Real Estate Information

They say the only constant is change... and more change is coming! Last month, the sweeping Financial Regulation Bill was signed into law and promises to bring a wave of new changes to the financial system. But the question is: what does this change mean to you? Here's what you need to know.

Generally speaking, the law calls for a new consumer protection agency and prohibits banks from taking risky bets. While those things are important, it's also important to realize that this legislation... over 2,000 pages worth... amazingly does nothing to address the core reasons for the financial collapse. Fannie Mae and Freddie Mac are completely left out of this legislation. Additionally, the credit rating agencies - which may have played the largest role in the financial collapse - also go unmentioned.

In fact, when former Fed Chairman Alan Greenspan was asked about Financial Regulation, he noted that this was the first time the Fed was not asked to write a regulation of this kind. He also said that there are "unintended consequences" in every page of this bill.

And one consequence we've seen already is that corporations are hoarding cash, and are somewhat stuck like a deer in the headlights due to the uncertainty that this and other pending legislation is creating. And when corporations hoard cash, they don't typically hire workers, and job creation is crucial to our recovery.

What all this will mean for our economy and home loan rates remains to be seen... which is why now is the perfect time to act, while home loan rates continue to be some of the best they have ever been! If you or anyone you know would like to learn more about this exceptional opportunity, please don't hesitate to call or email. Or forward this newsletter on to anyone you think may benefit and I'd be happy to talk to them free of charge.

Rob McCarthy
Owner and Senior Mortgage Planner - 101 Loan
www.101loan.com
Email Me 
408-377-4123 Office
650-465-8957 Cell
560 S Winchester Blvd, Suite 500
San Jose, CA  95128
A Dept.of Real Estate - License # 01165697

____________________________________________________________________
Author and Business are endorsed by The Dawn Thomas Team, Inc.
Silicon Valley and Beyond - our website
Silicon Valley Home Search  - find Silicon Valley properties for sale
What’s Your Silicon Valley Home Worth? - get current market information for your Silicon Valley home

Should you focus more on getting a low rate or wait for a price reduction on homes?

The Fed's Mortgage Backed Securities purchase program ended, the markets have seen much more volatile price swings. For potential buyers who are waiting to see if home prices come down a little more, that means the wait could well cost you more money in the long run.

Let's look at an example to see why. Say a homebuyer wants to buy a home that costs $300,000. But the buyer wants a better deal on the home, so she delays a transaction until the home is reduced by $10,000. If, in the meantime however, rates were to rise .75% to 6.00% and the buyer financed 90% of the purchase price, the amount of total payments over a 30-year term would be over $35,000 more than paying the $300,000 purchase price and locking in the 5.25% interest rate. In other words, the buyer would save $10,000 only to end up paying $35,000 more.

Now these prices and rates are just for the sake of example. But the point is that home prices are already very affordable...and rates are still at historic lows for now. So in the end, waiting for a home price to reduce may end up costing you much more than you expect if rates rise.

For more info or to get preapproved, please contact me.

Rob McCarthy
Owner and Senior Mortgage Planner - 101 Loan
www.101loan.com
Email Me
408-377-4123 Office
650-465-8957 Cell
560 S Winchester Blvd, Suite 500
San Jose, CA  95128
A Dept.of Real Estate - License # 01165697

____________________________________________________________________
Author and Business are endorsed by The Dawn Thomas Team, Inc.
Silicon Valley and Beyond - our website
Silicon Valley Home Search  - find Silicon Valley properties for sale
What’s Your Silicon Valley Home Worth? - get current market information for your Silicon Valley home

Pack the ICE!?! What I mean is that when you or your children travel, you should be sure to have your “In Case of Emergency” information organized and easily available. Many times, travel takes us to beautiful but remote locations. You may have changes in food and water, participate in more strenuous exercise, or simply forget to take medication on schedule. I hope all my clients find that dealing with sunburn or making dinner reservations is their biggest worry, but it helps to be prepared in case things don’t go quite as planned.

Traveling without your children or spouse?

1. Have an up-to-date estate plan -
   Last summer a friend of mine was planning a 25th anniversary trip to Ashland with her husband. It was the first time in years she and her husband would be away from their children together. They had an estate plan, but it was sorely out of date. The trip was the impetus for them to finally update their documents and make some changes in guardianship now that their children were in their teens. If you plan to travel without your spouse or children, make sure you have an up-to-date estate plan. And be sure that the plan can be found quickly if needed.
   
   
2. Other Emergency Information -
   If you are leaving your kids with family or friends be sure to have the following easily available: attorney’s numbers, doctor’s numbers, bank information, school information, the social security cards of the children, immunization records, and health insurance information. Also provide a copy of your detailed itinerary including flights, hotels, dates of arrivals/departures for each location, and tour company contact information. Obviously, leave your cell phone number, but remember, you can easily lose your cell phone or discover that service is spotty in your corner of paradise. Be sure to have a back-up contact plan other than your cell phone.
   
   I give my clients a wallet card that they can carry that has the name of the guardian of the children and my information on the card. It’s a good idea also to carry current photos of your kids when you travel. I also recommend programming ICE information into your phone and putting it in your wallet. Paramedics are trained to look for ICE in your contact list or documents.

Kids Traveling Separately?

1. Be sure they carry ID, ICE, and medical information
   Your kids should carry some form of ID and have ICE in their cell phone and/or wallet. Have them carry any medications that they regularly take and their medical insurance information. This is especially important if they have a chronic health problem. A friend who chaperoned a trip to NYC told me one of the students on the trip was diabetic. The chaperone checked daily to make sure the student was checking his blood levels and taking his insulin. Unfortunately, the student was not telling the truth and ended up in the emergency room with sky high blood sugar. Fortunately, being in NYC, he was close to excellent help and is fine.
2. Have a copy of their itinerary with you
   You should also know the itinerary of your kids and the contact information for hotels, chaperones, and trip sponsor. Go ahead and put these numbers on your cell phone temporarily.
   
   
3. Provide a Medical Release Form and Temporary Guardianship Papers
   Most camps and trips include medical release forms as part of the registration packet. But if your kids will be staying with friends or relatives, it is a good idea to provide a medical release form and, in some case, temporary guardianship papers. Temporary guardianship is not a substitute for an estate plan, but it can be useful if your child will be traveling with relatives or needs to seek medical care.

Your estate planning attorney can prepare these documents for you or you can find sample documents on the web.

The form should state that your caretaker has permission for any and all medical attention to be administered in the event of accident, injury, sickness, etc. until you can be contacted.

Also state that you will assume the responsibility for the payment of the treatment. Make sure you include your children’s names and sign the document. Include contact information for your children’s doctor and insurance information.

Don’t let this information scare you. Much like frequent travelers have a separate toiletry kit always at the ready, I recommend that you prepare an ICE kit with all of the necessary documents and update it with trip specific information before you travel. Use this checklist  to help you get organized and then have a wonderful, relaxing, care-free vacation!

E.J. Hong, Attorney at Law
LAW OFFICES OF E.J. HONG
2225 E. Bayshore Road, Suite 200
Palo Alto, CA 94303
Tel:  (650) 320-7680
Fax: (650) 320-7675

____________________________________________________________________
Author and Business are endorsed by The Dawn Thomas Team, Inc.
Silicon Valley and Beyond - our website
Silicon Valley Home Search  - find Silicon Valley properties for sale
What’s Your Silicon Valley Home Worth? - get current market information for your Silicon Valley home

Strategic default, that is, stopping payments on a mortgage when you still have the ability to make the payments, has become a trend nationwide for homeowners who have properties with values that have significantly decreased.  The consequences for walking away from your home vary depending on the state you’re located in and the type of loan you have taken out.  In California, generally, property owners who have taken out a purchase-money loan in a primary residence are not liable for a deficiency judgment by the lender.  The laws on deficiency judgments vary state by state.  

Although you can generally find out what your liability and tax consequences might be from walking away from your mortgage might be by contacting a real estate attorney and CPA, homeowners have had a hard time finding out what will happen in the future.  Specifically, will a homeowner be able to purchase a property again, and when.  

FannieMae has released two underwriting guidelines recently describing what waiting periods must be in effect after preforeclosure events, like short sales, a deed-in-lieu of foreclosure, or a foreclosure.  FannieMae has now altered their policy to highlight the importance of borrowers to try and work with their mortgage servicer to avoid foreclosure, and instituted guidelines on how long something before they might lend to a borrower who has a “credit event” like a foreclosure on their record.   FannieMae is encouraging borrowers attempt modifications by communicating with their lenders.  Borrowers who have extenuating circumstances, communicate heavily with their lenders to work towards a solution are able to qualify for a FannieMae backed mortgage in as little as three years.  Borrowers who don’t are penalized, from the current five year waiting period requirement to up to seven years.  

Interestingly enough, FannieMae is also encouraging servicers to provide recommendations in the future on whether the borrower is a “strategic defaulter” and whether the borrower is a good candidate for a deficiency judgment.  

If you are not familiar with what a deficiency judgment is, it is a judgment secured at the conclusion of a lawsuit by your lender against you in a court.  The lender must file a lawsuit against you, where you have the right to defend yourself.  If you do nothing, the lender will automatically receive a judgment.  If you get sued by your lender, it is important to contact a real estate attorney who can advise on whether you had the right to be sued, whether there are any statutory protections in place that you can use as a defense, or to negotiate a settlement if you do not have a legal defense.  

For more information on real estate law, contact:

Elena Rivkin Franz,  Attorney at Law
Pratt & Associates 
1901 S. Bascom Avenue, #350
Campbell, CA  95008
(408) 369-0800 ext. 202

____________________________________________________________________
Author and Business are endorsed by The Dawn Thomas Team, Inc.
Silicon Valley and Beyond - our website
Silicon Valley Home Search  - find Silicon Valley properties for sale
What’s Your Silicon Valley Home Worth? - get current market information for your Silicon Valley home

Just recently interest rates and some loan programs have gotten significantly better.  Conforming rates are in the low 4’s and loan up to $729k are in the mid 4’s with loans up to $1m are in the low 5’s compared to high 5’s just 2 weeks ago.

 As for loan programs many lenders are now offering purchase financing based on the following (owner occupied only):

• 5% down to $439k in Price
• 10% down to $811k in Price
• 20% down to $2.5m in Price

If you would like to either determine your purchasing power for an owner occupied home or investment property, please feel free to contact me.  If you are looking to refinance, please complete the following and send back to me.  I will provide you the best options out of 45 lenders:

1)  Provide your property/mailing address, day and evening numbers.

2)  What is the estimated value of your property and is your dwelling permitted with the city?

3)  What are the balance of your 1st Mortgage, 2nd Mortgage, 3rd Mortgage?

4)  What are the rates on your 1st Mortgage, 2nd Mortgage, 3rd Mortgage?

5)  What are the payments on your 1st Mortgage, 2nd Mortgage, 3rd Mortgage?

6)  Do you want cash out?  If so how much?

7)  How long do you plan on owning the property?

8)  Does your loan have a prepayment penalty?  If so, when does it expire?

9)  When did you purchase your home and for how much?

10) What is your annual, verifiable income and is your mid fico scores over 720?

Any questions, please contact me. 

Rob McCarthy
Owner and Senior Mortgage Planner - 101 Loan
www.101loan.com
Email Me
408-377-4123 Office
650-465-8957 Cell
560 S Winchester Blvd, Suite 500
San Jose, CA  95128
A Dept.of Real Estate - License # 01165697

I like a bargain just like anyone else.  I hate to think I’m paying more for something than I really need to.  So I am sympathetic but also concerned when clients ask me to review their DIY (do-it-yourself) legal documents or materials from paralegal document preparation companies.

Too often, the documents they have are not remotely adequate.  For example, one estate plan had no estate tax planning.  The clients had assumed that doing a living trust automatically took care of their estate taxes. (In fact, estate planning covers SIX kinds of taxes.)  In another situation, the trust was not funded, which meant that the heirs would have to go through probate even with a living trust in place.   You must fund a trust with assets, which means to title assets such as a house or stocks in the name of the trust.  Yet another client was not aware that different rules apply when creating an estate plan for a non-US citizen.   In another case, a trustee called because the DIY plan included several amendments that were in direct conflict:  one gave everything to the man’s ex-wife; the second disinherited her.   


So how do mistakes like this happen?  Document preparation companies, like LegalZoom (recently in the headlines due to a class action suit charging unfair and deceptive business practices) suggest that you can prepare your own legal papers with the help of their services.  What they fail to make clear is that they are not providing you with legal advice or counsel.  They are simply providing “general information on legal issues commonly encountered.”   In fact, it is ILLEGAL for them to provide legal advice without a law license.   Essentially, when you use these services, you are acting as your own lawyer.  Let me make a comparison: many of us will use the internet to research medical issues.  But would you attempt to perform your own heart surgery?  The answer, of course, is no.   Yet, with documentation preparation services, many people, lured by the promise of saving money, will go ahead and use these services believing that they are in fact getting legal counsel.  

Unfortunately, the money saved up front is often not nearly worth the time, trouble, and yes, money, that it will take a lawyer to untangle the mess later.  With estate planning in particular, clients may feel happy to have a living trust in place, but realize too late that there is no one to turn to if they want to amend the trust, or need help with trust administration once there is a death (trust administration involves inventory of assets, changing deeds, payment of debts, notices to beneficiaries, appraisals, taxes, disclaimers, subtrust funding, etc.)   These are the services and legal “legwork” that I and other estate planning lawyers provide.  


So is it ever appropriate to consider a DIY estate plan?  You might be surprised to learn that the answer is yes.  People with a “simple” estate (assets less than $100,000) can do a will.  In fact, you can do it for free using the California Bar statutory will. Or  you can use NOLO which is a lot less expensive (approximately $90) than document preparation companies.  Nolo offers good tutorials and explanations of legal concepts. You can also get advance health care directives from a hospital or from your doctor’s office.

Before you make a decision about whether to use a lawyer or “do-it-yourself” you might also take advantage of the California Bar’s excellent pamphlets on wills, estate planning, living trusts, and whole host of other topics. These give non-lawyers much need information, objective advice and warnings about the common pitfalls of DIY services. 

Finally, you might want to find out how much it costs to work with a lawyer to do an estate plan.   The number might seem high in comparison with DIY services, but considered as a percent the value of the estate or compared to probate fees, actually very reasonable.  Estate plans come in a great range of prices, but price is not always an indicator of value or service.    The best place to start is to get referrals from friends, family or colleagues.  You can also contact the California Bar to research any attorney you may be considering hiring.

When it comes to estate plans, one-size-fits-all and DIY documents are rarely going to give you the results you really want.  Be sure to read the fine print and know what you are buying.   And know where you can turn if you or your heirs need help. Your peace of mind and the secure future of your loved ones are worth the added effort and expense.

EJ provides general information about estate planning and related issues through her blogs.  She welcomes comments at ej@ejhong.com.  For legal advice or to discuss developing an estate plan, please call her below to make an appointment.

E.J. Hong, Attorney at Law
LAW OFFICES OF E.J. HONG
2225 E. Bayshore Road, Suite 200
Palo Alto, CA 94303
Tel:  (650) 320-7680
Fax: (650) 320-7675

____________________________________________________________________
Author and Business are endorsed by The Dawn Thomas Team, Inc.
Silicon Valley and Beyond - our website
Silicon Valley Home Search  - find Silicon Valley properties for sale
What’s Your Silicon Valley Home Worth? - get current market information for your Silicon Valley home

If you are involved in a dispute about a real estate matter, oftentimes, your contract provides that you must attempt to mediate your dispute before you turn to the court for help.  Mediation is a form of alternative dispute resolution (ADR).  Mediation allows the parties to reach a settlement with the help of a neutral third party, generally a retired judge or experienced attorney.  It is a preferred choice by many because it can reduce costs and quickly resolve conflicts.

 Please allow the following to be a guideline on what you can do to better prepare for the mediation of your case:

1.    Prepare Your Case

Preparing your case includes deciding what you need and hope to achieve.  This includes your claims for damages.  Make sure you prepare a detailed summary of your damages, including estimates, invoices and receipts.  If you have additional evidence of your losses, make sure to bring them and be prepared to share them.

2.    Evaluate Available Alternative If Mediation Is Unsuccessful.

Mediation is often successful because the alternative is initiating or continuing with litigation.  Litigation can be costly to finance when you add attorney’s fees, costs for depositions, discovery and experts.  Even if you are ultimately successful in the end, you may still need to finance your case to reach a final resolution.  

3.    Exchange Info With The Other Parties Before Mediation

Before mediation, the attorneys who represent the parties will exchange mediation briefs that describe the facts, background, and legal authority that supports their position, in addition to their claim for damages.  It is also helpful to have a draft settlement agreement available for the mediator to review before the mediation.  If you reach a settlement, this will allow you to expeditiously memorialize your agreement and finalize the draft settlement agreement.

4.    Have All Parties Available That Need To Provide Input Into A Settlement.

Don’t delay reaching a settlement because you do not have authority to settle from a spouse, real estate broker, manager or insurance adjuster.  Make sure everyone you need is available so you can make the most of your time with the mediator and other parties.  

For more information on real estate law, contact:

Elena Rivkin Franz,  Attorney at Law
Pratt & Associates 
1901 S. Bascom Avenue, #350
Campbell, CA  95008
(408) 369-0800 ext. 202

____________________________________________________________________
Author and Business are endorsed by The Dawn Thomas Team, Inc.
Silicon Valley and Beyond - our website
Silicon Valley Home Search  - find Silicon Valley properties for sale
What’s Your Silicon Valley Home Worth? - get current market information for your Silicon Valley home

For some clients, the following article will say things are getting worse… While there may be bad, there is definitely still many goods!
 
What’s good do you ask?
 
80% financing up to $2 million for a  loan amount is what’s good.  If you are purchasing from $1 million to $2.5 million in price, you can now put 20% down where as just 2 years ago, you would need 30 to 40% down.  For refinances without cash out, all you need is 20% equity to refinance. 

We really needed this and now have it!
 
Additionally, rates hit an all time low today in 12 months:
 
30 year fixed money for loans of $417,000 or less -  4.625% at 0 Points or 4.375% with 1 point.

Please note, rates and fees subject to change without notice or until locked in and approved by lender. Based on 60% loan to value or less on fully-documented owner-occupied property. 

Rob McCarthy
Owner and Senior Mortgage Planner - 101 Loan
www.101loan.com
Email Me
408-377-4123 Office
650-465-8957 Cell
560 S Winchester Blvd, Suite 500
San Jose, CA  95128
A Dept.of Real Estate - License # 01165697

Recently, I tackled the realities of estate planning after a divorce, especially where one or both parties have remarried.   It can be tricky to make sure your assets go where you intend them to (see below for previous blog).  Trickier still is what to do DURING THE PROCESS of divorce.

A colleague of mine who is a divorce attorney told me about a case where the husband died before the divorce was concluded.  Because the husband had not considered estate issues, his soon-to-be ex-wife now became his fully legal widow.  She inherited all of his assets.    We can safely assume that this was not his intent.

The process of divorce, even when it is not contested, can take a minimum of six months.   Many people separate prior to divorce which means the period that the marriage is in limbo is actually much longer.  Most people will live long enough to suffer a great deal through their divorce and even after.  But before final judgment of divorce is granted by the court, you are in a legal limbo period in which the spouse you are divorcing could still inherit your estate if you die or have power of attorney to make medical and financial decisions on your behalf if you become incapacitated.

When you are married (and even while separated), you can dispose of your assets in a will or trust pretty much as you wish (keeping in mind certain restrictions regarding community property and spousal election).  However, when you actually file for divorce with the court, there are restrictions placed on how you dispose of your assets (see below for the discussion on “ATRO”).

If you find yourself in the unpleasant position of hiring a divorce attorney, it is most definitely the time to hire a good estate planning attorney as well.  If you were represented by an estate planning attorney when you were together, it may be a conflict for that attorney to represent either or both of you.  Your divorce attorney and estate attorney can work together to protect your assets and interests.

Below I’ve outlined the legal “nitty-gritty” of divorce as it applies to estate planning.  Even just a cursory glance through the discussion should make clear that good legal counsel during this time is essential. Again, be sure you have a good legal team with both an divorce attorney and an estate planning attorney working together to protect you.

What is ATRO and how will it affect you?

Prior to filing for divorce a certain set of rules applies to married couples in California.   A married person can unilaterally control the disposition on death of one half of any community property assets and all of their separate property assets.  However, upon filing the dissolution petition and issuance of a summons, a new legal ball gets rolling called the automatic temporary restraining order (“ATRO”).  The ATRO immediately imposes four different rules:
 

1. First, the ATRO prohibits each spouse from cashing, borrowing against, canceling, transferring, disposing of, or changing the beneficiaries of any insurance or other coverage, including life, health, auto or disability, held for the benefit of the spouses and their children.
   
   
2. Second, the ATRO also restrains each spouse (1) from transferring any property, real or personal (except in the usual course of business or for necessities of life); and (2) from changing the death beneficiaries named on any nonprobate asset (such as retirement plans, annuities and revocable living trusts).  Spousal consent or a court order is needed to accomplish any change.
3. Third, the ATRO, however, still allows each spouse to revoke a revocable living trust, or other nonprobate transfer, and also to sever a joint tenancy, provided that notice of any such change is filed with the court and is served on the other spouse before the change takes effect.  Severing the joint tenancy, and thereby creating a tenancy in common, is important to prevent the other spouse from inheriting the entire joint tenancy asset according to the right of survivorship should one spouse die.
4. Fourth, the ATRO also allows each spouse, without notice or permission, to create, modify or revoke a will; create an unfunded revocable or irrevocable trust; and otherwise modify a nonprobate transfer, such as a trust, in a manner that does not affect the disposition of the property – for example, changing the designated successor trustee of an existing trust.  Thus, either spouse – without the permission of the other spouse or a court order – can create an unfunded living trust that would be funded on death by way of a pour-over will in order to effectuate estate planning changes. (Unfunded means that title to assets have not changed to the trust but assets are just listed in the trust.)  

E.J. Hong, Attorney at Law
LAW OFFICES OF E.J. HONG
2225 E. Bayshore Road, Suite 200
Palo Alto, CA 94303
Tel:  (650) 320-7680
Fax: (650) 320-7675

____________________________________________________________________
Author and Business are endorsed by The Dawn Thomas Team, Inc.
Silicon Valley and Beyond - our website
Silicon Valley Home Search  - find Silicon Valley properties for sale
What’s Your Silicon Valley Home Worth? - get current market information for your Silicon Valley home

The company at which my Brokers license is held--Intero Real Estate Services--encourages our agents to send out e-mails internally called "MARKET PULSE." It's quick communications within our company so that we are all informed of what's going on in the Silicon Valley. This quote came from a fellow professional just a few minutes ago:

"The home on Peartree in Mountain View sold with 5 offers…4 of those 5 came in with ZERO contingencies! The Listing Agent says she was “shocked” at the price they received. ZERO contingencies are coming back."

My Professional View: First of all, the property has to appraise for the sales price of the contract, otherwise the deal will have to have one of the three things happen:

1) The Buyer makes up the difference between the appraised value and the sales price. After all, the bank isn't going to lend the extra money on a house that doesn't appraise.

2) The Seller comes down in the sales price to meet the appraisal amount. Another appraisal can be ordered for a "second opinion," but chances are the two appraisals will be fairly similar.

3) The transaction falls apart and the Seller and Buyer kiss and go their separate ways. Seller puts the property back onto the market and the Buyer is knee-deep in searching for another home in a valley where inventory is currently limited.

Second, I have a fundamental issue with ZERO contingencies on a purchase agreement--no matter if I am representing the Seller or the Buyer. It is my professional belief that Buyers should have at least a few days to perform their investigations on a property.

Lastly, and from the legal standpoint--drafting a purchase agreement without contingencies built in for Buyers investigations can be a mess (FOR EVERYONE INVOLVED--Agents on both sides, Sellers, Brokerages, etc.) if something goes wrong down the road. In the heat of the negotiations moment--with the feeling of loss or being beaten looming--humans can sometimes make interesting choices that they regret later. Purchasing a home is a very emotional event. Talk to any good Real Estate Attorney regarding ZERO contingencies and you will likely get told to run from this situation.

Personally and professionally, I don't want any part of this kind of mess in my business! I would be happy to further this discussion over coffee. Get me a shout and let's get together.

What are your thoughts on this topic?

Dawn Thomas, Broker Associate
650-947-4661
www.SiliconValley365.com