REALTORS® all over the U.S. celebrated a major victory when Congress restored the higher loan limits that had expired on October 1. This may be just one step of many on the road to reforming the alphabet soup of federal housing finance: FHA, FHFA, Freddie Mac, Fannie Mae, and onward.

The Los Angeles Times reported today that the higher loan limits may turn the FHA into a key financing as qualified borrowers go looking for funds to purchase their new homes. Utlimately, a compromise was put in place to satisfy House Republicans who expressed concerns about Fannie and Freddie.

[Congress] raised maximum loan limits for the Federal Housing Administration while leaving loan ceilings untouched for Fannie Mae and Freddie Mac. In effect, this may make FHA the go-to financing option for borrowers needing loans up to $729,750 with down payments as low as 3.5% in high-cost areas of California, the District of Columbia, New York, New Jersey and scattered counties in other states including Massachusetts, Florida and North Carolina. Fannie Mae- and Freddie Mac-eligible loans in those areas, meanwhile, stay capped at $625,500.

This action appears to leave the door open for additional action on reforming Fannie and Freddie, while at the same time weakening their leverage by reducing the access of certain borrowers to Fannie and Freddie as compared to FHA.

The goal — lobbied aggressively by realty and home-building groups — was to inject needed oomph into home sales. But Republicans in the House balked at doing anything that might prolong the existence of Fannie Mae and Freddie Mac, both the targets of scathing criticism for their multibillion-dollar costs to taxpayers and big bonuses for top executives.

What ultimately emerged from the legislative scrum was the compromise penalizing Fannie Mae and Freddie Mac, while boosting FHA. House Republicans weren't enthusiastic about helping the FHA either — the agency faces its own financial challenges — but unlike Fannie and Freddie, the FHA is subject to congressional appropriations and closer oversight. Republican critics held their noses and voted for the plan.

Stay tuned for more developments in reform of federal housing finance programs.

C.A.R. Reports: BofA vows to streamline short sales

The California Association of REALTORS® reported to its members today that Bank of America says it is stepping up efforts to increase the number of short sales it completes.According to Bank of America officials, the bank is on track to complete 100,000 short sales in 2011, up from about 42,000 a couple of years ago. The bank plans to increase its short sale completions by 60 percent in 2012.

Bank of America now has 3,000 people on its short-sale account, bank officials said in a webcast statement. When the market first started to decline, the bank had approximately 200-250 people on its short sale account. The bank also is starting to mail out packets of materials to delinquent homeowners encouraging them to try to short sell.

Loan Limits Amendment Passes U.S. Senate in a Squeaker

The U.S. Senate barely passed a measure to reinstate the previous conforming loan limits that had expired on October 1. An amendment was added to a HUD Appropriations bill by two Senators, one Republican and one Democrat. Bipartisanship is not dead, after all!

Last night at around 11:30 eastern the Senate voted to include an amendment sponsored by Senators Menendez (D-NJ) and Isakson (R-GA) in the Transportation – HUD Approps bill that would reinstate conforming loan limits to 125% of median area home price capped at $729,750. The amendment required a 60 vote threshold to pass and came in 60-38.

REALTORS® across the U.S. contacted their representatives in the House and Senate all summer long in order to remind Congress that access to housing finance is a critical part of our economy and the recovery. The approps bill including the loan limits amendment now heads to the House where it will likely go to conference between the House and Senate. Stay tuned for more updates as the details come together on the conference committee and the prospects of the loan limits among House conferees.

Congressional Inaction on Track to Raise Your Loan Limits

Time's up! The October 1 deadline for loan limits is here, and homebuyers all over in America just ran out of time. NAR reported this week that Congress failed to extend the FHA and GSE Loan Limits. Tomorrow those limits will decline in 669 counties in 42 states. The new limits will now be equal to 115% of median home price (down from 125%), and the high cost gap will fall from $729,750 to $625,500.

NAR has a guide available to determine the new loan limits and it is available on REALTOR.org or by clicking here.  If your county isn’t listed, your limits will not change. NAR continues to work with Congress to get the higher limits restored.

Energy Upgrade California reports that energy efficiency benefits home resale

The good folks at Energy Upgrade California are talking about a study of "home sales in the Portland metropolitan area that showed newly constructed homes with third-party certifications for sustainability and energy efficiency (such as LEED, Energy Star and Earth Advantage) sold for 8% more on average than non-certified homes, and existing homes with certifications sold for 30% more."

In fact, over the past four years studies of Portland area home sales show a consistent trend that third-party certification continues to result in higher sales price. Homes in Seattle and Portland marketed with energy efficiency certifications sold faster on average too, as compared to homes without certifications. In San Diego and Sacramento, researchers found that solar panel installations increased appraised home values, leading to a 97% recovery on investment—much higher than typical home improvements such as major kitchen and bathroom renovations. 

Read on:

The Washington Post: Is Green Good for Home Resale Value?

Los Angeles Times: Energy-Efficient Homes Seem to Sell Faster, Fetch Higher Prices

Los Angeles County Provides More Incentives!

Beginning September 6, LA County homeowners who complete qualifying upgrades will receive up to $4,000 in County incentives plus up to $4,000 in utility incentives—for a grand total of up to $8,000 back! All Energy Upgrade Projects in LA County are eligible for the County rebate and this offer is retroactive, so no one misses out.

Here are the details:

• All projects must be located within LA County. 
• Projects from both the joint SCE/SoCal Gas and the SoCal Gas-only program are eligible. 
• For those projects that use either SCE or SoCalGas and a municipal utility, the utility portion will be discounted, but the LA County rebate will remain consistent. 
• This increase will be retroactive to the start of the program. 

Help us get the word out about this new incentive amount! Incentives are available until all funds are expended. The Energy Upgrade California in LA County website reflects this change and the LA County Call Center (1-877-785-2237) is available to answer any questions that you or your clients may have.

More information available here.

Action Alert! Ensure Your Clients Have Access to Affordable Mortgages

On September 30, the cost of a mortgage could rise significantly. If this happens, many of your clients run the risk of being priced out of the American Dream of home ownership. Even worse, this could hold back the housing recovery.

We need you to share your market expertise with Congress. Send the letter below urging them to make the current mortgage loan limits for FHA and GSEs permanent. Well-qualified buyers don't need another hurdle to access affordable mortgage financing.

 Click here to take action on loan limits!

Brokers: Down Payment Assistance Programs for Homebuyers

Learn about lending and real estate services in Los Angeles County funded in part by federal Neighborhood Stabilization grants

Real Estate Broker Orientation hosted by Neighborhood Housing Services of Los Angeles County

Thursday, September 22, 2011
9:00am-10:00am

Neighborhood Housing Services of Los Angeles County Corporate Office
3926 Wilshire Blvd. 3rd Flr. Los Angeles, CA 90010

Come learn more about:

• Neighborhood Stabilization Program (Low-Cost Rehab Homes) 
• Affordable Lending (Special Financing Programs and Down Payment Assistance) 
• Construction Management Services 
• And much more 

 Please note, this orientation is only open to real estate brokers and not to the public. Call 213-381-2682 ext. 566 to RSVP and find out about future orientations.

REALTORS® meet Congresswoman Janice Hahn

From left: Rick Otterstrom, Mina Semenza,
C.A.R. President Le Francis Arnold, Congresswoman Janice Hahn,
James Litz, David Kissinger, Allie Otterstrom

REALTORS® in the South Bay recently met with Congresswoman Janice Hahn as she gears up for reelection to Congress. Hahn is running in a new district after the recently completed redistricting of Congressional seats in California. NAR's REALTORS® Political Action Committee (RPAC) has supported Congresswoman Hahn.

Can falling loan limits affect you? Yes they can!

Federal loan limits will decrease on October 1 unless Congress takes immediate action to make the current loan limits permanent. The Daily Breeze today reports on the unreported story about loan limits:

Jumbo loans - the federally insured mortgages that allow homebuyers to secure lower interest rates and thereby increase the size of the loan they qualify for - will see a big change on Oct. 1.

That's when the jumbo loan limits will drop nationwide. The amount of decline depends on the homes prices in each county.

For Los Angeles County, the limit will fall from $729,750 to $625,500.

That affects home loans through the Federal Housing Administration that require a 3.5 percent down payment, as well as mortgages through Fannie Mae and Freddie Mac that demand 20 percent down.

But don't look for a mob of homebuyers rushing to close their loans before then. That is at least partly because few consumers know about the change.

Think that high loan limits are just a thing for a few high cost areas? Think again. NAR's research found that more than 669 counties in 42 states and the territories would be negatively impacted by the loan limit change. The average decline in loan limits would be more than $68,000. Only 8 states will see no decline (AR, IA, KS, MS, NE, ND, SD, & OK). Every other state will see a drop in loan limits.

August 20 - Energy Upgrade California - Come Meet the Contractors!

The South Bay Environmental Services Center invites you to a special event:

Energy Upgrade California: Come Meet the Contractors!
Enjoy free lunch from LA's premier food trucks and enter to win prizes . . .
like a Home Energy Audit!

When:
Saturday, August 20, 2011
10:00am - 12:00pm

Where:
South Bay Energy Efficiency Demonstration (SEED) House
5021 Lennox Blvd, Lennox, CA 90304

Join us for a special Homeowner workshop on Saturday, August 20 to learn how to save money, increase energy and water efficiency, and earn up to $6,000 in rebates and incentives from Energy Upgrade California!


10am - 11am - Homeowners Workshop
Learn how to save money by making your home more energy efficient and how to maximize your rebate with Energy Upgrade California!

11am - 12:00pm - Lunch & Meet the Contractors
Afterwards, enjoy complimentary refreshments from the BORDER GRILL (specialty Mexican Food) and REBEL BITE (comfort food with an attitude) FOOD TRUCKS, enter to win prizes, including a Home Energy Audit, and meet with our qualified Participating Contractors to get the ball rolling on your energy efficiency upgrade!

Event is FREE, but for planning purposes, please pre-register now

Please call SBESC at (310) 371-7222 if you have questions, and please feel free to share news of this event with your friends.

NAR Urges Action on Debt Ceiling

NAR calls on Congress to raise the debt ceiling to protect the fragile housing market and home buyers' financing options.

NAR issued a statement today calling on members of Congress to raise the federal debt ceiling with the warning that the continuing debate over the issue is destabilizing housing markets around the country as households, concerned about rising interest rates, remain on the sidelines.

"Until a resolution is reached, Congress will be unable to address the myriad issues facing the nation’s families, communities, and economy," NAR President Ron Phipps says in the statement. “The indecision in Congress is paralyzing progress on other fronts, and it is harming home buyer confidence and negatively affecting home sales.”

NAR does not take a position on the specifics of the legislation but has been in communication with members of Congress and their staffs throughout the debate over the risks of a default by the U.S. government. Although the consequences of default can’t be anticipated with certainty, there is broad consensus among economists that interest rates will rise. Higher interest rates will dampen home sales at a time when markets around the country are struggling to recover.

Are short sales being held up by lenders for all the wrong reasons?

Conferences held in May by both the National Association of REALTORS® and the California Association of REALTORS® held forums dedicated to short sales and the problematic state of housing financing. This blog post is a write-up of a forum held by NAR in Washington on mortgage financing, including short sales.

At NAR’s Mortgage Liquidity Symposium on May 10, a panel of banking and lending professionals faced an audience of hundreds of REALTORS from all over the U.S. There were some testy exchanges – in particular one panelist, Martin Eakes, Chief Executive Officer of the Center for Responsible Lending, claimed that we were at risk of going back to 1929 where, he felt, irresponsible and inappropriate lending practices were the order of the day. Some REALTORS in the Q&A session expressed frustration about short sales and appraisals.

Here in the South Bay, the Daily Breeze wonders if the problematic process for completing short sales are contributing to the slow housing recovery:

Realtors are increasingly blaming slow bank processing of short sales as at least one big reason for the weak housing recovery.

Short sales - which involve homes sold for less than the current mortgage - represented 26 percent of existing single-family home sales for March in Los Angeles County, the last month for which there is data. Short sales usually take several months or longer for banks to approve.

The Los Angeles Times' columnist David Lazarus also asks why short sales are drawn out so much:

The situation has grown so problematic that the California Assn. of Realtors recently ran ads in newspapers statewide saying more needs to be done to assist homeowners on the verge of foreclosure by expediting the short-sale process.

"Horror stories abound from potential home buyers and Realtors forced to wait 90 or more days for a response to a purchase offer or being required to fax short-sale applications or other paperwork as many as 50 times," said Beth Peerce, president of the organization.

FREE High-Efficiency Toilets - One day only in Manhattan Beach

Free High-Efficiency Toilets - April 9, 2011

This program is available to all qualified Manhattan Beach residents. You must pre-register using your water bill account number, so call today. More info here.

To pre-qualify and find out more about the upcoming FREE toilet giveaway event, please call ConserVision Consulting at (866) 861-0784 or visit our website at www.waterprograms.com/westbasin/

Energy Upgrade CA Offers a $50,000 Home Energy Makeover

Enter and Win Home Energy Makeover up to $50,000. This from the Energy Upgrade California website:

$50,000: One Grand Prize Winning Home

A “Toward Zero Energy” winning home will receive energy and water efficiency improvements estimated at $50,000, including solar and certification as a green home!

$10,000: Five Winning Homes
Five homes receive energy and water efficiency improvements estimated at $10,000 and certification as a green home!

20 Semi-Finalist Homes
Twenty semi-finalist homes receive state-of the-art home energy assessments estimated at $500 each.

All of the winners will receive energy-efficient home improvements that will increase the overall comfort of their home, reduce their energy use and allow their home to obtain GreenPoint Rated certification.

Contest Registration is March 1-March 31, 2011.

What You Will Need To Enter the Contest

1. The total square footage of your house
2. The year your house was built
3. The names of your electric, gas and water utility providers
4. The total annual dollar amount for your 2010 electric, gas and water bills (you can contact your utility if you’re not sure; see How to Get a Copy of Utility Bills)

• Optional – Take the “Home Energy Efficiency Survey,” which includes your monthly utility usage history, and send the summary Energy and Water Report provided to you as a pdf (see below).

Note: The Home Energy Makeover contest is sponsored solely by Los Angeles County and is NOT sponsored or endorsed by Southern California Edison or Southern California Gas Company. Any information submitted for this contest is THE RESPONSIBILITY of the contest participant and Los Angeles County and neither Southern California Edison or Southern California Gas Company will take any responsibility for maintaining customer confidentiality or accept any liability with regard to the Home Energy Makeover contest.

The Home Energy Efficiency Survey

This customized online survey is sponsored by customers of Southern California Edison, SoCalGas, and LADWP. It’s free and provides lots of useful information about your home and energy efficiency. You can save the report as a pdf and upload it with your contest entry if you wish.

Ways you can help the victims of the Earthquake and Tsunami in Japan

Our hearts go out to the victims of the devastating earthquake and tsunami in Japan. Not to mention the pending nuclear threat which could affect, well, most of the rest of the world, really.

We'll periodically post information about what you can do to help and what local governments in our area are doing in response. Check out these resources from Assemblymember Warren Furutani.

Dear Friend,

Last Friday, the north coast of Japan was struck by a massive 8.9 magnitude earthquake and subsequent tsunami that caused widespread destruction and devastation. Current estimates predict loss of life in the thousands, and millions are without shelter, food or heat as they brave winter temperatures. Relief organizations around the world are mobilizing to provide relief to those affected by the disaster.

If you would like to help the relief efforts, here is a list of organizations that you can support:

The Red Cross immediately launched relief efforts in Japan. For more information on how you can support their efforts please visit Redcross.org or text REDCROSS to 90999 to donate $10 from your phone.

Americares emergency team is mobilizing resources and has dispatched an emergency response manager to the region. For nearly 30 years AmeriCares has provided medical relief and humanitarian assistance to millions affected by natural disasters around the world. Click here for more information.

Global Giving launched The Japan Earthquake and Tsunami Relief Fund to raise funds for relief organizations already on the ground helping victims, including the International Medical Corps and Save the Children as well as others. Please click on this link for more information.

For more organizations that are providing assistance, please click here. For more information on the individual organization, go to www.charitynavigator.org for more information.

Google has also stepped up to help those who have loved ones abroad. They launched the Person Finder to help connect people that may have been displaced due to the disaster.

And, Verizon and AT&T are offering their customers free calls to Japan at this time. For more information, please click here.

As we receive more information regarding local efforts getting underway, I will keep you informed.

Dear Friends, Help us solve the housing crisis - Let's improve the short sales process!

This open letter from the California Association of REALTORS® appeared this week in several California newspapers. We are calling on regulators, elected officials, nonprofits, business organizations, companies, and individuals with a stake in California’s economic future to help protect families and preserve housing. Home Ownership Matters!

March 10, 2011

An important message from the CALIFORNIA ASSOCIATION OF REALTORS®:

I write on behalf of the CALIFORNIA ASSOCIATION OF REALTORS®, whose 170,000 members continue to witness the devastating consequences the home foreclosure crisis is having on California’s families, neighborhoods, and communities on a daily basis.

The number of families affected by foreclosure is staggering. During the past three years, more than 640,000 Californians have lost their homes. With the number of homeowners who owe more than their home is worth hovering at 30 percent, experts predict there will be many more foreclosures in 2011 and 2012. Unless we take immediate, aggressive action to assist these homeowners, any meaningful recovery in the housing market and overall economy will continue to be delayed.

Tragically, only a fraction of those who face foreclosure will remain in their homes when all is said and done. Those whose incomes and financial circumstances meet strict guidelines may qualify for a loan modification that will reduce their monthly payment to more affordable levels. Yet the federal Home Affordable Modification Program (HAMP) is expected to prevent only 700,000 to 800,000 foreclosures nationwide before it expires at the end of 2012, and the program does little to help those homeowners who are unemployed or otherwise no longer able to meet their financial commitments. Their last hope is to sell their home, which often means convincing their lender or the investor who “owns” the loan (and, in many cases, the holder of a second mortgage lien and the mortgage insurer) to accept a “short sale.”

With a short sale, homeowners with a proven hardship negotiate an agreement to sell their home for less than the balance owed. Although not every homeowner or mortgage is eligible, those who are able to finalize a short sale avoid a foreclosure on their credit record and can move on with their lives. Last year, 20 percent of home sales in our state involved short sales.

Short sales can play an important role in our state’s economic recovery by accelerating the pace of home sales and reducing the inventory of bank-owned homes on the market. There are other benefits as well. Homebuyers who can qualify for a mortgage at today’s low interest rates also are able to purchase a home at below-market prices. Banks get a nonperforming asset off their books and avoid the headaches associated with disposing of assets they don’t want to own in the first place. Neighborhoods have fewer abandoned homes, and local businesses have more customers with money to spend.

Unfortunately, many homeowners are unable to successfully negotiate a short sale. According to a recent survey of 2,150 California REALTORS® who have assisted clients with a short sale, only three out of five transactions closed – even when there was an interested and qualified buyer.

What’s the problem? For one, no two mortgage agreements are the same, so it can be difficult to standardize short sale processes and procedures. Many homeowners have second mortgages, which further complicate matters. Then there’s the challenge of convincing multiple parties to take a financial loss or, in the case of loan servicers, to forego fees they otherwise might earn during the course of the foreclosure process. Poor and slow service by many banks and servicers has only exacerbated the problem. Horror stories abound from potential homebuyers and REALTORS® forced to wait 90 or more days for a response to a purchase offer or being required to fax short sale applications or other paperwork as many as 50 times. These delays discourage potential homebuyers from considering a short sale purchase and undermine the process for those who short sales are intended to benefit – the hundreds of thousands of families facing foreclosure.

Increasing the number of closed short sales by speeding up and streamlining the short sale process is one important way we can help California families avoid foreclosure and move our economy closer to recovery. That’s why the California Association of REALTORS® is taking steps to enable more families to arrange a short sale. Recently, we advocated for improvements to short sale guidelines established under the federal Home Affordable Foreclosure Alternative (HAFA) program. We’re meeting with major banks, U.S. Treasury officials, government-sponsored entities (including Fannie Mae and Freddie Mac), and others to urge them to standardize processes, comply with federal guidelines, improve communication with other stakeholders and increase staffing with the goal of eliminating service issues. We’ve also offered our members training in every aspect of the short sale process so they can assist their clients.

But we can’t do it alone. That’s why we’re focusing the spotlight on short sales and calling on regulators, elected officials, nonprofits, business organizations, companies, and individuals with a stake in California’s economic future to resolve this issue and others that get in the way of a recovery. It won’t be easy, and some compromises will be required. The important thing is that we need to act today. Our families and our communities can’t wait any longer.

Sincerely,

Beth L. Peerce
President
CALIFORNIA ASSOCIATION OF REALTORS®

Remember to vote! Local elections in the South Bay

On March 8, local elections are taking place in Carson, Los Angeles, Manhattan Beach, and Redondo Beach. Remember to vote in your city! In Redondo Beach, you may have already received your mail-in ballot. Contact the city clerk if you have not received your ballot or if you have further questions.

• Redondo Beach. SBAOR supports Arda Clark for Redondo Beach School Board. This is a mail-in ballot only which is due by 8:00 p.m. on March 8. Late ballots with on-time postmarks will not count!
• Manhattan Beach. SBAOR supports Kathleen Paralusz for City Council.

Last Chance: Take the LA Bizfed Annual Poll

As partners and members of LA County Business Federation (BizFed), join with thousands of business leaders across our region to weigh-in on YOUR top concerns and business outlook for 2011.

Please take the LA BizPoll now!

Your input as an active business leader is vital:
1. How do YOU feel about business environment in the region and CA?
2. What are the critical issues impacting YOUR business during this economy?
3. What regulations and/or conditions need to change for your company to succeed here?
4. What state and local government issues affect the growth of your business the most?
We will make sure opinion leaders, policy leaders, lawmakers and the media know what is really on the minds of job CREATORS. Our collective business voice will help shape all of our futures.

Please take action NOW by completing this 10-15 minute survey. Hurry, the LA BizPOLL CLOSES this week.