Hello Elite,

As promised, I will continue to provide my fellow Real Estate Professionals with valuable industry related education and information.

I want you to rely on me not only as your Fidelity National Home Warranty and Disclosure Source NHD representative, but as a source for Real Estate industry news and information.

Yvonne Nelson                                                                                        

Assistant Vice President

Fidelity National Home Warranty & Disclosure Source

800-308-1424 ext 3518

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REO Disclosures: Who Discloses What?

Author: Chuck Piro, VP Disclosure Source

Okay……..so you’re ready to submit an offer on a REO property, but you’re really unsure of what disclosures you can expect from the bank.  In fact, the asset manager has confirmed that the property is being sold "as is".  So, does "as is" mean no disclosures for your buyer to review?  Not necessarily!

When representing a buyer on a bank-owned property, Realtors need to recognize what disclosures the buyer is entitled to receive from the bank.  Yet, this is an area that seems to be confusing to, not only Realtors, but the REO lenders themselves.   

As you know, owners of bank-owned properties are not legally obligated to provide you with the same disclosures that you would demand from a traditional seller.  But that certainly doesn’t mean that the bank is exempt from providing prospective buyers disclosures regarding potential hazards that may affect the property. 

In fact, the REO lender is required to disclose certain conditions that may affect the value or desirability of the property.  Even though they may be exempt from many obligations, they must still comply with many others.  So, even though the property is being sold "as is"; you need to know what to expect in terms of disclosure for your buyer. 

To help clarify the matter of disclosures on REO property, The California Association of Realtors has made available the REO Advisory (C.A.R. Form REO 4/08) that goes along with an offer on a bank-owned property.  This form clearly defines disclosure Exemptions and Requirements that pertain to REO property transactions.

Obviously, the bank never lived in the house, so they are exempt from providing the Transfer Disclosure Statement. Additionally, REO lenders are exempt from disclosing Mello-Roos and 1915 Bond Act Assessments, as well as Private Transfer Taxes.  And, they are not obligated to provide you and your buyer with the Residential Environmental Hazards Booklet.   

Included on the list of EXEMPTIONS is the Natural Hazards Disclosure Statement (NHDS), but…….REO lenders are "…not exempt from applicable statutory obligations to disclose earthquake fault zones, seismic hazard zones, state responsibility areas, very high fire hazard severity zones, special flood hazard areas and flood hazard zones…"  Of course, this information is typically included in disclosure reports obtainable from third-party disclosure companies.

But, keep this is mind….whether the bank discloses or not, Realtors should take a moral approach to real estate disclosure.  Obviously you want to avoid lawsuits and reduce liability.  However, reduced liability is a marginal benefit of disclosure; it shouldn’t be the primary motive.  The best reason…….it’s just the right thing to do!  Instead of focusing on liability, you ought to be supporting the best interests of your client.  Who is the beneficiary of a disclosure report?  It’s your buyer!  Realtors, who pursue that approach rather than the legalistic one, enjoy rewards.  Not only do they build solid reputations for honest, ethical business practice, but they receive repeat business and referrals created by a sound reputation.   Weather the bank is or not…..you should be practical about disclosure.  Remember, you’re in the service business.  Treat your clients the same way you’d like to be treated.  If you approach your dealings from this prospective, you will surely succeed in building a solid business with referral clients and repeat customers for years to come.

NAR Opposes Full Privatization of Fannie Mae and Freddie Mac and Adopts Secondary Mortgage Market Principles

 During its annual convention in Orlando , NAR adopted principles recommending continued federal government involvement in the secondary mortgage market. In light of disruptions in the credit markets and the conservatorship of Fannie Mae and Freddie Mac, NAR developed the principles for consideration of the 111th Congress and the Obama Administration.

The goal of the principles is to ensure there is sufficient capital to support mortgage lending to qualified borrowers in all market conditions and in all markets throughout the country.

 
Housing Markets Ready to Rebound?

While the national news still continues to focus on the challenges in the national housing market, many local markets are poised to rebound, according to SmartMoney Magazine. The editors researched all of the major metro areas in the US to find markets that aare primed to see home values increase. Some of these areas include, Seattle , WA , Des Monies, IA, Raliegh , NC , Philadelphia , PA , Birmingham , AL , and Denver , CO . To learn more visit www.SmartMoney.com/mag.   

 
Also - there’s an interesting tax credit for first time homebuyers available through mid-2009:

http://www.realtor.org/gapublic.nsf/files/hbtaxcreditqa2008.pdf/$FILE/hbtaxcreditqa2008.pdf 

Mortgage Market Update

After weeks of sizeable swings in mortgage rates, last week saw rates move significantly less. Most rates drifted downward, as evidence of the economic slowing mounted.

Retail sales dropped for the fourth month in a row, plummeting by a record 2.8%. The week was also filled with announcements regarding numerous government  programs related to housing. Both the Federal Housing Finance Agency and the Federal Deposit Insurance Corporation announced programs offering bounties to mortgage servicing companies for announcement that the $700 billion dollar Troubled Asset  Relief Program would not be used to buy toxic mortgage debt off financial companies’ books.

While financial markets may continue to be rocked on a daily basis, we hope to see mortgage rates remain calmer again this week. If data from the Industrial Production numbers and both the CPI and PPI point to economic slowing with lower inflationary pressures, rates may continue downward.

 
Mortgage Rate Trend Index
NATIONAL OVERNIGHT AVERAGES

30 yr fixed mtg        6.08%    
15 yr fixed mtg        5.76%    
5/1 ARM        5.95%    

Will rates rise or remain relatively unchanged? Experts and Bankrate analysts provide their insights.

This week, more than half of the panelists believe mortgage rates will fall over the next 35 to 45 days. The rest are about equally split between those who think rates will rise and those who predict that rates will remain relatively unchanged (plus or minus 2 basis points).

Well, as we all know… consumer confidence is quite low and the Fed’s know this also. To stimulate the economy, there is no “Magic Bullet”. The only thing that can help is time and patience. Expect 2008 to end on the downscale and a recovery to occur in some period of 2009. Since the Fed’s know the economy needs a kick-start to stimulate recovery, look for them to cut rates another .50 basis points. They’ll need to use everything they have in their tool kit to get the economy on the positive!

Keeping you updated on the market!

For the week of
October 27, 2008

The Real Estate Report

C.A.R. 2008 Survey of California Home Buyers

Declining home prices coupled with low interest rates prompted more home buyers to purchase in 2008 compared with last year, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) “2008 Survey of California Home Buyers.” Sixty-nine percent of all home buyers reported that price declines encouraged them to buy a home, while 40 percent said that low interest rates enabled them to move to a better location. Seventy-seven percent of first-time home buyers said lower home prices played a role in their decision to purchase a home.

“The housing market has confronted headwinds on several fronts since early 2007,” said C.A.R. President William E. Brown. “Lax underwriting standards that left some subprime borrowers unprepared for rate adjustments, the global liquidity crunch, sluggish economic growth, and higher fuel and food prices are some of the factors that led to the downturn in the housing market.”

“As the housing market dropped sharply from record sales levels set in 2004 and 2005, and prices began to soften, home buyers dramatically changed their attitudes and behaviors towards home buying and adapted to the new housing environment,” he said.

The Internet continued to be an integral part of the home-buying process, with 78 percent of buyers utilizing it to search for a new home and find a real estate agent, compared with 72 percent in 2007. The share of traditional buyers – those who did not use the Internet during the home-buying process – decreased from 28 percent in 2007 to 22 percent in 2008.

Both Internet and traditional buyers spent considerably more time searching for a home with their agent than in previous years, a reflection of the variety of home choices available in today’s market. Internet buyers spent an average of 8.3 weeks looking for a home with their agent, an increase from 5.2 weeks in 2007, and nearly quadruple the number of weeks from two years earlier when Internet buyers spent 2.2 weeks looking for a home. Traditional buyers spent 10.3 weeks looking for a home with their agent, compared with eight weeks in 2007. Traditional buyers also visited nearly twice as many homes with their agent, averaging 23.3 homes, compared with Internet buyers, who visited 12.7 homes.

Due to the high inventory of homes on the market, and uncertainty about the direction of home prices, buyers are more cautious and are moving at a slower pace during the home buying process than in previous years,N Brown said. MThe Internet also continues to play a vital role in this process and has solidified the relationship between REALTORS ® and home buyers.

According to the survey, 72 percent of home buyers either “agreed” or “strongly agreed” that using the Internet helped them better understand the role of real estate agents, and increased their appreciation for real estate professionals and how key they are in the home-buying process. More than half of Internet buyers thought the information their real estate agent provided was more useful than the information they gathered on the Internet. None of the Internet buyers reported that the information they found on the Internet was more useful than the information provided by their real estate agent.

Other key findings from C.A.R.’s 2008 Survey of California Home Buyers include:

  * Internet buyers spent significantly more time considering buying a home before contacting an agent, averaging 8.2 weeks than did traditional buyers, who spent 3.6 weeks.

* Nineteen percent of all buyers were first-time buyers, who spent on average 9.6 weeks with their agent, compared with 5.8 weeks in 2007. Repeat buyers spent 8.5 weeks with their agent in 2008, versus seven weeks in 2007.

 Hello Elite,

As promised, I will continue to provide my fellow Real Estate Professipnals with news that affects our industry.

Yvonne Nelson

Fidelity National Home Warranty and Disclosure Source

800-308-1424 ext 3518

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Part of my job and due diligence as Assistant Vice President and Senior Account Manager for 10 years with Fidelity National Home Warranty and Disclosure Source NHD Reports is to bring my clients and real estate professionals newsworthy industry related facts, news, information, market trends and value.

Sharing of information gives us all the ability to help our past, present and future clients make intelligent and knowledgable real estate decisions.

Check my post often. As I get "Hot off the Press" news of value I will pass it along to my fellow real estate professionals.  Lets all stay on top of our game and well informed.  I would love to read your information also.

Yvonne Nelson

Assistant Vice President

Fidelity National Home Warranty and Disclosure Source

800-308-1424 ext 3518

www.homewarranty.com

www.disclosuresource.com

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On October 3, 2008, President Bush signed into law the "Emergency Economic Stabilization Act of 2008." This bill extended tax credits for energy efficient home improvements (windows, doors, roofs, insulation, HVAC, and water heaters). Tax credits for these residential products, which had expired at the end of 2007, will now be available for improvements made during 2009. However, improvements made during 2008 are not eligible for a tax credit.

The products that are covered by the tax credit in 2009 include:

• insulation
• windows (including storm windows)
• skylights
• doors (including patio & sliding glass)
• metal roofs
• asphalt roofs
• Central air conditioners
• Air source heat pumps
• Geo-thermal heat pumps
• Gas, Oil, or Propane Furnace or Hot Water Boiler
• Advanced Main Air Circulating Fans
• Gas, Oil or Propane Water Heaters
• Electric Heat Pump Water Heaters
• Solar Water Heaters
• Photovoltaic Systems (solar panels)
• Fuel Cells

Products not covered by the tax credit included:

• refrigerators
• dishwashers
• clothes washers
• Room air conditioners
• Ceiling fans
• Programmable thermostats

For more information on products covered by the tax credit, visit www.energystar.gov/taxcredits

Yvonne Nelson                                                                                    

Assistant Vice President

Fidelity National Home Warranty and Disclosure Source

800-308-1424 ext 3518

www.homewarranty.com

www.disclosuresource.com

Mortgage Rate Outlook

Measures of consumer moods recently moved off lows, following the decline in gas prices. During September, the Conference Board’s review of Consumer Confidence ticked up to a reading of 59.8, up from August’s 56.9 level and exhibiting mild but steady improvement off June’s lows.

If job markets continue to decline, such optimism may grow harder to find. Weekly unemployment claims rang in at a hurricane-goosed 497,000 for the week ending September 27, but regardless of the reason, new claims remain high. As well, while the loss of jobs during this downturn has been mild compared to historical patterns, it does seem to be deepening.

In September, the economy shed 159,000 jobs, the ninth consecutive month of job losses, now nearly at an accumulated 750,000 since the turn of the year. The nation’s unemployment rate remained at 6.1% for the month, but given the gyrations in financial circles over the past fourweeks, and other markets so dependent upon them, more layoffs seem destined to come.

Now that we’ve got a "rescue" or "support" plan in place – please don’t call it a "bailout" — where do we go from here? Financial conditions should be improving, at least slightly, in the weeks ahead; inflation seems to be waning, at least for the moment, and markets have been flooded with liquidity, not that it’s making it out to main street just yet.

 We’re hopeful that it will; in these times of unprecedented government moves to kick-start markets, it’s no longer too far-fetched to think that more aggressive and direct government moves into other areas of lending can’t occur, if the banks remain unwilling or unable to do it. More likely, pressure will be exerted to get things moving, even if rates don’t fall right away. We’ll see where that goes.

For the week of
October 6, 2008

The number of Americans signing contracts to purchase previously owned homes probably fell 1.1 percent in August, according to the median estimate in a Bloomberg News survey ahead of Oct. 8 figures from the National Association of Realtors. The drop in oil prices caused imports to fall, narrowing the trade gap, a report two days later may show.
Job losses swelled last month, stock markets tumbled as commercial and investment banks collapsed, and money-market rates jumped to records as the credit crisis intensified. Passage of the government’s $700 billion rescue plan failed to ease concern the economy will falter, signaling the Federal Reserve may need to lower interest rates.

Home Prices
A private report last week showed home prices in 20 U.S. cities declined at the fastest pace on record in the year ended July. The S&P/Case-Shiller home-price index dropped 16.3 percent from July 2007.
Declining home prices threaten to throw more properties into foreclosure, prompting banks to keep reining in credit.
KB Home, the fifth-largest U.S. homebuilder by revenue, last month reported wider than forecast third-quarter losses after sales plummeted 56 percent compared with the same period a year earlier.
Congress last week passed the administration’s rescue package that lets the government buy troubled assets from financial institutions damaged by the subprime crisis. President George W. Bush signed the measure into law Oct. 3.

Payrolls Drop
Employers cut 159,000 workers from payrolls in September, the most since 2003, and the unemployment rate was unchanged at a five-year high of 6.1 percent, the Labor Department said last week.
Odds the central bank will lower its benchmark rate, currently at 2 percent, by at least a half percentage point between now and its next meeting on Oct. 29 rose to 100 percent on Oct. 3 compared with no chance a month earlier.
The cost of a barrel of crude oil averaged $119.77 in August, down from $132.04 in July. Prices have retreated further since then, dropping below $92 a barrel last week.

Exports, Growth
While the decline in the trade gap reflects forecasts for a drop in oil imports, economists will also be looking for evidence that American exports are starting to suffer as economies in the euro zone and Japan falter.
Less inflation may give Fed officials scope to lower interest rates to alleviate the credit crisis that brought down Lehman Brothers Holdings Inc., American International Group Inc. and Washington Mutual Inc.

Please help me welcome back, Regina "Gina" Bellamy to our Team! Gina specializes in listing and selling Bank Owned Properties.

Gina currently has 6 Active Banked Owned listings on MLS ranging from $97,000 - $629,000
You can check out Gina’s listings by clicking on the link below.

Click Here to View Gina’s Bank Owned Listings

You can welcome Gina yourself by posting a comment below.

Please help me welcome, Anthony Trias a new member to the Elite Realty Services Team! Anthony joins us from At Home Realty.

You can welcome Anthony yourself by posting a comment below.

 Please help me welcome, Sandra Silva a new member to the Elite Realty Services Team! Sandra joins us from Keller Williams.

Sandra has practiced Real Estate for more than 8 years.

You can welcome Sandra yourself by posting a comment below.