Fire Chief Philip White’s View On Unwarranted Home Inspections

Last week there was meeting with Chief White and Fire Marshall Luis Da Silva to discuss alternatives to Point of Sale (POS) inspections that has been a huge contention with the citizens and homeowners of South San Francisco. Steve Blanton, CEO of SAMCAR(San Mateo County Association of Realtors), Annie Oliva, President of the SAMCAR Board of Realtors along with 4 other Realtors and myself were there to discuss other possibilities. You see, the reason for the meeting was because we were all ordered by the City Council to meet and possibly find a compromise or an alternative to the POS inspection the night of the October 17th Study Session.  That Study Session was so vastly attended by many, many citizens that received my flyers and emails as well as other Realtors who tried to get the word out on such a short notice.  City Council had not seen so many attendees in a very long time so they knew this was an important issue. I was surprised to find that Chief was very amicable.   He joked with us during the hour we were there and worked very hard to get us to understand his point of view.  He only wants, so he says, is for the citizens to be safe and to rid the city of unsafe conditions.  White had in front of him a huge binder of information that he had hoped would sway us into believing that he had the right and obligation to have these inspections to protect the citizens.  He kept reading about State Law that  ties to their City  municipal codes., but us Realtors were not having any of it.  White thinks that while the State of California accepts self-certification, he does not and will not.  He wants to be sure that the smoke detectors, carbon monoxide detectors, strapping of water heaters, etc. are in compliance at close of escrow.  He wants to be sure there is no unpermitted constructions or any, what he calls "unsafe" conditions that exist at the property when it transfers title to the new buyer. Now, I am all for clean yards, and a safe envirnoment, but to legislate against our rights is just wrong! The South San Francisco Fire Department works very hard to protect us in the event of a fire and to educate the community on how to stay safe.    I very much respect the fire department for all it does with regards to their duties, but they have gone too far. Now in case you are not aware, California is one of the most stringent states when it comes to disclosure laws.  The Realtors must be sure that the seller complies with the law and signs a document stating such.   This is called self-certification.  There are so many, many disclosure forms that a seller fills out that we don't understand his thought process.  Or maybe we do and that is why we are so against it.  Also, in many cases, there is a termite and/or home inspector who can certify that these items are in compliance.  In these inspection reports, items are noted that are not up to code and/or are unsafe.  The buyer chooses to buy the property with these defects or not.  Besides, if the buyer wants to gut or remodel, why would you repair it now.  If the buyer takes on the repair work, then it must be completed in a short period of time.  When you want to remodel, it takes time to decide what you want, and a few months is not enough time to get it all done the way you want it. We tried to explain to him that what is doing is considered illegal per the SAMCAR attorney, and  the case Camara vs. Municipal Court of City and County of San Francisco but he tried to convince us that it was all in the name of health and safety.  He was just trying to protect the citizens from unsafe conditions and that he has the right and obligation to do so as it has been done before him.  He believes it is his duty to inspect properties to be sure they are not violating the fire codes and that it is safe to inside.  As misguided as his thought process is, it is also against the Fourth Amendment as it was stated in the Camara case. He doesn't trust that we as Realtors will do our job.  What is interesting, is that he is missing sales that is not handled by a Realtor.  State law has no exemption from these same disclousre laws whether or not a Realtor is involved as the laws apply to all sellers of real property  So, if the State is ok, why does the City feel they need an extra step into the seller's home by way of an inspection. A man's home is his castle in the eyes of the law.  When SAMCAR told him this practice is abusive, he said one might see it that way, but his goal was health and safety. Oh, and by the way, the City is exempt when they are a party to a sale.  How convenient.  If it is truly about Health and Safety, then they especially should not be exempt.  Are you not tired of politicians, government officials/employees who are exempt from the same laws that you and I  must abide by?  What ever happend to ""All Men Are Created Equal".   Same thing with insider trading that politicians are exempt from - I was shocked that they were exempt when Obama asked the politicians to repeal that little benefit !!      

History of Interest Rates

Thought you'd enjoy this history of interest rates over the years. I remember when the rates were 18%. I was an assistant in a real estate office in the early 80's. Since the rates were so high, home sellers, in many cases, carried the loan. They acted as the bank. It was called "Creative Financing." I could not imagine that rates would ever go this low. Great time to buy or refinance. interestrates[carrie.edits]10.9.12

Bernanke: Loan Standards Easing

Bernanke: Loan Standards Easing

On September 20, 2012, in Breaking News, Mortgage Financing, by Robert Freedman
One of the main questions hanging over the Federal Reserve’s plan to buy up to $40 billion a month in mortgage-backed securities (MBS) to help spur the housing market is whether continuing tight underwriting requirements will offset any positive impact the effort will have on lowering mortgage interest rates.   NAR Chief Economist Lawrence Yun and other analysts have said that interest rates, already at historical lows, don’t need to come down further to spur home buying. What needs to happen instead is a change in lenders’ underwriting policies. Since the downturn, lenders have been imposing underwriting restrictions on borrowers that go above and beyond what Fannie Mae, Freddie Mac, and FHA require for loans. For example, borrowers in some cases need to have a credit score 100 points higher than what Fannie, Freddie, or FHA require. These restrictions, or overlays as they’re sometimes called, on federally backed loans are crucial, because Fannie, Freddie, and FHA comprise so much of the mortgage lending market today. Lenders say they need these higher standards to ensure they don’t make loans on which borrowers subsequently default and then face having to take them back if Fannie, Freddie, or FHA say the loan violated the “representations and warranties” the lender made when they originated the loans. As Yun said in his monthly press conference yesterday, to release August existing-home sales figures, despite improvement in home sales and prices, these standards are keeping otherwise creditworthy households from getting financing, which could lead to wide and troubling disparities in home ownership rates down the road. “The tight underwriting standards are not a trifle matter,” he said. They’re “limiting who can become home owners and setting the stage for possible highly unequal wealth distribution in five years, because who will be getting [home price] appreciation over the next five years? They’re limiting the number of people in the middle who can become home owners.” Federal Reserve Chairman Ben Bernanke, at a press conference he held last week to announce the MBS purchase plan, known as QE3, (for “quantitative easing 3, because it’s the third such measure the Fed has taken since the downturn), said these tight underwriting standards are in fact easing. “As house prices have begun to rise, as the economy has gotten a little stronger, lending standards have eased just a bit,” he said. “There have also been other changes which are useful. I note for example that the FHFA (Federal Housing Finance Agency) and the GSEs (Fannie and Freddie) have recently changed their policy on put-backs, so that banks will have more certainty under what conditions a mortgage will be put back to them if it defaults. So, there are a number of things in train that will make the mortgage market a little bit more open. That is one factor actually that could make our policy more effective,  rather than less effective over time. If more people have access to more credit, more people will have access to the low rates we’re providing.” Other than the policy clarification on put-backs, also known as loan repurchases or loan buy-backs, Bernanke didn’t specify what those eased lending standards are. And, whatever they are, they don’t appear to be trickling down to many real estate practitioners on the ground. NAR just last week released survey findings that suggest tight standards continue to be a problem. In one of the findings, in about 75 percent of loans to Fannie and Freddie last year, borrowers had credit scores of 740 or above, compared to just 40 percent of borrowers between 2001 and 2004 who did so. The years 2001 to 2004 are considered stable and healthy, before the housing boom. The difference in credit scores suggests up to 700,000 more loans could have been made last year had that the tight restrictions not been in place. ”Financial institutions appear to be focusing on making loans only to individuals with the highest levels of credit scores,” Jed Smith, NAR manager of quantitative analysis, says in his anlaysis of the survey findings. All this is just another way of saying, as many of the reporters at Chairman Bernanke’s press conference last week were saying (see first video), that the MBS purchase plan might be all the Fed can do, given it’s mandate to focus on monetary policy (matters affecting the supply of money in the economy), but it misses the point. The problem is in lenders’ underwriting policies. And interest rates that go lower than even today’s historically low rates seem unlikely to have much impact on those. In the first video above, Bernanke makes some key housing market points, including about easing loan standards, as he talks about the Fed’s MBS purchase plan. In the second video, Yun talks about the continuing tight underwriting standards.

Federal Tax Credit to Buyers About to Expire

Remember that Tax Credit that I wrote about back in December fo 2009? Well, it is about to expire at the end of this month - April 30, 2010. In order to qualify you must be in a valid sales contract and be in escrow on or before April 30, 2010 and close escrow by June 30, 2010. So, if you are thinking about writing an offer on that property you saw recently and it is something you could see yourself living in, now may be the time to go forward. Remember, this is not only for first-time buyers but also for a repeat buyer who will live in the property. However, repeat buyers only receive $6,500 instead of the $8,000 for first-time buyers. The tax credit will be in the amount of 10% of the purchase price of the new home, not to exceed $8,000 for first time buyers (or $6500 for repeat buyers) and the home can't cost more than $800,000. There are income limits of $125,000 for single tax payers and $225,000 for married tax payers filing jointly (for sales occurring after November 6, 2009). For unmarried joint purchasers, the IRS allows the tax credit to be allocated to any purchaser that qualifies as a first-time home buyer. The government has added a new tax credit of up to $6,500 for repeat buyers. In order to qualify for the repeat buyer tax credit of $6,500, these buyers must have owned and used a prior residence as a principal residence for any five consecutive years in the 8-year period before the date of the purchase of the new principal residence. Now, what is a tax credit? A tax credit reduces your income tax bill on a dollar for dollar basis. This credit can be claimed on your 2009 tax return, due April 15, 2010. However, if your tax bill is less than the tax credit, you will still receive the money in the form of a check. All you need to do is file a form with the IRS after you buy your new home and they will send you a refund check. Remember though, you will receive this refund from the IRS after you purchase your new home, so you cannot use the funds to help with your down payment. For further information, please talk with your tax accountant or go to the IRS website at:,,id=204671,00.html However, this tax credit is expiring soon – so get into a valid contract and escrow must be opened in order to qualify by April 30 and close escrow by June 30, 2010.

How to Search for Listed & Sold Homes in Your Area

Do you want to know what your home is worth, or what the values are in your neighborhood or what the house down the street just sold for?  Here’s how to do it quickly and easily:

1.        Click on the “Resources” button above.

2.       Click on South City Real Estate Sales Info.  Or, just Click Here. This will take you to site which will allow you to search the Multiple Listing Service (MLS)

3.       Once on the website, click on “MY HOUSE” or “SIGN UP” button above.  Fill out the information and don’t forget to save your password for further access.

4.       If you want local sales and listing information for your neighborhood, fill out the information requested and it will give you information and compare surrounding homes in your area. Automatic, monthly updates can also be requested.

5.       Feel free to click “Home Search” to look for listed homes in other cities just by typing in the city of your choice. 

6.       Be sure to put in a Price Range and the minimum number of bedrooms and baths.

7.        The default is for Single Family Homes and Condo/Townhomes but that can be changed by opening up “Property Type”.  If you want to look for REO/bank owned properties, you can use the filter to show only those homes.  Don’t put in too many filters as it will show only homes with ALL those features which could cut down on the number of properties you will see.

8.       Play around with the site to become familiar with it, even saving properties for future viewing.

9.       Good luck and enjoy the site.

10.  Please give me your feedback on my blog and website.

11.   As always, you can call me at (650) 878-8813 with any questions.