Want Spacious Living Quarters? Welcome to the “A” Yacht, so called because the name of the Russian billionaire who owns the yacht is Andrey and his wife Aleksandra, Mr. Melnichenko’s Servian-born supermodel.
It has 23,600 square feet of living space and a 2,583-square-foot master suite wrapped in bomb-proof, 44-milimeter glass. At 394 long, it cost over $300 million to build and broke several of the contractors working on the yacht.
Are you facing foreclosure? Has someone advised you to do a short sale in lieu of foreclosure? Well, be careful, there could be a lot of problems down the road for you if you took out an equity loan to pay off debts or buy goods such as a car, boat, furniture or other such items.
Whereas California is a nonrecourse state, meaning lenders cannot pursue borrowers for unpaid balances on home-purchase loans. However, home loans not used for the purchase – home equity lines of credit and second loans taken out after purchase – are recourse loans, which means lenders are legally entitled to collect the unpaid balance. Depending on the type of loan, they have four to six years to pursue borrowers.
Refinanced mortgages do become recourse loans, but in California a nonjudicial foreclosure – the most common kind – eliminates the borrower’s liability to the lender that carried out the foreclosure, which is generally the main lender. A second lender for a nonpurchase loan, however, still has “recourse,” or the right to pursue the borrower.
The problem becomes that in the normal course of business, when you take out an equity loan, you sign a promissory note. That note is a promise to pay the lender, regardless if your property is sold as a short sale or sold in foreclosure. In short you may be stuck to pay off your note that you signed when you got your equity loan. This is what is called a recourse loan. Ouch, it can hurt.
Millions of borrowers do have recourse loans that they took out after purchase, which means lenders have a legal right to pursue them for unpaid balances.
In California during the boom real estate years – 2005 to 2007 – homeowners took out 2.88 million home equity lines of credit and 1.18 million nonpurchase second loans, according to First American CoreLogic, which tracks loan data. The total was 4 million such recourse loans totaling $485.3 billion.
Some experts think lenders may pick whom to pursue by probing defaulted borrowers’ net worth.
Rick Harper, director of housing at Consumer Credit Counseling Services of San Francisco, which staffs the federal HOPE for Homeowners hot line, said his workers tell borrowers who are considering default that their second loans could make them liable to debt collection.
“Depending on what the holder of that note wants to do, it can make their (the borrowers’) life miserable,” he said. “Most of the (lenders) do an asset test to see if there’s anything there. They can run credit reports, use investigative services, get their hands on the applications they used when they applied for a loan.” Applications for loan modifications and short sales also require disclosure of assets.
Most of this story was taken from an excellent article in the San Francisco Chronicle.
Fannie Mae today announced it is updating several policies impacting the future eligibility of borrowers to obtain a new mortgage loan after experiencing a preforeclosure event, including a preforeclosure sale, short sale, or deed-in-lieu of foreclosure.
Among the changes is the amount of time that must elapse after the preforeclosure event before a borrower is eligible to obtain a new mortgage loan owned or guaranteed by Fannie Mae. This waiting period may be dependent on the loan-to-value ratio of the transaction and whether extenuating circumstances, such as loss of employment, contributed to the borrower’s financial hardship. Additionally, Fannie Mae is updating the requirements for determining that borrowers have re-established their credit after a significant derogatory credit event.
These changes apply only to loans owned or guaranteed by Fannie Mae and do not impact those owned or guaranteed by Freddie Mac or the Federal Housing Administration (FHA).
For more information about the changes, including the new waiting period requirements, please visit Fannie Mae Selling Guide
John J. O’Dell
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RealtyTrac Inc. said Thursday that the number of U.S. homes taken over by banks jumped 35 percent in the first quarter from a year ago. In addition, households facing foreclosure grew 16 percent in the same period and 7 percent from the last three months of 2009. More homes were taken over by banks and scheduled for a foreclosure sale than in any quarter going back to at least January 2005, when RealtyTrac began reporting the data, the firm said.
“We’re right now on pace to see more than 1 million bank repossessions this year,” said Rick Sharga, a RealtyTrac senior vice president.
Foreclosures began to ease last year as banks came under pressure from the Obama administration to modify home loans for troubled borrowers. In addition, some states enacted foreclosure moratoriums in hopes of giving homeowners behind in payments time to catch up. And in many cases, banks have had trouble coping with how to handle the glut of problem loans.
These factors have helped slow the pace of foreclosures, but now that trend appears to be reversing.
The states with the highest foreclosure rates in the first quarter were Nevada, Arizona, Florida and California, with Nevada leading the pack, RealtyTrac said. Rising home prices and speculation fueled a wave of home construction there during the housing boom. But now the state, particularly around the Las Vegas metropolitan area, is saddled with a glut of unsold homes. Still, the number of homes in Nevada that received a foreclosure filing dropped 16 percent from the first quarter last year.
All told, one in every 33 homes in Nevada was facing foreclosure, more than four times the national average, RealtyTrac said. Foreclosure filings rose on an annual and quarterly basis in Arizona, however. One in every 49 homes there received a foreclosure-related notice during the quarter. Florida, meanwhile, posted the third-highest foreclosure rate with one out of every 57 properties receiving a foreclosure filing. California accounted for the biggest slice overall of homes facing foreclosure – roughly 23 percent of the nation’s total. One in every 62 properties received a foreclosure filing in the first quarter.
John J. O’Dell
Real Estate Broker Looking for short sales or foreclosures in Nevada County?
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Call me at 530-263-1091
This film, was originally thought to be from 1905 until David Kiehn with the Niles Essanay Silent Film Museum figured out exactly when it was shot. From New York trade papers announcing the film showing, to the wet streets from recent heavy rainfall & shadows indicating time of year & actual weather and conditions on historical record, even when the cars were registered (he knows who owned them and when the plates were issued).. It was filmed only four days before the quake and shipped by train to NY for processing. Amazing but true!
Copied from..www.archive.org.
A trip down Market Street. The original version of which can be downloaded at….www.archive.org…suffered badly from “Film Roll” at the beginning and end, this version however has had those faults corrected and shows a lot more detail particularly at the end were the film froze and skipped frames.
John J. O’Dell
Real Estate Broker Looking for real estate in Nevada County? Click Here
One of the sad realities of having your home foreclosed is the tremendous amount of physiological pressure that is involved. Can you imagine buying a home, calling it yours, spending money to fix it up, than due to circumstances beyond your control, loss of income, sickness or whatever, you can’t make your mortgage payments.
Having had several clients try to work out loan modifications with a bank, I can somehow understand the frustration that this man must have felt when he finally reached a breaking point.
Here’s one of the latest cases of a person going over the top due to foreclosure.
httpv://www.youtube.com/watch?v=V86zV5vSUtU
According to the Springhill News a man who told Ohio authorities that he was facing foreclosure rammed his house with his SUV.
Clark County Sheriff Gene Kelly says 30-year-old Steve Doak told deputies he was recently served with foreclosure papers and wanted to destroy the house rather than turn it over to the bank.
The sheriff’s office says Doak drove the vehicle into fencing and then into the rear of the house in New Carlisle, about 50 miles west of Columbus. They say he did extensive structural damage. Authorities say they shut off utilities in the home for safety reasons.
Doak was arrested Tuesday on charges of inducing panic, disorderly conduct and other counts.
He has pleaded not guilty. No one answered his phone Thursday morning and the voice mailbox was full.
Governor Schwarzenegger on Monday signed SB 401 (Wolk) into law providing distressed homeowners with state tax exemption on debt forgiven in a short sale, foreclosure, or loan modification.
KEEP THIS IN MIND
• SB 401 generally aligns California’s treatment of taxes on forgiven mortgage debt with that of federal law. For debt forgiven on a loan secured by a “qualified principal residence,” borrowers now will be exempt from both federal and state income tax consequences. Previously, California homeowners generally were exempt from owing federal taxes on the forgiven mortgage debt, but still were required to pay California taxes on the so-called “phantom income.”
• Qualified principal residence indebtedness is defined as debt incurred in acquiring, constructing, or substantially improving a principal residence, including both first and second mortgages. It also includes refinance loans to the extent the funds were used to payoff a previous loan that would have qualified under these guidelines.
• The tax relief applies to debts discharged from 2009 through 2012. Californians who already have filed their 2009 tax returns may claim the exemption by filing a Form 540X amendment.
• Taxpayers who do not qualify for the above exemptions (e.g., second home or rental property) still may be exempt from paying taxes on forgiven mortgage debt under other provisions. Most notably, bankrupt taxpayers are exempt from debt relief income tax. Also, taxpayers who are insolvent are exempt from debt relief income tax to the extent their current liabilities exceed current assets.
To read the full story, please click here:Sacramento Bee
John J. O’Dell
Real Estate Broker Looking for new listings when they first come out on the Nevada County MLS ?
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Yes, we know. The economy is bad. Recovery may be on the horizon, but no one really knows how close. Or if we can “hold out” till it happens. Yet we can each take some actions to position ourselves in the best possible way to survive a weak economy—and be at the front of the pack when it improves.
Dr. Ivan Misner, founder and chairman of BNI (Business Networking International), the world’s largest business networking organization, says that during an economic downturn “you can actually prosper…while everyone else flounders in fear.” He tells of being at a business mixer in the early 1990s, “right in the middle of a nasty recession.” As he looked around the room and listened in, he noticed that “[w]hile nearly all were commiserating with one another, very few were actually networking and working on seeking new business…,” which, of course, was the purpose of the mixer!
So, while we can’t control the economy, we can control our response to it. Dr. Misner goes on to say, “During the last recession, I watched thousands of business people grow and prosper…because they consciously made the decision to refuse to participate in a recession. They did so by developing their networking skills and learning how to build their business through word of mouth.”
I’ve heard several people in my contact sphere say they’re refusing to participate in the recession. What if everyone refused to participate? We wouldn’t have a recession!
Dr. Misner concludes, “Don’t let a bad economy be your excuse for failure. Instead, make it your opportunity to succeed. While others are looking at the problems, those of us looking for opportunities will not only get through a bad economy but will prosper.”
Here are some ideas on ways to find opportunity:
Invite people to meetings of your business or trade group.
Offer to speak at an industry conference.
Send out a mailing.
Begin an e-mail campaign.
Write letters to the editor.
Start a blog.
Submit articles to trade publications and online article sites.
Add an opt-in and an autoresponder series to your website.
If you don’t have a website, get one.
If you need to outsource any of these projects, do it.
Stay in front of potential customers. Whatever line of work you’re in, people still need your product or service. If you’ve made your name familiar to your target audience and established yourself as an expert in your niche, you’ll be the one they go to when they’re ready to buy—instead of your competitors. Your (former) competitors will be the ones commiserating about how the recession of the early 21st century ruined them.
Lisa J. Lehr is a writer and copywriter living in Grass Valley. She can help you promote your business with a full range of online and offline marketing pieces. A member of Empire Toastmasters, she’s available to speak to your business or professional group. Visit her website www.justrightcopy.com for more information, opt in for the message series, and receive a free Marketing Guide.
New quarters for real estate author and motivational speaker.
Have you ever seen these ads that start out – make millions in real estate – you don’t need money, let me show you how to get started in real estate and earn a ton of money in the first month. Excuse me, if you can make millions in real estate using this “motivational speaker’s” techniques , then why is the guy even bothering to try to teach you his “sure why to get rich in real estate”?
I’ve been to one of these seminars. The guy showed up in a chauffeured limo, got out and he had diamonds on his fingers and so much gold jewelry that I was surprised he could walk. (I’m sure all the jewelry was fake) To make a long story short, every thing he said made no sense, but I noticed the people in the audience seemed to be buying his grubbily glop. I’m sure he made a lot of money selling his course and his books and tapes.
Well, here’s one “motivational speaker” from Texas, who hawked a book and infomercial on how to make money in real estate, who is among eight people convicted of a multimillion-dollar mortgage fraud scheme. Eric Rulack Farrington Jr., 57, was president of Eric Farrington Seminars and Prestige Capital Corp., which did business as Farrington Mortgage Group.
A federal jury this week convicted Farrington of conspiracy to commit wire fraud, bank fraud, aiding and abetting, 15 counts of wire fraud and aiding and abetting, 10 counts of money laundering and aiding and abetting, five counts of engaging in a monetary transaction with criminally derived property and aiding and abetting.
Prosecutors said the eight defendants ran the scheme from March 2002 to January 2006. They found single-family residences for sale in the Dallas area, including distressed and pre-foreclosure properties, and negotiated a sales price. They created surplus loan proceeds by inflating the sale price, often using inflated appraisals.
“In some cases, they would create a bogus outstanding mortgage lien to be discharged,” prosecutors said. “They recruited individuals with high credit scores to act as borrowers and falsely represented to them that the property would be managed by the defendants and rented by a suitable tenant; that the mortgage, interest, taxes, insurance and property maintenance would be paid from the rental income; and the purchasers/borrowers would have no expenses. The borrowers had no intention to live in the property and did not have sufficient income to repay the loans.”
Conspiracy to commit wire fraud and wire fraud carries a sentence of up to 20 years in prison and a $250,000 fine. Bank fraud is punishable 30 years in prison and a $1 million fine. Money laundering is punishable by 20 years in prison and a $500,000 fine, and engaging in a monetary transaction with criminally derived property is punishable by 10 years in prison and a $250,000 fine.
The defendants also must forfeit $8.5 million. No sentencing dates have been announced.
I guess while the group is in jail, they might read some books on real estate law, and maybe they can even read a book on ethics. I doubt it, what do you think?
John J. O’Dell Real Estate Broker
Looking to buy or sell?
Call today 530-263-1091
Politicians, like diapers, should be changed often and for the same reason
After much political wrangling, which seems to be the norm for California politicians, the Governor signed “legislation to provide greater assistance to California Homeowners”. Amazing how the politicians pat themselves on the back with their wording for something they should have done last year. Anyhow, here’s the press release, notice all the huffing and puffing of their chests for something that was so obvious for the politicians to pass without any fanfare.
“Gov. Schwarzenegger Signs Legislation to Provide Greater Assistance to California Homeowners
Tax Conformity Bill Also Promotes Growth in California Renewable Energy Projects
Governor Arnold Schwarzenegger today signed SB 401 by Senator Lois Wolk (D-Davis), legislation that will bring much of our state tax policy in line with federal policy while specifically providing greater tax relief to struggling California homeowners who have sold their homes as short sales or modified their mortgage loans. This bill will also assist companies that are developing new renewable energy projects in the state that are financed by economic stimulus grants received through the American Recovery and Reinvestment Act (Recovery Act).
“This legislation is a great example of what we can accomplish when we work together to solve problems that affect Californians, and I applaud Senator Lois Wolk, Senator Ron Calderon, Assembly member V. Manuel Pérez and Assembly member Anthony Portantino for their work. It is important that we continue to provide all possible assistance to homeowners who were negatively impacted by the mortgage crisis, and this bill will provide them with necessary mortgage debt relief and protect them from thousands of dollars in unfair taxes,” said Governor Schwarzenegger. “SB 401 will also help promote the growth of renewable energy projects in California by providing tax assistance to businesses to get their projects of the ground, which is good news for our economy.”
SB 401 extends the law providing mortgage debt forgiveness to homeowners who have already lost their homes due to declining home prices and cannot afford to pay thousands of dollars in taxes because the mortgage company forgave the remainder of the loan. This means that Californians who have sold their homes as short sales are allowed to exclude from taxable income the amount that was still owed to the mortgage company. The legislation, which increases the amount of mortgage debt forgiveness available, also applies to homeowners who have made loan modifications in 2009.
The bill also assists renewable energy companies that are currently establishing the financing to build their projects in California. By designating federal economic stimulus grants received through the Recovery Act for renewable energy projects are not treated as income for tax purposes, this legislation will help companies move these projects forward and help their business thrive in the state.”
Notice that the bill also attached a rider to aid renewable energy companies. I wonder if our politicians ever pass a bill without a rider on it?
On the surface the rider on SB 401 seems to be a good one, but has anyone read the fine print? What do you think?
John J. O’Dell
Real Estate Broker Searching for short sales and foreclosures in Nevada County? Click Here
