via:dbusinessnews.com
Sales of million-dollar homes in Santa Clara County increased again in July to their highest level since last fall as the county’s luxury housing market continued to show encouraging signs of recovery.
A total of 226 luxury properties changed hands in July, up from 215 in June and 148 sales in May. Sales still trailed last July’s total of 251, but the year-over-year gap has been narrowing each month this year. The $1.29 million median sale price last month was down just 2 percent from June and 6 percent from July 2008.
* The most expensive sale in Santa Clara County in July was an four-bedroom, 5,081-square-foot home in Monte Sereno that sold for $4.25 million;
* San Jose boasted the most million-dollar sales in July with 50, followed by Palo Alto with 40, and Los Altos with 36;
* It took an average of just 53 days to sell a million-dollar home in the county, the same as June and up from just 36 days a year ago;
* Homes sold for an average of 94 percent of their asking price, up from 93 percent the previous month but down from 98 percent a year ago.
The improvement in Santa Clara County’s luxury market echoes the Bay Area’s overall housing market picture. DataQuick, the La Jolla-based research firm, announced earlier this month that sales in the Bay Area in July jumped to their highest level in four years, “as deals above $500,000 continue to accelerate,” the firm said in a statement. The median price paid for a home in the Bay Area also increased month-to-month for the fourth month in a row.
Friday, August 28, 2009
Thursday, August 27, 2009
Mortgage fraud bill proposed by Santa Clara County prosecutors close to becoming law
By Mark Gomez
mgomez@mercurynews.com
Posted: 08/26/2009 04:55:52 PM PDT
Updated: 08/27/2009 03:13:47 AM PDT
Santa Clara County prosecutors are hoping they will soon have a new tool that allows them to put crooked mortgage brokers out of business more efficiently.
Prosecutors are awaiting a signature from Gov. Arnold Schwarzenegger on a bill that will make it easier to obtain financial documents of mortgage brokers and lenders to determine if fraud has been committed. The legislation, SB 239, sailed through the Legislature with unanimous votes in both houses and could be approved by the governor in the next few weeks.
The legislation was originally drafted earlier this year by a Santa Clara County prosecutor as a way to better handle the growing number of complaints about mortgage fraud.
"We found it increasingly difficult to handle all of the complaints," prosecutor Mike Fitzsimmons said. "We were barely keeping our head above water. Not only us, but prosecutors all across the state."
Under current law, prosecutors must obtain search warrants to get financial records from brokers and lenders, a process that can be "time-consuming and expensive," according to Fitzsimmons.
Under the proposed law, prosecutors will need only a court order to obtain those records, Fitzsimmons said.
"This will be a much more efficient way for us to evaluate cases," he said
The Santa Clara County District Attorney's real estate fraud unit began receiving more and more complaints about crooked mortgage brokers about three years ago. In doing research
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for the legislation, Fitzsimmons found a report that indicated reports of mortgage fraud rose more than 1,400 percent from 2000 to 2008.
SB239, authored by Sen. Fran Pavley, D-Santa Monica, and sponsored by the California District Attorneys Association, will create a provision to existing mortgage fraud law that will classify the crime as a felony or misdemeanor. Currently, mortgage fraud has only misdemeanor status in California, and prosecutors are forced to pursue serious cases under other statutes, such as grand theft.
To get the measure through the Senate and Assembly, prosecutors had to assure legislators that the law would not send more people to prison, Fitzsimmons said. The legislation is intended to help prosecutors obtain financial documents from lenders and brokers
"We're not going to be putting a demand on prison beds," Fitzsimmons said. "Defendants usually don't get prison. They get county jail time unless there are multiple counts or they are a repeat offender."
If the bill reaches the governor's desk by Friday as expected, he will have 12 days to make a decision.
Other states that have recently adopted dedicated felony mortgage fraud statutes with similar wording include Georgia, Arizona, Nevada, North Carolina and Florida.
In one of the larger mortgage broker scams prosecuted by the Santa Clara County District Attorney's Office, a San Jose couple received hefty prison sentences in May for running a scheme that involved lying to five banks about borrowers' ability to repay $8 million in subprime loans and lying to borrowers about the terms of the loans.
Prosecutors accused Esperanza Valverde and Herman Covarrubias, who operated Summit Mortgage One of Milpitas, of obtaining loans for 22 clients by supplying lenders with false tax returns, W-2 statements, pay stubs and employment verification letters. They both received prison sentences of about 20 years.
"Mortgage fraud is one of the linchpins in the demise of the California real estate market and the related crises in the financial sectors," Santa Clara County District Attorney Dolores Carr said in a statement. "It is critical that something is done to assist law enforcement in handling the flood of mortgage fraud offenses that we continue to receive."
In typical cases of mortgage fraud, crooked brokers falsify loan documents by inflating a client's income by as much as 250 percent, manufacture bogus bank statements that show tens of thousands of dollars for deposits, and falsify employer information, Fitzsimmons said.
"Frequently we come across cases in which mortgage brokers have borrowers sign blank applications and fill them in later as they see fit in order to grease the skids and facilitate getting their commissions and fees," Fitzsimmons said. "It's only a year or two when mortgages adjust and everything hits the fan when a borrower comes to us."
Contact Mark Gomez at 408-920-5869.
mgomez@mercurynews.com
Posted: 08/26/2009 04:55:52 PM PDT
Updated: 08/27/2009 03:13:47 AM PDT
Santa Clara County prosecutors are hoping they will soon have a new tool that allows them to put crooked mortgage brokers out of business more efficiently.
Prosecutors are awaiting a signature from Gov. Arnold Schwarzenegger on a bill that will make it easier to obtain financial documents of mortgage brokers and lenders to determine if fraud has been committed. The legislation, SB 239, sailed through the Legislature with unanimous votes in both houses and could be approved by the governor in the next few weeks.
The legislation was originally drafted earlier this year by a Santa Clara County prosecutor as a way to better handle the growing number of complaints about mortgage fraud.
"We found it increasingly difficult to handle all of the complaints," prosecutor Mike Fitzsimmons said. "We were barely keeping our head above water. Not only us, but prosecutors all across the state."
Under current law, prosecutors must obtain search warrants to get financial records from brokers and lenders, a process that can be "time-consuming and expensive," according to Fitzsimmons.
Under the proposed law, prosecutors will need only a court order to obtain those records, Fitzsimmons said.
"This will be a much more efficient way for us to evaluate cases," he said
The Santa Clara County District Attorney's real estate fraud unit began receiving more and more complaints about crooked mortgage brokers about three years ago. In doing research
Advertisement
for the legislation, Fitzsimmons found a report that indicated reports of mortgage fraud rose more than 1,400 percent from 2000 to 2008.
SB239, authored by Sen. Fran Pavley, D-Santa Monica, and sponsored by the California District Attorneys Association, will create a provision to existing mortgage fraud law that will classify the crime as a felony or misdemeanor. Currently, mortgage fraud has only misdemeanor status in California, and prosecutors are forced to pursue serious cases under other statutes, such as grand theft.
To get the measure through the Senate and Assembly, prosecutors had to assure legislators that the law would not send more people to prison, Fitzsimmons said. The legislation is intended to help prosecutors obtain financial documents from lenders and brokers
"We're not going to be putting a demand on prison beds," Fitzsimmons said. "Defendants usually don't get prison. They get county jail time unless there are multiple counts or they are a repeat offender."
If the bill reaches the governor's desk by Friday as expected, he will have 12 days to make a decision.
Other states that have recently adopted dedicated felony mortgage fraud statutes with similar wording include Georgia, Arizona, Nevada, North Carolina and Florida.
In one of the larger mortgage broker scams prosecuted by the Santa Clara County District Attorney's Office, a San Jose couple received hefty prison sentences in May for running a scheme that involved lying to five banks about borrowers' ability to repay $8 million in subprime loans and lying to borrowers about the terms of the loans.
Prosecutors accused Esperanza Valverde and Herman Covarrubias, who operated Summit Mortgage One of Milpitas, of obtaining loans for 22 clients by supplying lenders with false tax returns, W-2 statements, pay stubs and employment verification letters. They both received prison sentences of about 20 years.
"Mortgage fraud is one of the linchpins in the demise of the California real estate market and the related crises in the financial sectors," Santa Clara County District Attorney Dolores Carr said in a statement. "It is critical that something is done to assist law enforcement in handling the flood of mortgage fraud offenses that we continue to receive."
In typical cases of mortgage fraud, crooked brokers falsify loan documents by inflating a client's income by as much as 250 percent, manufacture bogus bank statements that show tens of thousands of dollars for deposits, and falsify employer information, Fitzsimmons said.
"Frequently we come across cases in which mortgage brokers have borrowers sign blank applications and fill them in later as they see fit in order to grease the skids and facilitate getting their commissions and fees," Fitzsimmons said. "It's only a year or two when mortgages adjust and everything hits the fan when a borrower comes to us."
Contact Mark Gomez at 408-920-5869.
Wednesday, August 26, 2009
Propositions offer big savings on property taxes
Propositions offer big savings on property taxes
Written by Cres McFall
Wednesday, 26 August 2009
With the first installment for fiscal year 2009-2010 property taxes officially due Sept. 10, assessing your assessment is a good idea – particularly, if a review can save you money. Following are some tax exemptions you might have overlooked.
• Homeowner’s exemption. It is likely that you filed a request for a homeowner’s exemption when you purchased your principal residence. If you didn’t, you may be eligible for an exemption of up to $7,000 off your assessed value. This exemption would reduce your annual property tax bill by approximately $70.
• Proposition 8, decrease in market value. If you purchased your home during a heated market, its current value may be less than the purchase price. Assessments under Proposition 13 are based on the purchase price plus an annual 2 percent increase, unless the county assessor grants a reduced valuation under Proposition 8.
You must apply for the reduced valuation. If granted, be aware the reduction is temporary and prompts an annual reappraisal. If the market value later exceeds the Proposition 13-factored base-year value, the previous assessed value may be restored.
• Proposition 58, transfer of title between parents and children. Real estate transferred from parent to child or child to parent may be excluded from reassessment if a claim is filed within three years after the date of the transfer. Normally, a transfer triggers a reassessment to the current market value of the property.
There is no dollar limit on the original owner’s principal residence. On nonprincipal residential property, there is a $1 million limit (taxable value). Proposition 193 allows exemptions on grandparent-to-grandchild transfers if parents are deceased.
• Proposition 60, moving to another home within Santa Clara County. This proposition allows homeowners 55 years of age and older to transfer the Proposition 13 base-year value of their principal residence to a newly purchased residence in the same county, provided certain conditions are met:
1. The new purchase or new construction must be completed within two years, before or after, the sale of the original residence.
2. The replacement property must be equal to or lesser in value than the original residence, equal or lesser in value defined as 100 percent of the market value of the original property as of the sale date if the replacement dwelling is purchased before the original property is sold; 105 percent of the market value of the original property as of its sale date if the replacement dwelling is purchased within one year after the original property is sold; or, 110 percent if the replacement dwelling is purchased between one and two years after the original property is sold.
3. Special rules apply to multi-unit dwellings and mobile homes.
4. An application must be filed within three years of the date the replacement property is purchased or newly constructed.
• Proposition 90, moving to another county. This allows a homeowner to transfer the base-year value of the principal residence in one county to a newly purchased residence in another county. Provisions are the same as those under Proposition 60, except that a nonrefundable processing fee of $60 is required.
Five other counties have Proposition 90 transfers: San Mateo, Los Angeles, Orange, San Diego and Ventura.
For more information, visit www.sccassessor.org.
Written by Cres McFall
Wednesday, 26 August 2009
With the first installment for fiscal year 2009-2010 property taxes officially due Sept. 10, assessing your assessment is a good idea – particularly, if a review can save you money. Following are some tax exemptions you might have overlooked.
• Homeowner’s exemption. It is likely that you filed a request for a homeowner’s exemption when you purchased your principal residence. If you didn’t, you may be eligible for an exemption of up to $7,000 off your assessed value. This exemption would reduce your annual property tax bill by approximately $70.
• Proposition 8, decrease in market value. If you purchased your home during a heated market, its current value may be less than the purchase price. Assessments under Proposition 13 are based on the purchase price plus an annual 2 percent increase, unless the county assessor grants a reduced valuation under Proposition 8.
You must apply for the reduced valuation. If granted, be aware the reduction is temporary and prompts an annual reappraisal. If the market value later exceeds the Proposition 13-factored base-year value, the previous assessed value may be restored.
• Proposition 58, transfer of title between parents and children. Real estate transferred from parent to child or child to parent may be excluded from reassessment if a claim is filed within three years after the date of the transfer. Normally, a transfer triggers a reassessment to the current market value of the property.
There is no dollar limit on the original owner’s principal residence. On nonprincipal residential property, there is a $1 million limit (taxable value). Proposition 193 allows exemptions on grandparent-to-grandchild transfers if parents are deceased.
• Proposition 60, moving to another home within Santa Clara County. This proposition allows homeowners 55 years of age and older to transfer the Proposition 13 base-year value of their principal residence to a newly purchased residence in the same county, provided certain conditions are met:
1. The new purchase or new construction must be completed within two years, before or after, the sale of the original residence.
2. The replacement property must be equal to or lesser in value than the original residence, equal or lesser in value defined as 100 percent of the market value of the original property as of the sale date if the replacement dwelling is purchased before the original property is sold; 105 percent of the market value of the original property as of its sale date if the replacement dwelling is purchased within one year after the original property is sold; or, 110 percent if the replacement dwelling is purchased between one and two years after the original property is sold.
3. Special rules apply to multi-unit dwellings and mobile homes.
4. An application must be filed within three years of the date the replacement property is purchased or newly constructed.
• Proposition 90, moving to another county. This allows a homeowner to transfer the base-year value of the principal residence in one county to a newly purchased residence in another county. Provisions are the same as those under Proposition 60, except that a nonrefundable processing fee of $60 is required.
Five other counties have Proposition 90 transfers: San Mateo, Los Angeles, Orange, San Diego and Ventura.
For more information, visit www.sccassessor.org.
Monday, August 24, 2009
Home Maintenance Tip -
Conserve Water and Reduce Pocketbook Pressure!
You may love the forceful flow of water at your faucets, showerheads and toilets, but did you know that installing low-flow aerators could cut your annual water consumption by more than half? You can also conserve water and save money on your water bill just by adopting a few new habits:
-While waiting for water to warm up, catch excess water in a bowl or bucket and use for houseplants or pets
-Only run the dishwasher when it is fully loaded
-Instead of using the in-sink garbage disposal, compost your food scraps
-Simply cutting your shower by 2 minutes will save 1,000 gallons a year!
-Turn off the water while you brush your teeth, shave, and while you lather up when washing your hands.
You may love the forceful flow of water at your faucets, showerheads and toilets, but did you know that installing low-flow aerators could cut your annual water consumption by more than half? You can also conserve water and save money on your water bill just by adopting a few new habits:
-While waiting for water to warm up, catch excess water in a bowl or bucket and use for houseplants or pets
-Only run the dishwasher when it is fully loaded
-Instead of using the in-sink garbage disposal, compost your food scraps
-Simply cutting your shower by 2 minutes will save 1,000 gallons a year!
-Turn off the water while you brush your teeth, shave, and while you lather up when washing your hands.
Saturday, August 15, 2009
Wednesday, August 12, 2009
Mortgage news
Bonds have not been able to hold on to their gain this morning. There are two big events coming up this afternoon. At 1 o'clock Eastern Time, the results of the $23 Billion auction of 10-year Notes will be released. Then at 2:15, the Fed will issue its Policy Statement after its two-day Fed Meeting.
The news from the Fed will be both multi-faceted and potentially market moving. Any hints of inflation and hikes could cause the market to swing in one direction. However, news of Bond purchases could cause an opposite reaction.
The news from the Fed will be both multi-faceted and potentially market moving. Any hints of inflation and hikes could cause the market to swing in one direction. However, news of Bond purchases could cause an opposite reaction.
Thursday, August 6, 2009
Online home search: Make sure you get the complete picture
Online home search: Make sure you get the complete picture
By Gino Blefari
President and CEO
Intero Real Estate Services
There are lots of places to search for properties online. National sites, local sites, broker sites, agent sites.
After a while they all start to look the same.
But they are not the same.
In fact, there are important differences you probably didn’t know about.
Let me explain.
The electronic life of a property listing begins the moment an agent enters it into the Multiple Listing Service (MLS). There are thousands of MLS’s nationwide, and they serve as central regional databases that all REALTORS use to share information on properties. They are as close to a complete picture of what’s on the market as you can get.
In the past, REALTORS shared this information only amongst themselves. But in 2000, the National Association of REALTORS formalized something called IDX (Internet data exchange). IDX allows brokers and agents to show each other’s listings on their own websites.
So, for example, if you visit broker A’s website, you will see broker A’s listings, but also the listings from brokers B through Z. This is good for brokers – who get to market their listings more widely – but also good for consumers, who get a full picture of homes for sale in their market.
Everybody wins.
Now consider some of the most popular home search sites on the Internet – those run by media companies or start-ups, not real estate brokerage companies like Intero. These sites look good, but what you may not know is that many of them show you just a slice of the listings. Because they are not members of the MLS, they cannot participate in IDX.
And you, the consumer, see an incomplete picture.
Think about it: If you were shopping for digital cameras online, it might be OK to miss a few models. But homes? Not seeing all your options is a big deal.
So next time you go online to look for homes, make sure you’re on a site that gives you a complete picture.
By Gino Blefari
President and CEO
Intero Real Estate Services
There are lots of places to search for properties online. National sites, local sites, broker sites, agent sites.
After a while they all start to look the same.
But they are not the same.
In fact, there are important differences you probably didn’t know about.
Let me explain.
The electronic life of a property listing begins the moment an agent enters it into the Multiple Listing Service (MLS). There are thousands of MLS’s nationwide, and they serve as central regional databases that all REALTORS use to share information on properties. They are as close to a complete picture of what’s on the market as you can get.
In the past, REALTORS shared this information only amongst themselves. But in 2000, the National Association of REALTORS formalized something called IDX (Internet data exchange). IDX allows brokers and agents to show each other’s listings on their own websites.
So, for example, if you visit broker A’s website, you will see broker A’s listings, but also the listings from brokers B through Z. This is good for brokers – who get to market their listings more widely – but also good for consumers, who get a full picture of homes for sale in their market.
Everybody wins.
Now consider some of the most popular home search sites on the Internet – those run by media companies or start-ups, not real estate brokerage companies like Intero. These sites look good, but what you may not know is that many of them show you just a slice of the listings. Because they are not members of the MLS, they cannot participate in IDX.
And you, the consumer, see an incomplete picture.
Think about it: If you were shopping for digital cameras online, it might be OK to miss a few models. But homes? Not seeing all your options is a big deal.
So next time you go online to look for homes, make sure you’re on a site that gives you a complete picture.
Monday, August 3, 2009
Finding – or imagining – a market bottom
The Intero Insider: Finding – or imagining – a market bottom
By Gino Blefari
President and CEO, Intero Real Estate Services
There’s an increasing amount of talk – both locally and in the national media – that we may have reached the bottom of the real estate market’s downturn.
Stories about properties selling quickly are becoming more common, as are instances of bank-owned properties selling with dozens of offers.
Moreover, in the past week, the National Association of Realtors reported that existing home sales saw an increase of 3.6% in June. Also, the Commerce Department reported that sales rose 11% in June to a seasonally adjusted annual rate of 384,000, from an upwardly revised May rate of 346,000. The last time sales rose so significantly was in December 2000.
The average person may take all of this to mean that we have indeed reached the bottom – or even that it has already passed.
But if you follow the market as closely as we do here at Intero, you come to a different, and less clear-cut, conclusion.
As I reported a few weeks ago, there are promising signs at the market’s lower end. But to get a better sense for whether or not the market as a whole will see an upward trend soon, one needs to look at the foreclosure pipeline - the number of properties making their way through the lengthy foreclosure process.
According to ForeclosureRadar, a company that tracks California foreclosure data, Notices of Default – the first step in the foreclosure process – increased 11.8% in June to 45,691, the second highest monthly total on record and a 10% year-over-year increase from June 2008. Perhaps because of recent government restrictions on foreclosures, these properties are clogged in the pipeline. Yet it seems like there are more to come – to put NAR’s optimistic existing home sales report for June (as mentioned earlier) into perspective, last month we saw an increase in home sales nationwide, yet in California in June alone the total number of new home sales was less than 80% of the total Notices of Default issued. So this tells us to expect a flood of new foreclosures hitting the market as bank-owned for sale listings several months from now and ongoing.
To compound matters, Notices of Trustee Sale – the second step in the foreclosure process, when the property owner is notified that the lender, or trustee, will attempt to sell the property at auction – decreased by a surprising 28.9% in June. Which tells us that this drop in the available supply of homes has created what seems to be a false sense of market recovery.
A third factor, from an article in the Wall Street Journal in May of 2009 - Mortgage Modifying Fails to Halt Defaults cited the Fitch Ratings Report which stated, that although thousands of home owners have been saved from foreclosure through loan modifications, anywhere from 25%-60% of these homeowners, have or will re-default and re-enter the foreclosure process in the coming months.
These three statistics tell a deeper market story: Yes, things may be improving, but it is also clear that there is a way to go before foreclosures stop flooding the market and placing downward pressure on prices.
So, like me, keep an eye on what’s happening now in the market – but also on what’s to come.
By Gino Blefari
President and CEO, Intero Real Estate Services
There’s an increasing amount of talk – both locally and in the national media – that we may have reached the bottom of the real estate market’s downturn.
Stories about properties selling quickly are becoming more common, as are instances of bank-owned properties selling with dozens of offers.
Moreover, in the past week, the National Association of Realtors reported that existing home sales saw an increase of 3.6% in June. Also, the Commerce Department reported that sales rose 11% in June to a seasonally adjusted annual rate of 384,000, from an upwardly revised May rate of 346,000. The last time sales rose so significantly was in December 2000.
The average person may take all of this to mean that we have indeed reached the bottom – or even that it has already passed.
But if you follow the market as closely as we do here at Intero, you come to a different, and less clear-cut, conclusion.
As I reported a few weeks ago, there are promising signs at the market’s lower end. But to get a better sense for whether or not the market as a whole will see an upward trend soon, one needs to look at the foreclosure pipeline - the number of properties making their way through the lengthy foreclosure process.
According to ForeclosureRadar, a company that tracks California foreclosure data, Notices of Default – the first step in the foreclosure process – increased 11.8% in June to 45,691, the second highest monthly total on record and a 10% year-over-year increase from June 2008. Perhaps because of recent government restrictions on foreclosures, these properties are clogged in the pipeline. Yet it seems like there are more to come – to put NAR’s optimistic existing home sales report for June (as mentioned earlier) into perspective, last month we saw an increase in home sales nationwide, yet in California in June alone the total number of new home sales was less than 80% of the total Notices of Default issued. So this tells us to expect a flood of new foreclosures hitting the market as bank-owned for sale listings several months from now and ongoing.
To compound matters, Notices of Trustee Sale – the second step in the foreclosure process, when the property owner is notified that the lender, or trustee, will attempt to sell the property at auction – decreased by a surprising 28.9% in June. Which tells us that this drop in the available supply of homes has created what seems to be a false sense of market recovery.
A third factor, from an article in the Wall Street Journal in May of 2009 - Mortgage Modifying Fails to Halt Defaults cited the Fitch Ratings Report which stated, that although thousands of home owners have been saved from foreclosure through loan modifications, anywhere from 25%-60% of these homeowners, have or will re-default and re-enter the foreclosure process in the coming months.
These three statistics tell a deeper market story: Yes, things may be improving, but it is also clear that there is a way to go before foreclosures stop flooding the market and placing downward pressure on prices.
So, like me, keep an eye on what’s happening now in the market – but also on what’s to come.
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