A Bill of Rights...For Homeowners?

Hi Folks,
   I hope everyone had a great weekend, and welcome back!

   It had to happen. We knew it was coming. We didn't know how, or when, however, we do know what it is, from whom, and why! It started with our "Bill of Rights" here in the United States a few hundred years back. Fast forward those few hundred years, and we have seen the creation of a different Bill of Rights for Airline Passengers. And on January 1, 2013, the "Homeowner Bill of Rights" takes effect in the state of California.

   The legislation was actually passed in July, however, this "landmark law", as it's been referred to, is making a big splash from coast-to-coast. Emerging from the dust and ashes of the "Robosigning" scandal, as well as the vulnerability of homeowners during the mortgage modification and foreclosure process, this Bill of Rights is actually a "series of bills enacted to protect California homeowners", to which the California Attorney General Kamala Harris said, "will give struggling homeowners a fighting shot to keep their home" (as per a recent story by Barry Paperno on Credit.com).

   In terms of lenders and loan servicers, the Bill of Rights imposes requirements on them, such as prohibiting “dual track” foreclosures (simultaneous foreclosure process and loan modification negotiation with the servicer), guaranteeing a single point of contact from the lender/servicer "for a borrower with a loan modification application pending", writes Paperno. Additionally, banks will need to be much clearer in explaining a rejected loan modification to a borrower, and similarly, allows borrowers to sue lenders for "significant, material violations” of the law, writes Paperno. The Robosigning fiasco was also addressed in the requirement that servicers "document their right to foreclose and imposes fines of $7,500 per loan on fraudulently signed mortgage documents".

   These sound like some great components, however, as Paperno writes, consumer advocate critics of the bill have charged that "only first-lien mortgages for owner-occupants apply", that by first taking effect in 2013, "hundreds of thousands of troubled homeowners won’t benefit from these protections". Additionally, additional criticism included the lack of obligation by servicers to "consider applications for loan modifications or appeals before January 1, 2013."

   "Opposition to the Homeowner Bill of Rights was mounted by the large banks, the California Chamber of Commerce, title companies, real estate agents, trustees and securities industry representatives", writes Paperno.

   There may be some minor drawbacks, and there may be some tweaks needed, however, this looks like a solid piece of legislation in a state that has been pummeled by Foreclosures, and these new laws could have been quite helpful all along. Will they start sprouting up in other State Legislatures? I certainly believe so, but help is needed now in states such as Arizona, Nevada, Florida, and many more. How soon do you think these and the other states will see light at the end of the tunnel?

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Have a Great Week, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
Rent to Own Homes and Real Estate Blog for HomeRun Homes: http://blogging.lease2buy.com
HomeRun Homes Websites: http://www.lease2buy.com and http://www.homerunhomes.com


TAGS: #Homeowners #BillofRights #California #Robosigning #mortgagemodification #foreclosureprocess #loanservicer #lender #borrower #firstlien

UPDATED: Private Money...Any Available For Real Estate Deals?

Hi Folks,


   Happy Mid-Week to everyone, and welcome back.

   When we posted on the topic, "Best Markets For Commercial Real Estate Investing", we had a few requests to cover the topic of "Private Money", so as per your request, that is our topic for today!

   We spoke with 3 respected figures in the field to gauge their feeling on the topic. All 3 of them seem to agree that there is private money out there that is available for Real Estate deals, and we present their viewpoints below.

   Alfred Miller, President, Private Lending Solutions, LLC, states that, "Capital isn't scarce; vision is. There is tons of money available for real estate deals.", but says that he wants his, "money invested in solid deals (diamond in the rough)!" and the deals can be either residential or commercial.

   Vernon Martin, a commercial appraiser with American Property Research, who specializes in serving private lenders (96% of his work is for private lenders), says that, "There's no shortage of money waiting to be lent, but there also seems to be a shortage of credit-worthy deals.", which is similar to what Miller has said. "Most loan applications to private lenders are for refinancing deals which are already over leveraged, so there is no way the borrower can pay off existing debt at a safe loan-to-value ratio", says Martin.

   Martin also says that private lenders are, "very interested in financing REO purchases by new investors.", and provides an example, where last week, he worked "on a $35 million construction loan that is being purchased for only $5.2 million. The private lender feels safe in lending $2.8 million. The difference is that loans can be underwritten at today's market values without any disappointment to the borrowers.". Martin points out that some private lenders are looking overseas for deals in potentially "stronger markets" (i.e., "Canada, Australia, Fiji, Barbados, South Africa, Mexico, Costa Rica and Jamaica.")

   Dennis P. Fassett, a Real Estate Investor who interacts with many sources of private money, says that, "there's quite a bit of private money out there. But it's gotten more difficult to get to, despite what the late night gurus want people to believe.", which he attributes to, "the stock market crash and Bernie Madoff scandal". The impact of the crash and the scandal had a few ripple effect impacts on private lending, Fassett says, such as, "with people out of the market, there is a lot more money on the sidelines looking for a reasonable rate of return", and "the Bernie Madoff scandal has made a lot of people quite wary of where they invest their money.",and says that, it's ironic that the scandal has also helped make local real estate investing more attractive, because the investor can go drive by the asset that they either lent against or have an equity piece of."

   Fassett provides a hint into the mentality of the private investors. He finds that, "the private investors that I deal with are looking for a track record for one and a sense of stability by me as well. I'm fortunate that I have couple of dozen deals and now own or control 54 rental units in nice areas that are all doing well. I had one investor tell me that one of the reasons that he invests with me is because I have a whole lot to lose if I screw up in terms of reputation in the community.", and he continues to say that he's also finding that, "the direct approach to getting private money doesn't work anymore, as people are getting pitched to death about everything under the sun, so I have switched to an oblique approach that focuses on drawing people into being interested in my business to the point where they ask questions and close themselves."

   As the recession lingers on, Michael Stark, a licensed real estate broker in California, is clear about the future. "The greatest transfer of wealth since the Depression is underway.". Where this will ultimately channel the private funds is yet to be seen, however, we all hope and pray that it stokes our housing market and the economy. Comments are welcomed !

Have a Great Day, and Happy Rent-to-Owning !
HomeRun Homes Blog http://blogging.lease2buy.com
HomeRun Homes Website http://www.lease2buy.com





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