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What is Escrow Anyway

Once an offer has been accepted by a seller and both parties have signed all of the pertinent dotted lines on the offer this document becomes the sales contract (or agreement). Next, the contract and all necessary paperwork and/or funds are collected and delivered to a neutral third party called an escrow holder.

During the escrow process, this neutral third party will carry out the provisions of the agreement between buyer and seller. An escrow holder is typically an escrow firm or title company. As with the other parts of your transaction, a good real estate agent can help you find an escrow holder in your area. Check the fees charged by the various escrow holders in the area. These fees may be negotiable.

The escrow officer carries out instructions from the buyer and seller, and ensures that ownership of the property is transferred from the seller to the buyer.

The escrow officer will also collect all of the odds and ends in the purchase process.

This includes proof of insurance, the preliminary title report, inspection reports, loan information and the like. The escrow officer will also prepare the final closing statement. The final closing statement is much like a bank statement, in that it lists all of the credits and debits associated with the purchase of the home. Compare the closing costs to those listed on the Good Faith Estimate received from your broker/lender.

You will typically meet with the escrow officer to sign a lot of documents. READ EVERYTHING! Take your time and ask questions about things you don t understand.

Hints on Closing

  • Keep in close communication with your lender. Are there any problems with documentation on the loan Has everything been verified
  • Keep in close communication with your real estate agent. Are there any problems with the home inspection Pest report
  • Always be available for any questions from your real estate agent, escrow officer, loan officer, or anyone else involved in the buying process. Make sure you re  in the loop with any issues that may arise.
  • When it comes time to close escrow — that is, take possession of the house — clear some time. Figure out WHEN you d like to close, and then look at when you HAVE TO close. Are you moving at the end of the month from a rental to your new place Don t let delays leave you out in the street!

Ask your escrow officer for an estimate of closing costs. You won t know exactly how much you ll pay until escrow closes, but it is good to know these figures ahead of time.

Community Development Block Grants (CDBG)

Community Development Block Grants (CDBG) provide annual grants on a formula basis for many different types of grantees.

The programs covered under this designation are: Entitlement Communities, State Administered CDBG, Section 108 Loan Guarantee Program, Colonia, HUD Administered Small Cities, Insular Areas, and Disaster Recovery Assistance. From all of these programs, only the first two provide important funding opportunities for the development of housing and housing programs.

Entitlement Communities
CDBG provides eligible metropolitan cities and urban counties (called “entitlement communities”) with annual direct grants that they can use to revitalize neighborhoods, expand affordable housing and economic opportunities, and/or improve community facilities and services, principally to benefit low- and moderate-income persons. To receive its annual CDBG entitlement grant, a grantee must develop and submit to HUD its Consolidated Plan, (which is a jurisdiction’s comprehensive planning document and application for funding under the following

Community Planning and Development formula grant programs: CDBG, HOME Investment Partnerships, Housing Opportunities for Persons with AIDS (HOPWA), and Emergency Shelter Grants (ESG)). Entitled communities are responsible for developing their own programs and for setting their own funding priorities. Grantees must give maximum feasible priority to activities which benefit low- and moderate-income persons.

CDBG funds may be used for activities which include, but are not limited to:

  • Acquisition of real property
  • Relocation and demolition
  • Rehabilitation of residential and non-residential structures
  • Construction of public facilities and improvements, such as water and sewer facilities, streets, neighborhood centers, and the conversion of school buildings for eligible purposes
  • Public services, with certain limits
  • Activities relating to energy conservation and renewable energy resources
  • Provision of assistance to profit-motivated businesses to carry out economic development and job creation/retention activities.

Funds are received by entitled communities, which post a Notice of Funding Availability (NOFA), through their housing and development department or their city council, and grant proposals are requested. After a series of hearings and evaluations of the grant proposals, funds are awarded to the final recipients. These are generally non-profit agencies that have submitted projects deemed to be of great social value for the community.

Projects submitted for evaluation have to meet general funding criteria and specific funding criteria (Economic Development, General/Native American/Colonias Enterprise Fund and Planning and Technical Assistance ).

When evaluating who should receive funds and on what amount, entities place a high value on: number of people serviced per dollar, addressing a local need, and efficient distribution of human and material resources. Other factors also impact funding, such as competing agencies already providing the service proposed or total number of proposals submitted (some localities like to fund as many as possible, thereby diminishing the amount allotted to each grantee).

The final allocation process is a competitive one, usually there are several agencies competing for a limited amount of money. However, some localities either do not promote effectively the availability of CDBG funds or potential grantees are not aware of their existence, leaving in the coffers of local governments thousands of dollars. This money has to be returned, by the end of the period, to the State. REALTORS should inquire with their local governments about the availability of CDBG funds. Local or municipal housing or economic development officials should be able to furnish information of CDBG funds availability.

  • Open CDBG Grants, see the manual for supported activities.
  • 2004 CDBG budget allocation for California (includes the counties, cities and municipalities not in the State CDBG funding Allocations list). In the same page, links to 2001, 2002 and 2003 budget allocations.
  • California Entitlement List of Contact by City, County and Town

State Administered CDBG

The California State CDBG program has as its objective to develop viable communities by providing decent housing and a suitable living environment and by expanding economic opportunities, principally for persons of low- and moderate-income.

Grants are only awarded to non-entitlement areas which include those units of general local government which do not receive CDBG funds directly from HUD as part of the entitlement program (Entitlement Cities and Urban Counties). Non-entitlement areas are cities with populations of less than 50,000, and counties with populations of less than 200,000, although some entitlement cities have a population of less than 50,000 (cities that are designated central cities of Metropolitan Statistical Areas). The State CDBG program has replaced the Small Cities program in states that have elected to participate.

Annually each state develops funding priorities and criteria for selecting projects. Each year the program makes funds available only to eligible jurisdictions (non-entitlement areas) through several allocations: General and Native American, Economic Development, Planning and Technical Assistance, and Colonias. Notices of Funding Availability (NOFAs) are published for each allocation as the funds become available.

Successful applicants enter into contracts with the State to complete the specified activities with the grant funds. The Department of Housing and Urban Development (HUD) transfers federal funds to the State of California’s Department of Housing and Community Development (HCD). Funds allocation is typically announced by HUD in late February, and it awards the funds to the State in May of each year. Under State statute and regulation, HCD allocates the federal CDBG award into various program components. Once the State receives the funds, it distributes them to eligible jurisdictions, i.e. counties, cities and towns, for their use. One of the requirements to receive a grant is to have submitted a housing element to HCD*. Funds cannot be denied to an entity because of the findings made by HCD regarding the element.

However, Section 50830 of the California Health and Safety Code states that if the city or county has adopted a general plan, ordinance, or other measure which directly limits, by number, either the buildings permits that may be issued for residential construction or the buildable lots which may be developed for residential purposes, then the entity becomes ineligible to receive funds. The flow chart prepared by HCD succinctly describes the allocation process.

If the state finds a jurisdiction to be non-performing, it disencumbers the funds previously awarded and rolls them over to a similar program within the other State eligible jurisdictions. Programs elected for the rollover are selected from the waiting list. Programs are placed, according to ranking, in a waiting list either because they couldn t be fully funded or because they were not funded at all. Since the program s award grant in a sense is lost for the community for that funding cycle it is important to monitor the performance of the local government.

  • State CDBG Funding Allocations Packages, information on NOFAs: general and specific funding application packages.
  • State CDBG Rep List by County (Adobe PDF) All listed numbers are area code 916.
  • State CDBG Rep List by Program
  • CDBG Information, use this page to learn about late-breaking news and to view copies of the most recent Program publications. Information is updated monthly or as needed.
  • State CDBG 2003 General Allocation Funding List (Excel file provided by HCD)
  • State CDBG 2003 General Allocation/ 2nd Rollover Funding (Word file provided by HCD)

Section 7056 (b)(1) of Title 25 of the California Code of Regulations, and Section 50829 California Health and Safety Code.


Short Sales Predictions?

Will we see an increase or decrease in Short Sale Activity in 2011?
It’s been a bumpy ride for short sales investors since 2008. Over the last two years a lot of banks have been less than eager to approve short sales, instead drawing out the process for long periods of time and ultimately halting short sales completely for a while at the end of 2010 because of the robo-signing debacle. So is there light at the end of the tunnel for short sale investors?

Short Sale Predictions

While I have continued to operate my short sales business successfully through this mess, I must say that it has become more difficult for a short sale to get approved by the bank, so it’s taken working on more deals to create the same income (luckily for investors, there are a lot of short sale deals out there). If the short sale predictions for 2011 that are reported in the news are correct we should see a significant increase in short sales a fewer foreclosures during 2011. One report released today explains it like this:

“According to global ratings agency Fitch Inc. and Managing Director Diane Pendley industry experts are expecting to witness more short sales and fewer foreclosures in 2011, an encouraging sign for homeowners in the D.C. Metro, northern Virginia and Maryland regions as well as those seeking alternatives to foreclosure. A short sale, or a sale in which a property is sold for less than what is owed on the mortgage, can be an effective alternative to foreclosure while allowing homeowners to escape the burden of bankruptcy. The Tania Ivey Real Estate Group, which services Northern Virginia, Maryland and Washington, D.C., offers a number of Certified Distressed Property Experts (CDPE) to advise clients in the short sale process. Home sellers in specific areas such as Fairfax County VA, or Loudoun County VA are seeing the number of Short sales increase. If you are a homeowner in Leesburg VA or Ashburn VA trying to sell your house you are competing with numerous Short Sales. Even areas such as Great Falls VA and Vienna VA are seeing a major part of the market being short sold.”
Read more:

Ultimately, the banks will be the ones that decide if they are ready to play ball in 2011. There will be no shortage of delinquent mortgages any time soon, and so it comes down to foreclosure or short sale for the banks. For both investors and homeowners alike, let’s hope the banks choose to start short selling more properties again.

Article Source:

About the Author:
Phill Grove has conducted approximately $200M in real estate transactions – using non-traditional investing methods such as mortgage assignment, short sales, equity partnering, auction-options, wraps, swaps, and other methods – many of which he invented and/or pioneered for the industry. Phill has invented a new strategy called the Mortgage Assignment Profits System. Phill Grove has personally trained and coached hundreds of Real Estate Investors on the “12 Ways to Buy and Sell Real Estate”, as well as marketing and lead processing strategies that actually work. Find out more about Phill at

Secondary Mortgage Market

Conventional financing assistance and loan programs are offered by private lenders, non-profit organizations, savings and loan institutions, credit unions, commercial banks, mortgage banking companies and state and local housing finance agencies. These lenders, the originators of loans, are also called primary lenders.

By extension, the primary mortgage market is the place where loans originate and are issued directly to the homebuyer by primary lenders.

After issuing loans to homebuyers, primary lenders have the option to keep it in their portfolio or to sell it to the secondary mortgage market in order to replenish their funds and have more money available to issue new loans. The secondary mortgage market includes investors and financial companies, pension funds, housing GSEs (Government Sponsored Enterprises) and other financial agents.

The Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) are the two GSEs that purchase loans from the primary lenders. Their purpose is to support homeownership. They replenish primary lenders funds and support their financial activity so that lenders have money available for more mortgage loans.

Fannie Mae and Freddie Mac do not lend money directly to homebuyers. Instead they fund several of the affordable financing programs in place in the mortgage market and publish a number of educational materials for the public, in some instances in other languages than English, to provide consumers with the necessary tools to become knowledgeable in the home-purchasing and home-owning process.

The loans issued through their sponsorship are called conforming loans because the primary lender drafts the loan according to the secondary purchaser s terms. Their loans are designed to help people become homeowners in spite of the challenges they face, such as coming with a down payment or having credit problems.


What You Should Know About Probate Advance

Before talking about what a probate loan is, it’s important to first understand the process of probate. Probate is a legal procedure where the ownership of assets of a deceased person is moved to his heirs or beneficiaries. Due to how it is shown in the media, many people think that the concept of a last will and testament or estate is straightforward. They are mistaken. Although it is fairly easy to understand, there are intricacies people need to know about.

The property of the dead person is called an “estate.” An estate can include stuff like personal belongings, real estate, bank accounts, as well as other properties. If the individual who died came up with a will prior to death, this individual is called the “testator.” The estate of a person who dies with a will becomes a “testate estate.” In instances where a will is prepared by the deceased, the estate is called an “in testate estate.” If a will exists, it will more than likely identify a single person who carries out the bequests of the deceased. This individual is known as the “executor.”

In short, the probate process requires the verification of assets. A legal court certifies whether the deceased has any debt or other issue that will need addressing.

When an estate goes into probate, beneficiaries can take one of three steps. First, they can wait out the entire probate process. The length of the process differs depending on the size of the estate. In most cases, the process takes at least six months. If an heir would like to claim their inheritance right away, they can, but this process will most likely involve large fees and high taxes. The third and most suitable option is to secure a probate advance.

What is a probate advance/loan?

A probate loan is more like a cash advance than a loan. A beneficiary won’t be personally in charge of repaying what is advanced. The pay return process will be left up to the estate. In essence, instead of waiting, heirs advance what they stand to inherit and shift the waiting process to their funding source.

What are the eligibility requirements?

Requirements differ according to lenders. However, the basic requirements are the following: First, there has to be an estate. Second, the applicant will have to be a beneficiary or heir of the estate. Lenders require those that seek loans to present supporting documents to prove that they’re heir to or will benefit from the estate. The final basic requirement would be that the estate has to be in probate.

While it might seem to be an ideal option, there are things beneficiaries need to remember. If there are other heirs involved, it will be smart to keep everyone informed. If an estate is not that big, consult with a probate attorney. In some instances, beneficiaries of a smaller estate are more well off waiting out the process instead of trying to get a probate advance.

Article Source:

About the Author:
Isabella Manzanares is a probate lawyer who has helped folks get probate loan. For additional information on how these can assist you, read up about probate advance.


There are many factors to take into account when trying to choose the right home. After you ve settled on a price range that you can afford, start asking yourself some questions:

  • What part of town do I want to live in In an urban area Near good schools (Are you single, partnered, partnered with kids )
  • Is a big house more important than location
  • How many bedrooms do you need/want Bathrooms Other amenities
  • Do you want a new home A used home A condominium A fixer-upper

Other things to consider: Are you very tolerant to loud neighbors or un-kept houses If you answer  yes, you should have no problem finding a great deal on a home. A problem may arise, however, when you attempt to sell the home. While making yourself happy with your new home, keep in mind that one of these days you may want to try and make someone else happy with it!

Choosing what part of town to live in is mainly based on your lifestyle. If you re single and enjoy a very active lifestyle, living in a quiet, tree-lined neighborhood close to good schools may not be too important to you. On the other hand, if you have three small children, living in a singles condo complex might be a poor choice  or at least make you unpopular with your neighbors!

Pay attention to the quality of the neighborhood in which you are looking.  Pride of ownership shows through in how well yards and homes are maintained. If dead lawns and over-grown shrubs are the norm, you may want to think twice before buying there.

True, you might get more house for the money, but in the long run, you may have trouble re-selling it.

Think about what is going to make your home livable: bedrooms with bathrooms a removed master bedroom a two car garage a gourmet kitchen a large yard a small yard You should write up a wish list, then start looking at what is available in your price range. From there, you can whittle the list down to what you really want and what you can live without.

Why you missed the boat on record-low mortgage rates

Source: CNNMoney/AOL Real EstateBorrowers who didn’t take advantage of the historically low interest rates likely have missed the opportunity to purchase or refinance using an ultra-low mortgage rate. In the past month, rates have been on the rise and are expected to continue to climb. Fannie Mae’s chief economist doesn’t believe mortgage rates will ever be that low again.

Making sense of the story

  • According to the economist, the Fed is going to stop bolstering the housing market, which has kept rates at rock-bottom levels by buying up to $85 billion a month of Treasury bonds and mortgage-backed securities. That has enabled lenders to sell mortgage loans at low interest rates and recoup their money immediately – plus profits.
  • If the Fed stops purchasing the securities, private investors will have to pick up the slack. For investors to do that, the loans will have to offer a better payoff, and that would mean raising rates for borrowers.
  • Low mortgage rates generally are a result of an economy in distress. But now, the market believes the economy is getting stronger. Job gains have picked up, and the fact that that hiring is advancing rather than retreating is good news for the economy. Any positive future reports are expected to push rates higher.
  • Today’s rates are unprecedented. The ever-popular 30-year, fixed-rate mortgage hit a 37-year low in 2003 at 5.23 percent. It is likely that any return to normal conditions will be accompanied by higher mortgage rates.
  • Borrowers should keep in mind that even if rates go up a percentage point or two, mortgages will still be relatively low. Historically, 30-year loans are usually 5.5 percent or higher. For clues in the direction of mortgage rates, experts recommend borrowers look at the daily movements in 10-year Treasury bond yields. Mortgage rates track Treasury yields with the difference between them holding fairly constant.

Read the full story

Talking Points

  • Real estate agents marketing a property for which they have obtained a listing generally will place that listing on the Multiple Listing Service (MLS). At times, however, listings are not placed into the MLS. These listings are commonly referred to as off-MLS or pocket listings.
  • While not a new concept, pocket listings are growing in number – as many as 10 percent to 15 percent of homes offered for sale today are “off-MLS” listings, according to one MLS.
  • Sellers should strongly urge their agent to place their home on the MLS. A property that is listed on the MLS has the advantage of being marketed to every real estate agent who belongs to the MLS and, through those agents, to their vast network of potential buyers.
  • Active marketing on the MLS usually includes open houses, broker tours, and inclusion of the seller’s property in the MLS’ download to various real estate Internet sites commonly used by the public to search for properties.
  • A pocket listing generally is marketed by a single agent to one or a select few potential buyers. The marketing pool can be so small that in some cases, other agents within the same brokerage or brokerage office may not even be aware that a fellow agent has the listing.
  • While pocket listings sometimes are requested by sellers who wish to maintain their privacy, the downsides to off-MLS listings outweigh the advantages. Primarily, the pool of real estate agents and potential home buyers who will know the property is for sale and make an offer to purchase may be limited. With fewer offers, sellers may not receive the best possible price for their home.

Closing Documents You Should Keep

On closing day, expect to sign a lot of documents and walk away with a big stack of papers. Here s a list of the most important documents you should file away for future reference.

HUD-1 settlement statement. Itemizes all the costs  commissions, loan fees, points, and hazard insurance  associated with the closing. You ll need it for income tax purposes if you paid points.

Truth in Lending statement. Summarizes the terms of your mortgage loan, including the annual percentage rate and recision period.

Mortgage and note. Spell out the legal terms of your mortgage obligation and the agreed-upon repayment terms.

Deed. Transfers ownership to you.

Affidavits. Binding statements by either party. For example, the sellers will often sign an affidavit stating that they haven t incurred any liens.

Riders. Amendments to the sales contract that affect your rights. Example: The sellers won t move out until two weeks after closing but will pay rent to the buyers during that period.

Insurance policies. Provide a record and proof of your coverage.

Sources: Credit Union National Association; Mortgage Bankers Association; Home-Buyer s Guide (Real Estate Center at Texas A&M, 2000)

Reprinted from REALTOR magazine ( with permission of the NATIONAL ASSOCIATION OF REALTORS .
Copyright 2008. All rights reserved.

8 Tips to Guide for Your Home Search

1. Research before you look. Decide what features you most want to have in a home, what neighborhoods you prefer, and how much you d be willing to spend each month for housing.

2. Be realistic. It s OK to be picky, but don t be unrealistic with your expectations. There s no such thing as a perfect home. Use your list of priorities as a guide to evaluate each property.

3. Get your finances in order. Review your credit report and be sure you have enough money to cover your down payment and closing costs. Then, talk to a lender and get prequalified for a mortgage. This will save you the heartache later of falling in love with a house you can t afford.

4. Don t ask too many people for opinions. It will drive you crazy. Select one or two people to turn to if you feel you need a second opinion, but be ready to make the final decision on your own.

5. Decide your moving timeline. When is your lease up Are you allowed to sublet How tight is the rental market in your area All of these factors will help you determine when you should move.

6. Think long term. Are you looking for a starter house with plans to move up in a few years, or do you hope to stay in this home for a longer period This decision may dictate what type of home you ll buy as well as the type of mortgage terms that will best suit you.

7. Insist on a home inspection. If possible, get a warranty from the seller to cover defects for one year.

8. Get help from a REALTOR . Hire a real estate professional who specializes in buyer representation. Unlike a listing agent, whose first duty is to the seller, a buyer s representative is working only for you. Buyer s reps are usually paid out of the seller s commission payment.

Reprinted from REALTOR magazine ( with permission of the NATIONAL ASSOCIATION OF REALTORS .
Copyright 2008. All rights reserved.

12 Tips for Hiring a Remodeling Contractor

1. Get at least three written estimates.

2. Check references. If possible, view earlier jobs the contractor completed.

3. Check with the local Chamber of Commerce or Better Business Bureau for complaints.

4. Be sure the contract states exactly what is to be done and how change orders will be handled.

5. Make as small of a down payment as possible so you won t lose a lot if the contractor fails to complete the job.

6. Be sure that the contractor has the necessary permits, licenses, and insurance.

7. Check that the contract states when the work will be completed and what recourse you have if it isn t. Also, remember that in many instances you can cancel a contract within three business days of signing it.

8. Ask if the contractor s workers will do the entire job or whether subcontractors will be involved too.

9. Get the contractor to indemnify you if work does not meet any local building codes or regulations.

10. Be sure that the contract specifies the contractor will clean up after the job and be responsible for any damage.

11. Guarantee that the materials that will be used meet your specifications.

12. Don t make the final payment until you re satisfied with the work.

Reprinted from REALTOR magazine ( with permission of the NATIONAL ASSOCIATION OF REALTORS .
Copyright 2008. All rights reserved.

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