Fran Gatti - Realtor®, RDCPro®, Crescent City CA Real Estate

I wrote about my travails with a credit card several months ago. My post hit a nerve and was featured. There were a lot of comments by card holders who had been similarly abused.

It looks as though relief for wary card holders may be on the way.

Just released:

Congress passed a bill that SHOULD offer relief from out of control credit card issuers who are trying to make up for a drop in profits on the backs of customers who faithfully pay their cards on time.

What the bill does:

-- Credit card firms are generally barred from boosting interest rates on existing balances unless the account is 60 days overdue. Rate increases for new purchases require a 45-day notice.

-- Customers under 21 cannot have a card unless a parent or other responsible party signs on. (No more abusing young adults).

-- No fees for a charge that exceeds a credit limit without prior say-so from card holder.

-- Rates and terms must be clearly worded and publicly posted.

-- Bills must be sent 21 days before the due date.

-- Bills must state the time and total interest needed to pay off the balance if only monthly minimum payments are made.

-- Interest rates can't be raised in the first year after an account is opened.

If you have suffered credit card issuer abuse, you may want to see if the issuer is more malleable now that Congress is getting involved. You may be able to get any abuses that have been heaped on you, reversed. It's certainly worth a try. Good luck.

Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, announced today at an address to several thousand REALTORS that the Federal Housing Administration is going to allow first time home buyers to use their $8000 federal tax credit as a down payment for the purchase of their home (Woo hoo).

Secretary Donovan said that important changes, which the National Association of Realtors(R) has been calling for, will help consumers purchase a home. "We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a downpayment," Donovan said. According to Donovan, the FHA's approved lenders will be permitted to "monetize" the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.

What constitutes a "first time home buyer" for FHA's purposes?

A first-time homebuyer is an individual who meets any one of the following criteria:

	An individual who has had no ownership in a principal residence during the 3-year period ending on the date of purchase of the property. This includes a spouse (if either meets the above test, they are considered first-time homebuyers.
	A single parent who has only owned with a former spouse while married.
	An individual who is a displaced homemaker and has only owned with a spouse.
	An individual who has only owned a principal residence not permanently affixed to a permanent foundation in accordance with applicable regulations.
	An individual who has only owned a property that was not in compliance with State, local or model building codes and which cannot be brought into compliance for less than the cost of constructing a permanent structure.

If you meet one of these guidelines and thought you were out of the housing market because you lack a down payment, the Department of Housings new policy may get you in the game. Call me for a referral to a lender who is experienced with FHA financing.

There is also a $10,000 tax credit available for NEW HOME purchases in California. You do not have to meet first time home buyer criteria for this tax credit, but you do have to purchase a new home, which is a home that has never been lived in. Consult your tax professional for more information.

The Crescent City/Del Norte County Real Estate Market Report for April 2009 - Improving.

I was really upbeat when I sat down to write this report, however when I pulled up the number of sold residential listings for April of 2008, I realized sales have definitely dropped off and we have a way to go before the market reaches that level again (April 2009 is 42% lower than April 2008).

My spirits were lifted for the upper end home buyers, though. Although homes in the upper end price range (I'm calling that $300,000 and up at this point) aren't flying off the MLS, at least we are seeing some movement and that should be encouraging for upper end homeowners who need to sell.

The current absorption rate is 27 months, which is abysmal. The absorption rate is how long it would take to sell the current inventory at at the current rate of 10 homes sales a month (Aprils number of sales).

Look at the stats for homeowners that have a home to sell under $200,000...Wow! That is the segment of the market that is moving and no wonder. 22% of current pending sales are REO's or distress sales such as bankruptcy or short sales. Banks are putting foreclosed listings on the market at way below market price, sometimes 60% or more. One new listing that came on the MLS on Saturday, had two offers this morning. Those type of listings are bringing down home values for the surrounding homes (and entire market) and foreclosures are not through by any means.

Prices will continue to fall until the foreclosures slow to a trickle and hopefully stop. Banks are cooperating more with loan modifications and a note about that: YOU DO NOT NEED TO HIRE SOMEONE TO DO A LOAN MODIFICATION. Our president has set-up an agency who will help you for free. If you are in trouble with your loan, please check out www.makinghomesaffordable.com.

The market at a glance (a few sales were reported after my original post. These are updated figures):

If you are a buyer, now is a great time to buy. In fact, you need to have all your ducks in a row and work with an agent who is on top of the game and will let you know the second a deal hits the market so you are ready to pounce.

If you are a seller, being priced right is the name of the game. With so few sales over $200,000, it's very important to be competitively priced in that price range. If you are not priced to sell, you may want to wait until the market sways back to a sellers market in that price range. Same strategy applies if your home is priced under $200,000. Remember, that price range is especially hit hard with REO listings and you have to compete.

If you are ready to list your property, give me a call. I have sold more listings so far in 2009, both in volume and number of sales, than any other agent in Del Norte County. The reason for this is because I know the market and work with my clients to price accordingly.

If you are looking to buy, give me a call and subscribe to my foreclosure alerts to be the first to hear of the deals that hit the market.

If you are a fan of In-N-Out Burger, you know why the following is scary to us In-N-Out Burger groupies. If you haven't eaten at In-N-Out Burger, you are missing out.

In-N-Out Burger at a crossroads? (from American Thinker)

Thomas Lifson
Sometimes a company comes along that helps restore your faith in American capitalism. It is a shame that more Americans have not had the opportunity to visit In-N-Out Burger, which is just such a company. It comes as close to the ideal of a hamburger as is possible in a fast food setting. Prices are a little higher, but the quality is first class. Everything is fresh and top quality. The menu is limited to burgers, fries, and drinks, including the best fast food milkshakes I have ever had.

The company famously pays its staff more than other fast food places, and it shows. They are uniformly cheerful, on the ball, and anxious to get it right for the customer. I still remember my first visit to In-N-Out Burger; bye-bye, McDonalds.
I rarely eat fast food, but when I do, it is nearly always In-N-Out. Normally, that is when traveling by car, and I know exactly which freeway exits to use on the way to LA, or Sacramento, or Santa Rosa to find superior fast food.
Most intriguing to me, the company does not use the franchise system, but rather owns all of its 232 units, and finances growth through internal cash generation. Privately held, the company's financial results are not released publicly, but it is reckoned to be very profitable. This is conservative management personified: keep it simple, do it right, invest in quality, and treat the customer as king.
And, oh yes, have a personality.
The company is endearingly quirky. You can find Biblical verses on the inside of the rim at the bottom of drink cups. Everyone knows where to look. It is almost like a Christian version of the fortune cookie. The company has a "secret menu" (it calls it the not-so-secret menu) with slight variations on its items. This cleverly builds patron loyalty, as once initiated in the secrets by friends, people feel like an insider. I always order my burgers protein-style (lettuce substituting for the bun), for instance.
We Californians tend to feel a bit possessive of In-N-Out, as our superior version of the fast food on offer elsewhere in America (the company has expanded into neighboring states in the past decade, but no farther).
But according to a story in today's LA Times by Michael Hiltzik, thanks to a court battle, control of the company is about to pass into the hands of a 27 year old heiress, Lynsi Martinez, and nobody knows what, if any changes she will make. Given the structure of ownership (which is on the public record, thanks to a family legal battle), she will apparently have absolute control.

Once she takes formal ownership, if she declares In-N-Out will henceforth sell only Buffalo Burgers or Broccoli Burgers, or will dispense prayers rather than food, her word will be law. Indeed, given the inviolability of the trusts, her word probably already is law.

What should keep the chain's fans up at night is whether In-N-Out can continue to tread the fine line between modern business imperatives and its own traditions. [Chief executive Mark] Taylor has been quoted as saying he intends to stick to a pattern of opening 10 to 12 new stores a year, though [former executive Robert] Boyd claimed in his lawsuit that he had heard him express national ambitions.

An expansion across the Mississippi would probably strain In-N-Out's self-generated financial resources to the limit -- the chain doesn't even accept franchisees. But a public offering, much less a buyout by a public company, would almost certainly render it unrecognizable. The homogenizing cost-cutting of corporate number-crunchers ("let's drop the beef by a grade; the customers won't notice") could mean the end of In-N-Out as we know it.

If the company is sold and ruined by the new owners, we will all be the poorer for it. For those readers who have never indulged in the company's burgers, on your next West Coast trip, make a point of visiting a store.

I wouldn't say I have been avoiding short sale listings, but thankfully, most of my clients do not have to go this route at this time.

Why am I thankful? Because statistics show that the majority of short sales never culminate in the sale of the owners home. This short sale is another one of those statistics.

Seller purchased home in 2005 at height of market and shortly thereafter had a life change and had to move to another home.

Market dropped and home is upside down (seller owes more than the home is worth).

Seller remodels home in hopes of attracting a buyer and lists home at a price that will get seller out of home just breaking even.

Market drops more, homeowner lists home as short sale, receives offers and submits to bank.

Here's where it gets interesting.

Chase asks for way more documentation for sellers hardship than previously seen before. A standard hardship letter is not sufficient anymore. Two letters along with a time line of ALL THE EVENTS leading up to the short sale, in chronological order from date seller purchased to now are required. These events clearly showed the seller has a hardship and in my experience, would have been approved if these offers had been submitted just a few months ago, but Chase told seller that under President Obama's current guidelines for short sales, seller does not fit the criteria BECAUSE HE MOVED OUT OF THE HOME more than a year ago.

I talked with a colleague yesterday who said the bank approved the short sale for one of her listings and the owner is an investor who has tenants in the home.

I'm not sure if Chase is misinterpreting the new regs, or if the other agent is working with someone who isn't aware that the rules have changed.

The seller loses, but the bank loses as well. The offers on the home were far more than the bank will receive if the home becomes an REO. If that happens, the neighborhood loses as well with a further decline in home values. There are no winners when it comes to foreclosure.

Times are a-changing. More documentation is being required than ever before for any type of transaction from a short sale to a conventional mortgage, where underwriters and account executives are running scared that funding a bad loan may cost them their job. Let's hope we soon find a middle ground where the banks are protected, but consumers are as well.