Wells Fargo Nixes Extensions on Residential Short Sales

By Kate Berry/American BankerOctober 1, 2010

Wells Fargo has stopped granting extensions for distressed homeowners to complete short sales, a move that will expedite foreclosures.

In a short sale, a home is sold for less than the amount owed on the mortgage and the lender accepts a discounted payoff. The loss to the lender can be smaller than if it had to foreclose and liquidate the property.

But in a memo emailed to short sale vendors last month and obtained by American Banker, Wells said it will no longer postpone foreclosure or trustee sales for those who do not close short sales by the date in their approval letter from the company. Only extension letters dated Sept. 14 or earlier would be honored, Wells said.

The change comes after Fannie Mae told servicers early last month that they needed to stop unnecessarily delaying foreclosures. The GSE said it would hold servicers responsible for unexplained delays to foreclosures by issuing fines and conducting on-site reviews of a servicer’s operations.

Mary Berg, a spokeswoman for Wells, said its new policy on short sales was put in place “over the past couple of months … in response to various investor changes.”

Those investors, she said, “would include the GSEs, Department of Housing and Urban Development (HUD) and those investing in private-label” MBS.

Yet Wells’ decision also follows efforts by the Obama administration to encourage short sales for borrowers who do not qualify for loan modifications.

“It makes no business sense why they are doing this, since it’s wrong for the borrowers and for the government,” said Eli Tene, chief executive of IShortSale, a Woodland Hills, Calif., firm that advises distressed borrowers.

Wells said it will make an exception to the new policy for loans in its own portfolio, which includes those it acquired with Wachovia Corp. in 2008. For these loans, Berg said, Wells allows for one foreclosure postponement, provided the following: it has an approved short sale in hand that includes approvals from junior lienholders and mortgage insurers; the buyer has proof of funds or approved financing; and the short sale can close within 30 days of the scheduled foreclosure sale.

Experts on short sales said that in recent months servicers have been reluctant to approve such transactions out of concern that the buyer will not get financing, or that the buyer’s lender will not be ready to close, causing the buyer to lose patience and walk away from the deal and further prolonging the process.

Wells’ move preceded the recent revelations of faulty paperwork at two major servicers — JPMorgan Chase & Co. and Ally Financial Inc. — which said they had suspended thousands of foreclosure actions to review their processes.

On Thursday, Acting Comptroller of the Currency John Walsh said he had told seven major servicers, including Wells, to review their processes. Another Wells Fargo spokeswoman, Vickee J. Adams, said the company’s “policies, procedures and practices satisfy us that the affidavits we sign are accurate.”

Read the full article here


Gov. Vetoes CAR Anti-deficiency bill. Thanks Arnie. Are you almost gone?

Update!

Governor Vetoes C.A.R.-Sponsored

Anti-Deficiency Bill

On Thursday, Governor Schwarzenegger vetoed SB 1178 (Corbett), C.A.R.’s sponsored bill that would have expanded anti-deficiency protections. In his veto message, the Governor made clear his view that the bill interferes with an existing contract. While disappointed in the Governor’s misinterpretation of the bill, C.A.R. is grateful to the almost 13,000 California REALTORS(R) who urged him to sign the bill by responding to the Red Alert.

C.A.R. sponsored SB 1178 to better protect homeowners going through foreclosure. SB 1178 would have ensured that homeowners keep the same “anti-deficiency” protections they have in the original loan after the loan has been refinanced.

California’s anti-deficiency protection for “purchase money” mortgages says that if a homeowner defaults on a mortgage used to purchase his or her home, the homeowner’s liability on the mortgage is limited to the property itself. The law has worked well since the 1930s to protect borrowers, ensure the quality of loan underwriting and allow borrowers brought down by financial crisis to get back on their feet.

Unfortunately, the 1930s law hasn’t kept up with current times. Current law doesn’t apply to loans used to refinance the original purchase debt, even if the refinance was only to gain a lower interest rate. Recent years of low interest rates have induced tens of thousands of homeowners to refinance their mortgages. During those years, almost no one realized that refinancing their mortgage to obtain a lower rate, they were forfeiting their protections and were becoming personally liable on the new note.

SB 1178 would have corrected this injustice by extending anti-deficiency protections to those who have refinanced their loans.

Thank you again to everyone who joined C.A.R.’s Government Affairs Team and fought for our clients.

For More Information

No Matter What The Economy is Doing, Fraud is Always With Us.

DOWNEY MAN CHARGED WITH RUNNING $11 MILLION PONZI SCHEME, AS WELL AS RELATED $10 MILLION MORTGAGE FRAUD SCHEME THAT TOOK ADVANTAGE OF DISTRESSED HOMEOWNERS

Juan Rangel’s Financial Plus Investments Targeted Spanish-Speaking Victims and Conned Them Out of Their Savings and Titles to their Homes

LOS ANGELES – A federal grand jury has indicted a Downey man on a series of fraud charges for allegedly running two related fraud schemes – a Ponzi scheme that took more than $11 million from more than 300 victims, and a mortgage fraud scheme that preyed on homeowners by stealing the equity from their homes and secretly taking title to their properties.

Juan Rangel, 46, who is already in federal custody after his conviction last year for bribing a bank manager at Bank of America, was charged in a 16-count indictment that was returned by a federal grand jury on September 22.

In relation to the Ponzi scheme, the indictment alleges that Rangel and his company, the Commerce-based Financial Plus Investments, recruited new investors through Spanish-language newspapers and magazines, as well as in radio advertisements and infomercials broadcast on television. Rangel and Financial Plus promised to pay investors guaranteed returns of 60 percent each year out of the profits from Financial Plus’ real estate investments and lending business. The indictment alleges that Financial Plus did not make any actual profits from real estate or lending, and that Rangel instead used the victims’ money to make Ponzi payments to other investors, as well as for his own personal use, including the monthly mortgage payments on his $3 million home, to make monthly lease payments for his Lamborghini sports car and a limousine, and to buy cocaine.

In the related mortgage fraud scheme, the indictment alleges that Rangel and others targeted Latino homeowners who were at risk of losing their homes and offered to help them avoid foreclosure. Rather than assist them, however, the indictment alleges that Rangel took titles to their homes and drained the remaining equity out of the properties.  As part of this scheme, Rangel arranged to sell the homeowners’ properties, usually without their knowledge, to third-party straw buyers. He then applied for loans in the straw buyers’ names related to these supposed purchases, and used a variety of falsified documents to ensure that the fraudulent loans were approved. The proceeds from these loans went to Rangel and his companies. The indictment alleges that this scheme was successful in duping mortgage lenders into approving more than $10 million in fraudulent loans.

United States Attorney André Birotte Jr. announced the indictment today after Rangel’s two co-defendants were taken into custody this week and the indictment was unsealed.

Co-defendant Javier Juanchi, 42, of Sherman Oaks, a vice president at Financial Plus, was arrested by special agents with the Federal Bureau of Investigation on Monday. Juanchi, who is charged only in relation to mortgage fraud part of the scheme, was ordered held without bond.

The third defendant in the case, Pablo Araque, 40, of Downey, who owns the Downey-based tax preparation and bookkeeping company A One Tax Pros, was arrested yesterday. Araque, who is also charged only in relation to the mortgage fraud component of the scheme, is being held in jail pending a detention hearing scheduled for tomorrow afternoon.

Rangel, who is scheduled to make his first court appearance in this case tomorrow afternoon, is charged with a total of 11 counts of mail fraud, four counts of aggravated identity theft, and one count of money laundering, in relation to the two schemes he ran out of Financial Plus. If he is convicted of all 16 counts, Rangel would face a statutory maximum sentence of 232 years in federal prison.

Rangel owned and operated Financial Plus Investments, which was based in Commerce. Financial Plus purported to provide guaranteed returns to investors by using their money to invest in real estate and make high-interest loans to homeowners facing foreclosure. Financial Plus originally offered returns as high as 60 percent each year to investors, but during the later part of the scheme began to offer investors guaranteed annual returns of 100 percent on their investments. The indictment alleges, however, that only a small fraction of the money that Financial Plus received from investors was ever used to invest in real estate or to make loans. Instead, investor money was used to make monthly Ponzi payments to other investors that were falsely characterized as investment profits. At the same time, Rangel allegedly diverted a substantial portion of the investors’ money for his own use.

In addition to the company’s purported investment business, Financial Plus also purported to offer foreclosure relief services. Rangel and Juanchi identified Latino homeowners who were at risk of losing their homes but who appeared to still have substantial equity in their properties. Financial Plus then offered to help these homeowners avoid foreclosure. Many of the homeowners were told that Financial Plus would save their home by refinancing their mortgages using a co-signer who would be provided by the company. These homeowners were told that the co-signer would be removed from the loan after one year, once the homeowners had fixed their credit.

The indictment alleges, however, that Rangel and Juanchi did not refinance these homeowners’ properties. Instead, they arranged to sell the homeowners’ properties to straw buyers and apply for loans related to these supposed purchases in the straw buyers’ names. Rangel and Juanchi allegedly paid Araque to create false documents, including pay stubs and tax forms, to support the false information listed for the straw buyers on the fraudulent loan applications. Once the loans were funded by the victim banks, Rangel and his companies received the proceeds from the loans, funded by the equity from the homeowners’ properties, as well as title to their homes.

An indictment contains allegations that a defendant has committed a crime.  Every defendant is presumed to be innocent until proven guilty.

Rangel is currently pending sentencing for his conviction last year on federal charges of bribing a bank manager to falsify bank records and release holds on millions of dollars in checks that he deposited at the bank. Rangel’s son, Harold Rangel, was also charged in that case, but fled while on pretrial release.

The cases against Rangel are the result of an investigation by the Federal Bureau of Investigation, the United States Postal Inspection Service and IRS-Criminal Investigation.

CONTACT:        Assistant United States Attorney James A. Bowman

Major Frauds Section

(213) 894-2213

Release No. 10-139


More Unnecessary Delays in Foreclosure Market.

Brown Demands JP Morgan Chase Suspend Foreclosures Unless It Can Demonstrate Compliance with California Law

LOS ANGELES – Attorney General Edmund G. Brown Jr. has demanded that JP Morgan Chase prove immediately that it is complying with state law or, if it cannot, halt foreclosing on California homes.

“I’m taking this action to further protect California homeowners on the brink of foreclosure,” Brown said, “JP Morgan Chase, like GMAC/Ally Financial, has admitted that its review of key foreclosure documents was a ruse.”

“I’m directing Chase to prove it is following the law before it continues foreclosures in California,” Brown added.

California law prohibits lenders from recording notices of default on mortgages made between January 1, 2003 and December 31, 2007, unless, subject to limited exceptions, the lender contacts or tries diligently to contact the borrower to determine eligibility for a loan modification. A notice of default must include a declaration of compliance with California law.

JP Morgan Chase, the nation’s third largest loan servicer, has admitted that employees signed affidavits in 56,000 foreclosure cases nationwide without first personally reviewing the contents of the borrowers’ loan files. As a result, those borrowers lost their homes based on affidavits the bank never confirmed were accurate.

This practice strongly suggests that any purported verification by JP Morgan Chase that it complied with California law before beginning foreclosures here is also questionable.

JP Morgan has suspended foreclosures in 23 other states that, unlike California, require a court order for foreclosures.

On Sept. 24, Brown sent a similar letter to Ally Financial, Inc., formerly known as GMAC, directing it to prove it is complying with California law or cease foreclosures in California until it can. The Attorney General’s office is in contact with Ally.

Brown’s letter to JP Morgan Chase is attached.

# # #

Southwest CA Legislative Council on ballot props

As you are aware, the California Association of Realtors does not take positions on ballot propositions that are not real estate related. On the November 2 ballot are a plethora of propositions but none that are deemed RE Related – so no official CAR position statements.

swbiz

However, if you are curious, the Southwest California Legislative Council, a business advocacy group composed of business & civic leaders from the Temecula, Murrieta, Lake Elsinore & Wildomar Chambers of Commerce (and of which SRCAR is a founding partner), has considered each propositions during the past few months and has published the following positions:

Proposition 19 – Oppose: Legalization & Taxation of Marijuana.

Prop 19 allows people 21 years and older to possess, cultivate or transport marijuana for personal use while permitting local governments to regulate and tax commercial production and sale of marijuana to people 21 years and older. Hotly debated, proponents claim this bill would bring billions into our state coffers and eliminate or greatly reduce the hold of organized crime, especially narco-trafficantes, from a legal and regulated market. Opponents simply don’t want it legalized.

Proposition 20 – Support: Voters FIRST Act for Congress

Prop 20 extends the responsibilities of the Citizens Redistricting Commission and gives the commission the authority to draw boundaries for the United States Congressional Districts.

Proposition 21 – Oppose: Annual Vehicle License Surcharge to Fund State Parks

Prop 21 establishes an $18 annual state vehicle license surcharge and grants free admission to all state parks to surcharged vehicles and requires deposit of surcharge revenue in new trust fund for parks. There is no nexus – we would all pay a vehicle license tax to support parks.

Proposition 22 – Support: Local Taxpayers, Public Safety & Transportation Act

Prop 22 would prohibit the State from taking, borrowing or re-directing local taxpayer funds dedicated to public safety, emergency response or other vital local government services. Further, the act would protect vital, dedicaed transportation and public funds from state raids.

Proposition 23 – Support: Suspension of AB32 the global climate initiative bill

Also known as the California Jobs Initiative, Prop 23 would delay the implementation and operation of AB32 until California unemployment rate returns to the levels that existed when the bill was passed, 5.5% or less, for four consecutive quarters.

Proposition 24 – Oppose: Repeal of Corporate Tax Breaks

Prop 24 would repeal several corporate tax reforms that are slated to go into effect in 2010 and 2012. The corporate tax reforms were approved by the legislature and signed into law by Gov. Schwarzenegger in February 2009 as part of the budget agreement. Democrats got their tax increases as a result but now want to renege on the corporate reform portion of the deal.

Proposition 25 – Oppose: Legislative Vote Requirement for Passage of State Budget

Prop 25 changes the legislative vote requirement necessary to pass the state budget from 2/3 to s simple majority. The only check & balance we have in this state is 2 Republican votes keeping Democrats from simply raising taxes every time they overspend. This bill further states that if the legislature fails to pass a budget by June 15, all members of the legislature would permanently forfeit any reimbursement for salary and expenses until the budget is passed. Not nearly enough incentive to forgo our slim safeguard of 2/3 requirement.

Proposition 26 – Support: Legislative Vote Requirement for State Levies & Charges

Prop 26 increases legislative vote requirements to 2/3 for state levies and charges with limited exceptions, and for certain taxes currently subject only to majority vote.

Proposition 27 – Oppose: Eliminate State Commission on Redistricting

Prop 27 voids Prop 20 by eliminating the 14 member public redistricting commission and it’s authority and places the authority to set boundaries back with elected representatives responsible for setting their own districts. This gerrymandering approach has resulted in the fact that since 2000 just 1 single legislative seat in Sacramento has changed parties and is responsible for much of the gridlock and dysfunction we are experiencing today.

As always, we encourage you to do your own research and draw your own conclusions about what is best for you and our  state. These suggestions are the result of considerable debate by a 15 member board of local business and civic leaders and represent the consensus of that body, not necessarily the individual opinion of each member.

Remember – I’m a Realtor® and I VOTE. Make YOUR voice heard on November 2.

rltr


Sen. Dennis Hollingsworth's Corner

Measure the State Budget by Sustainability

By Senate Republican Leader Dennis Hollingsworth

As seen in the FlashReport

Sustainability should be the benchmark taxpayers use to measure state budget proposals. It’s obvious that past state budgets have postponed real solutions, proved unsustainable, and led to the current budget mess.

This year legislators face another budget crisis and another round of budget proposals. The difference between the budgets Republicans and Democrats are offering is simple: the Republican budget is sustainable; the Democrat budget is not.

The Democrats’ budget depends on plans to raise taxes by $4.5 billion. That act alone will take money away from consumers, drive more employers out of California — or simply out of business, and continue the fiscal death spiral that grips the state. Democrats want these new taxes to pay for $3 billion in welfare programs that California can no longer afford. There’s a certain consistency in their thinking. Democrats know their policies will result in more Californians losing jobs and turning to government assistance, so they want to “help” the taxpayers they’ve pushed over the edge.

Their tax measures offer more unsustainable ideas. They propose to convert “temporary” taxes to permanent taxes–even though voters rejected those taxes by a two-to-one margin last year. They propose raising income taxes on most people earning $20,000 to $200,000 a year at a time when the middle class is already straining to make ends meet. They propose to raise taxes on employers and delay business incentives, when jobs are already leaving the state.

The incontestable truth is that government cannot spend its way to prosperity. Every dollar the government spends is a dollar that was first taken out of the economy in the form of taxes. Last year, personal income in California dropped by $40 billion. Increasing taxes now will only accelerate that decline. Unemployment has reached heights not seen since the 1940s. With less money to spend, most people are cutting back wherever they can—reducing economic activity and tax revenues yet again.

The Democrats’ tax-hike budget will further corrode California’s economy, and that’s simply not sustainable.

Republicans propose to pare the state budget back to a sustainable level by cutting unaffordable programs while maintaining education funding at last year’s levels. The Republican budget avoids new taxes, leaving those hard-won dollars to be spent by the consumers and businesses that earned them.

Protecting middle-class wage earners, shunning job-killing taxes, and delivering promised incentives to private sector employers are vital steps in a sustainable plan to restore prosperity and encourage job creation. Restraining spending is another, equally important step, needed to break the cycle of tax-and-spend government growth. Republicans aim to bring government spending into line with existing state revenues, just like ordinary Californians must do every month to sustain their household budgets.

Residents of the Golden State are waiting to see whether legislators will choose another tax-and-spend budget that can’t be sustained, or whether they will arrive at a sustainable budget that matches government spending to income and protects hard-working taxpayers. Given the heavily weighted Democrat majority, the Legislature is unlikely to adopt a strong, sustainable budget. Unless Democrats adopt the Republican budget proposal—the only sustainable budget plan—our state will base its economic future once again on Democrat schemes and dreams, not reality.


Kevin Jeffries Corner

A Broken Process

Anarchy: [an-er-kee]-noun 1. A state of society without government or law.         2. Sacramento on the last night of session.

Where do I start? No State Budget?, Record High Unemployment?, Massive State Debt?, Businesses and Jobs Leaving the State?, Dysfunctional State Legislature?, Unaccountable State Bureaucrats? Pick one – anyone – and your blood will start boiling.

If you had the pleasure of watching the final days of the State Legislature on August 30th and 31st, you watched a hurricane blow through the State Capitol, with hundreds of bills (legislation) being shoved through the process. Rules were waived, procedures were set aside, public hearings were held on newly drafted legislation with only a few minutes public notice – it was model of efficiency – so long as you didn’t care about content, fairness, public access, or say – good government.  A good “non-partisan” account of this chaotic finish can be seen in this LA Times article.

In one committee I serve on, we had a hastily called meeting to hear several re-written or amended bills. One bill dealt with a very significant change in wagering (betting) at horse racing tracks in California. The Author of the bill was on hand to testify. The supporters and opponents testified. Funny thing – for those of us who were expected to vote on the proposed legislation – we didn’t even have a written copy of the bill to examine and ask questions about! Some legislators liked what they “heard” and took a leap of faith in support. I just couldn’t do it. I refused to even vote. Maybe I’m thick-headed or stubborn or both, but we all deserve better from our government.

That is why I continue to push my reforms to the legislative process, to require that bills be publicly available (and available to the legislators) at least 24 hours before a vote, and to end midnight sessions where important decisions are being made while the citizens sleep.

Now some of you will fire-off a nasty-gram to me stating “Who cares, you should be focused on the budget.” Trust me – I get it. But I would argue that the root of most of our problems in our state can be traced back to the dysfunction of our State government and State Legislature. We spend very few hours throughout the year actually investigating how wisely your tax dollars are being spent by state agencies on state programs. Regretfully we spend more time listening to those who want to create and impose new regulations, and less time listening to those who want to create and keep good paying private sector jobs in California. As an added bonus, we also spend a fair amount of time telling counties and cities how they are to conduct the “peoples business” (via mandates & regulations), and then of course the Legislature exempts itself from those very same rules.  We cannot have good outcomes when our process is broken from the beginning.

In closing, some of you want to know when a State Budget is going to be adopted. I initially thought a budget deal would have been done by early August. Now I have to say I don’t know. A revised version of the Governor’s proposed budget (with no increased taxes) was rejected on party-line votes on August 31st. A counter budget proposal (with billions in new taxes to follow) was also rejected on August 31st. A few months ago I laughed at the conspiracy theory that a state budget would not be approved until after the November election. I’m not laughing anymore.

Respectfully,

Kevin Jeffries


City Manager panel welcomes Realtors to our new home.

Yesterday our Association held our inaugural event in our brand new home. We closed escrow back in March and have been doing the TI’s  since then  and completed our move just last week. There’s still a couple areas under construction and we’ll bring you more photos when we’re all done.

mgrBut timing presented a terrific opportunity for our association to acquire a new facility, to own our own home free and clear and have a great place for our members to meet, to learn and to shop. As I tell folks, it’s always a good market for somebody and in this case, what was a bad market for the Jaguar dealer that previously owned the place turned out to be heaven-sent for Realtors. Big facility, lots (but never enough) parking, nice high-tech gadgetry, a huge meeting room with food prep facilities that can be rented out – a win-win for SRCAR.

mgrSo for our kick-off event, we did an RAF fundraiser featuring a panel of four of our local city managers moderated by yours truly. Temecula’s Shawn Nelson, Murrieta’s Rick Dudley, Menifee’s Steve Harding and Wildomar’s Frand Oviedo joined us for the morning providing city updates and fielding questions from over 150 Realtors.

mgrWe started the morning with a breakfast put on by our affiliates – including fresh-made strawberry waffles by the one and only Billy McDougal, eggs, sausage & bacon prepared by Judy Edgerton, plus fresh fruit, muffins, juices and coffee from our terrific support team of affiliates. Waffles were so popular we set up back-up waffle irons in the board room to meet demand.

mgrThe facility seats nearly 200 at tables, well over 300 in conference seating. The front of the room features two large projection screens to present slides, overheads, video or live feed directed from the media center. There are also 55″ screens strategically placed in the lunch room, the board room and behind the front desk so live events can be played throughout the facility, webinars can be conducted or calendars of coming events and other promotions can be played during normal business hours. For us that’s all pretty cool stuff.

mgrAs I noted in my remarks, we are indeed fortunate to have the city managers in place we do. With 5 cities in close proximity, the potential is there (and has been in the past) to compete for housing, compete for businesses and work counter-productively to the well-being of the region. Our city managers and councils have adopted a more cooperative mode the past few years understanding that each location may be a better fit for one particular venue and that a win for one is a win for our region.

mgrEach Manager gave a 15-20 minute overview of where their city is financially, what they have planned, how the housing crisis has both hurt and helped them, how they’re coping with budgetary restrictions, how they’re working with businesses and attracting new jobs to the area. The Managers were uniformly upbeat believing we’ve been through the worst for our area, we’ve adjusted to that decline and are poised to benefit from the pending up cycle. With continued strong demand for housing, inventories of 3 months or less and stable to slight price appreciation for the past 18 months, they are well supported in their idea that, at least for us, the worst may be over.

Questions from members covered a range of topics from healthcare to builder fees to infrastructure improvements. Our cities continue to move forward with civic projects and substantial highway improvements funded by local redevelopment fees because – as one manager put it, if we don’t use it the state will just steal it – as they have done the past couple years.

mgrA great morning was capped by an opportunity drawing including a flight over the valley, a day at Disneyland and an iPad. Everyone who attended took home something from the event, some a little more than others. Welcome members to our new Realtor home.


Reverse mortgages – know what you're signing and to whom.

My wife and I were having dinner with her mother yesterday. Her mom’s getting up in years and still lives in the big family home on an acre and has seen some decent appreciation even considering the recent bust.

Over dinner she asked if I knew anything about reverse mortgages? I told her I know 2 things about reverse mortgages –

  1. For the right person a legitimate reverse mortgage can be a wonderful thng.
  2. They are currently the most prevalent form of real estate fraud being perpetrated on elderly people.

Now Jan has had a reverse mortgage for 16 years and it has been a lifesaver. She gets just enough every month to augment her SS and pension but not enough to live a wild lifestyle – well, not too wild. She does drink White Zinfandel out of a box.

So she received a call from somebody she assumed was with her existing mortgage company telling her about a new product. He was very nice, claimed to be almost 70 himself, chatted about grand kids, told her the new product would save her money on interest rate, she would continue to get her monthly payment AND she would get a lump payment of more than $50,000 to spend as she saw fit – buy a new car, take a cruise, help her grandkids – whatever.

Well, she really wasn’t too interested in taking out more money that she really doesn’t need but thought the rest sounded good so she asked me to take a look at the paperwork the guy had sent over. Nice paperwork – 4 color brochures, info on government programs and a breakdown of her situation with numbers that sounded close to what she thought she owed and what her interest rate is.

Trouble is, when we got to looking at it and pulled her latest mortgage statement, we found the numbers really weren’t that accurate – in fact they were actually the sort of numbers you might get if you were just using a public tax database record and making some assumptions on balances and interest. An even closer look revealed that while the logo and name were similar to her existing mortgage company, they weren’t the same at all. Close but no cigar.

Finally, buried in the fine print was the disclosure that there were nearly $8,000 worth of costs & fees buried in the transaction along with some commission for the ‘very nice man’.

Now I’m not saying this is a fraud or a scam – in fact looking at their website they appear to be totally legitimate. Of course, who doesn’t these days. I’m just saying the marketing pitch is a little ‘iffy’. It confused Jan and she’s still pretty sharp – it could easily mislead others into thinking they were just getting a new product from their existing lender, that their rates would go down while their payments would stay the same.

So the worst that might have happened would have been that Jan did the refi, her interest rate might have dropped a few bucks and she would have paid $8 grand in fees and commissions.

OR she might have been signing over her home, forfeiting all her equity to a flim-flam man, and ended up living on the streets at 80. Or with me. That’s why I’ve gotta keep on top of this stuff.

Folks, if somebody calls you or sends you something you don’t quite understand, please, PLEASE talk to somebody you trust. Back in the day it might have been OK to just trust the nice man on the telephone. Today – not so much. You do bear some responsibility for your own well being and security – after all, you made it this far. Don’t blow it now.



Proposition 23 needs your vote.

As you know,CAR does not take ballot positions on issues they deem ‘not real estate related.’ However, I will be posting information from our local legislative business partners regarding the upcoming propositions. Meanwhile, here’s a position paper representing a minority business coalition that pretty much sums up the arguments for and against Prop 23.

Proposition 23 Is Needed to Save Jobs

By Earl Cooper
President/CEO of the Black Business Association

The African American business community has long been wary of California’s global warming law (AB 32) because of its potential negative impact on small businesses in the state.  A large percentage of African American-owned businesses fall into precisely that category.

Unfortunately, our instincts have proven correct.  The independent Legislative Analyst has determined that AB 32 will increase energy costs and result in lost jobs.  The California Air Resources Board (CARB) itself has acknowledged that small businesses will be hit disproportionately hard since they typically spend a larger percentage of their budgets on utilities and fuel.

That’s why the Black Business Association, and African American organizations across the state, strongly support Proposition 23.  By temporarily suspending the state’s costly global warming law, Yes on 23 will save small businesses and families from the electricity, gasoline and natural gas cost increases that would occur if this flawed law were implemented.

Yes on 23 will also save jobs – more than one million of them – by keeping energy costs down.  With 2.3 million people out of work in this state, we need to do everything we can to save jobs.  That’s why we are proud to join with other organizations such as the California Small Business Association, California Hispanic Chambers of Commerce and National Federation of Independent Business in support of Proposition 23.

There is also growing support for Proposition 23 from cities and counties because according to the Legislative Analyst Yes on 23 will save local governments from the higher energy costs the global warming law would impose.  According to the Legislative Analyst, Proposition 23 also would improve the economy, which will help local governments facing budget problems.

And a recent study found that Yes on 23 would save the City of Los Angeles nearly $200 million per year.  Sacramento County would save over $70 million per year and the City of San Diego would save over $50 million per year.

These local government benefits mean that cities and counties will have more funds available to pay for vital public safety services such as law enforcement and fire protection.  It’s not surprising that the California State Firefighters’ Association and the Los Angeles Police Protective League are among the public safety organizations supporting Proposition 23.

And this is important: while global warming is a serious issue, we need to understand what California can and cannot do to influence it.  According to CARB, California can’t solve global warming all by itself, and in fact can’t even make a difference in worldwide global warming emissions.  So what California small businesses and consumers are left with are higher energy costs and no measurable climate change benefits.

Equally important is the fact that Proposition 23 won’t in any way weaken or roll back any of the numerous clean air and water laws that protect our communities from smog-forming or other emissions that pose a risk to the environment or public health.

That’s why Proposition 23 just makes sense. It will save jobs that are in dire need right now, and keep down energy costs for small business, while maintaining existing laws that are vital for protecting the environment and public health.

Now more than ever, we need Proposition 23.