Categories

JB Home Sellers

News and Information

Local Fave Restaurants

Health & Humanity

Special Events

Places to Play

Blogroll

Archives

JB Home Sellers
6965 El Camino Real Suite 105-479
Carlsbad, CA 92009
Number 00964507

Archive for February, 2009

It’s Getting Easier Being Green- San Diego Business Journal Excerpt

SBA, CDC Small Business Finance Piggyback on Green Movement

ring-around-the-world
 

San Diego Business Journal Staff

The U.S. Small Business Administration and CDC Small Business Finance, its local partner lender for commercial property loans, are jumping on the “green” bandwagon by doubling the maximum lending amounts for those mortgages that benefit the environment.

The new program, Green 504 (referring to the SBA’s 504 commercial property loans), doubles the ceiling to $4 million from $2 million for projects that reduce energy consumption or generate renewable fuels.

CDC loan officer Ken Rosenthal said businesses can qualify by either cutting energy uses 10 percent or producing energy through renewable sources such as solar, wind and hydropower.

“The easiest way to qualify is for a business to add solar panels,” Rosenthal said.

The 504 program has been a popular financing tool for buying buildings in which the businesses are housed. The bank provides half the loan, while SBA provides 40 percent and the owner 10 percent.

Manufacturers can also obtain $4 million in SBA financing without connections to green projects, Rosenthal said.

Like most others in the finance industry, CDC Small Business Finance has seen a big drop in demand in the past quarter or so.

According to an SBA report for the five months ending Jan. 31, CDC made 24 loans for $16 million, second highest in the region in number of loans. But that’s half the volume for the same period a year earlier, Rosenthal said.

“We’re off by 50 percent and the reason for it is purely based on the lack of buyers,” he said. “People are on the sidelines, waiting to jump in.”

The latest SBA report shows the No. 1 lender was Wells Fargo Bank, with 33 loans in the 7(a) program for $10 million. U.S. Bank and Borrego Springs Bank were tied for third place with 10 loans.

Spoken by Jennifer Bonasia | Discussion: No Comments »

Homeowner Affordability and Stability Plan- California Association of Realtors Update

Man and house icon

President Obama unveiled the Homeowner Affordability and Stability Plan, which will offer assistance to as many as 9 million homeowners, while attempting to prevent the destructive impact of foreclosures on families and communities.

The plan contains three main components, and only applies to primary residences. The loans referenced in the plan cannot exceed Freddie Mac/Fannie Mae conforming loan limits.  I’ve outlined the plan in greater detail below.

The first component is directed toward homeowners suffering from falling housing prices who still have equity in their homes, but no longer have the 20 percent equity needed to refinance.  Under the plan, homeowners who have conforming loans owned or guaranteed by Freddie Mac and Fannie Mae will be allowed to refinance their homes, even if they do not have 20 percent equity left in the house. The U.S. Treasury Dept. estimates that about 5 million homeowners will be helped by this portion of the program.

The second component, known as the Homeowner Stability Initiative, is designed to assist homeowners who are “underwater” on their mortgages. The $75 billion initiative will bring together lenders, servicers, and the government so that all stakeholders share in the cost of the modification.  Primary mortgages would be reduced to monthly payments that do not exceed a 38 percent debt-to-income ratio, with the costs of doing so borne by the lender. The government and lender then would split the costs of further reducing the monthly payments until they were at a 31 percent debt-to income ratio. An important aspect of the initiative is that homeowners do not have to be delinquent to participate.

The Homeowner Stability Initiative also will create incentives for servicers, mortgage holders, and homeowners. Servicers would receive an up-front fee of $1,000 for every eligible modification meeting the initiative’s guidelines. Guidelines are scheduled to be released by March 4. Mortgage holders will receive an incentive payment of $1,500, and servicers $500, for modifications made on loans that are current but at risk of imminent default.

The final aspect of the Homeowner Stability Initiative is creating clear and consistent guidelines for loan modifications. The Obama Administration plans to work with federal agencies, banking and credit union regulators, and the private sector in order to develop loan modification guidelines that can be implemented across the entire mortgage market. While adoption of the guidelines will be voluntary for the private sector, all financial institutions receiving Financial Stability Plan assistance going forward will be required to implement the loan modification guidelines.

The government estimates that between 3 and 4 million homeowners will benefit from the Homeowner Stability Initiative component of the plan.

The third component of The Homeowner Affordability and Stability Plan is supporting low mortgage rates by strengthening Fannie Mae and Freddie Mac.  The Treasury Dept. plans to increase their Preferred Stock Purchase Agreements with both Fannie Mae and Freddie Mac from its current $100 billion in both entities to $200 billion in each. The Treasury Dept. also will continue to purchase Fannie Mae and Freddie Mac mortgage-back securities in order to help promote stability and liquidity in the marketplace.  Additionally, the Treasury Dept. will increase Fannie Mae and Freddie Mac’s portfolios by $50 billion, for a total of $900 billion. The Obama Administration will work with Fannie Mae and Freddie Mac to support state housing finance agencies in serving home buyers, such as CalHFA. Funding for this will not come from TARP money but from the Housing and Economic Recovery Act.

While some of the details still are being developed, such as the modification guidelines, the Obama Administration plans on using programs and funding already allocated for The Homeowner Affordability and Stability Plan and will need little legislative approval for programs under the plan.

Spoken by Jennifer Bonasia | Discussion: No Comments »

Fed Adopts Program To Stem Foreclosures

 

housing-key-21

Mortgage Renegotiation to Focus On Reducing Amount of Principal Owed

 

Washington Post Staff Writers
Wednesday, January 28, 2009; Page D01

With its bailouts of Bear Stearns and American International Group, the Federal Reserve took a vast portfolio of mortgages onto its books. Now, it is trying to use its control of billions of dollars worth of home loans to help prevent foreclosures.

The Fed will seek to renegotiate mortgages it owns that might otherwise enter foreclosure, Chairman Ben S. Bernanke told congressional leaders in a letter yesterday. The decision won praise from congressional Democrats, who took it as a sign that the central bank’s leaders are cooperating with efforts to use government power to try to stem the number of foreclosures.

It is unclear how many homeowners stand to benefit. Under the program, the Fed can reduce what a homeowner owes on a mortgage, lower the interest rate, lengthen the term of a loan or take other steps to keep a loan from defaulting, if doing so would offer taxpayers a better long-term payoff than foreclosure. Individual borrowers are unlikely to know whether their mortgages are owned by the Fed, but if they qualify for a renegotiation, they would deal only with their mortgage servicer.

The Fed is emphasizing reducing the amount of principal owed by people at risk of foreclosure, particularly those with a loan balance that is more than 125 percent of the estimated value of their property. Private lenders have been reluctant to renegotiate loans that way, as some of the institutions that own those loans, in the form of mortgage-backed securities, stand to lose money and therefore object.

Bernanke has previously advocated principal reductions, saying in a speech in March that they could be an “effective means of avoiding delinquency and foreclosure.”

If the Fed strategy works and reduces the number of foreclosures while helping the owner of the loans — the central bank in this case — it could serve as a model for other owners of mortgage loans. For example, the Federal Deposit Insurance Corp. has tried to use its control of California bank IndyMac, which it seized last summer, to do loan modifications, but has been frustrated by investors in those loans being unwilling to reduce the amount of principal owed.

“It’s a step beyond what FDIC is doing with its own portfolio,” said Alan White, an assistant professor at Valparaiso University School of Law, who has been studying the foreclosure crisis. “Principal write-downs are still the critical issue” in keeping borrowers in their homes.

It is impossible, based on public information, to know the exact dollar value of the mortgages the Fed holds — though it is in the tens of billions of dollars. In the near term, the mortgages affected are those held in special limited liability corporations that the central bank created to hold assets after its March rescue of investment bank Bear Stearns and September takeover of insurance company AIG.

The Bear Stearns portfolio is worth $27 billion, of which some portion — exactly how much the Fed will not disclose — consists of residential mortgages. The AIG assets include a $20 billion portfolio of mortgage-backed securities and a $27 billion portfolio that includes complex securities that are partly backed by mortgage debt.

Congressional leaders yesterday praised the Fed’s action, while urging further steps. “This is an important advance, and I hope to work with the [Fed] to strengthen the program,” said Sen. Christopher J. Dodd (D-Conn.), chairman of the Senate Banking Committee. Dodd also urged the Fed “to work with consumer advocates to develop the most effective program possible.”

Spoken by Jennifer Bonasia | Discussion: No Comments »

House Passes Stimulus Package – Wall Street Journal Excerpt

$819 Billion Jolt to Economy Aims to Reshape Education, Health Care; Deficit to Soar

 By JONATHAN WEISMAN, GREG HITT and NAFTALI BENDAVID

The House passed an $819 billion tax-and-spending bill Wednesday, in a recession-fighting effort that would extend the reach of the federal government across the U.S. economy by reshaping policy on energy, education, health care and social programs.

The House bill is one of the largest single stimulus packages in history, almost equal to the entire cost of annual federal spending under Congress’s discretion. A parallel Senate measure, which is expected to come to a vote next week, is now valued at nearly $900 billion.

 WSJ’s Greg Hitt explains why there’s a great divide between House Democrats and Republicans over the government’s economic stimulus package.

Either bill, if enacted, would push the federal debt toward levels not seen since the second World War.

The package embodies President Barack Obama’s philosophy, stated in his inaugural address, that a nation in crisis has moved beyond “stale political arguments” over the size and reach of government.

Although most of the money — about $526 billion — will be spent in 2009 and 2010, spending on some programs, including student-loan programs, clean-water projects and housing assistance, is expected to last well beyond the current recession. The House bill expands access to health care for the unemployed, represents perhaps the largest expansion of the federal government’s role in education financing ever and begins what Mr. Obama has promised will be a push toward renewable energy that will continue throughout his presidential tenure.

Also tucked inside is $335 million for programs that help prevent sexually transmitted diseases, and $50 million for the National Endowment for the Arts. The Senate version includes $70 million for a supercomputer at the National Oceanic and Atmospheric Administration and $75 million for smoking-cessation programs.

The package, which would cost more than the entire Iraq War, would reverse the Bush administration’s approach to boosting the economy. That approach relied heavily on tax cuts that tended to put money in the pockets of middle-class and more affluent Americans. The $275 billion in tax relief offered in the stimulus package focuses more on lower-income families. It also includes business incentives to spur job creation and a $500 payroll tax holiday for workers.

The 244-188 vote was not what Mr. Obama had hoped for. A week of presidential wooing — including a visit to the Capitol, a return visit to the White House by moderate House Republicans and a bipartisan cocktail party Wednesday night — did not yield a single Republican vote. The president also lost 11 Democrats.

Getty Images

House Minority Leader John Boehner, center, and every other Republican voted against the stimulus bill.

House Minority Leader John Boehner, center, and every other Republicans voted against the stimulus bill.

House Minority Leader John Boehner, center, and every other Republicans voted against the stimulus bill.

House Republican leadership aides said the vote should force Democrats to compromise in the Senate, but White House aides were more sanguine. They said the package in the Senate has already moved toward Republican positions on key issues, making GOP votes more likely. Mr. Obama has said he wants a final compromise version by Feb. 13.

By providing enormous sums for social programs and changing many of the rules to allow more people to take advantage of the programs, the Obama plan has prompted some Republicans to complain that the bill is becoming a back-door way to expand the social contract. The long-lasting nature of some of the items, say Republicans, has as much to do with pent-up policy demands of a Democratic Congress and White House as reviving a flailing economy.

“The strategy under this bill is to throw billions of dollars in every bureaucratic direction, and cross our fingers and hope for the best,” said Rep. Ken Calvert (R., Calif.) Wednesday during debate on the House floor.

“We need to compare the cost of this package against the cost of doing nothing. The cost of nothing would be catastrophic,” said Rep. David Obey (D., Wis.).

Among the longstanding policy fights the bill weighs in on is whether to mandate that broadband cables controlled by telecommunications and cable firms be open to any Internet content provider; the House bill includes language favoring open access — so-called net neutrality — that telecoms have long opposed. It also secures an expansion of unemployment insurance for part-time workers that Democrats have sought for more than a decade. And it would push the private sector toward enterprises the free market has not favored, such as providing fast Internet access to rural areas and funding for alternative energy during a time of low energy prices.

In the education realm, the stimulus aims more than $125 billion at bolstering public education, an unusual federal intervention in a sphere usually left to state and local governments. It calls for spending $20 billion on school and college renovations. There’s another $79 billion proposed for aid to the states to help them avoid education-related layoffs. In addition, more than $2 billion would go to the Head Start program, $13 billion to supplemental funding for high-poverty areas, and another $13 billion for special-education programs.

The plan provides $5 billion for the construction and repair of public housing. Democrats say this will reduce a backlog of such projects and will mostly be distributed according to existing formulas. But Rep. Jerry Lewis (R., Calif.) depicts it as a quiet reversal of a 30-year trend of the government extracting itself from public housing construction.

In an effort to directly help those hurt by the economic downturn, the plan provides $27 billion to continue unemployment insurance benefits through Dec. 31. It allots $9 billion to increase the current benefit from roughly $300 to $325 per week.

The bill also expands COBRA, the law that allows a company’s former employees to continue receiving group coverage. It would fund 65% of individuals’ premiums for up to 12 months. And it allows workers older than 55, or those who have worked at a company for 10 years, to keep their COBRA coverage until they qualify for Medicare or find a new job. Among the plan’s biggest departures is allowing those who are unemployed to enroll in Medicaid, the health program for the poor. It would temporarily expand Medicaid to allow millions of unemployed workers to qualify for benefits.

[Chart]

Top House and Senate Democrats are also negotiating major changes to longstanding efforts to help workers who lose their jobs to foreign competition. The Trade Adjustment Assistance program, created in 1962, would be broadened to cover a wider range of workers, including employees in service industries, from accounting to aircraft maintenance, lawmakers and congressional aides said.

As the sweeping measure moves to the full Senate next week, tussles loom that will eventually require Mr. Obama to referee differences between the House and Senate. The Senate is looking to add more business-friendly provisions, for example. Senate Finance Chairman Max Baucus (D., Mont.) is signaling a willingness to add amendments that would extend soon-to-expire tax breaks for U.S. timber companies, as well as strengthen a provision already in the bill that creates a tax benefit to encourage corporate debt restructuring.

An issue of keen interest to a wide coalition of businesses, including real-estate, home builders and telecommunications companies, is a proposal added in the Senate to allow companies to defer taxes in 2009 and 2010 that they would otherwise owe for restructuring or retiring debt. As currently written, the bill would require corporations to eventually pay back the taxes, and only applies when companies use cash to buy back debt.

Behind the scenes, a fight is brewing that pits Democrats from rural and urban areas against one another. At issue is how to divvy up $87 billion in spending on Medicaid, which is designed to ensure cash-strapped states don’t cut services as a result of the recession. Under the House bill, 52.5% of the funds would be doled out under the regular formula for annual Medicaid disbursements; the balance would be parceled out under a new “bonus” program benefiting states with high unemployment rates.

Critics say that “bonus” formula short changes poor rural states, where unemployment numbers are already high, but where the rate of decline in jobs isn’t as steep as in urban areas.

“We are getting killed,” said Sen. Conrad of North Dakota. The Senate’s version would split the funds up differently, with 80% to be doled out under existing rules and the balance spent under the “bonus” plan.

Then there is the cost. The deficit, already in record territory, would likely reach between 10% and 12% of the gross domestic product in 2009 and 2010, roughly double the previous peacetime record, according to projections by Decision Economics Inc., a New York economic forecasting firm. That’s partly because of the sheer size of the package, but also the long-term nature of some of the programs.

Without fast action, federal debt levels could soon reach 100% of GDP, levels not seen since World War II, said Allan Sinai, chief economist at Decision Economics. That would put the U.S. in the same league as Italy, whose debt equals 104% of GDP.

Democrats are focusing on rallying public support for the Senate vote expected next week. Mr. Obama met Wednesday morning with a corps of supportive chief executives and used the occasion to make his case that doing nothing in the face of the economic slump isn’t an option.

“The workers who are returning home to tell their husbands and wives and children that they no longer have a job, and all those who live in fear that theirs will be the next job cut, they need help now,” he said to a group that included longtime allies Google CEO Eric Schmidt and Xerox CEO Anne Mulcahy. They are looking to Washington for action — bold and swift.”

—Jane Zhang contributed to this article.Write to Jonathan Weisman at jonathan.weisman@wsj.com, Greg Hitt at greg.hitt@wsj.com and Naftali Bendavid at naftali.bendavid@wsj.com

Spoken by Jennifer Bonasia | Discussion: No Comments »


Directory of Real Estate Blogs Add to Technorati Favorites Add Your Blog.com

Copyright © 2007 JB Home Sellers     Agent Login     Design by Real Estate Tomato     Powered by Tomato Blogs