34288 Camino El Molino - Capistrano Beach Oceanview Duplex

This is a great new listing in Capistrano Beach that is full of possibilities.

With a lot size of approximately 9,900 square feet, this oceanview duplex with a total of about 2,700 squart feet (front unit 1,400 sq. ft. and the rear unit of approximately 1,300 sq. ft) is in a quiet residential neighorhood. The property resides in the award-winning Capistrano Unified School District.

The front unit is single level with 3 bedrooms and 2 baths with direct access to a newly resurfaced Anthony swimming pool. Ocean views from the main living areas. The unit has a fireplace and laundry hookups. The rear unit is 2 bedrooms and a full bath downstairs entry level, great room, kitchen/dining and a 3/4 bath upstairs with an ocean view deck. The rear unit also has a fireplace in the great room and laundry hookups on the bedroom level. The units are behind a private gated driveway.

There are many possibilities for this property including multi-generational housing. Owner unit with rental unit in the rear, or simply as a duplex. The property could also easily be converted to a single family home. Close to shopping, the beach and freeway.

MLS #S678294 priced at $799,000. Currently the owner occupies the property and intends on moving out-of-state. Equity seller. Shown by appointment only. Please call Jaime Gable 714.335.8975 or Searl Stock 949.496.4675 to schedule a viewing.

Senate Passes Amendment to Restore $729,750

Thursday the Senate approved an amendment to a spending bill which would restore the $729,750 maximum loan limit on government backed mortgages for two more years. In addition to increasing the ceiling, which dropped to $625,500 on October 1, the Senate amendment would also restore through 2013 the formula for determining the upper loan limit in high-cost housing markets.

The Senate approved the loan limit amendment by a 60-38 vote. It now moves to the House. It remains to be seen whether the House will approve the higher loan limits. The National Association of Realtors lobbied heavily to preserve the higher limits but previously, bills that would have extended it, failed to reach the House or Senate floors before it expired. The White House wants to reduce the government’s role in mortgage lending and was against allowing the higher limits to remain in place.

To appeal to those against the higher limits, the Senate amendment would impose a new loan fee of 15 basis points a year on unpaid principal balance for the life of the mortgage, which backers said would raise $300 million in revenue. A basis point is a hundredth of a percent, so a 15 basis point fee would amount to $750 on a loan with a $500,000 balance.

It has been estimated by Fannie Mae, Freddie Mac and FHA that the lower loan limits would have affected approximately 83,000 mortgages in the high cost areas. These three government agencies back 9 in 10 mortgages.

New Proposed Legislation To Help Save Homes: The HOME Act

A great story in the Sunday Los Angeles Times by Ken Harney about a bill introduced October 5th that would amend the tax code to allow homeowners who have 401(k) retirement plans to pull out money to save their houses from foreclosure without the usual tax penalties. This bill would waive the 10% penalty if the purpose of the distribution is to make loan payments to avoid loss of a primary home to foreclosure. The bill would allow owners to pull out up to $50,000 that could be used in a lump sum to pay down the delinquent morgage balance or to fill shortfalls caused by reductions of household income. It could also be used as part of a loan modification agreement with lenders designed to avert a foreclosure. The money would need to be spent within 120 days of receipt and could not exceed 50% of the funds in the retirement account.

Titled the HOME Act, short for Hardship Outlays to protect Mortgagee Equity Act, the proposal is designed to help avoid some of the known problems of tapping into employee retirement accounts. Many 401(k) plans allow "hardship" withdrawals. but these come with much stricter rules and fewer eligible uses, plus the tax penalties. Hitting your 401(k) is a desparate act for these desparate times. It should be your last resort when there isn't anything else that will save your house and you don't want to walk away. But check your plan documents you may have an alternative buried away that allows a "save-the-house" loan to yourself.

WHAT SELLS A HOUSE

by Carla Hill

In today's market many sellers want to know the secret to selling their homes quickly. They want to know ways to hold on to the equity they've build over the past decade.

Unfortunately, there is no golden equation that equals the perfect sale. Yet, while there is no "sure thing" in the housing market these days, there are certain factors that affect how quickly and for how much your home sells.

Here are the top ten. Consider how these apply to your own home, how that affects marketing, as well as what aspects of your home you should "play up" to elicit a better response from buyers.

1. Price: It's a common misconception that location is the leading factor of whether or not a home sells. It is, instead, price. Think about this scenario. You have a home located in a prestigious and sought-after neighborhood, yet the list price is tens of thousand of dollars over the comps for the area. No one will be interested. This same property priced just below the competition will fly off the market.

2. Location: Okay, location is still important. A home that sits next to a refinery, crime-ridden neighborhood, or busy street is less desirable than one that backs up to green space. If your home has a boastable location, then by all means boast about it in your marketing.

3. Liveability: This is fast becoming a hot button word in real estate. Buyers today are looking for neighborhoods that deliver amenities such as golf parks, restaurants, theaters. They want good schools, walkable neighborhoods, and plenty of things to keep them entertained.

4. Condition: There is a certain segment of the market that is made up of renovators, flippers, and investors. You won't find as many people these days eager to buy your run-down property that is in a good location. They simply can't sell the property fast enough before monthly mortgage payments begin eating up their profit. Homes that are well-maintained or in move-in ready condition appeal to a broader range of buyers. Even simple fixes, such as new paint, cleaned carpets, or power-washed decks, can have an effect.

5. Competitive Advantage: Don't make the mistake of assuming that you're in this race alone. Past area sales, as well as current listings and foreclosures, are your direct competition. You must take these into consideration when settling on a list price for your home. What amenities and upgrades do these homes have? Do the homes in your neighborhood all have updated baths, kitchens, or landscaped yards? In order to price in line with them you must be able to boast these same things.

6. Curb Appeal: Curb appeal is the first impression of the home world. You must keep the yard orderly and maintained when your home is on the market.

7. Staging: Once inside your home, a buyer must be wowed. Intoxicate their senses. They want to see up-to-date furnishings, smell a clean home, touch cabinets that are in good repair, hear peace and quiet, and of course "taste the good life."

8. Kitchens: A kitchen sells a house. It is where families gather and connect. Minor kitchen remodels rank high among the list of top remodeling projects, with owners updating cabinets, counters, and floors. Nobody wants an outdated kitchen. What fixes are in your budget? If your kitchen is already spectacular, be sure you play this up in any marketing.

9. Agents: An accomplished, knowledgeable agent can be your biggest ally during the selling process. They know the latest market trends and have built a network of agents and contacts to market your home to. With an arsenal of marketing tools available to agents today, from video tours and webcasts to brochures, websites, and mls listings, they are part of your selling team.

10. Marketing: Marketing has gone global. With the power of the Internet, you can showcase your home to millions of potential buyers. Sit down with your agent and develop a solid marketing plan. This is why you are paying them a commission. Make them earn it!

The market is not what it once was. You must be realistic about what selling in today's market means. You value your home, but it may not be "worth" as much today as it was yesterday, last month, or last year. Consider these top ten ways a home sells and help your home put it's best face forward.

VACATION HOMES: WHY IT MAY BE TIME TO BUY

By JESSICA SILVER-GREENBERG

The clouds hanging over upscale vacation-home markets are starting to lift. While prices are still falling in most regions, the luxury segment is picking up, and brokers are reporting more inquiries than they have had in years.

The upshot: If you have the money and plan on staying put for the long term, now may be a good time to buy.

Five years after housing's peak, markets that once were out of sight even for well-heeled buyers are now in range. On Hilton Head Island, S.C., a three-bedroom home nestled between the Atlantic Ocean and Calibogue Sound changed hands in April for $750,000, after having sold for $1.2 million in June 2006. In Vail, Colo., a three-bedroom home that fetched $3.3 million in 2008 sold in February for $2.5 million.

Overall, the median second-home price was $150,000 in 2010, down 11% from 2009 and roughly 25% from 2006, according to the National Association of Realtors. That isn't pretty, but it is only slightly worse than the 22% drop for the overall housing market. The higher end of the market—homes in the $5 million-plus range—has held up better, says Douglas Duncan, chief economist at Fannie Mae. "At the top of the market, particularly luxury homes, prices have proven very elastic, and have sprung upward quickly," he says.

Buyers are taking heed. On Palm Beach Island, Fla., sales were up 50% in the year ending June 30. Transactions in the Hamptons, on New York's Long Island, jumped 59% in the second quarter from a year earlier. In Aspen, Colo., sales for the year ending May 31 were up 10%.

The number of people looking at properties is up as well: In Vail, Hilton Head and Palm Beach, foot traffic has jumped by at least 30% this year, according to local real-estate agents. "People have frugality fatigue," says John Burns, president of John Burns Real Estate Consulting Inc. in Irvine, Calif.

This isn't to suggest the boom is back. In general, properties situated in prime locations—on the water or near a ski slope—are selling well, but homes in less desirable spots are languishing on the market. Banks are increasingly wary of making second-home mortgages, particularly "jumbo" loans above federally guaranteed limits; 10% of banks raised their standards on such loans last year, according to the Federal Reserve. And the tax deduction for mortgage interest on second homes is at risk of being cut back.

Geography is the best guide to today's vacation markets: In some places prices are holding up, while in others they are still tanking.

The blue-chip market consists of a handful of spots where prices have stabilized and could soon rebound as sales pick up. Some, such as Hilton Head, have benefitted from tough restrictions on building, which kept inventories manageable during the bust. Prices there have risen by 4% during the past year.

The other market is still very much in crash mode. In places like Miami, Fla. and even Martha's Vineyard, Mass., prices have continued to drop as foreclosed properties flood the market. But bargains abound as sellers cut their asking prices or accept less to unload properties. In March, for example, a three-bedroom home on Palm Beach Island, Fla., listed for $4.6 million sold for just $2.5 million.

With the broader housing market still so sick, it might seem the height of folly to jump into such unpredictable investments now. Even in blue-chip markets there isn't a guarantee of price appreciation anytime soon. Indeed, over time vacation-home markets don't do noticeably better than primary-home markets. Homes on Martha's Vineyard appreciated by 40.9% over the past 10 years, edging out Boston's 40.5%. But Hilton Head's 15% gain was trounced by nearby Charleston, S.C.'s 25.4% rise.

Then again, most vacation-home buyers aren't looking to make big investment profits. More than 80% of second-home buyers surveyed by the National Association of Realtors in May reported that they bought for consumption reasons—to live in the house and enjoy it.

And many second-home buyers are wealthy enough to pay in cash, sidestepping the restrictive and time-consuming mortgage process. Last year, 36% of vacation-home transactions were all-cash deals, up from 29% in 2009, according to the National Association of Realtors. "If you have cash right now, you are in unique position," says Paul Dales, senior U.S economist with research firm Capital Economics.

If you are thinking of taking the plunge, here is a look at some prominent markets across the country.

Blue Chips
These markets are stabilizing and, in some, prices already have started to rise.

Santa Barbara, Calif.
Median home price: $695,000
Median home price five years ago: $1,000,000

Market Snapshot: Situated roughly halfway between San Francisco and Los Angeles, Santa Barbara is starting to reel in wealthier buyers again, says Ken Switzer, a real-estate agent with Prudential California Realty. While prices have plunged since the peak, they have steadied out over the past two years, and sales are starting to jump, according to Paul Suding, president of Santa Barbara's Association of Realtors. Strict zoning and scarce available land helped protect Santa Barbara from the overbuilding that swept much of California, he says.

Who's Buying: With interest rates near record lows, restaurant owners Dave and Leah Larson decided it was time to buy. In June, they picked up a four-bedroom ranch-style home for $1.39 million. The couple says the property seems like a great investment because it is on a street where homes recently sold for about $2 million. "We're very happy and we get the tax savings on the second home," says Mr. Larson, 39 years old.

Aspen, Colo.
Median home price: $781,000
Median home price five years ago: $802,000

Market Snapshot: Housing economists look to Aspen as a luxury-market bellwether. Dotted with upscale boutiques and four-star restaurants, the ski town is welcoming buyers with ample cash on hand, says Steven Shane of SDS Real Estate, a local real-estate broker. Sales of $1 million-and-above are on the rise—especially on the higher end. So far this year, 18 properties priced at $5 million or above have sold, up from 14 in the same period last year.

Who's Buying: Laura Stovitz, a Los Angeles lawyer, already had a second home in Aspen but couldn't resist the opportunity to trade up. In April, she sold her town house for $3 million and purchased a $6.5 million home with three bedrooms, an office, gym and adjacent guest house. She says she isn't worried about falling prices because the posh ski town seems so "European in its appeal and will likely be insulated from the domestic market's doldrums."

The Hamptons, N.Y.
Median home price: $680,000
Median home price five years ago: $1,100,000

Market Snapshot: Prices have fallen 42% since their peak, but sales are picking up, say real-estate agents. That's thanks, in part, to the return of Wall Street bonuses, says David Adamo, chief executive of Luxury Mortgage Corp. in Stamford, Conn. Despite booming sales, prices have fallen in the past year, creating opportunities for buyers, according to Clear Capital, a Truckee, Calif.-based research firm. The best deals, of course, can be found away from the water, where inventories are high and properties are sitting for longer.

Who's Buying: Jeffrey Ponzo, a retail executive, is still marveling at the deal he got on his ranch-style home with a pool and tennis court in East Quogue, N.Y. The 45-year old New Yorker closed this month on the $950,000 home; a year earlier, it was listed for $1.1 million, he says. "The return on a quality-of-life aspect far exceeds any money I might have saved if I waited for prices to fall further," he says.

Hilton Head, S.C.
Median home price: $307,000
Median home price five years ago: $574,000

Market Snapshot: Sales are up 17% for the year ending June 30, according to Jim Keilor, a real-estate agent with Hilton Head-based Alliance Group, while prices are ticking up. The vacation spot, famous for its golfing and lush beaches, didn't see the overbuilding found in places like Phoenix and Las Vegas. "We were insulated from much of the pain elsewhere because we are an island," Mr. Keilor says. Interest from buyers is back to 2006 levels, says Randy Smith, a real-estate agent on the island.

Who's Buying: Steve Race, 52, purchased a two-bedroom oceanfront home in April. The former Lockheed Martin executive, who took a buyout in February, wanted a sunny spot at a good price, but didn't want to brave the "softness" of the foreclosure-scarred Florida markets. He watched prices fall for more than two years, he says, before deciding that even if they fell further he was scoring a good deal on the two-bedroom house he bought for $500,000. Given the uncertainty of the stock market right now, he says, he would rather have his "money invested in a home with real value."

Depressed Markets
These areas are still suffering—but bargains abound.

Martha's Vineyard, Mass.
Median home price: $403,000
Median home price five years ago: $638,000

Market Snapshot: Even though this exclusive northeastern island sidestepped overbuilding during the boom, buyers still seem reluctant, says Sean Federowicz of Coldwell Banker Landmarks, a broker on the island. The problem: Martha's Vineyard is made up of six different communities, some of which have had waves of foreclosures, says Carol Shore, a real-estate agent on the island. "Even though the $22 million waterfront properties are selling, the lower-end properties are dragging down much of the rest of the market," she says.

Who's Buying: In February, Brian Roach and his wife snapped up a three-bedroom house in Oak Bluffs for $740,000, roughly 35% below the asking price. The 53-year-old financial-services executive is comforted by the island's cachet, which he believes will help prices appreciate down the road. "At some point, you see such low interest rates and good prices and you don't want to wait anymore," he says.

Vail, Colo.
Median home price: $385,000
Median home price five years ago: $562,000

Market Snapshot: Unlike its nearby resort cousin, Aspen, Vail experienced a wave of development just as the market crashed, says Josh Lautenberg, owner of Sonnenalp Real Estate in Vail. Since the peak, available inventory has shot up by 40%, he says. Although sales started picking up in 2010, there has been another dip in activity while people "wait to see if the other shoe is going to drop."

Who's Buying: Falling prices didn't discourage Peter Tempkins, a 56-year-old insurance executive, from buying a $370,000 three-bedroom home in May. "My gut feeling is that we didn't buy at the bottom, we bought one step from the bottom, and for us it was just a great time to buy a place we love," he says.

Miami, Fla.
Median home price: $130,000
Median home price five years ago: $302,000

Market Snapshot: Miami was among the biggest casualties of the housing crash, in part because a wave of speculative building swept through the market. Prices have fallen 57% percent since 2006, reports Clear Capital, and 10% from last year. But bargains are beginning to attract more foreigners—particularly wealthy Venezuelans looking for a safe haven from President Hugo Chavez, says Michael Internosia, vice president of sales for Pordis Residential, a Miami based real-estate firm, who notes that such buyers made up 35% of his sales so far this year.

Who's Buying: Sam Mandel considers himself something of a second-home veteran. Last year, the 78-year-old retired physician bought a Hamptons home in Shinnecock Bay, N.Y. In February, he purchased a home in Miami Beach's Canyon Ranch development for $985,000. The two-bedroom condominium with beach views caught his eye because it was "distinctive and will be easy to resell if need be," he says.

Palm Beach, Fla.
Median home price: $254,000
Median home price five years ago: $758,000

Market Snapshot: A condo binge during the boom has led to a glut—and shoppers are swarming on low-priced units, says Alex Villacorta, director of research and analytics for Clear Capital. That is presenting bargains at the higher end, says David Fite, owner of real-estate agency Fite Shavell & Associates. Sales are on the rise: there were 29 transactions in the first quarter, typically the busiest selling season, up from 6 in 2009 and 26 last year, says Christine Franks, president of real-estate broker Wilshire International Realty.

Who's Buying: John Reid, a 57-year-old retired financial-services executive, and his sister are taking advantage of plunging prices. The siblings earlier this month purchased a $4.75 million four-bedroom home near the ocean, in an all-cash deal. "I got the sense that prices were nearing the bottom," Mr. Reid says. "If we wanted a good deal on a fabulous home, we had to act quickly."

Write to Jessica Silver-Greenberg at jessica.silver-greenberg@wsj.com

SORTING THROUGH LENDING COSTS

By MARYANN HAGGERTY
Published: July 21, 2011

PLENTY of people have ideas about what you should be told when you’re shopping for a mortgage, but for now, that may not be much help.

Even before it officially opened for business on July 21, the Consumer Financial Protection Bureau, the federal agency created to oversee mortgage lending, started looking at loan shopping. The bureau is legally required to propose by July 2012 a way to streamline mortgage disclosure. It is exploring avenues for combining the two forms that borrowers get now — the three-page Good Faith Estimate and the two-page Truth in Lending Act form.

These forms tell would-be borrowers the terms of their loan — for instance, how payments on an adjustable-rate mortgage change. They also lay out fees.

Although interest rates grab attention, fees can make a big difference, said Eileen Anderson, senior vice president of the Community Development Corporation of Long Island, which provides home buyer education. The easiest way to compare loans, she said, remains the Annual Percentage Rate, or A.P.R. That calculation rolls in fees as well as the stated interest rate. Because lenders are required to follow the same formula, useful comparisons can be made. “That’s the best way to shop for a loan, whether it’s 10 years ago, or now,” she said.

In May, the Consumer Financial Protection Bureau solicited reactions to two versions of a form that combines the current forms onto one double-sided sheet. It received more than 13,000 comments. According to a bureau summary, people praised the effort, but had specific suggestions on layout and phrasing.

On June 27 the bureau posted two more revised versions. The comment period on them closed July 5; among those responding was the Mortgage Bankers Association, which said in a three-page letter that the proposals didn’t mesh with current laws, and also criticized the mechanics and design. The bureau says forms are evolving.

All this comes less than two years after the Department of Housing and Urban Development overhauled the Good Faith Estimate — an effort that involved years of soliciting comments and was mightily resisted by some in the lending industry. That form not only changed the way information was presented, but also required brokers and lenders to commit to many parts of their estimates — a big change, as previous estimates sometimes had little relationship to actual closing costs.

But the forms themselves are longer and, for some borrowers, more confusing than the previous ones, Ms. Anderson said.

The form is still “horrible, just horrible,” said Mark Yecies, an owner of SunQuest Funding, a lender in Cranford, N.J. “The G.F.E. doesn’t actually itemize the closing costs in such a way that makes it easy for a borrower to understand what they are.”

Still, he advises people to get the form from every lender they approach. “If you receive approximate closing costs in an e-mail or a form that is not the G.F.E.,” he said, “it doesn’t mean squat.”

He added that some lenders had become adept at manipulating the estimates, by providing interest-rate quotations that expire almost instantaneously, or by low-balling fees in instances where they have legal flexibility. “If you get two or three different G.F.E.’s and there’s several thousand dollars’ difference,” he said, “you know someone is playing games.”

But David Flores, a financial counselor with GreenPath Debt Solutions in New York, which provides home buyer education, says game playing is not as big a problem as it used to be. “We’re removed from the day when it was a 3 percent interest rate with a big asterisk,” with the asterisk leading to fine print about teaser rates, he said.

Borrowers seem to have learned a lot from the attention paid to shaky loans in the last few years, he said. “More people are asking the right questions when it comes to these adjustable rates and exotic loan types. More people are wise to them.”

A version of this article appeared in print on July 24, 2011, on page RE4 of the New York edition with the headline: Sorting Through Lending Costs.

WHY NOW IS THE TIME TO BUY - ESPECIALLY INVESTORS!

May 31 (Bloomberg) -- For all the attention given to almost $4-a-gallon gas, the biggest threat to containing U.S. inflation may be the shift away from homeownership, which is pushing up the cost of leases across the nation’s 38 million rented residences.

Shelter represents about 40 percent of the consumer price index excluding food and energy and accounted for almost one quarter of the 1.3 percentage point rise in April. That share has grown as falling home prices shake Americans’ confidence in housing as an investment.

Federal Reserve Chairman Ben S. Bernanke and his colleagues say they will hold interest rates at record lows for an “extended period,” based on an assessment that slack in the economy from 9 percent unemployment will help subdue core inflation and any threat of accelerating prices likely will be “transitory.” Not everyone agrees with that judgment.

“They should have looked at rents,” said Maury Harris, chief U.S. economist in New York at UBS Securities LLC, whose team at UBS was the most accurate inflation forecaster over 2009 and 2010, according to Bloomberg calculations. “They’re putting too much weight on the ‘slack is all that matters’ theory. It matters but, for heaven’s sake, it’s not all that matters.”

Housing has become “a contributor to inflation, and it continues to rise,” agreed Bruce McCain, chief investment strategist at the private-banking unit of KeyCorp in Cleveland, with $22 billion in assets under management. That’s partly why he’s advising clients to look at “specifically, a heavier mix of equities, and maybe the use of TIPS to mitigate the effects inflation could have over 10 years or longer.”

Investor Expectations

Investor expectations of rising prices in the next decade, as measured by the spread between Treasury Inflation Protected Securities and nominal bonds, have fallen to 2.28 percent from 2.66 percent on April 11, the year-to-date high.

“When you look at the longer-term portion of a bond portfolio, consider pretty carefully the ravaging effects that inflation could have,” McCain said in an interview. He estimates that rents have accounted for about 1 percentage point of the last decade’s 2.4 percentage point rise in prices and soon may revert to or overshoot this trend.

“The worse it gets for apartment rentals, the more you’re going to see that number adding to the overall inflation rate,” he said.

Preferred Gauge

Harris calculates that prices excluding food and energy have risen at an annual rate of 2.1 percent so far this year based on the consumer price index. The Fed’s preferred gauge, the Department of Commerce personal-consumption expenditure index, rose 1 percent in April from a year earlier. Including all items, it increased 2.2 percent.

Policy makers are “misreading the inflation, period,” Harris said in an interview. “If you have a healthy rate of core inflation, you don’t have any business having the federal funds rate under 25 basis points. That’s ridiculous.” The Fed cut the target rate for overnight loans among banks to near zero in December 2008.

Confidence in homeownership has been battered in the wake of the subprime-mortgage crisis, which pushed housing prices down 33 percent since July 2006, based on the S&P/Case-Shiller index of property values in 20 cities. Prices in these cities fell in March to the lowest level since 2003 -- led by Charlotte, North Carolina, and Minneapolis, showing that housing remains mired in a slump almost two years into the economic recovery.

Seized in Foreclosure

More than 3 million homes have been seized in foreclosure since the start of 2008, according to RealtyTrac Inc., and the rate of homeownership has fallen to 66.4 percent, the lowest since 1998, data from the Census Bureau show.

About two-thirds of Americans now think buying a home is a safe investment, down from 83 percent in 2003, said government- supported mortgage financier Fannie Mae in a national survey released May 11.

The percentage of AvalonBay Communities Inc. residents moving out to purchase a residence fell to 12 percent in the first quarter, down from 15 percent in the last quarter of 2010 -- “the lowest level since we began tracking this data,” Chairman and Chief Executive Officer Bryce Blair said in a April 28 analysts’ call.

AvalonBay is the second-biggest publicly traded U.S. apartment owner with more than 50,000 units in the Northeast, Mid-Atlantic, Midwest, Pacific Northwest and Northern and Southern California. First-quarter funds from operations climbed 18 percent to $93.5 million from a year ago as rising demand helped it increase rents, the Arlington, Virginia-based company said in an April 27 statement.

‘Muted’ Supply

“Job growth, particularly among young workers, is driving higher rental demand, while new supply remains muted,” Blair said in the statement. “We expect fundamentals will continue to accelerate during the year.” AvalonBay stock has risen 16 percent this year.

U.S. apartment rents climbed 5 percent in the 12 months through April, according to research company Axiometrics Inc. Effective rents in the first quarter, or what tenants actually paid, rose in 75 of the 82 markets tracked by data provider Reis Inc., which said the average was up 2.5 percent from a year earlier to $991 a month.

“Landlords have a couple years of runway to have pricing power over their tenants,” said Anthony Paolone, an analyst at JPMorgan Chase & Co. in New York. He recommends that investors looking to profit financially from the increases should consider a trio of real-estate investment trusts: Palo Alto, California- based Essex Property Trust Inc., UDR Inc. in Highlands Ranch, Colorado, and Equity Residential in Chicago.

Rising Shares

UDR has risen 8.8 percent since January, Equity Residential climbed 17 percent and Essex jumped 18 percent. The Standard & Poor’s 500 Index increased 5.8 percent in the same period.

The boon for landlords is a burden for residents like Alexander Shevlyagin, a 25-year-old Seattle computer-software manager, who said he was shocked to learn his rent is rising to $1,305 a month from $935 and his free parking space will cost $100.

“My building manager told me, ‘Hey, we’re almost at full occupancy,’” Shevlyagin said. “He said he signed the same place I have on a different floor for the new rates, so someone thinks that this is reasonable. Knowing what I’m paying right now, I don’t consider it reasonable.”

Negative Change

From January until October 2010, rents helped hold down overall inflation as the year-over-year change in shelter -- mainly rents and what owners would receive if they rented their homes -- was negative, according to data from the Bureau of Labor Statistics.

Then the component turned positive in November. Rental yields, or rents relative to home prices, will climb this year to the highest level in more than 20 years and remain elevated for as many as four years, predicts Paul Dales, senior U.S. economist in Toronto for Capital Economics Ltd.

“I’m sure it’s something the Fed is watching, but I wouldn’t be too surprised if they haven’t factored in such a rise,” Dales said. “It’s possible the Fed may be surprised there.”

At their April meeting, Fed officials projected core inflation for 2011 between 1.3 percent and 1.6 percent; their estimate for 2012 was 1.3 percent to 1.8 percent.

‘Resource Slack’

“With resource slack likely to diminish only gradually over the next few years, it seems reasonable to anticipate that underlying inflation will remain subdued for some time, provided that longer-term inflation expectations remain well contained,” Fed Vice Chairman Janet Yellen said in a April 11 speech in New York.

While rents weren’t mentioned in the minutes of the April meeting, the Fed’s April 13 Beige Book report, an anecdotal survey of economic conditions, was peppered with stories of rising costs.

In Manhattan, studio-apartment leases “continued to climb and were up more than 10 percent from a year ago.” In Boston, apartment “rental-rate increases persist,” and contacts in Chicago reported “developing strength in the rental market and a corresponding pick-up in conversions of condominiums into apartments.”

The Fed may be falling behind the curve, said Joel Naroff, president of Naroff Economic Advisors in Holland, Pennsylvania. Rising rents are “a risk to the core, which is the important number if you’re looking at Fed policy,” he said, estimating the rate could top 2 percent by the end of this year.

“It’s clearly a cost-of-living issue, especially as people who were in the homeownership market are winding up in the rental market,” he said.

--With assistance from Oshrat Carmiel in New York. Editors: Melinda Grenier, Kenneth Fireman

To contact the reporter on this story: Joshua Zumbrun in Washington at jzumbrun@bloomberg.net

To contact the editor responsible for this story: Chris Wellisz at cwellisz@bloomberg.net

When Can I Buy Again?

This question seems to arise frequently in all types of conversations. The time frame when a client can buy a home after a foreclosure, deed-in-lieu, short sale or bankruptcy varies by the agency purchasing or insuring the loan as well as the dollar amount of the loan. Below is a chart to help you know when a client who has experienced one of these events can purchase again.

Federal Housing Administration (FHA)

Bankruptcy – 2 years after date of discharge.
Deed-in-Lieu – 3 years after closing.
Foreclosure – 3 years after closing.
Short Sale – 3 years after closing.

Conventional Conforming (FNMA/FHLMC)

Bankruptcy – 4 years after date of discharge.
Deed-in-Lieu – 4 years after closing (LTV <80%); 5 years after closing (LTV>80%); 7 years after closing for second homes and investment properties regardless of LTV.
Foreclosure – 7 years after closing.
Short Sale – 2 years after closing (LTV <80%); 5 years (LTV 80.1-90%); 7 years (LTV >90%).

Conventional Non-Conforming “Jumbo” (FNMA/FHLMC)

Bankruptcy – 7 years after date of discharge.
Deed-in-Lieu – 7 years after closing.
Foreclosure – 7 years after closing.
Short Sale – 7 years after closing.

Veterans Administration (VA)

Bankruptcy – 2 years after date of discharge.
Deed-in-Lieu – 2 years after closing.
Foreclosure – 2 years after closing.
Short Sale – 2 years after closing.

CALIFORNIA ASSOCIATION OF REALTORS SHORT SALE LENDER SATISFACTION SURVEY RESULTS

For release:
March 8, 2011

LOS ANGELES (March 8) – Fewer than three of five short sales close in California, illustrating the complexity and difficulty of navigating lenders’ and servicers’ short sale procedures, according to a Short Sale Lender Satisfaction Survey conducted by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.). The survey gauges REALTORS®’ experience in working with short sale transactions – transactions in which the lender or lenders agree to accept less than the mortgage amount owed by the current homeowner.

“It’s disappointing that less than three in five short sales close, despite every effort by the REALTOR®, home seller and potential home buyer,” said C.A.R. President Beth L. Peerce. “Many underwater homeowners who have been hit by the recent economic crisis can no longer afford to stay in their home and just need to sell their home as expeditiously as possible are unable to largely because of the complex and cumbersome short sale process,” she said.

Of the REALTORS® surveyed, 94 percent participated in a short sale transaction during 2010, demonstrating the surplus of short sale listings in today’s real estate environment.

The most frequent problems REALTORS® cited in working with lenders and servicers during the short sale process include unresponsiveness, onerous procedures, and long processing delays.

Nearly three-fourths (70 percent) of REALTORS® said that closing their most recent short sale transaction with a lender or servicer was “difficult” or “extremely difficult,” while only 10 percent said it was “easy” or “extremely easy.”

“The lack of standardization, long approval process, and lack of lender approvals are hampering what should be a 45-day short sale process,” said Peerce. “Instead we’re hearing the typical response time for lenders is at least 60 days, and in many instances, their response time exceeds 6 months.”

More than half (63 percent) of REALTORS® said that lenders took more than 60 days to return a written response of the approval or disapproval of the short sale agreement submitted. Only 4 percent said they received a written response in less than 14 days.

Additionally, 44 percent of REALTORS® said that lenders took more than five business days to return any form of communication to REALTORS®. Only 14 percent said lenders responded “within one business day.”

“The survey results show that the short sale system is clearly flawed and must be standardized and streamlined to reduce the inventory of foreclosures,” said Peerce. “Increasing the number of successful short sale transactions is one important way we can help California families avoid foreclosure and move our economy closer to recovery,” she added.

Further illustrating faulty communication problems, 64 percent of REALTORS® were “not satisfied” or “not at all satisfied” with the timeliness of lenders’ response to their inquiries, while only 22 percent said they were “satisfied” or “extremely satisfied.”

Moreover, nearly three-fourths (74 percent) of REALTORS® were “not satisfied” or “not at all satisfied” with the amount of time it took to hear whether a transaction was approved or disapproved, while 16 percent said they were “satisfied” or “extremely satisfied.”

In overall satisfaction with the lender they worked with, 67 percent of REALTORS® were “not satisfied” or “not at all satisfied,” while 19 percent were “satisfied” or “extremely satisfied.”

C.A.R.’s Short Sale Lender Satisfaction Survey was conducted during the last two weeks of December 2010 to gauge REALTORS®’ experience in working with lenders or servicers of short sales, bank-owned properties (REOs), and foreclosures. The survey was delivered to 20,000 REALTORS®, with 2,150 responding to the survey.

Leading the way...® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with more than 160,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

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FORECLOSED HOMEOWNER HAS CAUSE TO SUE BANK FOR FRAUD

This recent California appeals court ruling has established precedent that needs to be watched and followed. This is very important to all homeowners out there in trouble with their lender. A California appeals court ruled that a former homeowner's lawsuit against U.S. Bank (USB: 27.52 -0.61%) for fraud may continue after the bank allegedly reneged on a promise to negotiate a mortgage modification, opening the door for claims from potentially thousands of similarly situated troubled borrowers in the Golden State.

While the court ruled that a case for fraud–which includes claims for damages–could proceed, it also ruled that the homeowner, Claudia Jacqueline Aceves, lacked sufficient cause to get her home back after the foreclosure sale.

What could become a landmark foreclosure ruling appears to be both a win and a loss, for mortgage servicers and foreclosure defense attorneys alike. Mortgage servicers prevailed on issues of alleged defects in the foreclosure process, with the court ruling that none of the Aceves allegations of irregularities "would permit the trial court to void the deed of sale or otherwise invalidate the foreclosure." Aceves had claimed, for example, that the notice of default was defective and therefore void, a claim the court rejected outright. "Absent prejudice, the error does not warrant relief," according to the ruling.

The court spent most of its 15-page ruling, however, discussing how U.S. Bank had purportedly promised to negotiate a potential loan modification if the homeowner agreed to allow the bank to lift a bankruptcy stay, which had protected the home from seizure. Yet, when the homeowner agreed and attempted to begin negotiation on a loan modification, the bank allegedly opted to foreclose without negotiating.

"We conclude plaintiff could have reasonably relied on the bank’s promise to work on a loan reinstatement and modification if she did not seek relief under Ch. 13; the promise was sufficiently concrete to be enforceable; and plaintiff’s decision to forgo Ch. 13 relief was detrimental because it allowed the bank to foreclose on the property," according to the ruling, filed Jan. 27, in the Court of Appeal of the State of California’s second appellate district.

In April 2006, Aceves took out a 30-year, $845,000 loan at a rate of 6.35% with original payments about $4,860 per month. After two years, the rate became adjustable. In January 2008, Aceves could no longer make her payments, and a notice of default was filed in March of that year. Shortly thereafter, Aceves filed for Chapter 7 bankruptcy protection, which automatically stops foreclosure proceedings.

Aceves contacted U.S. Bank, which told her it "would work with her on a mortgage reinstatement and loan modification" as soon as the loan was out of bankruptcy, according to the ruling. Aceves said her intention was to convert the Chapter 7 case to Chapter 13, which allows a homeowner in default to reinstate original loan payments, pay the arrears over time and avoid foreclosure. U.S. Bank, meanwhile, filed a motion to lift the bankruptcy stay.

In November 2008, Aceves’ bankruptcy attorney received a letter from the attorney for the loan's servicer, American Home Mortgage Servicing. The letter asked for an agreement in writing to allow American Home to contact Aceves to "explore loss mitigation possibilities." When Aceves contacted the servicer, she was told American Home would not speak to her before the motion to lift the bankruptcy stay was granted. Aceves decided not to pursue Chapter 13 bankruptcy protection based on U.S. Bank’s promise to reinstate and modify the loan, according to the appellate court.

On Dec. 4, 2008, the bankruptcy stay was lifted. Five days later, without contacting Aceves, U.S. Bank scheduled the home for a Jan. 9, 2009, foreclosure sale. Aceves sent documents to American Home on Dec. 10 and was told on Dec. 23 that a negotiator would contact her on or before Jan. 13 (four days after the scheduled auction.). On Dec. 29, a negotiator called and said to forget about the foreclosure because the "file" had been "discharged" in bankruptcy. On Jan. 2, the negotiator called again and said American Home was incorrect and that it would reconsider.

On Jan. 8, the day before the scheduled sale, the negotiator said the loan's new balance was $965,926, the new monthly payments would be $7,200 and a $6,500 deposit was due immediately. The negotiator refused to put the terms in writing, according to the appellate court's finding. Aceves did not accept the offer, and the house was subsequently sold back to U.S. Bank the next day.

"U.S. Bank never intended to work with Aceves to reinstate and modify the loan," the latest ruling said. "The bank so promised only to convince Aceves to forgo further bankruptcy proceedings, thereby permitting the bank to lift the automatic stay and foreclose on the property."

During an original lower court case, U.S. Bank had prevailed with the court, which ruled there was no promissory fraud involved. Aceves filed the appeal spanning issues of standing as well as reiterating a claim for promissory fraud, on which the appellate court based its ruling.

For its part, U.S. Bank alleged that Aceves' bankruptcy case was filed in "bad faith."

U.S. Bank referred comments to the servicer, American Home Mortgage Servicing. A spokeswoman for American Home Mortgage Servicing said the company is still reviewing the court case and has no comment at this time.

Write to Kerry Curry.

Keller Williams Realty Announces Numbers for 2010, Continued Growth During Real Estate Downturn

Company Launches eEdge Industry’s First Lead-To-Close Business Solution Today

AUSTIN, TEXAS (February 21, 2011)–Keller Williams Realty reported today at its national convention that it ended 2010 with 79,315 associates, 701 market centers (offices), and associate profit share up 7.2 percent, with its agents receiving $34.6 million dollars back. Since the inception of the profit sharing program, the company has given back over $304 million in earnings to its agents. Additionally, CEO Mark Willis shared in his annual State of the Company address to more than 8,000 convention attendees that, since the real estate market’s sharp downturn in 2005, the company has grown 30 percent in agents, 40 percent in market centers, 21 percent in closed units and 11 percent in closed GCI.

“Keller Williams agents have outpaced the market in every way, through productivity and profit share. As a company, we are better off now than we were before the shift–and we have our associates to thank for that," said Willis.

The growth of the company can be attributed to the growth of its agents. Agent productivity continued to rise with units closed up 6 percent from December 2009 to 2010, while comparably, the NAR membership as a whole went down in closed units 4.8 percent. Overall the company’s associates saw productivity year on year percentage increases across the board in listings taken (up 13 percent), contracts closed volume (up 9 percent) and contracts closed units (6 percent).

“These numbers are the most important to us because they are proof that our agents are succeeding, making more money and growing their businesses. They are truly breaking through," Willis added.

Willis also did the honors of “turning on" the industry’s firstcomplete lead-to-close business solution, eEdge, during his address. This unique tool is now available to every Keller Williams associate at a fraction of the cost they would normally pay with functionality to build their leads, database and sales. Additionally, with the company-wide paperless transaction system, consumers can expect a faster, more seamless closing process.

“We want to thank our associates and their unwavering commitment to the growth of their businesses and leading the way in the industry in technology," said Mary Tennant, president and COO of Keller Williams Realty. “Keller Williams Realty wouldn’t be forging ahead with such an important product like eEdge without the support of our agents and their vote!"

In addition to reporting positive growth and technological advancement, the company received many accolades in 2010 including:
· Entrepreneur magazine, No. 1 ranked real estate franchise on the 31st Annual Franchise 500 list
· J.D. Power and Associates, highest in overall satisfaction ratings from home buyers among the largest full-service real estate firms for the third year in a row
· Inman News, Co-Founder and Chairman of the Board Gary Keller named one of the 100 Most Influential Leaders in Real Estate
· Training Magazine, highest ranking real estate franchise on the annual Training Top 125, #47 Overall


About Keller Williams Realty, Inc.:
Founded in 1983, Keller Williams Realty Inc. is the third-largest real estate franchise operation in the United States, with 690 offices and almost 80,000 associates in the United States and Canada. The company, which began franchising in 1990, has an agent-centric culture that emphasizes access to leading-edge education and promotes an economic model that rewards associates as stakeholders and partners. The company also provides specialized agents in luxury homes and commercial real estate properties. For more information, or to search for homes for sale visit Keller Williams Realty online at (www.kw.com).

CALHFA ANNOUNCES FULL IMPLEMENTATION OF $2 BILLION EFFORT TO ASSIST HOMEOWNERS STRUGGLING TO REMAIN IN HOMES

SACRAMENTO – The California Housing Finance Agency today announced the full
implementation of four programs to fight the ongoing foreclosure crisis in California, with the primary goal to help families remain in their homes.
The programs, under the umbrella title of Keep Your Home California, are federally funded as part of the U.S. Treasury Department’s Hardest Hit fund, and are aimed at helping low and moderate income homeowners struggling to pay their mortgages amid the worst real estate crisis in decades.

“Our goal is to get the very most out of these federal dollars to assist California families,” said Steven Spears, Executive Director of CalHFA. “With families struggling through a number of financial hardships and the disruption in the real estate market, these programs will help those in need while stabilizing neighborhoods and communities severely impacted by foreclosures.”

California received a total of nearly $2 billion through the Hardest Hit fund. After consulting with community leaders throughout the state, four programs were created to assist California families. Mr. Spears said that all four programs are intended to help avoid foreclosure: three offer several forms of mortgage assistance, as well as a separate program that will provide transition assistance to borrowers who execute a short sale or deed in lieu transaction.

All of the programs are designed specifically for low or moderate income homeowners who are either unemployed or are facing another financial hardship, have fallen behind on their mortgages and owe significantly more than the value of their homes.
“In partnership with the federal government, Keep Your Home California is one more step we are taking to help low and moderate income California families who are struggling to remain in their homes,” said Assemblymember Norma Torres, Chair of Assembly Committee on Housing and Community Development. “No one program will solve the foreclosure crisis affecting our state, but together we hope to make a difference for as many families as possible.” "The foreclosure crisis continues to hinder our potential for economic recovery, and strips stability from our communities,” said Assemblymember Mike Eng, Chair of the Assembly Committee on Banking and Finance. “I'm pleased that the Keep Home California program is
ramping up to address these challenges and, as the program moves forward, I will continue to monitor its progress to ensure that it's an all around success at assisting California borrowers."

Specifically, the Keep Your Home California programs provide:
• Mortgage assistance of up to $3,000 per month for unemployed homeowners who are in
imminent danger of defaulting on their home loans.
• Funds to help homeowners who have fallen behind on their mortgage payments due to a
temporary change in a household circumstance. The program will provide up to $15,000
per household to reinstate mortgages to prevent foreclosures.
• Money to reduce the principal owed on a mortgage for a home where the low or
moderate income homeowner is facing a serious financial hardship and owes
significantly more than the home is worth. The program requires lenders to match any
assistance provided by the Keep Your Home California program.

A full description of the programs can be found at www.KeepYourHomeCalifornia.org
How to Apply: The programs will be limited to homeowners who meet a number of criteria, including owning and occupying the home as their primary residence, meeting income limits and facing a financial hardship. Homeowners who consummated a “cash-out” refinance are not eligible for Keep Your Home California programs.

To apply for the assistance, a homeowner should contact the Keep Your Home California call center toll-free at 888.954.KEEP(5337) or their mortgage servicer – the company to which the borrower sends monthly mortgage payments. Each of the mortgage assistance programs requires the participation of the mortgage servicer.
As of February 9, the following servicers are participating in all four Keep Your Home California programs:
 GMAC
 Guild Mortgage
 California Housing Finance Agency
 California Department of Veterans Affairs

Other servicers, including Bank of America, JPMorgan Chase, CitiMortgage and Wells Fargo are currently participating in some, but not all programs at this time. The list of participating servicers is expected to expand in the coming weeks. Full details regarding servicer participation can be found at www.KeepYourHomeCalifornia.org.

“The problems of unemployment and the unprecedented disruption in our real estate markets have impacted so many families,” Mr. Spears said. “These programs are designed to move homeowners who have been told ‘no’ into the ‘yes’ category and qualify them for a mortgage they can afford over the long term." Borrowers with questions about the program may call Keep Your Home California toll-free at
888-954-KEEP(5337).

THE END OF FANNIE AND FREDDIE

The White House outlined last Friday its plans to begin shrinking their support of both of the government sponsored entities (GSEs) Fannie Mae and Freddie Mac. While the process could take several years, the effects will be felt in coming months.

The government took over both GSEs in September of 2008 when the financial crisis took place. Both agencies have been in receivership which has cost tax payers an estimated $134 billion so far. If the housing market was not so fragile the timeframes would be much quicker to dissolve the two agencies.

Last year, Fannie, Freddie and FHA guaranteed 95% of all home loans. The role these government agencies have played has been crucial to the lender markets over the last 40 years. There would not have been a housing market the last two years had these agencies been dissolved as is the plan going forward. The goal is to have the private sector originate mortgages and securitize them without any government backing.

The proposed plan by the administration is to allow the maximum loan limits to fall to $625,500 from $729,750 beginning October 1st, 2011. The plan is to increase minimum down payments to 10% on all loans eligible for purchase by Fannie and Freddie. In addition, insurance premiums charged on new loans backed by the Federal Housing Administration (FHA) will also go up.

Waiting Period Requirements To Purchase A Home Again...

With all of the craziness in the real estate market, one question that continually arises is; "if I do this ... how long until I can purchase another home". Here are the current answers to this question based upon the type of loan you have/had.

The waiting periods in order to qualify for a home loan after a foreclosure, deed-in-lieu, short sale and bankruptcy varies both by the government agency purchasing or insuring the loan as well as the dollar amount of the loan.

Federal Housing Administration (FHA)

1) Foreclosure is 3 years
2) Deed-in Lieu is 3 years
3) Short Sale is 3 years
4) Bankruptcy is 2 years

Veterans Administration (VA)

1) Foreclosure is 2 years
2) Deed-in Lieu is 2 years
3) Short Sale is 2 years
4) Bankruptcy is 2 years

Conventional Conforming (FNMA/FHLMC)

1) Foreclosure is 7 years
2) Deed-in-Lieu is 4 years < 80% LTV and 5 years > 80% LTV for primary residences. 7 years for second homes and investment properties regardless of LTV.
3) Short Sales is 2 years < 80% LTV and 5 years > 80% LTV and 7 years > 90% LTV
4) Bankruptcy is 4 years

Conventional Non-Conforming (JUMBO)

1) Foreclosure is 7 years
2) Deed-in-Lieu is 7 years
3) Short Sale is 7 years
4) Bankruptcy is 7 years

Hope this information helps. Call me with any questions...