Mother & Daughter Blog: June 2007

ALERT:

The rumors are true or will be soon!

Consumer Alert:
FICO Scores Dropping Authorized User Accounts

Information from: Credit.com

A major change to the FICO® credit score formula was announced by Fair Isaac Corporation earlier this week. FICO scores will no longer factor authorized user accounts into their credit scoring formulas.

Well, its coming time for me to get serious about renewing my notary public commission.  Things have changed since I received my commission.  It is now manitory to take the 1 day seminar, but there is some good to that as they give you the exam right then and there.

So I was bold today and went on the site that offer a free sample exam.  It is timed and has a sample 30 questions.  Well, I wized through the exam but when I got my results I now know why the 1 day seminar is manitory!!!! I got a 50% and 70% is required to pass.  So what this tells me if with the new rules and my "senior moments" while doing the exam --- I need to study!!

So I will be downloading the handbook, studying it and signing up for the seminar soon. Oh the free sample exams are on site:  http://www.notaryclasses.com/notary/testfree 

Visit the site and see how you score. Good luck!

I have recommended vistaprint and I have read several other comments/posts that recommend it for business cards, postcards, website, post its, note pads, checks, invitations, announcements, cards, folders and they even have letterhead and brochures.  They offer a free webinar on interesting and useful subjects. I like there are several helpful ways to enhance your business right there on one site.

I do not work for vistaprint or anything like that, I just like their products and I wanted to share that with my buddies at AR.  And I love a deal. I recently ordered business and postcards and noticed another free offer which I'd like to share.  They give you free software = QuickBooks - its a free edition - simple start 2007. It is free for you to check out QuickBooks without having to purchase it first.  This edition allows you to test it by letting you manage your first 20 customers and vendor names for FREE!

I have been looking for a software program like this and will use it to see if I like it.

Its an easy way to track sales and expense

• Its Completely free software - no hidden fees
• It allows you to orangize sales and expenses in one place
• You can instantly see if you're making money
• Its easy to learn and use
• And a bonus - quick tips to help you find customers, pay less in taxes and succed in business!

 If you want to receive vistaprint's free special offers, just log on to the site and enter your email address.  They have some really good deals, especially the free offers where all you pay is postage on your order and you can customize your business cards, postcard and note pads.  Sometimes they have a reasonable deal on brochures.

What do you use to organize your income, expenses and business activities.  Please share.  Remember sharing is caring!

Visit the Questions for Real Estate Professionals

Have you checked out the question and answer section of AR? There are some really good questions asked on that section and it just might be a place to get a lead or two from. This is a good source for consumers to ask questions that they need an immediate answer to.  It is another opportunity to add value to someone that is looking for answers. It is also interesting to read the answers from other agents.  So really its another learning tool that AR offers.

Every time I come on AR I learn something, am able to share information and find new ways to use AR to better myself and profession.  By reading questions, using your thought process it is a way to enlighten yourself and by providing answers to others is a way of helping out. Might get lucky and get a sale, referral or self satisfaction out of it.

When you have nothing else to do check it out.  Sharing is caring!

Sharing is caring... With Short sales we need to share as much as we can to make the road a little less rocky.  I want to share this tip.  As I was up late last night getting paperwork together for a short sale I had a light bulb come on! Something to share.

When you are dealing with a short sale, default, pre-foreclosure or foreclosure make sure you open up a pre-sale escrow, and have them order a preliminary report. Review the preliminary report, looking for liens against the property. The common liens that lenders don't sweat are: Mortgage liens, Property Taxes and HOA.   If the seller has other liens against the property, it can cause a problem in tryng to sell the property.  Most sellers in default or in the foreclosure process will not have the money to pay off a lien at closing.  The liens have to be paid before the sale can close.  And the lender/bank will not entertain paying off the seller's liens unless it is the standard liens and even then they might try to negotiate that the seller pay part or all of them.

If there is a child support lien against the seller and property - which is what I ran into this week.  I called the county child support and asked what was the procedures for requesting a release of the lien on this property only, because of the nature of the sale.  The reasoning why is that the seller will not get any proceeds from the sale, therefore there will be no money to pay off the lien.  The county made no promise to me, but advised me to write a letter explaining the situation and include it with the demand for a 0 balance that escrow sends out.

I have prepared the letter and sent it to escrow and asked them to send out the demand so that the county have time to review and hopefully, this will be approved in a timeframe that will not conflict with the timing I've requested from the lender for the short sale.  Now my problems are compound because I am dealing with two entities that DO NOT MOVE FAST.

I would assume that other lien types would work the same. But each type is different and would require some research on the part of the real estate agent and the seller.  Escrow is helpful in some cases because they run into this type of issue more than we do.

Sometimes you take a listing and don't know that it will turn into a short sale.  A good practice tip....Like foreclosures, it may not be apparent to an agent taking a listing that there may be a short sale. Obtaining a property profile upfront will usually alert you to the possibility of a short before you agree to take a listing.

Having done all that I have been told need to be done, and prayer I am standing on faith that this will work out for my seller, his family, the buyers and of course his real estate agent -- me!

Please bookmark as a reference, as you may run into this situation dealing with foreclosures and short sales.

If you have something to share that you have ran into or heard about, please share.  Sharing is caring!

Rosemary Brooks

Why take a pre-foreclosure listing?

Many agents wonder: Are foreclosure related transaction viable business opportunities? The answer depends on you.  Forecosure related transactions are worthwhile endeavors for agents who can summount the high learning curve necessary to master the art of closing these types of transactions.  If that describes you, here are some good reason to go for it!

• Significant Opportunites:Owners facing foreclosure and lenders with bank-owned real estate properties (REOs) are looking for listing agents with those specialized skills, whereas prospective buyers are zooming in on agents who can hunt down great bargains.
• Homeowners in Need: Agents can use their real estate expertise to help protect homeowners from those who prey upon owners in foreclosure.
• Compensation and Referrals: At their core, foreclosure related transactions are very similar to the other transactions agents handle.  Some agents even create a new niche for themselves by specializing in foreclosures, short sales, or REOs.
• Helping the Community: Saving a homeowner from foreclosure also can protect their community from the adverse effects of foreclosure, such as abandoned properties and vandalism.Not only do such homes become an eyesore, but they also may drive down home values in the neighborhood.

Tell me some of the experiences you have had dealing with sellers that are in default, pre-foreclosure or foreclosure and how it has either scared you away or made you want to jump in with both feet and help your client and his/her family. What has inspired you?

How California law Affects Foreclosure

 Attention: Real Estate Agents & Short Sale / Foreclosure/ Default -  Investors

In California, a real estate agent cannot represent a buyer who is an investor to purchase a foreclosure property if all of the following four statements are true:

• The home qualifies as the seller's personal residence.
• The property is a single family home or 2 to 4 units.
• A Notice of Default has been filed in the public records against the property.
• The investor buyer will not occupy the property.

All four of the above conditions must be met to trigger the home equity sales law.  In the typical situation where a buyer of aproperty in foreclosure will be occupying the property as a personal residence, the home equity sales law does not apply.

The following transfers also are exempt from the home equity sales law:

• By deed in lieu of foreclosure
• By trustee's sale
• By tax sale or authorized by status
• By court order
• By spouse, blood relative, or blood relative of spouse  other sale 

Transactions failling within the scope of the home equity sales law must meet certain requirements.  The contract itself must be in 10 point bold font and in the same language principally used by the parties to negotiate the sale.  It also must contain certain contractual provisions.  Most notablly, the seller must be given a note of the the right to cancel within five business days after signing the contract (or by 8am of the day of the trustee's sale, if sooner).

Under the home equity sales law, a buyer's agent generally cannot represent an equity purchaser. A "representative" for purposes of this law is anyone of the owerner's family or household) to transfer title to the equity purchaser.  Among other things, the representative of the equity purchaser must provide proof of a valid California real estate license and be bonded by an admitted surety insurer for twice the value of the property.  Yet, such bond is difficult, if not impossible, to find.  This bonding requirement applies to a buyer's agent or dual agent but not a listing agent representing the seller exclusively. So as a pre-foreclosure investor in California, you are on your own.

Violations

A violation of the home equity sales law can be very serious.  Equity purchasers who violate the equity sales law may be convicted of a crime punishable by one year imprisionment, plus a $25,000 fine, for each violation. Plus any civil court actions in favor of the sleller.  

States have varying laws governing foreclosures and some follow California law. To completely understand your rights as a foreclosure buyer, contact a local real estate lawyer.

Some of the forms that may be needed for a short sale/home equity/ Default / Foreclosure - investment sale

Reverse Mortgages: Greater Consumer Protections

Civil Code Sections 1632, 1923.2, 1923.5

This new law strengthens consumer protections by prohibiting certain self-dealing activities by companies providing reverse mortgages, requiring additional disclosures for reverse mortgages, and requiring translation of the contract for a reverse mortgage into the language in which it was negotiated. Specifically, this law:

• Prohibits requiring the purchase of an annuity as a condition to get a reverse mortgage;
• Prohibits offering an annuity or referring the borrower to another for an annuity prior to loan closing or before the end of buyer's right to cancel;
• Requires referring the borrower to housing counseling agency;
• Prohibits accepting a full application for a reverse mortgage before the borrower receives housing counseling;
• Modifies the disclosure notice;
• Requires lender to provide a list of independent loan counselors; and
• Requires the contract to be translated into Spanish, Chinese, Tagalog, Vietnamese, or Korean if the reverse mortgage is primarily negotiated in that language.

May be reprinted for non-commercial use if a credit line is included acknowledging the County of Los Angeles Department of Consumer Affairs.

I researched to get more information on this subject because someone asked for more details.  This is good protections for our seniors and to avoid mortgage fraud.

Reverse Mortgages:

Lenders can no longer accept an application for a reverse mortgage - a transaction where the homeowner uses his / her home equity as a source of income - until the borrower certifies that he/she has received financial counseling.  Prior to this year, lenders only had to provide a disclosure notice adverising applicants to seek such financial counseling.  The new law also prohibits lenders from requiring borrowers to obtain an annuity as a condition for obtaining a reverse mortgage; requires lenders to refer the borrower to a housing counseling agency and to provide a list of independent counselors; and requires mortgage documents to be translated into the language in which the mortgage was negotiated.

Some older homes have plumbing issues. Here are a few things to be aware of.

You will spot several different types of plumbing systems in any housing market, including our own. Copper, galvanized, rigid plastic, polybutylene, and soft plastic are but a few. Certain systems are more prone to having certain problems. Galvanized water pipe is most prone to rusting on the horizontal surfaces (such as under a floor) versus vertical surfaces (running up a wall) and it corrodes from the inside out. Some rigid plastic systems have been recalled, while others have fared very well. The most reliable types seem to be made of copper, but again there can be issues to check: are the hangers plastic lined? Are there any lead solder joints? A good home inspector can help you identify any problem areas before you buy. There are several reputable inspectors in our area that I would be happy to refer