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New federal rules protecting applicants for home loans take effect July 30
The Federal Reserve regulations require lenders to provide consumers with initial disclosures of their mortgage costs within three business days of their loan applications, among other changes.By Kenneth R. Harney
July 19, 2009
Reporting from Washington - If you're applying for a loan to buy a primary or secondary home, or planning to refinance, you should be aware of a little-publicized set of federal consumer-protection rules that take effect July 30.
Among other key changes, the new Federal Reserve regulations require lenders to provide you with initial disclosures of your estimated mortgage costs within three business days of your loan application. If you don't get them, you can pull the plug.
The rules also prohibit lenders from collecting any fees -- except a reasonable charge for checking your credit -- until you've been given the loan-cost disclosures.
This means no more out-of-pocket upfront application charges until you've received the truth-in-lending disclosures and an annual percentage rate (APR) calculation of those loan costs.
Because many mortgage brokers and lenders traditionally have collected fees covering appraisal, credit and various other charges at the time of application -- sometimes amounting to hundreds of dollars -- this will be a significant change in procedure for the lending industry.
The rules also prohibit quickie closings on loans by requiring a seven-day waiting period after applicants are handed their early disclosures or the disclosures are mailed. You'll have a week to think about the transaction and decide whether it's right for you. Final truth-in-lending disclosures are due three business days before closing.
Here's an even more sweeping change for applications on or after July 30: The new Fed rules require lenders to deliver a copy of the real estate appraisal to you three business days before the scheduled closing on the loan.
In the past, even though federal regulations guaranteed that consumers could request and obtain a copy of the appraisal, lenders and home buyers frequently ignored that right. Many consumers had no knowledge of this right because no one in the home purchase, financing or settlement process told them about it.
Now the timing of the loan closing -- which is the financial ballgame for loan officers, realty agents, title and escrow officials -- will depend upon your receipt of the appraisal in advance. The three-day rule can be waived if you don't think receiving the appraisal is necessary.
Another significant change under the new rules: If the APR on the early truth-in-lending disclosure increases by more than one-eighth of a percentage point (0.125), the lender will now be required to "redisclose" -- that is, provide you with a corrected version and allow you an additional seven business days to consider the transaction before settlement.
What might cause the APR to increase after the initial disclosure? Lots of things: Say you left your initial rate on the loan to float with the market, but rates increase.
You'll need to get an amended truth-in-lending disclosure. Or perhaps the lender got inaccurate estimates of costs from third-party participants in the transaction, such as the settlement or escrow company. Or say that unexpected eleventh-hour junk fees materialize.
All these events, which have been frequent sources of consumer complaints this decade, could force the lender to redisclose loan costs and set back timing for the settlement.
What are some of the likely repercussions of the Fed's new mandates? First, the traditional approach of aiming in advance for a date-certain settlement target for home loan transactions almost certainly will be affected.
Closing dates will be more closely tied to lenders' and settlement agents' accurate estimates and their ability to deliver disclosures and appraisals by the required dates. If appraisers are backlogged and can't produce valuation reports quickly, settlements will have to be delayed.
Second, the purposes of the rules are to afford consumers better access to, and more time to consider, key elements of what are major financial transactions for most people. There might be fewer instances of last-minute closing-date surprises on fees, where buyers are slammed with hundreds of dollars of charges they'd never expected. But nobody can say that for sure.
Finally, the rules may well trigger waves of litigation if lenders and their business partners are not scrupulous in their compliance. There is an active and aggressive segment of the legal profession that specializes in going after banks and mortgage companies for truth-in-lending violations. Don't be surprised if you hear of lawsuits seeking cancellation of mortgage deals because timing deadlines were not met or appraisals not received.
As David Berenbaum, executive vice president of the National Community Reinvestment Coalition, put it in an e-mail comment: "Consumer advocates will closely monitor" compliance with the new Fed regulations, and the lending industry can expect "civil litigation against bad actors."
kenharney@earthlink.net
Distributed by the Washington Post Writers Group.
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I have lived in Rancho San Diego, CA and it's surrounding neighborhoods since I was two years old when my parents first moved from North Park, CA in 1976 to a three bedroom 2 bath home which at that time was a new development. A lot has changed since our newspaper boy used to ride their horse and deliver our paper, but a lot has kept the same with the great sunny weather and beautiful rolling hills and slower paced life that is just 15 miles from Downtown San Diego and the beaches and Balboa Park.
Rancho San Diego Association is comprised of 429 acres, of which 229 acres are beautifully landscaped with green belt and xeroscaped areas. The Rancho San Diego Association is a self-managed association with an onsite management office located in the Hatfield Park clubhouse. There are 832 homes in the development map . Three classifications of properties in the association offer different floor plans and include single family homes, town homes and apartment living that consist of:
Monthly dues are prorated for each classification. As of July 26th, 2009 the Rancho San Diego Association website states that Class I dues are $99.68 per month, Class II dues are $119.62 per month and Class III dues are $159.49 per month.
Included in the monthly dues are: Landscape maintenance of the common green belt and zero scape areas, common area slopes and both of the parks.
Weekly trash and recyling pick up is every Thursday by Allied Waste. Green fill, large item pick-ups or wheeled totes can be contracted seperately by calling Allied Waste at (619) 421-9400. Trash pick up will be delayed by one day on the following holidays: New Years' Day, Memorial Day, 4th of July, Labor Day, Thanksgiving Day and Christmas Day.
The association features two club houses with swiming pools both named from famous local pioneers:
Hatfield Park 10050 Austin Drive Spring Valley, CA 91977
Hansen Park 2730 Cliffside Avenue Spring Valley, CA 91977
Both clubhouses are available to rent for showers, birthdays, weddings, graduations, ect. to all residents of RSDA. The rental fee is $100 with a $300 security deposit (cash or money order only). Each clubhouse has a capacity of 50 people. Contact the office at contact us or by calling (619) 464-1221 for available dates and times.
I had my 16 year old birthday party at Hatfield Park and it was a real great time. Feel free to contact me if you are new to the area and are relocating and would like to buy a home in the area or if you are curretnly a resident and would like to market your home for sale. Jason Kardos, Real Estate Agent
Picture and Association information taken from www.RSDA.org
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Bond money will be used for a library
District's new facility to serve schoolchildren and public
By Michele Clock Union-Tribune Staff Writer
2:00 a.m. July 25, 2009
Natanya Brown (left) of San Diego and Alex Hoskins, 11, (right) of Lemon Grove work on computers at the Lemon Grove Library. The current facility does not have room for additional computers. - LAURA EMBRY / Union-Tribune
LEMON GROVE - The Lemon Grove School District is planning a new, $8 million library to be used both by schoolchildren and the general public following last year's passage of a $28 million bond measure. School officials hope to open the new facility as early as 2013.
Despite the dismal economy, district officials said funding is available because of the Proposition W bond measure. The project doesn't rely on state funds, said Lemon Grove School District Superintendent Ernie Anastos, and the district has so far issued $5 million in bonds. It also expects to use an estimated $700,000 donated by the Thren Family Trust.
Construction is likely two years away, but district officials said they envision a state-of-the-art, 14,000-to-15,000-square-foot facility to replace the current 9,000-square-foot county library, housed in a leased storefront in a small shopping center on Broadway. The staff from the current library would transfer to the new facility. The library gets an average of more than 330 visitors a day.
Anastos said the new library is expected to be built either at or adjacent to Lemon Grove Middle School. The district favors the area in part because of its central location.
"We see this hopefully becoming a centerpiece of the community," Anastos said.
District officials have created a citizens' oversight committee to monitor the Proposition W projects, and they plan to meet with architects next month to talk about the new library's design. Another planning committee made up of citizens and representatives from the city and school district will be formed this fall.
Anastos said the district hopes to design the library in a way that will "blend comfortably with Lemon Grove's history."
The community has tried to get a new library built before.
The city came close to getting a library after securing a $3.8 million state grant in 2002. Faced with tight budgets, the council placed a bond measure on the ballot in 2004 to help pay for the project, but it narrowly failed.
Lemon Grove Councilman George Gastil, who previously served on the Lemon Grove school board, said that after the bond measure lost in 2004, it became clear that someone else "was going to have to pick up the ball" if a new library was to rise in the city in the near future.
Results from surveys showed the public supported the idea of a new library as part of a school district bond measure, and the project was added to the to-do list under Proposition W.
Anastos said he thought the past library efforts helped the idea win at the ballot box this time.
"Many of the same people were quick to support this initiative," Anastos said. "They hadn't ever stopped dreaming about a new library."
County Library Director José Aponte said the existing library could use more space - and more efficient uses of space.
Rosemary Putnam, a member of the bond oversight committee and a longtime advocate for a new library in the city, said that every time she runs into friends they ask her if the planned library is really going to be built and, if so, when.
"All I can say is it takes time, we all have to be patient," Putnam said. "Lemon Grove deserves this library more than any place that I can think of."
Michele Clock: (619) 542-4577; michele.clock@uniontrib.com
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City heaps praise on composting as landfill relief
By Valerie Lemke
2:00 a.m. July 26, 2009
At the San Diego Zoo workshop, Georgia Nally demonstrated how compost can be made using a simple wooden box. (John Gibbins / Union-Tribune) - 
Laura Eubanks shows workshop participants the basics of vermicomposting, a space-saving method in which earthworms eat fruit and vegetable scraps. The two-bin receptacle can be stored in any shady spot. (John Gibbins / Union-Tribune)
Peel a potato, squeeze an orange or mow the lawn and you're a candidate for backyard composting, the timeless recycling practice that transforms waste organic materials into nutrient-rich and fragrant loam.
Today, composting is recognized as a fast-growing player in the green revolution. Recent actions of two California cities illustrate the renewed significance of this homely art.
The San Francisco Board of Supervisors approved the most comprehensive mandatory composting and recycling law in the country, and has a goal to achieve zero waste by 2020.
In the past year the city of San Diego has imposed ordinances mandating recycling and increased fees for construction and demolition wastes, a major part of landfill glut, according to Stephen Grealy, waste reduction program manager for the city.
San Diego's Miramar landfill has taken in 1.6 million tons of solid waste annually in recent years. Grealy estimates it will be nearer 950,000 tons this year. A healthy proportion of this decrease is due to backyard composting.
Citizen compliance was dramatically illustrated at this spring's Earth Fair that attracted more than 80,000 to Balboa Park. Dubbed "rot stations," receptacles labeled "recycle," "compost" and "trash" were distributed throughout the park and their use was monitored.
Waste was weighed at the end of the day and showed an 80 percent diversion of materials from the landfill. Recycled materials such as aluminum cans, glass and recycled plastics came in at 54 percent, compostables represented nearly 30 percent and less than 10 percent went to the landfill.
"That's bloody wonderful," Grealy said. "Things are getting better all the time."
The city has long worked with local environmental groups to educate the community on the importance of recycling, and composting is a big piece of that education. More San Diegans are responding to the need and rewards that come with composting, the results of which enrich the soil with recycled organic materials, prevent erosion, conserve water, save money and extend the life of the landfill.
To help you get started, the city and the Solana Center for Environmental Innovation have partnered to offer free composting workshops, booths at public events and educational programs in schools. The center teaches a master composting course, and composters then give back by conducting presentations such as a recent workshop at the San Diego Zoo.
"I haven't used my garbage disposer in two years," Master Composter Georgia Nally told 60-plus attendees at the workshop.
"Our grandparents used to throw everything onto a pile in the backyard," she said. "It worked. Even if you do nothing, it happens sooner or later. But you can hasten the job with just a bit of effort."
The recipe is uncomplicated, and features four basic ingredients, equal portions of "greens" and "browns" mixed with water and air.
Greens include materials high in nitrogen such as vegetable and fruit peelings, grass clippings and coffee grounds. The browns provide carbon from dried leaves, straw, newspaper and wood chips. Water, plus air from mixing the pile, pulls the whole melange together.
Nally likens composting to throwing a party.
You prepare food and drinks for your guests - in this case sow bugs, earwigs, redworms, green fruit beetle larvae and microorganisms. These are the critters that decompose the greens and browns.
Meat, bones, dairy products, fresh weeds, dog or cat manure and treated wood products are not on the menu. When in doubt, leave it out, say the experts.
Nally took workshop participants on a tour of zoo composting bins.
"You decide what's good for you," she said of the receptacles that allow for as much or as little effort as you desire. Active composting involves heating the pile by turning it regularly, while passive methods are less labor intensive but take longer.
Composting with worms, or vermicomposting, the alternative for apartment and condo dwellers, was covered at the workshop by Master Composter Laura Eubanks, who brought her bin of red wiggler worms that produce a nutrient-rich fertilizer in the form of castings and worm tea.
To vermicompost, make or purchase a two-bin receptacle, the top bin designed to house the worms and castings, the bottom to catch the tea, Eubanks told the group. Feed the worms fruit and vegetable scraps and store them under the kitchen sink or any shady spot.
Available at most nurseries, the "tenants" are about $15 a pound, but be prepared to share. "They reproduce like rabbits," Eubanks said. They also consume all the fruit and vegetable scraps created by her family of six.
"There's no right or wrong way to compost or vermicompost, but you'll know if something is wrong," Nally said. In case of trouble, such as odors, flies or animals invading the pile, composters can call the Solana Center's "Rotline" at (760) 436-7986, ext. 222, for advice.
Information on composting and vermicomposting including bin varieties and plans for building your own is available at howtocompost.com.
And if you can't produce enough of this lovely stuff, there's plenty at the Miramar Landfill's Greenery. The facility processes mulch, compost and wood chips, offering compost and wood chips at moderate prices and mulch for free. For information visit sandiego.gov/environmental-services, then click on Miramar Landfill.
Once you begin, composting is habit forming.
A bad back forced workshop participant Judy Vance to quit composting some time ago. "Stopping was just torture," she said. "I'm here to find out what kind of bin will work for me."
Valerie Lemke is a San Diego freelance writer.
In the Union-Tribune on Page H1
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From the top down
Stale high-end condo sales affect the rest of the housing market
By Roger Showley Union-Tribune Staff Writer
2:00 a.m. July 26, 2009
Executive chef Alastair Revell (top left) gladly moved from a house in Point Loma to a high-rise condo downtown, while Tom Paschen (top) and his wife, Lee, want to do the opposite and buy a house in Mission Hills that they think will appreciate more in the long run. (Peggy Peattie / Union-Tribune photos) -
The luxury condo market, where much of the boom in buying took place until prices peaked in 2006, has been nearly dead.
Sales are running at a fraction of their boom-time levels, plans for dozens of new, shiny high-rises are on indefinite hold, and would-be buyers, who might yearn for the "lock and leave" lifestyle, are stuck in their empty-nester households waiting for the dark economy clouds to blow over.
How the top-end market behaves has some bearing on the course of the overall recovery in San Diego housing. If buyers aren't selling and moving up, then would-be purchasers of those homes can't move up either - disrupting the traditional ladder of real estate.
Similarly at the bottom of the market, analysts say, sellers of distressed properties aren't buying and moving up - they're occupying rentals - and their buyers are either first-timers or investors who rent out the units.
"I see a disconnect in the market today," said Anthony Napoli, a Little Italy real estate agent. "I don't see a lot of selling and buying."
At the request of The San Diego Union-Tribune, MDA DataQuick analyzed resale condo transactions from 2002 through May of this year, priced at $417,000 or more - the traditional conforming-loan limit.
The company found that luxury resales dropped from an average of 93 per month to 43 in June. In the two most active high-end neighborhoods, downtown and La Jolla, the maximum sales rate has plummeted from 40 and 29 at the peak, respectively, to just a handful lately.
In downtown alone, HouseRebate.com counted 347 condos for sale earlier this month above the $417,000 figure. There are an additional 3,459 units in 19 proposed projects in the pipeline, construction start dates unknown, according to the Centre City Development Corp.
For the first half of the year, all condo resales totaled 5,448, 31.2 percent higher than 4,152 in the same period last year - an indication that low-priced condo sales increased even as high-priced condos stagnated.
"Unless you're a have-to buyer and are simply a want-to buyer, and you can make the election to hang on, you more prudently hang on than sell and buy later," said real estate consultant Gary London. "I hear from those buyers all the time, people I know, and they're telling me they're looking for big-time bargains."
That's exactly what prompted Tom and Carolyn Lechowitz of Chicago to buy a penthouse at the Aria project on Cortez Hill downtown. Originally priced at more than $1 million, they said they're getting it for $725,000.
"We fell in love with the location at Ninth and Ash," said Tom Lechowitz, 56, who owns an accounting practice. "I told my wife maybe it's a little more than we wanted to spend for a second home, but we said why not see if we could beat them down a little bit more."
While many would-be buyers may be sitting on the sidelines, timing sometimes prompts them to act. Another Aria buyer, Alastair Revell, executive chef for the Catamaran and Bahia hotels, said he had gotten divorced, sold his Point Loma home at a tidy profit and wanted to move to a downtown condo.
"I was done with houses," Revell said. "I don't need a garden or want to do repairs on homes anymore. I love downtown, I love the ability to walk to restaurants and do the night life, the ability to go to the cinema and Symphony Hall."
But in the course of closing escrow, Revell encountered one of many new impediments put in the way of condo owners since the subprime mortgage meltdown surfaced two years ago.
If he had not made a 25 percent down payment, Revell said, his loan amount would have crossed the $417,000 threshold and his options would have been fewer and more expensive.
That's because Fannie Mae, Freddie Mac and the U.S. Department of Housing and Urban Development have instituted new guidelines that affect all aspects of condo buying. Together with other stiffer requirements for borrowers, buyers face:
Fewer insured loan programs above the $417,000 limit and almost none above $697,500 for jumbo loans. Interest rates on loans above $417,00 typically are one-quarter to one-half percentage point higher and even pricier for jumbos.
More scrutiny of assets and income statements.
A 31 percent debt-to-income ratio for housing costs, down from as high as 65 percent at the peak.
No government-insured loans in condo projects where more than 15 percent of the owners have defaulted on their homeowner association dues. The same rejection takes place when owner occupancy falls below 51 percent and sometimes 70 percent.
Multiple appraisals, necessitated when appraisers, now operating under no-contact rules with lenders, do not value a property highly enough and a buyer seeks another opinion. The delay can lead to expired loan commitments, additional costs and more delays.
Additional property insurance to cover the full replacement cost that the homeowner association previously covered. Lenders also pay much closer attention to association reserve funds.
"We're going to see the pool of buyers just dwindling," predicted mortgage broker Dave McDonald, after toting up these new rules and guidelines.
He said that if underwriting is not loosened up, it may take many years, if not decades, before San Diego's resale condo median rises to $400,000 once again. The June median was $210,000.
DataQuick analyst Andrew LePage said high-end condo sales in June suggest a new trend may be developing that could awake a near-dead market. He said motivated sellers are now more willing than earlier to take a lower price, and some would-be buyers find it slightly easier to get jumbo loans at acceptable rates.
The percentage of condo loans over the $417,000 mark rose from 3 percent in April to 4 percent in May to 6 percent in June - an improvement even if the seven-year average was 18.2 percent.
"It looks like it's starting to wake up," LePage said. "Stronger sales reflect lower prices."
Some condo sales go through because buyers pay all cash. That was the case for Prudential California agent Barbara Leinen Weber, who received two all-cash offers within one week of listing a $592,000, 800-square-foot condo on Prospect Street in La Jolla.
"People just scoop 'em up," she said. "Prices are down and this is their only chance to maybe get a nice little condo in La Jolla."
But Brian Yui, president of HouseRebate.com, an online realty company, said the attraction for condos may be waning as single-family home prices fall.
"Now, houses are within striking distance for many people," he said.
Mark Magstadt, a buyer specialist on the Gellens team at Prudential California's La Jolla office, said agents usually advise sellers to lower prices if they attract little interest in the first two weeks after a condo is listed.
"I definitely see we have some shifting downward of the upper end," Magstadt said. He predicted prices and sales will remain flat for the next two years.
If buyers shy away from condos, then the region's goal of promoting anti-sprawl by building higher-density housing may be stalled. In Carlsbad, for example, the 78-unit Bluewater Crossing live-work condo and apartment project offers units ranging in price from $495,000 to $950,000 - competing in a market where resale houses were selling for a $655,000 median in June. Only four condo units have been sold after four months on the market.
"This is a very small demographic this is suited for," acknowledged development spokeswoman Catherine Nicholas of the CADO Real Estate Group.
Not all high-end condo dwellers are as happy with their buying decisions as they expected. One example is Tom Paschen, 52, who in 2005 moved from Orange County with his wife Lee to a 28th-floor unit in the Grande at Santa Fe Place, just west of the Santa Fe Depot downtown.
Since then, the monthly homeowners association dues have risen from $726 to $806; the market value has not improved markedly from the $1.65 million purchase price; and no one has made an offer in six months on the Paschens'home, listed for $1.68 million.
Paschen also complains about homeless people on the streets and deferred maintenance on downtown public infrastructure. He hopes to sell and buy a house in Mission Hills.
"From an investment standpoint, when you look at things, maybe it would be a smarter investment," he said. "It might cost a little more, but it won't lose value."
Roger M. Showley: (619) 293-1286; roger.showley@uniontrib.com
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Jason Kardos is a San Diego native who was born in La Mesa, CA. & is an active investor/agent who buys and sells, including auctions & 1031 tax-deferred exchanges. GRI, RMS, CCRM, and Realtor.
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