July California Association of Realtors

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       San Diego Union-Tribune

New law gives added protection to short-sale hopefuls
On Friday, Gov. Jerry Brown signed Senate Bill 458 (Corbett) into law. The new law, which
contained an urgency clause and became effective upon signing, protects homeowners
pursuing short sales by barring first and secondary lien holders from going after sellers for
money owed after the short sales close.

Making sense of the story

      A short sale – a transaction in which the homeowner sells the property for less than is
       owed on the mortgage – must be approved by the lien holder or lien holders, if there is
       more than one.

      Under previous law (SB 931 of 2010), a first mortgage holder could accept an agreed-
       upon short sale payment as full payment for the outstanding balance of the loan, but the
       rule did not apply to junior lien holders. SB 458 extends the protections of SB 931 to
       junior liens.

      The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) sponsored the bill and
       urged lawmakers to pass this much-needed legislation.

      “The signing of this bill is a victory for California homeowners who have been forced to
       short sell their home, only to find that the lender will pursue them after the short sale
       closes and demand an additional payment to subsidize the difference,” said C.A.R.
       President Beth L. Peerce. “SB 458 brings closure and certainty to the short-sale
       process and ensures that once a lender has agreed to accept a short-sale payment on a
       property, all lienholders – those in first position and in junior positions – will consider the
       outstanding balance as paid in full, and the homeowner will not be held responsible for
       any additional payments on the property.”

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July 21, 2011
       The Wall Street Journal

Lower “jumbo” loan limits coming
People buying homes in the country’s most expensive housing markets likely will face pricier
mortgages starting in the fall.

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       The Mercury News

Mortgage documents continue to be “robo-signed”
Mortgage industry employees are still signing documents they haven’t read and using fake
signatures more than eight months after big banks and mortgage companies promised to stop
the illegal practices that led to a nationwide halt of home foreclosures.

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       Press Enterprise

Home loan modification hard to get, report says
California homeowners continue to have trouble getting home loan modifications that stick
under the Obama administration’s Home Affordable Mortgage Program, according to a report by
the California Reinvestment Coalition.

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       CNN Money

Foreclosures plunge in first half of 2011
Foreclosure filings plunged 29 percent compared with the same period a year ago and were
down 25 percent from the last six months of 2010, according to the latest report from Realtytrac.

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July 21, 2011
       The Wall Street Journal

FTC mailing refund checks in Countrywide settlement
The Federal Trade Commission said Wednesday that it is mailing more than 450,000 refund
checks to struggling homeowners who were allegedly cheated by Countrywide Home Loans as
they fought to keep their homes.

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       Los Angeles Times

Litigation gauges banks’ ability to cut home-equity credit lines
A federal district court in Chicago has given the green light to clients of JPMorgan Chase Bank
to proceed with a consolidated lawsuit alleging that their equity lines were yanked or reduced
illegally, costing them billions of dollars in lost borrowing power.

Read the full story,0,7718385.story

       CNN Money

Fed hits Wells Fargo with $85 million fine
The Federal Reserve announced a record $85 million fine Wednesday against Wells Fargo for
allegedly pushing borrowers with good credit into expensive mortgages and falsifying loan

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       The Wall Street Journal

Big mortgages are back
Low interest rates are driving high-end home buyers to supersized mortgages at a pace unseen
since the housing boom. But the deals may have a limited shelf life.

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July 21, 2011
Talking Points

      Although a 30-year fixed-rate loan is considered the sensible, conservative loan type,
       some borrowers still are getting or keeping adjustable-rate loans, which have even lower
       interest rates than 30-year fixed loans.

      Adjustable-rate mortgages generally attract borrowers when interest rates are high. The
       rate is set for a specific time – generally one, five, or seven years – and then adjusts to
       prevailing rates within boundaries. Rates, and thus payments, can go up or down.

      Generally, financial advisors say adjustable-rate mortgages are good for borrowers with
       short-term time frames, usually seven years or less. The best candidates for these
       mortgages include: certain first-time borrowers who plan to move up; a single person
       buying a studio apartment; people who are relocated for work, or expect to be;
       borrowers who refinance and plan to live in their current residence only for a few more
       years; jumbo mortgage seekers looking for a lower-cost alternative; and folks who are
       approaching retirement age who want to improve their cash flow to maximize their
       retirement accounts.

      Conversely, adjustable-rate mortgages aren’t recommended for borrowers who plan to
       stay in their home for the long-term or those who would have trouble managing rising
       payments, which could include people who expect cash-flow restraints, such as those
       starting a family.

July 21, 2011

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