Archive for September, 2009
FHA, its time to accept digital signatures!
As geeky Realtors Mike and I are constantly trying to drag our vendors kicking and screaming into the big new technical world, so we can all work more efficiently together. Below I am posting a letter I just sent to our CA public representatives to try to talk some sense into FHA when it comes to accepting digital signatures.
I guess a lot of agents are getting offers kicked back because they don’t have ‘wet’ signatures. This upsets me greatly as a professional in the industry because right now on the average my FHA clients are having to submit at LEAST 5 offers to get one accepted. A normal offer is no less than 25 pages, so in essence FHA is killing trees, wasting ink, and WASTING MY TIME & GAS to go and meet with these buyers for wet signatures. As far as I’m concerned, a digital signature is no different than a fax…so what’s the problem?????? Please comment your thoughts below.
Dear Commissioner Stevens:
Until recently, many real estate professionals, such as myself, have been successfully using electronic signatures to execute purchase and sale agreements. In the last year, we have been experiencing considerable problems in connection with FHA loans—loans which now dominate the market and fuel the buying and selling of homes. While other federal agencies and market participants are readily and eagerly accepting electronically signed agreements, FHA is refusing to accept electronic signatures on real estate purchase and sale contracts.
As a result, real people–consumers and real estate professionals alike–are being negatively impacted:
* Commerce is significantly slowed as lenders retract long-standing policy decisions to accept electronic signatures on P&S agreements;
* Real estate and mortgage loan closings are being delayed because lenders and escrow agents are having to chase down “wet” signatures to meet the FHA rules;
* Delayed closings are resulting in foreclosures;
* Short sales are also being impacted;
* Valid and legal contracts entered into between buyers and sellers are being ignored; and
* Significant productivity gains for real estate professionals are being lost.
Use of e-signatures in real estate transactions has a positive impact on the economy with the average REALTOR saving over 6.6 hours per week. Unfortunately, because of the current status quo and problems with lender acceptance, REALTORS are only using e-signatures in 45% of their purchase transactions due to lenders and escrow not accepting e-signatures at the closing table. With electronic signature acceptance by the FHA, REALTORS and lenders using e-signatures could be saving another 5.4 hours/week of productivity. Without a clear written policy on electronic signatures, this equates to a 13.5% drag on economic productivity based on a 40 hour work week.
E-signatures are not a new idea. Signed into law in 2000 by President Clinton, the ESIGN act made it clear that documents and signatures in electronic form have the same standing as paper documents and handwritten signatures. RESPA and TILA rules recognize the use of electronic records to meet disclosure requirements. Fannie Mae and Freddie Mac accept electronic signatures on all loan documents. By not recognizing electronic signatures on purchase and sale contracts, these otherwise 100% valid electronic transactions, FHA is single-handedly setting e-commerce back years and is creating real economic hardship.
As a real estate professional impacted by FHA position on electronic signatures, I am asking FHA to take action immediately and to issue a Mortgagee Letter (similar to the Mortgagee Letter for the use of electronic signatures on appraisal documents) providing clarification on the acceptance of electronic signatures on purchase and sale contracts. Without a clear statement from FHA on this matter, consumers, real estate professionals, and the economy will continue to suffer undue and unnecessary delays and increased costs.
Sincerely,
Mike & Angie Weeks
Read Full Post | Make a Comment ( 1 so far )Orange County Dog Parks – OC Bark Parks
Smokey grabs some water from a fountain at San Remo park in Laguna Terrace.
Happy Saturday everyone!
We’re going to take Smokey to the dog park today and wanted to share these links with various dog parks in Orange County:
http://www.ocdogfriendly.com/dogparks.html
http://www.ocregister.com/ocregister/life/pets/dogparks/article_1640738.php/
For us, our dogs are our kids, and we know some of you spoil your pups even worse than we do. What a better way than taking them out for an afternoon romp!
For travelers, we found Laguna Beach has some great dog friendly hotels, too. We’ve stayed at Casa Laguna with Smokey – its nice place with some history behind it! Walking along Laguna Beach is one of our favorite things to do, there are so many people, beautiful homes, and dogs to see 🙂
Where is your favorite dog hang out? Let us know – comment below! Have a wonderful weekend!!
Read Full Post | Make a Comment ( None so far )FHA Approval – what Orange County First Time Buyers need to know
Hi all,
I was just meeting with one of our first time buyer preferred lenders, Manny Piceno. Manny plays hockey with Mike at Aliso Ice rink, and he’s always been one of our favorite g0-to guys because he’s full of good info but not full of himself 🙂
If you’re not actively looking for a home right now, you may not know that the most common first time buyer loan, FHA, has stricter guidelines than other loan packages. FHA is a great 1st time buyer loan to get because its fixed rate, backed by the government, AND you only need 3.5% down.
BUT, there are additional guidelines for FHA loans. One of those guidelines is that the HOA doesn’t have too many homeowners defaulting on their HOA payments. When people get in financial trouble, one of the first bills they stop paying is the local HOA. Also, the HOA needs to have a certain percentage of owner occupied properties. If too many investors own and are renting out properties in that neighborhood, it may not be FHA approved.
FHA approved neighborhoods in Orange County – how the heck do you find them?
Well, Manny let us know about this website:
https://entp.hud.gov/idapp/html/condlook.cfm
Of course, its not perfect and the status of neighborhoods is constantly changing, but at least you can have a resource to get an idea.
What about spot FHA approval for Orange County condos?
Well, its possible, but highly UNlikely if your neighborhood is listed on this website as ‘withdrawn’ or ‘rejected’. If you’re a first time buyer doing an FHA loan, you just cannot buy a property in that neighborhood. We’re sorry, you may complain to the government 😉 Or, you can borrow $$ so you have a 20% down loan, and buy wherever the heck you want. Really, although it can be frustrating to be limited when buying your first property, FHA is truely looking out for you and your best interest.
If you DID buy a property in a neighborhood where the HOA is belly up, the exterior could go south quickly and then it would be hard to sell. Don’t believe us? Call and ask Angie about how she had to be an expert witness in a court case where the HOA went bankrupt and the complex is now INFESTED with termites. A poor unsuspecting homeowner cannot sell her condo, and she had a shady Realtor represent her in the buy. She is still living with lots of winged roommates, and this has literally been going on for YEARS. If FHA loans would have been available in CA at the time she bought, they would have prevented all the drama for her. So sometimes, being told no is a good thing people! 🙂
Please call us if you have any questions about getting an FHA pre-approval. You CAN own a home, we can help! 877-230-3211
Read Full Post | Make a Comment ( 1 so far )Short Sale 101 – how long till I can get this property, anyway??
So, you can’t find any decent REO’s, or you’re getting outbid.
And there’s not enough equity sales.
You want the 8k homebuyer credit.
You find youself here, fishing in the sea of short sales in Orange County.
You’ve already read our post about what every buyer needs to know about a short sale.
But you’re still stuck! Short sales won’t close in time for the 8K first time buyer credit, right?! Honestly, probably not 80% of them. But a small percentage will. What clues should you look for?
1. Check for the word “approved” in the notes. Short sales that have been approved by the bank can many times sell within 30 days. Its getting the bank’s approval that usually takes months.
2. Look for experience / feel of the listing agent or team. Do they respond? Are they on top of things? If the listing agent doesn’t know how to deal with the bank it can add months to the process. Go ahead, Google them.
3. Do you see Short Sale – Notice of Default on the MLS report ? This means the property is in process of foreclosure and the bank has filed a notice of default on the property. You’d think notices would be filed immediately, but many times the bank waits for 3, 6, or 9 months of no payments until filing the NOD. After the notice is filed, stats are very high that a foreclosure will occur within the next 90 – 120 days. On short sales with a NOD the bank has a little more motivation because they aren’t receiving any money from the current owner, and they are being offered in essence, a settlement and solution with your offer.
4. Check for Short Sale – offers submitted – this indirectly tells you the current owner has submitted the hardship package, because it usually needs to be submitted with the offer. That being said, I have seen this status used when agents had a lowball offer in hand but NOT submitted to the bank. It depends on the agent, and their ethics. This status is better than a short sale with no offers submitted, but you are still probably looking at at least 60 days and multiple offers when here. Not worth chancing for your 8K credit, we need to find you an approved short sale or one close to foreclosure. PERIOD!
5. Check notes for only one mortgage! We’re currently STILL WAITING for an answer to one of our “approved” short sale offers that was literally submitted in JUNE. (Its Sept.) The first “approved” the price, but the second loan had not approved their settlement, and the agent didn’t notate that detail in the listing.
Short sales are complicated, but we can help. Mostly by having the best Orange County MLS searches so you get new REO and equity listing emails the DAY they come on the market! We still recommend buying foreclosures or equity (normal) sales to have the best experience with today’s market.
Read Full Post | Make a Comment ( None so far )Selling Dead Donkeys
Hi everyone, this is an article written by Mary Jane Cambria, 2009 Orange County Association of Realtors‘ President. As an agent, many of my buyers are feeling this pain, and I am posting with permission to help bring about awareness and change to make your experience with buying Orange County real estate a pleasure!
There’s an old story that goes like this:
“A city boy moved to the country and bought a donkey from an old farmer for $100. The farmer agreed to deliver the mule the next day.
The next day, the farmer drove up and said, “Sorry, but I have some bad news. The donkey died.”
“Well then, just give me my money back.”
“Can’t do that. I went and spent it already.”
“Okay then. Just unload the donkey.”
“What ya gonna do with him?”
“I’m going to raffle him off.”
“You can’t raffle off a dead donkey.”
“Sure I can. I just won’t tell anybody he’s dead.”
A month later the farmer met up with the city boy and asked, “Whatever happened with that dead donkey?”
“I raffled him off. I sold five hundred tickets at two dollars apiece and made a profit of $998.”
“Didn’t anyone complain?”
“Just the guy who won. So I gave him his two dollars back.”
It’s not nice to sell dead donkeys. Nor is it nice if, instead of a donkey, you list an REO property on the MLS as active when it should be in “back up.”
By the rules of the MLS, when an owner accepts an offer, the listing agent is required to change the property’s status even if, as we all have experienced, the bank takes weeks to approve the transaction.
A friend of mine suggests that agents are committing a fraud when they allow properties to stay active even as an accepted offer awaits lender approval. “I could be spending time with my mother who is in stage IV kidney failure instead of calling on so-called active listings. It wastes time and distorts true market inventory,” she complained to me recently.
I understand her frustration. But I understand the listing agent may be frustrated too, when forced to wait, sometimes for months, their deal is rejected by the bank. They are trying to serve their clients—sellers often in distress, selling short and desperate to resolve their financial crisis.
I do not have a perfect solution to this but wish to point out that the REALTOR® Code of Ethics stipulates there is an “obligation to treat all parties honestly.” And Article II subsequently states, “REALTORS® shall avoid exaggeration, misrepresentation, or concealment of pertinent facts relating to the property or the transaction.”
The most successful REALTORS® practice the art of cooperation to perfection. Professionalism is the bedrock of their business: They nurture their image and reputation in small ways, including being courteous to colleagues.
We cannot forget these basic principles because we are frustrated. Rationalizing poor business practices because the market is in turmoil is no way to convey confidence and trust to our clients. I can only imagine what an anxious buyer must think touring all day long only to find out that none of the properties he or she visited are actually for sale.
In the end, we cannot persist in criticizing lenders for being unresponsive and neglectful, when we in turn go about our workday refusing to return phone inquiries on our REO listings.
Author bio………………………………………
Mary Jane Cambria serves as President of the Orange County Association of Realtors®, which is the 2nd largest Association in California. Mary Jane is Broker/Owner Cambria Real Estate. She has earned many achievements in her 20-year real estate career. She serves as a director for the California State Association of Realtors® and as a National Association of Realtors® director. She was the 2004 California State President for Women’s Council of Realtors® and was awarded the: 2007 State Member of the Year. She serves as a volunteer at Fair Housing of Orange County with the Foreclosure Prevention Program and teaches First Time Buyers Classes there and at Neighborhood Housing Services of Orange County. She is a director on the OCHOPC council (Orange County Housing Collaborative, Director for the Orange County Housing Trust, and Director for AREAA (Asian Real Estate of America Association and a member of the Orange County District Attorney’s Advisory Board for the Real Estate Fraud Department.
MARY JANE CAMBRIA,
CIPS, CRS, GRI, LTG, PMN, SRES,E-PRO
2009 PRESIDENT ORANGE COUNTY ASSOCIATION OF REALTORS®
Good news about Short sale taxes, and Mortgage PMI from an expert ;)
Hi everyone!
Thought you’d enjoy this real estate update from Suze Orman – feel free to post questions below!
Read Full Post | Make a Comment ( None so far )
Orange County Real Estate Success 