Real Estate

Lots of Home Bargains, But Few Willing Lenders

Bank of America Nevada City Photo by John J. O'Dell
Bank of America Nevada City Closing in 2012 Photo by John J. O'Dell

Faced with finicky lenders, would-be home buyers are increasingly turning to family members, friends, and even strangers they meet online.  While this is understandable, given the abundant bargains on the market, they also present significant risks.

  • So-called peer-to-peer lending sites, such as Prosper and Lending Club, say demand for home-related financing is on the rise.  In September, Weemba, a social-networking site, launched a platform to connect lenders directly with prospective home buyers and other borrowers.
  • Despite historically low mortgage rates, traditional lenders remain reluctant to provide mortgages to anyone with less than stellar credit.  And, in certain markets, lenders are requiring down payments of more than 20 percent of the home’s purchase price.
  • Borrowers taking loans from family members – so-called intrafamily loans – save on interest since family members are likely to charge less than the banks.  Additionally, parent lenders can earn a higher return from their child’s interest payments than they would on a certificate of deposit or money-market fund.  Under federal law, on a loan of more than nine years, parents must charge at least roughly 2.8 percent, in most cases.
  • Consumers who prefer to look for loans beyond the family can apply at peer-to-peer lending sites.  If approved for a loan after a screening by the companies, applicants may then receive money from investors.
  • However, these alternative routes to financing can be expensive for borrowers.  Rates at Lending Club run from around 7 percent to 28 percent.  At Prosper, rates run roughly 7 percent to 35 percent.  The companies say these rates, which are fixed, are higher than traditional mortgage rates in part because their loans are unsecured.

Real Estate

Another Arrest in Nationwide 6$ Million Loan Modification Scam

December 7, 2011

LOS ANGELES— Attorney General Kamala D. Harris today announced the arrests of two Southern California men who, under the guise of an attorney-backed loan modification company, collected more than $6 million from homeowners nationwide for services that were never performed.

Christopher Fox, 37, of Laguna Niguel and Curtis Melone (AKA Curtis Kubat), 37, of Huntington Beach were arrested Tuesday on 37 felony counts, including conspiracy, grand theft and unlawful collection of advance fees. They are being held at the Orange County Jail on $500,000 bail and will be arraigned today in Orange County Superior Court.

Fox and Melone – along with King Harris III, 42, of St. Louis, Missouri – collected more than $6 million in up-front fees through Orange County- based Green Credit Solutions. The Attorney General’s office will seek extradition of Harris, who currently faces federal mail and wire fraud charges in Missouri.

“Homeowners continue to struggle throughout California and across the country to hang onto their homes, and this prosecution is another warning to predators who would seek to profit from their distress: this kind of criminal conduct will meet with swift and certain consequences,” Attorney General Harris said. “Homeowners should never pay up-front fees to reduce their loans. Californians who face mortgage difficulties should instead contact a non-profit housing counselor, either through www.HUD.gov or a local non-profit housing clinic, to learn about the mortgage process and their rights as homeowners.”

In June 2009, the Attorney General’s office launched an investigation of Orange County- based Green Credit Solutions – later renamed Guardian Credit Services and Get My Credit Grade – in response to numerous consumer complaints filed with the office, as well as with the Better Business Bureau, the California Department of Real Estate and the State Bar of California.

Through witness interviews, analysis of the company’s marketing materials, and its business and financial records, DOJ investigators uncovered a scheme in which thousands of victims paid $3,500 for what they believed were attorney-backed loan modification services to reduce their interest rates, monthly payments or principal balance.

From November 2008 to October 2009, Fox, Melone and Harris collected more than $6 million from thousands of homeowners across California and nationwide. Victims were told their funds would be held in a so-called “attorney escrow account” until services were completed. In fact, those fees were often deposited into the account of a disbarred attorney and then promptly transferred to GCS.

Likewise, the company fraudulently claimed that loan modification services would be performed by attorneys; Harris is a disbarred Tennessee attorney and marketing materials referred to his alleged partners at the defunct law firm of “Smith Harris PLLC.”

In May 2011, Attorney General Harris formed a Mortgage Fraud Strike Force to investigate and prosecute mortgage fraud. In August, the Strike Force filed its first suit against a law firm that took millions from desperate homeowners: Click to view

The complaint is attached to the online version of this release at http://oag.ca.gov/

 

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Real Estate

Best Christmas Present – Help With A Down Payment

Photo courtesy of GlobalGiving blog
Photo courtesy of GlobalGiving blog

With most lenders requiring borrowers to put down at least 20 percent as a down payment – unless using an FHA or VA loan, or purchasing mortgage insurance – the best holiday gift some people might receive would be help with a down payment on a house.

  • According to a survey by Trulia, the biggest barrier to buying a home these days is saving for the down payment.  The survey, conducted over the summer, found that 51 percent of renters said coming up with money for the down payment was preventing them from buying, while 35 percent identified qualifying for a mortgage as the stumbling block.
  • Under federal tax law, each individual is permitted to give money or valuables worth up to $13,000 to a single recipient in a calendar year.  A married couple could jointly bestow up to $26,000 a year per recipient.
  • According to one financial planner, there also is the option of lending a relative or close friend the money for the down payment, or the closing costs, then forgiving the loan in a future year.  The recipient would have to pay interest on the loan until it was forgiven, at which point it would become a gift.
  • Another way to help with the down payment is to pay other expenses, such as tuition, thereby freeing up money to make a home purchase.  Gifts for educational or medical expenses are not subject to taxes, as long as they are paid directly to the educational or medical institution.
  • However, prior to giving the money, gift-givers should consider their own financial picture, and they should make sure the recipient is responsible and not behind on other payments that could be subject to debt collection.

Read the full story

 

 
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Real Estate

Home Affordable Refinance Program Plan A Boost To Borrowers, Banks

 

The Obama administration announced broad outlines of the revised Home Affordable Refinance Program on Oct. 24. Fannie Mae and Freddie Mac issued guidance last week that filled in most of the details.

  • HARP 2 greatly reduces or eliminates the risk-based fees Fannie and Freddie charge on many loans and virtually eliminates the chance that lenders will have to pay for losses on loans that go into default if they made underwriting mistakes. It also vastly streamlines the underwriting process.
  • Although lenders can begin taking applications Dec. 1, it could take several months before the new loans are made. Fannie Mae said it won’t begin buying certain types of refinanced loans until March.
  • To qualify, the existing loan must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009. The loan balance must be more than 80 percent of the home’s market value. The loan must be current for the past six months, with no more than one late payment in the past 12 months. Those who previously refinanced through HARP are ineligible.
  • The new program improves on the existing HARP refi program by letting borrowers refinance into a new fixed-rate loan regardless of how much is owed. The existing program caps the new loan at 125 percent of the home’s market value.
  • Homeowners also can refinance into a new adjustable rate loan that has a fixed rate for at least the first five years, but in this case the new first mortgage cannot exceed 105 percent of the home’s value.
  • In most cases, borrowers won’t have to pay for a new appraisal (Fannie or Freddie will use their automated in-house appraisals) or have any particular debt-to-income ratio or credit score.
  • Borrowers who refinance through their existing loan servicer generally won’t have to document their income or assets or have a particular credit score or debt-to-income ratio. The lender will only have to verify that one borrower on the loan has a job or other source of income, but not the amount of income.
  • Homeowners who refinance through a new lender will have to meet additional underwriting requirements, but not as many as people who are refinancing through traditional routes.
  • Borrowers can have a second loan on the house of any amount and still qualify, as long as the holder of the second mortgage resubordinates it to the new loan. Most of the big lenders have agreed to do so, but there is no guarantee they or others will.
  • If borrowers have mortgage insurance on the existing loan, they must maintain it, but they should be able to transfer that insurance to the new loan at the old premium rate, according to Freddie Mac. The big mortgage insurers have agreed to allow this, but again there is no guarantee all will.
  • There are still many questions about the program, such as what interest rates banks will charge, whether they will impose additional fees or underwriting requirements beyond what Fannie and Freddie require, and whether investors will be willing to buy securities backed by these new HARP 2 loans.

Read the full story
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nevada county fair

Nevada County Fair Country Christmas Faire Results

Gingerbread House Best of Show 2011
Gingerbread House Best of Show 2011

By Wendy Oaks

Gingerbread House Competition Results and Canned Food Drive Results

A successful canned food drive, more than 100 vendors, and 50 gingerbread houses built made the 27th Annual Country Christmas Faire at the Nevada County Fairgrounds a success.

The 9th Annual Gingerbread House Competition was once again a crowd favorite, with 50 entries received. Of those entries, the Best of Show winner was Kristal Souza of Grass Valley, and the People’s Choice Award went to Mary Abbott of Grass Valley. The Best of Show is chosen by the judges, and the People’s Choice is selected through ballots cast by individuals who attend the Craft Faire.

Gingerbread house People's Choice
Gingerbread house People's Choice

First place winners in the individual categories include Willow West (child 5 & under); The Dougherty Family (child – ages 6-8); Mollie Becker (child – ages 9-12); Helen Sands (kits – ages 8 & under); Nora Devlin (teen – ages 13-17); Kristal Souza (adult – 18 -64); Mary Abbott (adult – 65 & over); Hennessy Tween Tigers (group – children 12 & under); Lauren Kraemer (group – family); and The Perilmans and Crew (group – adult 18 & over). A complete list of the winners can be found on the Fairgrounds’ website at www.NevadaCountyFair.com.

With the help of HOPE (Help Other People Eat) in Nevada County, Sunday’s canned food drive collected more than 250 cans of food, as well as cash donations. These donations will be used at the organization’s December food distribution. HOPE in Nevada County is a program established through the Grass Valley Elks, who partner with the Food Bank of Nevada County to feed those in need. HOPE distributes food once a month to anyone in the county in need of food and emergency food every Monday.

The 2012 Country Christmas Faire is planned for Thanksgiving weekend,
November 23 – 25, 2012. For information, visit www.NevadaCountyFair.com or call 273-6217.

Wendy Oaks
Publicist, Nevada County Fairgrounds
(530) 273-6217
wsoaks@gmail.com
Website: www.NevadaCountyFair.com
Facebook: Nevada County Fairgrounds

Nevada County Fair                         August 8 – 12, 2012

Draft Horse Classic                         September 20 – 23, 2012

Halloween at the Fairgrounds      October 27, 2012

Country Christmas Faire                November 25 – 27, 2011
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Travel

Costa Rica – Corcovado National Park

Tapir browsing in the jungle
Tapir browsing in the jungle

By Judy Pinegar

The day dawned (it was a 4:30 AM start) without rain and clear skies promised, and it lasted dry all day which I feel was a near miracle, given the amount of rain we have been encountering so far in Costa Rica. We had opted for the longer trip, by boat to La Serena Station (reached only by boat or small plane), although San Pedrillo station was closer to us, because the word was the animal “finds” were much better at La Serena.

So it was an hour and a half, out of the bay and through the open Pacific on a small boat holding 15 people  max, to a beach unidentifiable to my eye than any other, but the guides knew. With the tide out, and no dock, we landed in the water and quickly got to a huge area of old lava flow, at least 150 feet of it, before the sand and then the jungle started. At about 9 AM, stowing some stuff on shore we were quickly into the jungle and our first sighting was a Chestnut-mandibled Toucan, beautiful in black and yellow. A while further and we saw a pair of Scarlet Macaws.

Within an hour we had also seen three of the four species of Monkeys in Costa Rica, and had heard the fourth, the Howler Monkey. First was the tiny Squirrel Monkey, then the largest, the Spider Monkey, a whole family, and then a family of the White Faced Capuchin. Then we saw some cute, tiny Leaf Tent Bats, who bite at a leaves by the main rib until both sides fold in, then they attach upside down within the leaf.

By then we were back on the beach and following the tracks of a Baird’s Tapir, which had traveled quite a way up the beach, so we rapidly walked up the beach in the now hot sun, when we found a group of tourists with cameras, there he was… HUGE really, with a funny elephant like nose with a prehensile finger like structure on the end. And boy could he eat, our guide said he ate 80 pounds of leaves a day. He continued to graze, ignoring at least 20 people who got within 3 feet of him for pictures for over 30 minutes.

costa-rica-coast

Image 1 of 9

Costa Rica Shoreline

Looking up we found a White Nosed Coati, resting, after a feast of what was a nest of turtle eggs laid last night, we could still see the tracks of the poor mama turtle, and the eggshells left over, now being nibbled by Hermit Crabs. By now we had also seen the fourth species of monkeys, the Mantled Howler Monkey, and more toucans and macaws too, as well as the other monkey species. So we moved to the river, where a large American Alligator was resting with his mouth completely open (because he was lying in the sun and was hot).

A noise behind us and it was a small Collared Anteater, who however quickly moved away, our guide said it was unusual to see them. Moving back into the forest, a Three-toed Sloth was resting high in a tree, after more monkeys, we came to about four Collared Peccaries, including a baby about 8 inches long… sort of grey instead of black and so cute. The monkeys were eating and dropping many of the nuts so the peccaries were having a feast.

We came to the ranger station for a rest, seeing another pair of Scarlet Macaws, one of whom had been nursed back to health there and keeps trying to come back to get food (which everyone was forbidden to give them of course). Then a walk back through the jungle with more sightings of the same animals, to arrive at the beach about noon, for the boat trip home. It was an extraordinary 3 hour jungle hike, full of seeing fantastic mammals, birds, and a reptile in a well protected rain forest.

Judy Pinegar is a writer and her articles have appeared in numerous publications.


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