Early last month, the Federal Housing Administration (FHA) laid out the details of a new policy that will tweak the First Time Home Buyer Credit guidelines, allowing first time home buyers to apply the $8000 federal tax credit toward the purchase costs of an FHA-insured home.

As reported  by Carrie Bay of DSNews.com, “The American Recovery and Reinvestment Act of 2009, enacted under President Obama, offers homebuyers a tax credit of up to $8000 for purchasing their first home before December 1, 2009, but the credit can only be accessed after filling an amended tax return with the IRS. However, the new FHA rules allow first-time homebuyers using FHA-backed financing to obtain a short term loan from state housing financing agencies and certain non-profits for 10 percent of the home’s price, up to the full amount of the tax credit.” So what exactly does that mean? Well, it means that as nice as it sounds to be able to use that tax credit towards a down payment, quite a few factors have to work out in your favor in order for you to take advantage of such an offer.

For one, you have to qualify for an FHA loan. (See guidelines at http://www.fha.com/important_facts.cfm) Second, you obviously have to be a first time homebuyer (although this may change soon; see previous blog). And finally, and much more difficult to come by depending on where you live, you need to have a state housing finance agencies or a non-profit group that will allow you to obtain a short term loan for this credit to go towards your down payment and/or closing costs. While there is a push by home builders and Realtors to urge more states to institute programs to provide down payments loans for the federal tax credits, so far, according to Bay, only Colorado, New Jersey, New Mexico, Florida, Ohio, and Pennsylvania have them. However, don’t take my word for it. Before you dismiss this as a possibility, ask your lender if this might be an option.

To answer a couple more questions and to help consumers better understand how this expanded First Time Home Buyer Tax Credit work and how to take advantage of it, the National Association of Home Builders has released the following “FAQ on Monetization:”

What exactly does “monetizing” the tax credit mean?

The term “monetization” is defined as the act of converting something into money. In the context of the first time home buyer tax credit, monetization means to treat the payment of the credit as if it was cash and allow its use as a payment for certain closing and down payment expenses.

What is a “bridge” loan?

A bridge loan is a type of loan that is intended to be outstanding for a very short time period, often only a few days or weeks. Bridge loans are used to provide funds in situations where the borrower is expected to receive funds, such as the payment of this tax credit, within a very short time.

What is a state housing finance agency?

A state housing finance agency, often referred to as an “HFA” is an organization that provides funding for a variety of loan and grant activities related to for-sale and rental housing. HFAs are also typically responsible to distribute grant funds from federal agencies, such as the U.S. Department of Housing and Urban Development (HUD)

How do I find out if my state housing finance agency is providing this service?

The best way to locate information about your state’s HFA is via the Internet. The National Council of State Housing Agencies (NCSHA) maintains a directory of state HFA’s at: http://www.ncsha.org/section.cfm/4/39/187

What kinds of lenders are doing this? How can I find a list of lenders who are providing these short-term loans?

Many state housing finance agencies are either running or sponsoring programs that will use a tax credit for a down payment. These programs often place a second lien on the home as collateral to secure the eventual repayment of the tax credit funds. Some state HFAs lend directly to home buyers while other HFAs work through networks of state-approved lenders.

In addition to state agencies, FHA-approved lenders may be offering to purchase first time home buyer’s tax credit in conjunction with an FHA-insured mortgage loan. Interested buyers should check with area lenders, home builders, or real estate agents for the names of participating lenders.

The Federal Housing Administration (FHA) also has an online tool to find FHA-approved lenders:  http://www.fhaoutreach.gov/FHALookup/

What types of loans qualify?

Any lender could offer a program that would permit a first-time home buyer to apply the tax credit to funds needed for a loan that is obtained in conjunction with a home purchase. At this time, however, only the Federal Housing Administration (FHA) has issued guidance regarding the monetization of the first time home buyer tax credit in conjunction with FHA-insured mortgage loans.

Can this short-term loan be applied to the minimum 3.5% down payment required by my FHA loan or is it only available above and beyond the initial down payment required?

If an FHA-approved lender or state housing finance agency is purchasing a tax credit and therefore making a short-term loan that is secured only by the repayment of the first-time home buyer tax credit, these funds cannot be applied to a down payment in lieu of the home buyer’s funds. A home buyer still has to provide the 3.5 percent down payment from his or her own funds. The money from the short-term loan can be used to pay closing costs and prepaid expenses, such as escrows for taxes, insurance, and community association assessments. These funds could also be used to make a larger down payment or to “buy down” the interest rate on the mortgage loan.

However, many HFA’s are offering tax credit loan programs that offer home buyers a short-term loan backed by the anticipated tax credit and secured by a second lien, which in general will be paid off after the homebuyer receives their income tax credit from the IRS. The proceeds of these loans may be used to satisfy the 3.5 percent down payment requirement for FHA-insured loans. The National Council of State Housing Agencies (NCSHA) maintains a list of such tax credit loan programs at: http://www.ncsha.org/section.cfm3/34/2920.

Who should I contact at my state housing finance agency to urge them to participate in this program if they don’t already do so? What should I say?

The best way to locate information about your state’s HFA is via the Internet. The National Council of State Housing Agencies (NCSHA) maintains a directory of state HFAs at http://www.ncsha.org/section.cfm/4/39/187

Most state HFA web sites include phone numbers and email addresses by which they can be contacted.

Is this an interest-free loan or are there fees associated with this type of short-term loan?

If a governmental agency, such as a state housing finance agency, or an FHA-approved lender purchases a first-time home buyer tax credit, they are allowed to charge no more than 2.5 percent of amount of the credit.

How can I tell if the short-term loan on the tax credit is being offered by a reputable company?

If the organization is a unit of state government, it is safe to say that it is reputable. Otherwise, a home buyer may want to check with their local Better Business Bureau or through a state or local government’s department of consumer affairs.

The $8000 First Time Home Buyer Tax Credit offer is due to expire on December 1, 2009 and to qualify, your home purchase must close on or before November 30^th.  So if you are a first time home buyer, GET ON THIS ASAP. If, however, you absolutely positively, will not be ready to buy a home by November, then there is still hope out there. There are currently five, count em FIVE, bills on the table in Washington that propose to extend and tweak the current tax credit bill.

The most publicized proposal, has been introduced by Johnny Isakson (R-GA) who is responsible for getting the current tax credit bill passed. This new bill, The Home Buyer Tax Credit Act of 2009, proposes a non-refundable tax credit up to $15,000 for ALL primary residence purchases-not just by first time home buyers. The bill would also remove income limits that had prevented individuals making more than $75,000 a year from claiming the credit. This bill would expire one year after it was enacted.

According to Luke Mullins of USNews.com, Isakson argues that the current tax incentive is insufficient because it misses a second set of buyers who are essential to a housing recovery. “We don’t have a recession in first time home-buyers,” a statement from the senator said. “We have a recession in the move-up market.” The legislation aims to convince these “move-up” buyers that, despite falling real estate prices and mounting job losses, now is the time to buy that larger house.

The second bill floating around the capital, introduced by one Kenny Marchant (R-TX) proposes to extend the existing $8000 tax credit to June 2010 and expand it to all primary resident home buyers. It also adds provisions for a tax credit of up to $3,000 for homeowners who refinance.

The other three bills are all virtually identical to each other, each one proposing an extension of the $8000 tax credit to June 2010 and expanding it to all primary resident homebuyers. I suppose that in Washington, it’s just a matter of getting your name on a bill and trying to be the one that gets the bill actually pushed through.

Isakson’s bill is easily the most aggressive of the lot, and it is not going to be easy to get a bill like that passed. But as Mark Zandi, Chief Economist at Moody’s Economy.com says, “My guess is that if the economy does continue to struggle…if these rates stay higher and the scenario that the recession will end this year is wrong, then there will be another stimulus package early next year, and [the expanded tax credit] could be a part of it.”

So we shall see what happens. But whatever  you do, don’t sit back and wait for one of these bills to get passed. Like I said, if you have the means to qualify now for the $8000 tax credit, do so.

By Andrew Brentan

This just in (well, maybe it was three days ago)! The San Diego County Fair, in Del Mar released a statement offering free admission to anyone who is unemployed (plus 1) on Monday, June 29^th.  ”We feel this Fair Stimulus Promotion would be a good way for people to come and enjoy everything the Fair has to offer,” said Fair General Manager Tim Fennell. “That evening’s grandstand show, Clint Black, is free with admission, other entertainment is free, and the exhibits are free. People can bring their lunch and store it at Guest Services. They can park for free at Horsepark and have an entire day at the Fair for no cost.”

The program, good only on Monday, June 29^th, requires showing an unemployment check at the Box Office and is good for two admissions. It’s a nice offer. Kind of awkward if you ask me to have to show an unemployment check at the ticket counter, but then again, I can’t think of a better way to show proof. So why not?

The San Diego County Fair is the largest annual event in San Diego County and the sixth largest fair in the United States, drawing more than 1.2 million visitors each year. The Fair will be open now through July 5, 2009. Gates open at 10 a.m. Saturday and Sunday; 11 a.m. weekdays. Gates close at 11 p.m. Friday and Saturday; 10 p.m. other nights. Admission is $13 for adults, $7 for ages 6-12 and 62 and older, and free for ages 5 and younger. For information, log onto the Fair web site at www.sdfair.com/fair.

Imagine if you will, a pleasant summer morning. You are out on your front porch getting details in order for the upcoming family reunion, to be held at the home that your father built back in the 50’s, just a few miles from where you now live. The home, though not currently occupied, remains a frequent place for family and close friends to stay and contains some of your family’s most precious heirlooms. Sipping on your coffee, the phone rings.

“Hello?”

“Yes, are you the owner of 11 Byrd Trail in Corrollton?”

“Why, yes, that was the home my father built. The home I grew up in. Who is this?”

“This is Larry Watts of Southern Environmental Services. I’m afraid there has been a mistake. That home was demolished yesterday.”

Al Byrd, of Carrollton, Georgia received what must have been a similar call last week, to be alerted to the fact that the house his father built; the house that still remained in the family was accidentally reduced to rubble along with everything inside. According to the local ABC News affiliate, “An Austin-based realty company, Forestar Group Inc., had contracted the demolition of a vacant one-story house at 3050 Highway 16 South, about 150 yards from Byrd’s house and on the opposite side of the road.”

I can’t even imagine how pissed I would be if that happened to me. How in the HELL does something like that happen???! Apparently, as ABC’s Sarah Netter reported, “Larry Watts told Byrd that “the crew that actually did the demolition had picked Byrd’s house to destroy based on GPS coordinates.” At this point, if I was Al Byrd, I would have just lost it. So tell me Larry, I’d say, when was the last time you identified which house was your friend’s house by using GPS coordinates? There are useful resources now-a-days for finding the precise home you’re looking, and they are much more reliable than Global Positioning Systems. They are called ADDRESSES!

Supposedly, the CFO of Forestar, Chris Nines told ABCNews.com that “his company gave Southern Environmental Services color photos and an address to work from and that he has no idea how they allegedly got GPS coordinates.” He then went on to say, “Certainly, we’re not happy about it and feel bad for Mr. Byrd.” Geee, that was nice of him to say. YOU JUST DESTROYED HIS HOUSE!  I mean, there was NOTHING left. One would think, that before you level a house, you’d at least have a quick peak inside, make sure there was nothing in there. One look inside and this wouldn’t have happened. And what about when the demolition began?! No one noticed that there was furniture and pictures being shattered and thrown about like shrapnel? It is infuriating to learn of such reckless irresponsibility. Byrd has obviously hired an attorney and compensation has yet to be determined. I think compensation should start with all the people involved lining up on the street so Al can slap them across the face one by one.

Unfortunately for all of us, accidents involving contractors are not that uncommon. Especially in a market that is inundated with foreclosures. Team Aguilar had one instance where they were helping a couple do a short sale on their home. As we all know, short sales take a long time and after a couple months of waiting, the couple had a knock at the door. There was a man saying that he had just bought their home at a foreclosure auction and he wanted to begin fixing the roof that week. The couple were so taken aback by this man’s certainty that he now owned their home that they believed him. They thought that somewhere along the line, the short sale wasn’t working and the bank foreclosed and just didn’t tell them. So they called Team Aguilar and due to the regular lack of communication between banks, asset managers, and real estate agents, even Team Aguilar wasn’t certain that the home hadn’t gone into foreclosure without their knowing. As it turns out, the guy who claimed he’d bought the home at the auction, had bought a similar home across the street. It’s scary to think that the couple were ready to move out of their home, and this guy was going to tear off their roof.

Thankfully, this accident was averted. But there is a responsibility we all have to keep an eye out for things going on in our neighborhoods. It is not nosey or uncalled for if you go inquire about what’s going on when you see some sort of construction going on, or ESPECIALLY if you see a demolition being prepped. Go over and check it out. Find out what’s going on, and if anything is a little fishy, don’t hesitate for one second to call the city and inquire. Every big job requires permits and the city will be able to tell you if permits were issued. If you’re a resident of San Diego and want to inquire about a project going on in your neighborhood, call the Neighborhood Code Compliance Department at (619) 236-5500. Don’t let someone’s home get accidentally destroyed just because a bunch of idiots have GPS and some bulldozers.

By Andrew Brentan

Some people say it is human nature, but I believe that it is only a small portion of humans whose nature is to take advantage of other people. It is most unfortunate, and often times mind boggling, but no matter what situation you find yourself in, there will always be someone trying to weasel you out of something. When the real estate market went into the gutter, the swindling scum adapted like a virus and found new ways to take advantage of people in desperate and/or unfamiliar situations. And so, my fellow honest, good natured humans, please take note of the following and make sure you know a thing or two about a thing or two before some shmuck tries to make you pay him/her for their “services”.

Loan Modification Scammers

When the government and banks decided it would be helpful to attempt to modify home mortgages to reduce the frightening increase in foreclosures, it was almost overnight that “Loan Modifying Specialists” came into our lives. . “Loan Modifying Specialist” is just a stupid way of saying they’re loan modifying broker, but nonetheless, they can be very helpful. Banks have been so overwhelmed with people applying for loan modifications, that they are brutally slow in the process and the specialists can help speed things up by gathering all the information that the banks would need and can first determine if you qualify for a loan mod, and if so, can help push it through the bank’s system.

But there have been “Loan Modifying Specialists” who have charged fees upfront for people to see if they do or do not qualify for and then, like Billy Joe and Bobby Sue, take the money and run. As a result of such instances occurring, the Department of Real Estate issued a Consumer Alert that states, “You must be very careful if you are asked to pay for any of these services in advance, whether in cash, check or by charging your credit card. First, California Civil Code Section 2945, which regulates “foreclosure consultants”, forbid anyone who falls under the definition of a “foreclosure consultant”, as well as a real estate licensee, from collecting any advance fees for these types of services if a Notice of Default has been recorded against your property.” There are exceptions to this advance payment warning though. Lawyers are exempt as well as brokers who have been approved by the DRE to charge advance fees.

To be certain, check out the DRE’s list of acceptable companies that are charging some sort of payment in advance as well as companies that have been accused of and/or have refrain orders against them:

Advance Fee Agreement Listing

Desist and Refrain Orders and/or Accusations for Loan Modification Activities

Fake Rentals

This scam was attempted recently with a property that my boss, Carlos Aguilar had listed. It was a bank owned property that Carlos was in charge of marketing and selling. As a part of all residential real estate marketing, the property is listed on the Multiple Listing Service (MLS), which allows other agents to view the property. A feature of the MLS provides all agents with access to the lock box code for that property so that they can show the property to a client without the listing agent needing to be present. In other words, the listing agent keeps a key to the property in a combination lock box on the property and if someone has access to the MLS, they also have access to the keys in the lock box. 

In this particular instance, an agent who had access to the MLS put an add in Craigslist saying that they had a property for rent. The property, however, was not for rent. It was the bank owned property that was being listed by Team Aguilar. But this person decided that since they had access to the lock box, they could show the property as if they were the rental agent and perhaps get someone to put down a security deposit before they were gone and never heard from again. Thankfully, we were alerted to this scam by a responsible agent who saw that the listing was also listed on Craigslist as a rental and the authorities were notified.

How is this scam avoidable? It can be difficult to detect. If you are responding to a rental ad on Craigslist, before you sign a lease or put down a security deposit, check with a local and respectable real estate agent. Have them check the MLS and make sure the property is not for sale. Or you can check with a local title company and look at the ownership history.

Former Landlord Still Thinks Rent is Due

Like I’ve said before, if you are a renter and the property that you are living in has been foreclosed on, your landlord has no right to ask for your rent. After all, they no longer own that property; the bank does. I have heard tons of stories about how tenants are verbally attacked by their former landlords demanding that they pay their rent, when in actuality, the landlord no longer owns the property. It can be a rough situation, especially if in the past the tenants had a good relationship with the landlord. But despite how much they yell, beg, or plead, saying that the bank is wrong, the tenant does not owe a dime. Just make sure that the property has definitely gone into foreclosure before you hold up on making the payments.

By Andrew Brentan

My boss, Carlos Aguilar, real estate agent extraordinaire (he pays me to say things like that), receives countless emails and calls from renters whose landlord’s are being foreclosed upon, and they are left in the dark, trying to figure out what they need to do. One such email he recently received was from a woman who found out her landlord was being foreclosed on when the Home Owners Association for the complex called her and told her. And since the landlord was no longer paying her HOA fees, the HOA requested that the she pay THEM her rent.

I can imagine that it’s quite unnerving when out of the blue, you get a call from someone you don’t know telling you all this. It’s the kind of call where you hang up and say, “What the F*CK?” Then you try and contact someone…anyone who might have some information on what’s going on, and no one can tell you a thing. So, if you are a renter and your landlord is being foreclosed on, let me help ease your mind. This article is about what will happen and what you need to do.

Finding Out

A few days after the Trustee Sale (foreclosure) occurs, someone will be knocking at your door inquiring about whom you are and the names of any other occupants. This person represents the bank that now owns the property you are occupying. If you are not home, they will post a notice on the door asking you to contact them. This notice may sound harsh, and may even sound like an eviction notice, but it is not. It is simply an initial attempt to impress upon you the seriousness of the situation and to make you aware that the property is now owned by a bank and their purpose is to gather information.  The new owners need to know who you are and what your intentions are. For the most part, they will want the property to be vacant as quickly as possible. The one exception to that is Fannie Mae, who, if they are the new owners, may give the option to some tenants to continue to rent the property. But almost all other lenders are not willing to rent the property and will assign it to an eviction attorney to begin the eviction process.

Eviction Notice

The eviction attorney (or someone representing them) will present you with a notice alerting you that you have 90 days to vacate the property. Depending on how fast the eviction attorney begins the case, this notice may not come for weeks (sometimes even up to a month) after the house has already been foreclosed on. NOTE: Despite what your former owner’s HOA tells you, you DO NOT owe them any money.

Cash for Keys

The Bank, AKA the new owner, will usually offer you cash to entice you to move out and waive the 90 day eviction period. The sooner you move out, the more money the bank is willing to offer you to help with your relocation costs. Typically, if you agree to move out in the first 30 days, the bank may be willing to pay you a fee of $3000-$4000. If you move out within 60 days, this amount is reduced substantially, and if you move out towards the end of the 90 days, you most likely will not be offered any money. The reason the banks are willing to offer you a relocation fee is to offset the cost of having to pay legal fees to have you evicted. And the sooner you are out of the property, the sooner they can put it on the market for sale. And they are EAGER to sell those properties.

Whatever you do, don’t play dumb and pretend like nothing is happening (see The Life and Time of an REO Field Agent: Part III). Talk to the bank, let them know what you intend to do. Will you take the full 90 days to find a new place and move? Or will you take the cash for keys and move out sooner? Depending on how much the banks offer you in the form of cash for keys, it might make sense to get out fast if you are able. If the amount is minimal, it makes sense to use those 90 days of living rent free to search for a new place.

Any way you slice it, it’s not your fault that your landlord got foreclosed on. Don’t take the eviction as a personal attack. It is without a doubt a large inconvenience, but the sooner you address the situation, the sooner you’ll be living in a new place. And who knows, maybe you will even make out with a little extra cash in the process.

By Andrew Brentan

Well folks, I can’t keep silent anymore. I’ve been biting my lip, avoiding the topic because it is SO RIDICULOUS but I have now reached my boiling point and I have to take the time today to remark on the issue of the La Jolla “Children’s Pool”. It seems that the Pacific Harbor Seal has found the perfect way to expose just how completely nuts we humans can be and how ineffective our judicial system can be at times.

For those unfamiliar with the situation, here’s a brief synopsis:

In 1931, the State of California conveyed this beach area of La Jolla to the City of San Diego.

Ellen Browning Scripps, then donated money to build a wall that slightly enclosed the beach so that children could swim there.

Harbor Seals, that have been sunning themselves on the rocks that the wall was constructed on for 100’s of years, found that the beach within the confines of the wall was a good spot too, so they became year round users of the beach.

About 15-20 years ago, a small number of nostalgic folks in La Jolla began lobbying to get rid of the seals at that beach because it was supposed to be a swimming beach for children.

This issue has been in and out of courts for YEARS now, and just last week,  San Diego Superior Cort Judge Yuri Hofmann ordered the city to remove the seals from the beach. However, a federal court still has a restraining order against the city of San Diego to remove the seals, and so, Judge Hofmann’s ruling is still not final.

So here we are today…with what seems like 98% of the people of San Diego asking why this is even an issue?! And the other 2% whining and pleading and making sure that this area remains as it was “originally intended” as a children’s swimming area.

I do not need to get into the reason’s that this issue has been help up in the court system for over a decade. But it bears importance for me to harp on the fact that if we all just had a little more common sense, I wouldn’t be wasting my time writing about this. It is unfathomable to me that people are fighting so hard to preserve this area as a swimming spot for children when San Diego is home to over 60 miles of coastline. Not only that, but there are swim-able areas just a few hundred yards from this beach!

The one place in San Diego where wild harbor seals come to rest, and we can’t just let them kick it there in peace? Who are you people that are arguing to have them removed? What is your line of reasoning? It DOESN’T MAKE SENSE! Show me one kid that would want to go swimming at that beach as opposed to taking a dip at the cove 2 hundred yards to the north. ONE KID! You won’t find one. You now why? Because kids LOVE seeing those seals. Jim Carretta of the San Diego News Network adds another point saying that “[Ellen Browning] Scripps was responsible for the creation of Children’s Pool in the 1930s as a place where young children could safely swim. Today, I don’t think this argument that the children of La Jolla lack a safe place to swim stands up in the presence of the sandy expanse of La Jolla Shores beach”. I agree Jim, I don’t think that’s a valid argument at all.

And forget the fact that it’s a full blown rarity for wild harbor seals to have found a rookery in an urban environment. Or that the other nearest rookery for harbor seals is at Point Mugu, near Ventura, which isn’t available to the public because it’s on military property. And forget the fact that the people against the seals have proposed a $700,000(!!!!) plan to chase away the seals by installing speakers that have the sound of a dog barking from sunrise to sunset (possibly the most absurd solution I’ve ever heard in MY LIFE). And forget that everything involved in this dispute and what is entailed to get rid of the seals is not what our completely broke city and state needs to be spending their money on.

The real issue here is that those that want to preserve this area as a children’s swimming pool are stuck in a world that no longer exists and this legal battle is the only tangible thing they have to hold on to the La Jolla of their past. I am sorry that you have fond memories of that area as a child and that seals have now come to rest there. I’m sorry that perhaps these seals are bringing more tourists than you might like to your beautiful town and boosting business as well as traffic. And I’m sorry that some of you who are privileged enough to live that close to the ocean don’t love the smell that the seals bring with them. But I am not sorry for calling you all nuts. Whatever your reasons are for trying to get rid of the seals, they are not in the best interest of anyone but yourselves. And if, by some horrible flaw in our legal system you win this battle, I wonder how long it would take before you began longing for the return of that pungent smell of harbor seals…anything to get rid of those damn barking dogs!    

For more information on the interpretations of law and this matter in general, check out the following sites:

http://www.seashepherd.org/news-and-media/editorial-041020-1.html

http://childrenspool.org/

http://www.lajollafriendsoftheseals.org/

http://www.360cities.net/image/la-jolla-sea-wall-children-s-pool-and-seals

By Andrew Brentan

As summer approaches…well hell, Memorial Day Weekend was this past weekend so……Now that summer is here, we San Diego residents find ourselves in a formidable “Level 2″ drought alert condition. For residents this means that there will be rate hikes on excess water use, limits on outdoor watering, and mandates to promptly repair leaks. But this drought brings to light an ever-increasing problem and the need for a new era of water restrictions and social responsibility.

In 2001, California passed a bill that, according to Hoa Quach the political writer for the San Diego News Network, that “forces developers to show that the Urban Water Management Plan, which is completed in five-year cycles for a 20-year outlook, shows a sufficient amount of water is available for the proposed project.” Much more effective, in my opinion, is the part of the bill that “requires projects over 500 units to create an alternative water supply.” Hoa Quach interviewed Tom Sudberry or Sudberry Properties whose company is developing a 4780 unit multi-use development called Quarry Falls near Qualcomm Stadium. That development, per the requirement of 2001’s senate bill, will have its own water treatment plant. According to Tom Sudberry, “We’ll be able to create about 250,000 gallons of water a day, enough water to irrigate all of the landscaping of the entire project.” In addition, sub-meters will be installed for each unit allowing the tenant to keep tabs on their own water use.

It’s good to see some real solutions being put into action on new developments. But a big step to improving our city’s water conservation would be to require sub-meters to be placed in all new developments. However, according to Marco Sessa, Sudberry VP, “regardless of new buildings having sub-meters or not, older homes use more water than new buildings as older homes may, sometimes have leaks that use a vast [amount] of our H20. One wonders whether more effort should be placed into retro-fitting some of the older homes.” Well Marco, brings up a good point. But in my opinion, more effort should first be put forth towards permanently expanding water restrictions not just to developers, but to everyone, just as they have done now that we’re at a Level 2 Drought Alert. I couldn’t believe how much my condo complex watered the lawns every day until the alert came into action. I like a green lawn as much as the next guy, but no one needs to water their lawn twice a day EVERY DAY!

So, in the spirit of our Level 2 times, I am providing a list, courtesy of Better Homes And Gardens, of things you can do to help reduce the amount of water you use, and to help Southern California face our water shortage head on:

Check all pipes, hoses, and faucets in the house for leaks. According to the American Water Works Association, a dripping tap can waste 5,000 gallons of water in a year.

Check toiliets for leaks. put a little food coloring in the tank. If it appears in the bowl without flushing, it’s leaking and  can waste up to 4,000 gallons of water in a year.

Take shorter showers as they use two or three “buckets” of water every minute; limit baths as they use two-and-a-half times as much water on average as a shower.

Turn on your dishwasher or washing machine only when it’s full. A dishwasher uses only about 9-12 gallons of water while hand-washing dishes can use up to 20 gallons.

Don’t run the tap when brushing your teeth; use a cup of water to rinse.

Use a trigger hose when washing the car.

Use a broom to clean your driveway, not your hose.

Install water-saving shower heads and low flow faucets.

Consider buying a rain barrel to capture water for shrubs and lawns.

Cover the swimming pool on hot days and at nights as pools can lose up to 50 gallons of  water in a single day through evaporation.

Don’t use your toilet as a disposal unit by flushing a used tissue or other garbage. A single flush can use as much as seven-to-ten gallons of water depending on your resevoir.

Keep a container of drinking water in the fridge. Running the tap to cool water can waste up to three gallons per minute.

By Andrew Brentan

It was the final day that I was following Cory McGilvery, REO Field Agent Extraordinaire, on his daily rounds to bank owned properties. We were on our way to a property to meet our boss, Carlos Aguilar, a locksmith, and the sheriff’s department to evict a tenant.

The tenant lived at a property Cory and I had visited the prior week. The property actually had two separate living spaces: The main house in the front, and attached to the garage in the back, was a loft type 1 bedroom, 1 bath, 1 story apartment. The owners had their home foreclosed on, cooperated in a cash for keys exchange, and vacated the premises in a reasonable time-frame. When the property came under the ownership of the bank and Cory was sent to inspect the property, he noticed that someone still seemed to be living in the separate living space attached to the garage. So, as part of his duties, he left a note on the door alerting the tenant that the owners had foreclosed and he had 60 days (it is now 90 days) to vacate the property. Week after week Cory came to check on the place and could tell by looking at the gas and electric meter that someone was definitely still living there, but no one was ever home, nor did anyone ever respond to the notices that he continued to leave on the door.

So when Cory and I went to inspect this property one last time before the 60 days were up we weren’t surprised when no one answered the door. We left another notice and on our way back to the car were caught by surprise by a man on his cell phone in the driveway who asked if he could help us with something. The man claimed to be on the phone with the tenant and as Cory explained who he was and why he had been coming by leaving notices for the past 8 weeks, the man kept asking his friend on the phone if he was hearing all of that. Cory told him to tell his friend to call him as soon as he can because he has to be out by next week. And we left.

Driving away, I asked Cory what the chances were that the man’s friend would actually call. Cory laughed and said, “I bet you a $100 that that WAS the tenant. Never believe anything anyone tells you…especially when you’re there to evict them.” Good point, I thought, and why would he call? Afterall, he’s been living rent free for three months. In theory, he’s supposed to be paying the bank his rent, but that never happens.

As we waited for the sheriff’s department to arrive, we saw the tenant in the back frantically throwing away his stuff and packing. Afterall, he knew we were coming (the sheriff’s department is responsible for posting a notice at least 24 hours in advance, stating that the courts have approved an eviction and then lists the date and time that they will be returning to proceed with the eviction). Sure enough the guy rushing to get his stuff cleaned out was the same person on his phone claiming to be the tenant’s friend the week before.

Upon their arrival, we followed the officers to the back and they presented the man with his eviction papers. He assured them that he would just need a few more minutes to finish, even though the place was still a complete mess. As the locksmith geared up his drill bit to change the locks on the place, an officer took a call on his radio, and minutes later, he alerted the man being evicted that there was a warrant out for his arrest. As it turns out, it’s easier to get away with not paying your rent then it is to get away with not paying you traffic tickets. So, what did you do today? It was great! First I got evicted and then escorted to jail in handcuffs for outstanding speeding ticket! Wooohoo! What a day!

Well there you have it folks. Life as an REO Field Agent isn’t the most glamorous work, but it can open up one’s eyes to some things that you might not see every day. And it will certainly make you appreciate your stable living situation a whole lot more. And so, while Cory doesn’t wake up every morning thrilled to go do his property inspections, he leaves his house, camera in hand, knowing that today he might see something completely strange and unexpected. And that makes his job something he’s more than willing to do for now.

By Andrew Brentan

In response to a comment left on “The Life and Times of An REO Field Agent: Part 1“, I have concluded that it is important for me to delve into the Asset Manager/Listing Agent relationship that takes place when selling bank owned properties (You see? We’re here for our readers :-D  ).To better understand the life and times of an REO field agent, we must take a look into how real estate agents handle the initial property assignments, and then how they market those properties in accordance with the bank and asset manager’s guidelines.

As I covered in the previous blog, the banks who own the properties hire asset management companies to do just that: manage the enormous of amount of “troubled” assets or homes that they now own due to foreclosure. The asset managers are responsible for hiring real estate agents to prepare and sell the property. The following are typical of the procedures required of the real estate agents by the asset managers:

PRE MARKETING PROCEDURES:

Agent Approval: First, the agent must obviously get approved by the asset manager. This entails an application package that includes all tax information, insurance, licenses, etc..

New Assignment: When the asset manager receives a new property from the bank, they send notice to the agent asking to accept or reject the listing.

Reporting Occupancy: If accepted, the agent must report back on the number of units, the occupancy status, and a personal inspection of the property within 24 hours. A checklist of damages must be completed within two days.

Evictions: Like I covered in the last blog, the agent must visit the property at least once a week to check on the status of occupancy until the eviction is complete.

Cash for Keys: The Agent is responsible for offering cash for keys to the occupants. Cory said he’s seen offers ranging from a couple thousand dollars to tens of thousands of dollars.

Initial Valuations: The listing agent must provide a Broker Price Opinion on the property which serves notice to the asset manager that the property is secured and ready to be marketed. This also provides the asset managers and the banks with their first glimpse of what the property should be listed for.

Now, in regards to the comment on the last blog, “Are there rules that govern how these homes are marketed or do they sometimes get sold by a Realtor to his investor without ever getting to market?”

The “rules” of how a property is to be marketed are outlined clearly in the listing agreement between the bank and the agent (and issued by the asset manager). The agreement includes a requirement to submit the MLS sheet, the marketing description, and photos to be placed on the MLS for asset manager approval.

Unfortunately, there are instances where a Realtor will weasel their way around and limit the marketing done on a property so that they can sell to their own client; Especially in California where dual agency is legal. This is why asset managers are responsible for keeping tabs on their agents, and banks on their asset managers. To a large extent, the agent must build up a trustworthy relationship with their asset managers because they will not hesitate to cease assigning tasks to the agent. To help ensure that the properties are being marketed and fully exposed to the public, agents are required to provide updated Broker Price Opinions which entail updated MLS listings. In addition, all offers submitted to the agent must be reported to the asset manager and they will respond to the offer within in one business day.

Lastly, regarding another part of the comment from last blog, “I drove by and looked at a bank owned home last week. My client wanted to make an offer but the Realtor said it had not been priced yet and we could not even get in the door.” As mentioned in the Pre-Marketing Procedures, there is a lot that goes into prepping the house for marketing, and often, a lot of the prepping entails providing all the information to the asset managers. Therefore, if that home hadn’t even been priced yet, that agent wouldn’t be able to submit offers to the asset manager.

Ohhhhhh, what a tangled web they weave. Asset management is quite the bureaucracy.

I’m happy to address any other questions for this blog topic or any others for that matter. As mentioned in the previous blog, stay tuned for the conclusion of The Life and Times of an REO Field Agent as we get a first hand glimpse at an eviction and the start of what turned out to be a super shitty day for that tenant.

By Andrew Brentan