prepaid finance charges, such as origination fee and attorney’s fees, and if you are required to purchase private mortgage insurance. If any of these charges fluctuate beyond 1/8^th of a percentage either way, you can get a new estimate and potentially save money. This means every time the APR increases or decreases beyond the .125% point, the process must stop and begin again giving you another 7 days to accept the new transaction.
3. Additional closing fees are not payable until the transaction is accepted. Within three days of receiving a mortgage-loan application and before any fees are levied — beyond the fee to obtain a creditor report — creditors must provide a solid estimate of mortgage-loan costs. Before July 31^st, banks could collect origination fees, property appraisal and application fees, etc, at any time. You could spend a considerable amount of money with one lender whose loan offer you decided to decline. No fees, other than a credit report fee, can be charged prior to the initial TIL disclosure being provided.

Still confused about how the MDIA will affect you?

If you have any questions, or would like to speak to a trusted lender, contact Shandrow Group, and we’ll do our best to answer your questions or put you in touch with someone who can.

Best,
Your trusted connection to the Southern California foreclosures and short sales markets,

Sincerely,

Mark Shandrow
Real Estate Broker
ShandrowGroup.com