Archive for January, 2012

3 considerations before abandoning underwater home

REThink Real Estate

By Tara-Nicholle Nelson Inman News®

Editor’s note: This is  the second of a two-part series. Read Part 1: “When it makes sense to keep an underwater home.”

Q: At the top of the  market, I owned three properties: my first home (in a marginal neighborhood, now  about 100 percent upside down), my own residence (a big fixer in a great  neighborhood), and a triplex I bought as an investment (an OK neighborhood,  needed some work, fully rented, but now upside down by about 30 percent).

When the market  turned, I had a couple of bad tenants in my first home and the triplex that set  me way back financially, and I was unable to borrow the money I needed to fix  the house I lived in. I did a short sale on the fixer and got temporary loan  mods on the other two, and moved back into my first home.

The problem is, they’re  both so upside-down and don’t seem likely to come back up anything soon … should  I just sell everything and start over?

A: Last week, we covered the preliminary step I want you to  take with respect to your personal residence, of examining whether the home  still works for you, for the most part, as a personal residence,  notwithstanding the fact that it’s upside-down.

Many a homeowner makes the wise decision of staying put in  an underwater home on the grounds that the home is functioning well as a home  for their family, is affordable and looks like it will remain functional on  those counts for the foreseeable future.

I’m aware, though, that your situation is complicated by  your perception of both of the properties at issue, at least in part, as  investments that now seem likely to have outlived the purpose for which you  bought them.

I can’t give you a black or white answer in terms of whether  you should sell or hold either or both of your properties. But I can give you a  set of considerations to factor into your decision. After you evaluate the  life-property fit of the home you currently live in, consider these three  things:

1. Your options.  One of the biggest, most stressful mistakes we make, as humans, is to agonize  over decisions without a complete understanding of the full spectrum of options  that are available to us. So, educate yourself!

Get online and do your reading,  talk with your own lenders to see what options they might have available, and  then also talk with local professionals you trust — at the very least, include  a real estate broker, a mortgage pro, an attorney and a tax expert on this  list. They might know of options you don’t, and they might be able to help you  understand the timelines and feasibility associated with each option.

For example, banks seem to be granting short sales at higher  rates than before, but they still take a long time, and the exemption from  federal income taxation on the debt forgiven via a short sale is currently set to  expire at the end of 2012. That might suggest you should list your properties  for sale and apply for short-sale approval, stat.

On the other hand, there have been a number of governmental  foreclosure relief program developments that might offer help for you, some of  which are available only in the hardest-hit states.

The pros can also help you get a deep understanding for all  of the tax, credit, financial and even legal implications of all the options  available to you. Get the information and professional input you need to fuel a  clear, complete understanding of your options before you move forward with your  decision-making process.

2. Your values. The  decision whether to hold or sell your properties is a hybrid business/personal  decision that will impact the overall “after” picture of your life.  While you can and should factor in input from professionals and even personal  advisers whom you trust are knowledgeable and have your best interests at  heart, only you can decide what’s really important to you in a way that drives  the ultimate decisions you make.

(And decision really should be decisions, plural, because you could  very well create an action plan that involves putting the place on the market  as a short-sale listing while you apply for a loan modification, or some other  set or sequence of actions.)

So, when I say to factor in your values, I’m simply  encouraging you to get clear on what is important to you. Owning the place you  live? Tax advantages? Reducing your expenses? Saving up to secure your  retirement?

This phase of the process will help you get out of the very  common real estate decision trap of doing things for their own sake: owning  because ownership is good, or getting out of the market because that’s the  supposedly smart thing to do.

Whether you decide to hold, sell, or try to make  some other changes to your situation then sell as a backup plan, it’s important  that each action step you build into your plan be set in service of some higher  life aim, goal or value.

3. Your priorities.  Once you do a deep dive into your values and even list them out in writing, one  essential truth will quickly become very evident: You can’t (likely) have them  all. Early on in this decision process, you’ll need to rank your values and  objectives in order of importance, and communicate that to the professionals  you look to for advice.

There are trade-offs involved in virtually every real estate  decision. For example, you might have to give up some tax benefits of property  ownership to cut your costs and save your financial acorns for the winter of  retirement.

You might have to sacrifice free time and get a side job to  make your real estate obligations if you decide to keep the triplex after the  mortgage adjusts (if you’re currently paying only interest, a mortgage  adjustment that happens in January might involve a decrease in interest rate but still increase the overall payment if you have to begin paying toward  principal).

Only you can know what’s important to you, in your finances  and your life, to make the critical decisions you now face. So get clear on  your full range of options and the implications thereof, build out a strong  sense of your own values and life vision, then prioritize and rank the  things that are important to you. Once you have these inputs, your action plan  should soon become clear.

Tara-Nicholle Nelson is author of “The Savvy Woman’s Homebuying Handbook” and “Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions.” Tara is also the Consumer Ambassador and Educator for real estate listings search site Trulia.com. Ask her a real estate question online or visit her website, www.rethinkrealestate.com.


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The Federal Reserve Board issued enforcement actions against four large mortgage servicers            –GMAC Mortgage, HSBC Finance Corporation, SunTrust Mortgage, and EMC Mortgage Corporation–in April 2011. Under those actions, the four servicers were required to retain independent consultants to review foreclosures that were initiated, pending, or completed during 2009 or 2010. The review is intended to determine if borrowers suffered financial harm directly resulting from errors, misrepresentations, or other deficiencies that may have occurred during the foreclosure process. The servicers are required to compensate borrowers for financial injury resulting from deficiencies in their foreclosure processes.       

           If you had a mortgage loan on your primary residence and believe you were financially harmed during the mortgage foreclosure process by any of the four servicers in 2009 or 2010, you can request an independent review and potentially receive compensation. The four servicers are required to make the independent reviews available to borrowers as part of their compliance with the April 2011 enforcement actions.        

           A number of servicers supervised by the Office of the Comptroller of the Currency (OCC) are also required to conduct independent reviews. (See below for the full list of servicers.)       

           Eligibility for Review       

           Borrowers are eligible for an independent foreclosure review if        

  •             the property securing the loan was the borrower’s primary residence;         
  •             the mortgage was in the foreclosure process (initiated, pending, or completed) at any time between January 1, 2009, and December 31, 2010; and           
  •             the mortgage was serviced by one of the following mortgage servicers:         
              America’s Servicing Company                          Countrywide                          National City           
              Aurora Loan Services                          EMC                          PNC           
              Bank of America                          Everbank/Everhome                          Sovereign Bank           
              Beneficial                          GMAC Mortgage                          SunTrust Mortgage           
              Chase                          HFC                          U.S. Bank           
              Citibank                          HSBC                          Wachovia           
              CitiFinancial                          IndyMac Mortgage Services                          Washington Mutual           
              CitiMortgage                          Metlife Bank                          Wells Fargo           
                                                                    Wilshire Credit Corporation           

           If you previously filed a complaint with these servicers about foreclosures pending during the review period, you may still seek an independent review of your foreclosure.        

           There are no costs associated with being included in the review; the review is a free program. Beware of anyone who wants payment to assist you in connection with the independent foreclosure review or any other foreclosure assistance program.       

           Review Process       

           Information about the review process, including how to request an independent review, is being provided in mailings to borrowers who may be eligible for a review. Those mailings began November 1, 2011, and should be completed by the end of the year. Assistance and answers to questions about the process and borrower eligibility are available at 888-952-9105, Monday through Friday from 8 a.m. to 10 p.m. (ET), and Saturday from 8 a.m. to 5 p.m. (ET). Individuals can also get more information about the review through a website set up by the servicers, www.IndependentForeclosureReview.com  A list of Frequently Asked Questions and Answers are available on the website.        

           Individuals will be sent an acknowledgement letter from the review administrator within one week after their request for an independent review is received. Individuals will be notified in writing of the results of the review. Because the review process will be a thorough and complete examination of many details and documents, it could take several months to complete the review.         

           Rust Consulting was selected and hired by the servicers to serve as the central administrator of the independent foreclosure review. Rust Consulting will notify borrowers, receive requests for a review, and respond to questions about the independent foreclosure review process.          

           Deadline to Request a Review       

           Requests for review by the servicers’ independent consultants must be received by April 30, 2012.  Borrowers are encouraged to carefully consider the information about the review program to determine if they are eligible to participate.         

           Federal Reserve’s Role       

           The Federal Reserve’s role is to ensure compliance with the enforcement actions issued in April 2011. As required by those actions, independent consultants will conduct the reviews of foreclosures and determine whether errors, misrepresentations, or other deficiencies resulted in financial injury. The Federal Reserve will monitor the independent foreclosure review process and the servicer’s outreach efforts.       

           Related Links       

Federal Reserve Board announces that borrowers from four mortgage servicers can request an independent review and potentially receive compensation

Interagency Review of Foreclosure Policies and Practices

OCC’s Correcting Foreclosure Practices

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Remodeling and repair questions? Energy Saver and Green questions?
Email Tanya at
Shaping Spaces

Fogged-up glass a red flag
By Paul Bianchina
Inman News®

It’s winter, and the temperatures are dropping outside. One day you’re warming up your home and suddenly you notice something that you hadn’t seen during the summer. That perfectly clear window in the living room or the kitchen or somewhere else in the house suddenly looks foggy. You wipe it down from the inside — and from the outside — but the fog won’t go away. The next day, it warms up again outside, and to your surprise, the fog disappears again. So what’s going on?

That intermittent fogging during cold temperatures is an indication that you have what’s known as a “blown seal” in your insulated glass window. Here’s what happens:

Insulated glass windows, also known as double-pane windows, have two panes of glass that are held apart by a metal strip. The strip, usually somewhere between 1/4 and 3/4 of an inch wide, is adhered to the two glass panes with a flexible sealant material.

During the manufacturing process, moisture is evacuated from between the glass panes as they’re sealed together, forming a dead air space. It’s the combination of the two glass panes and the dead air that gives the window panes their additional insulating value, and helps keep the window warmer than one with a single pane of glass.

Depending on the type and design of the window, sometimes inert argon gas is used between the panes to increase the insulating value even further. Some windows also have decorative grids trapped between the panes as a design feature. The sealed, insulated glass units are then placed into the frame and held in place with molding strips, making up a complete window unit.

What happens when damage occurs

The sealed, insulated glass unit is designed to have quite a long life span; in theory, it should last as long as the window unit itself. However, sometimes there are flaws in the manufacturing process or, more likely, some type of impact damage occurs to the window. That can cause a small opening to appear in the seal between the glass and the spacer bar. It’s something you won’t see, but it’s enough to allow air to enter the space between the panes of glass.

You might be thinking that that’s no big deal, since that’s just an air space anyway, right? But the difference is that it’s designed to be a dead, dry air space. Now, with the broken seal, air that has moisture in it has been introduced.

During the summer, when the air temperatures outside are warm and the glass is also warm, that’s OK. But now, with the colder temperatures of winter, the outer pane of glass gets cold. The warm air inside your house is trying harder than ever to escape, and it carries moist air into the window cavity, where it hits that cold glass and condenses back into a liquid. The result is that fogging you see. And because it’s inside the window, you can’t do anything to get rid of it.

Replacement is the only option

Once you discover a window with a blown seal, your only option is to replace the insulated glass unit. You need to do that as soon as you discover the problem, as the window has lost its insulating value, and the trapped moisture can potentially lead to other problems. Not to mention the fact that you can’t see through the window!

The good news is that you must replace only the sealed glass unit, not the entire window. This is something that you need to leave to the pros. Contact a glass company in your area and have them make a site visit. They’ll examine the window, measure the insulated glass unit, including the size of the air space, and have a new one made up that matches. When the new one is ready, they’ll come back out, remove the moldings and the old unit, and install and seal the new unit in place.

If the window is relatively new and the glass unit fails, contact the company or the contractor where you purchased it. Home centers such as Lowe’s and Home Depot will typically replace insulated glass units that fail, as will many other retailers.

If you have windows that are damaged in an insurance-related claim, such as a fire, wind storm, or some type of impact such as a tree limb that falls, you may not be aware of the fact that a seal has been damaged until winter comes around and the fogging becomes obvious. For that reason, if you suspect any type of potential window damage, always make your insurance adjuster aware that you’ll be holding the claim open for possible future supplemental damage claims.

Remodeling and repair questions?
Email Tanya at
Shaping Spaces
Email Paul at paulbianchina@inman.com. All product reviews are based on the author’s actual testing of free review samples provided by the manufacturers.

Copyright 2012 Paul Bianchina

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It’s official. The Federal Housing Finance Agency (FHFA) unveiled a new, revamped government mortgage refinancing program Monday.

The initiative involves a series of rule changes to the Home Affordable Refinance Program (HARP) to allow more underwater homeowners to reduce their mortgage debt by taking advantage of today’s rock-bottom interest rates.

Mortgages backed by Fannie Mae and Freddie Mac, and originally sold to the GSEs on or before May 31, 2009 are eligible for the program.

Under the revised HARP guidelines, the 125 percent loan-to-value (LTV) ceiling has been eliminated. Previously, only borrowers who owed up to 25 percent more than their home was worth could participate in HARP. That limitation has now been removed. The program will continue to be available to borrowers with LTV ratios above 80 percent.

The new program enhancements address several other key aspects of HARP that industry participants say have restricted its impact, including eliminating certain risk-based fees for borrowers who refinance into shorter-term mortgages and lowering fees for other borrowers, as well as allowing mortgage insurers to automatically transfer coverage from the original loan to the new loan.

In addition, Fannie Mae and Freddie Mac have done away with the requirement for a new property appraisal where there is a reliable AVM (automated valuation model) estimate already provided by the GSEs, and they’ve agreed to waive certain representations and warranties on loans refinanced through the program.

Not only are loans eligible for HARP considered “seasoned loans,” but a refinance helps borrowers strengthen their household finances, reducing the risk they pose to the GSEs. Thus, FHFA feels reps and warranties are not necessary for some of these loans.

With Monday’s announcement, the end date for HARP has been extended from June 30, 2012 to December 31, 2013.

The GSEs will release program instructions to lenders by the middle of next month, and FHFA expects some lenders will be ready to accept applications by December 1.

Since HARP was rolled out in early 2009, approximately 1 million homeowners have refinanced their mortgage loans through the program. FHFA estimates that with the revised guidelines, another 1 million will be able to take advantage of the program.

To qualify, borrowers must be current on their mortgage payments, but government officials believe by opening HARP up to more homeowners with higher thresholds of negative equity, it will help to prevent foreclosures by erasing the primary motivation behind strategic defaults.

Economists at the University of Chicago Booth School of Business estimate that roughly 35 percent of mortgage defaults are strategic. Numerous industry studies have found that homeowners who owe significantly more than their home is worth are more likely to throw in the towel and walk away from their mortgage debt even if they have the ability to continue making their payments.

“We anticipate that the package of improvements being made to HARP will reduce the Enterprises credit risk, bring greater stability to mortgage markets, and reduce foreclosure risks,” FHFA stated in its announcement Monday.

Fannie Mae and Freddie Mac also released statements in response to the announcement.
Michael J. Williams, Fannie Mae’s president and CEO, called the program a “welcome development.”

“By removing some of the impediments to refinance, lenders can more easily participate in the program allowing more eligible homeowners to take advantage of the low interest rates,” Williams stated.

Charles E. Haldeman, Jr., CEO of Freddie Mac said, “These changes mark another step on the road to recovery for the nation’s housing market.”
For more detailed information, please visit:


Authors: Krista Franks and Carrie Bay
Source: DSNews.com

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Another beautiful Sunday with Ian. Shopping the Santa Monica Farmers Market for our weekly provisions. Lovely music, warm sun, Ian in the petting zoo while I read. Followed by a nice beach bicycle ride to the park in Venice. We have so many wonderful communities in southern california where we can walk and enjoy our families and friends.

Santa Monica has a terrific volunteer program directory. It’s all about getting acquainted, giving back, meeting new people, learning new skills, sharing old ones. Remaining active, replacing loss and building a richer life by supporting our non-profit, human service agencies.

Take a look – you probably have a skill or special interest that you can share!!!

Santa Monica Volunteer Programs
Best Buddies for intellectual disabilities
Find the Children dedicated to the recovery of missing children
Heal the Bay Santa Monica Aquarium at the pier
Free Arts for Abused Children
School on Wheels for one on one tutoring of homeless children
Westside Food Bank

We hope you have a relaxing Sunday!!!





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Had to share this quote. It made me laugh. No physical training today….yesterday we walked from the Marina to Santa Monica pier so today I trained my mind. I thought marathon training and racing would be my greatest mental challenge but it appears that maintaining laughter and a positive outlook right now is more difficult. Grats for a lovely evening of love with Reena and Kira. Grats for music by http://www.ChristopherHawley.com, LobstaRoll food truck and The Victorian. Grats to Ronald Regan for his humorous quote – it’s nice to smile tonight.


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Finally a new year has started which means I get to run again. I’m writing this blog this year to learn and hopefully share that just because you hit a road block in life it doesn’t mean you stop. It means you work harder, defy odds, climb over the road block and never look back. The dr says I can run or jog for up to 30 mins a day. This sounded like a joke especially since I just ran a marathon a few months ago. But I guess he knew better. I jogged a mile this morning at 13:20 – yikes and it hurt…long road ahead but it felt oh so good. If this is what I get for 30 days I’ll take it with a smile and so begins my training for something wonderful this year. I can’t weight train or work my abs so I will focus on miles and improving my time again. I will focus on raising money as I train for the Pediatric Cancer Research Foundation Half Marathon on May 6. Here’s to Jan 2012 and my goal to lose 10 lbs and improve my time to 10 min miles. Perhaps without hair I will run a faster time – regardless my 2012 journey has begun.


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