September 2011
HOME & GARDEN Reading Between The Guidelines by Barry O'Meara ~ THE LOAN WHISPERER
SANTA ROSA, CA. ~ It was just three years ago we sat in total dismay as we watched the rising tide of defaults and foreclosures’ submerge our home values. The housing market was primed for disas- ter with distressed properties destined to flood the market. Homeowners had a new ver- sion of a flood, as the term “underwater” took on new meaning. People owed more than their homes were worth. The housing bubble inflated home values with such gusto that people were enthralled with new found wealth. Banks were giving away” Home Equity Lines of Credit “like they used to give away toast- ers. Open an account with us and we’ll give you “Free Equity Line”, was pitched by all the banks. Like any over indulgence they always have their hangovers. As the banks came to grips with the reality of falling home values, they scrambled to lower or close all those Home Equity Lines that they were so eager to give away. With each hint of the down turn in the housing market, the banks continue to tighten their underwriting guidelines and rules for offer- ing credit. From freestyle days stated income loans, banks moved to the complete oppo- site, requiring two years legit- imate income. No more stated income loans. Two years of
iceberg, it floats with one-seventh of its bulk above
The mind is like an
water. Sigmund Freud
w-2’s and if there is a hint of 1099 you better pull out those 1040’s and not just the first two pages they want all sched- ules. Lending became brutal. Money became tight. With all this tightening of underwriting guideline, any reason could be a reason to decline a loan. The Flipping Rules, the debt to income too high, the non-permitted work on the property, the appraisal came in too low. The under- writers were not given much room to deviate from the guidelines and if the loan did not fit the vanilla mold, it may not get approved. As pendu- lum swings, I’m here to say we are swinging into better days. Changes in underwriting guidelines are reflective of the housing market. The conven- tional underwriting guidelines forbid flipped properties. A flipped property is one that the seller has owned less than 90 days. The banks felt that after the housing boom that a property should not appreciate too quickly. That philoso- phy may have some validity, but in this distressed market, most of these flipped proper- ties were distressed proper- ties. Distressed properties are usually short sales (the bank takes less than what is owed on it) or REO’s (properties foreclosed by the bank), with serious deferred maintenance. The banks would never have
lent on those properties any- way. Now they have seen the light. There are new changes in the Flipped property rules. No longer will a second appraisal be required. The underwriter has the discretion to rely on the review process. These new changes will allow investors opportunity to buy distressed properties and reha- bilitate them. These vacant and abandoned homes can now be turned back into func- tioning homes. This helps our communities and contrib- utes to our local economy. Eliminating the 90 day waiting period for a flipped property, adds more potential buyers to the market place and can help the housing market gain solid ground. Seeing these changes in underwriting gives me a glimmer of hope that lenders can see real appreciation in the housing market. Home values are on the rise.
September 24 - 25
Food Education: Join local farm- ers for a weekend of tours, arti- san foods, wine tasting, hands-on activities, cooking, pick-your- own, agricultural demonstrations, music and harvest. From hay rides to cheese-making, Weekend Along the Farm Trails offers a chance to experience Sonoma County's agricultural heritage. Fee: Free. Time: 10 a.m. to 4 p.m. 707-837-8896
Weekend Along the Farm Trails
September 30 - October 2
Festival: Come join us at the Sonoma County Harvest Fair for premier wine-tasting, food- tasting, art show and sale, pump- kin carving, hay rides, Haunted Room, jazz stage, and many more events and fun activities for the whole family. Don't miss our renowned World Championship Grape Stomp competition! Sonoma County Fairgrounds, 1350 Bennett Valley Road, Santa Rosa CA. Fee: $8 Adults/$3 Children/Ages 6 & Under Free. Time: Fri 12p.m.-7p.m./ Sat & Sun 10a.m.-7p.m. Phone Number: 707-545-4203
Sonoma County Harvest Fair
Pg 13
The Arizona trout is found only in the Arizona.
Weird Facts & Trivia -6 Arizona Facts
The saguaro cactus blossom is the offi cial state fl ower. The white fl ower blooms on the tips of the saguaro cactus during May and June. The saguaro is the largest American cactus.
Arizona leads the nation in copper production.
Petrifi ed wood is the offi cial state fossil. Most petrifi ed wood comes from the Petrifi ed Forest in northeastern Arizona.
The bola tie is the offi cial state neckwear.
The Palo verde is the offi cial state tree. Its name means green stick and it blooms a brilliant yellow-gold in April or May.
17.In 1926, the Southern Pacifi c Railroad connected Arizona with the eastern states.
Corks Restaurant at
Russian River Vineyards Now open 7 Days a Week
Thanks for reading and I
welcome any questions or com- ments at
barryo@stearns.com or or see my promo on page 30!
RESTORATION STUDIO
Quality Restoration of Antiques and Collectibles
59 MONTGOMERY DRIVE SANTA ROSA, CA 95404
Monday‐Thursday 9‐5, Friday 1‐5 pm
Free Estimates - (707)544-5580
www.restoration-studio.com
email
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Tasting room hours: OPEN DAILY
(707) 887-3344 Be careful of your thoughts, they may become words at any moment. ~Iara Gassen 11am – 5pm 5700 Highway 116 North • Forestville, CA 95436 UPBEAT TIMES • September 2011 • 13
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