Monday, December 17, 2007

CA COURT STRIKES DOWN BOND REQUIREMENT FOR HOME EQUITY SALES CONTRACT

Monday, December 17, 2007
Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS®

CA COURT STRIKES DOWN BOND REQUIREMENT FOR HOME EQUITY SALES CONTRACT

The bond requirement for buyers' agent under the home equity sales contract law is unconstitutionally vague and unenforceable. That was the decision of a recent appellate case Schweitzer v. Westminster Investments, 2007 WL 4340853 (filed December 13, 2007).This case involved a homeowner who sued to reclaim real property that he voluntarily sold to an investor the day before a scheduled foreclosure sale. That sales agreement fell within the scope of the home equity sales contract law which has certain requirements for investors who buy owner-occupied residential property of one-to-four-units after a notice of default has been filed. One of the statutory requirements is for the buyer's agent to be bonded by an admitted insurer in an amount equal to twice the fair market value of the subject property.The plaintiff in this case tried to reclaim the property by arguing that his sales contract was voidable because the buyer's agent failed to comply with the bond requirement. The trial court agreed and awarded the title of the property to the plaintiff. The buyer appealed that decision.On appeal, C.A.R. filed an amicus curiae or friend of the court brief supporting the buyer's position.

The appellate court took judicial notice of C.A.R.'s Legal Q&A advising REALTORS® we are unaware of any insurer currently offering the requisitebond. In striking down the bond requirement, the court ruled as follows: "[The bond requirement] provides no guidance on the amount, the obligee, the beneficiaries, the terms or conditions of the bond, the delivery and acceptance requirements, or the enforcement mechanisms of the required bond. Instead, persons of ordinary intelligence must necessarily guess at what the statute requires for them to comply with its obligations. Under these circumstances, the bond requirement of section 1695.17 [of the California Civil Code] is void for vagueness under the due process clause and may not be enforced."The appellate court, however, pointed out that the other requirements of home equity sales contract law are valid.Real estate practitioners involved in home equity sales contracts are encouraged to maintain status quo for the time being, and to continue using C.A.R.'s standard-form Notice of Default Purchase Agreement (NODPA) on applicable transactions where a notice of default has been filed against an owner-occupied residential property of one-to-four units and the buyer is an investor.

The Schweitzer decision does not become final and controlling authority on lower courts until January 14, 2008, and the plaintiff's deadline to file a petition for review to the California Supreme Court is ten days thereafter. If the Supreme Court grants review, this opinion is not binding until the Supreme Court rules on the case.

Wednesday, April 11, 2007

February 2007 Foreclosure Statistics In

Florida foreclosures lead nationState's filings were way up in February over last year. California and Arizona also showing strain.

By Les Christie, CNNMoney.com staff writer.
March 26 2007: 6:04 AM EDT

NEW YORK (CNNMoney.com) -- The once red-hot Florida housing market leads the nation in delinquencies, according to the latest report on foreclosure filings from RealtyTrac, an online marketer of foreclosure properties.

There were more than 19,144 properties in some stage of foreclosure in February in the Sunshine State, up 63.5 percent from January and nearly double the number a year earlier. Nationally, foreclosure filings fell in February, down 4 percent from January. They were, however, up 12 percent from February 2006, and were running at a rate that would project into a 33 percent increase for the year, according to James Saccacio, RealtyTrac's CEO.

Many housing markets that until a year or so ago were recording big gains in home prices are now racking up high delinquency levels. With billions of dollars worth of subprime ARM loans scheduled to reset this year, the situation could get worse.

The RealyTrac report covers several stages of foreclosures including: notices of default; notices of trustee sale; notices of foreclosure sale; and real estate owned, that is, properties already foreclosed on and repurchased by lenders.

In addition to Florida, other once-hot markets showing weakness include California, where filings shot up nearly 79 percent compared with a year ago, and Nevada, which for the second straight month had the nation's highest foreclosure rate relative to the number of households.
Nevada's 3,124 foreclosure filings during February, a rise of 77 percent from a year earlier, gave it a rate of one filing for every 278 households - more than three times the national average.
In Las Vegas, one of the fastest growing large cities in the United States, an overbuilding excess of the past few years has left the area with a large inventory of vacant new houses, which has depressed sales of existing homes.

Out-of-state speculators had invested heavily in the Vegas market during the boom years through 2005 and many may have now abandoned their holdings, allowing a large number of them to slip into foreclosure.

Arizona markets, such as Phoenix, may be experiencing a similar trend. Filings there totaled one for every 703 households and have risen 44.1 percent since last February.

Colorado, at one filing for every 345 households, had the second highest rate in the nation. Other states with high foreclosure rates include Georgia (one for every 424 households), Michigan (one per 455), Ohio (one per 640), Tennessee (one per 639) and Texas (one per 650).

For the Midwestern states, however, the news was actually an improvement on the recent numbers; filings were down from January and year ago levels for both Michigan (down 19.6 percent compared with January and 10.2 percent from last February) and Ohio (12.1 percent and 24.3 percent).

Very low default markets were led by Vermont, which had just one foreclosure blemish - a notice of default - on an otherwise spotless record. Other low foreclosure states included Maine (one per 72,432 households), West Virginia (one per 27,246) and North Dakota (one per 16,093).

U.S. Foreclosure Market Statistics by State – Feb 2007

US 130,786 (1 in 884 households)
FL 19,144 (1 in 382 households)
CA 16,273 (1 in 751 households)
TX 12,386 (1 in 650 households)
MI 9,287 (1 in 455 households)
OH 7,478 (1 in 640 households)
GA 7,294 (1 in 424 households)
IL 6,622 (1 in 739 households)


For the complete article visit:
http://money.cnn.com/2007/03/23/real_estate/february_foreclosure_fall/index.htm

Friday, January 19, 2007

US Migration

Where'd Everybody Go?
by Broderick Perkins
Realty Times

January 16, 2007

Americans were more likely to pull up roots in the Northeast and across the Rust Belt and put down stakes in the West and Southwest last year, according to a migration study by the nation's largest mover.

St. Louis, MO-based United Van Lines' "2006 Migration Study" of 227,254 interstate household moves in the 48 contiguous states and Washington, D.C. reveals a definitive migration pattern in the nation -- at least among those who used the mover's service.

For more on this article visit the publisher: http://realtytimes.com/rtcpages/20070116_everybodygo.htm

Thursday, January 18, 2007

New Stats -- New York and New Jersey

CNN 01/17/2007

New York 4,690 in December
1 in 1,637 homes
+ 5.0% over last year
"4.7% of all US foreclosures were in NY"


New Jersey 3,865 in December
1 in 856 homes
+44.76% over last year

CNN 01/17/2007

"Doug Duncan, chief economist for the Mortgage Bankers Association, estimates that $500 billion to $800 billion in loans outstanding went to borrowers who will face difficulties."

"Americans continue having difficulties paying their mortgage obligations, with December foreclosure rates above the 100,000 mark for the fifth straight month."

NY TIMES 12/20/06

"About one in five subprime mortgages made in the last two years are likely to go into foreclosure, according to a report released yesterday, ending the dream of homeownership for millions of Americans."

"1.1 million homeowners who took out subprime loans in the last two years will lose their houses in the next few years."

"2.2 million borrowers who took subprime loans from 1998 to 2006 are likely to lose their homes."

"The highest default rates are expected to be in cities in California, Nevada, Michigan and New Jersey as well as Washington, D.C."

Read more at:
http://money.cnn.com/2007/01/16/real_estate/December_foreclosures_up_from_2005/index.htm
http://homefinance.nytimes.com/nyt/article/news/2006.12.20.20home/

About Me

Philadelphia, PA, United States
Bob Diamond is a practicing real estate attorney, real estate developer, and published author of three books on foreclosure investing. You may be familiar with Bob from his appearances on FOX, NBC, or CNBC or on his real estate radio show. Inside the investor world, Bob is known as the ‘guru’s guru’ and teaches advanced real estate investing techniques including buying discounted liens, notes and judgments, buying out of bankruptcy, short sales, taking under and subject to, straight equity purchases, multi-units and even condo conversions.