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As the Senate continues work on its $15 billion mortgage relief bill next week, states will be keeping a close eye on one measure: it would authorize them to issue an additional $10 billion of tax-exempt housing bonds to fund mortgage programs.

Up until now, efforts by states to help distressed homeowners refinance have had negligible results. The new measure would give them additional tools. Still it's unlikely to help them refinance large numbers of borrowers with subprime mortgages.

States currently can sell tax-exempt bonds to finance mortgage assistance to first-time home buyers and those who buy homes located in economically disadvantaged areas. The proposed legislation would allow states to use these bonds to help homeowners refinance as well and allow states to issue more tax exempt bonds to finance their mortgage programs. The additional funds would be allocated on a per capita basis.

Some states are already trying to help. In an effort to stem rising foreclosures, nine states -- including Ohio, Maryland, Illinois and New York -- have started or are preparing to start refinance programs aimed at subprime borrowers facing interest-rate resets, according to the National Governors Association.

The problem, however, is that the refinance programs are turning out to be far less effective than officials had hoped, in part because borrowers seeking state help tend to be in such bad financial shape they don't qualify. Healthier borrowers are bypassing the state programs and seeking other options to refinance their subprime loans, such as the Federal Housing Administration, which has already refinanced 145,000 mortgages in the past seven months.

"Our experience, like the experience of other states, is that refinance programs have limited success," says Philip Lentz, a senior vice president with the State of New York Mortgage Agency, which has refinanced just three borrowers since its "Keep the Dream" program, aimed at those with subprime mortgages, began accepting applications in September; it has another 17 loans in the pipeline. The legislation "will allow us to be more flexible," Mr. Lentz says. But it won't, for instance, make it possible to refinance borrowers whose loans are underwater.

Other state officials say the measure would lower their costs, making the loans they offer a more attractive alternative. They say it also would allow them to make more loans to first-time homebuyers and help homeowners who aren't in serious financial trouble refinance.

"It adds another tool for us," says Clarence J. Snuggs, deputy secretary of the Maryland Department of Housing and Community Development. "But I don't think refinancing is going to resolve the lion's share" of mortgage problems, he adds. "Restructuring [loans] is going to the place where most people get relief."

The state bond measure before Congress isn't likely to address one of the fundamental problems for the refinance programs: many borrowers don't qualify because they have missed too many payments or owe more than their home is worth. Maryland, for instance, has closed 18 loans since its "Lifeline" refinance program was announced in June and has another 17 in the pipeline.

The Ohio Housing Finance Agency tried to boost participation in its subprime refinance program by relaxing underwriting guidelines, and ran an eight-week radio advertising campaign to boost awareness. Still, the program has refinanced just 37 borrowers.

Many borrowers "have credit problems that go beyond our expanded criteria," says Cindy Flaherty, director of special projects.

Which way should you hold title?

You should ask an Attorney for the best way to hold title. Below are the different options:

HOW YOU TAKE TITLE - ADVANTAGES AND LIMITATIONS:
Title to real property in California may be held by individuals, either in Sole Ownership or in Co-Ownership. Co-Ownership of real property occurs when title is held by two or more persons. There are several variations as to how title may be held in each type of ownership. The following brief summaries reference seven of the more common examples of Sole Ownership and Co-Ownership.

SOLE OWNERSHIP

• A man or woman who is not married.
  Example: John Doe, a single man.

• An Unmarried Man/Woman:
  A man or woman, who having been married, is legally divorced.
  Example: John Doe, an unmarried man.

• A Married Man/Woman, as His/Her Sole and Separate Property:
  When a married man or woman wishes to acquire title as their sole and separate property, the spouse must consent and relinquish all right, title and interest in the property by deed or other written agreement.
  Example: John Doe, a married man, as his sole and separate property.

CO-OWNERSHIP

• Community Property:
  Property acquired by husband and wife, or either during marriage, other than by gift, bequest, devise, descent or as the separate property of either is presumed community property.
  Example: John Doe and Mary Doe, husband and wife, as community property.
  Example: John Doe and Mary Doe, husband and wife.
  Example: John Doe, a married man

• Joint Tenancy:
  Joint and equal interests in land owned by two or more individuals created under a single instrument with right of survivorship.
  Example: John Doe and Mary Doe, husband and wife, as joint tenants.

• Tenancy in Common:
  Under tenancy in common, the co-owners own undivided interests; but unlike joint tenancy, these interests need not be equal in quantity and may arise at different times. There is no right of survivorship; each tenant owns an interest, which on his or her death vests in his or her heirs or devisee.
  Example: John Doe, a single man, as to an undivided ¾ ths interest, and George Smith, a single man as to an undivided 1/4th interest, as tenants in common.

• Trust:
  Title to real property in California may be held in trust. The trustee of the trust holds title pursuant to the terms of the trust for the benefit of the trustor/beneficiary.

The preceding summaries are a few of the more common ways to take title to real property in California and are provided for informational purposes only.

There are significant tax and legal consequences on how you hold title. We strongly suggest contacting an attorney and/or CPA for specific advice on how you should actually vest your title.

CONCURRENT CO-OWNERSHIP INTERESTS
The comparison below is provided for information only, it should not be used to determine how you hold title. We highly recommend that you seek professional counsel from an attorney and/or CPA to determine the legal and tax consequences of how title is vested.

	COMMUNITY PROPERTY	JOINT TENANCY	TENANCY IN COMMON	TENANCY IN PARTNERSHIP	TITLE HOLDING TRUST
PARTIES	Only husband and wife	Any number of persons (can be husband and wife)	Any number of persons (can be husband and wife)	Only partners (any number)	Individuals, groups of persons, partnerships or corporations, a living trust
DIVISION	Ownership and managerial interests are equal except control of business is solely with managing spouse	Ownership interests must be equal	Ownership can be divided into any number of interests equal or unequal	Ownership interest is in relation to interest in partnership	Ownership is a personal property interest and can be divided into any number of interests
TITLE	Title is in the "community." Each interest is separate but management is unified	Sale by joint tenant severs joint tenancy	Each co-owner has a separate legal title to his/her undivided interest	Title is in the "partnership"	Legal and equitable title is held by the trustee
POSSESSION	Both co-owners have equal management and control	Equal right of possession	Equal right of possession	Equal right of possession, but only for partnership purposes	Right of possession as specified in the trust provisions
CONVEYANCE	Personal property (except "necessaries") may be conveyed for valuable consideration without consent of other spouse; real property requires written consent of other spouse, and separate interest cannot be conveyed except upon death	Conveyance by one co-owner without the others breaks the joint tenancy	Each co-owner’s interest may be conveyed separately by its owner	Any authorized partner may convey whole partnership property for partnership purposes	Designated parties within the trust agreement authorize the trustee to convey property. Also, a beneficiary’s interest in the trust may be transferred.
PURCHASER'S STATUS	Purchaser can only acquire whole title of community; cannot acquire a part of it	Purchaser will become a tenant in common with the other co-owners in the property	Purchaser will become a tenant in common with the other co-owners in the property	Purchaser can only acquire the whole title	A purchaser may obtain a beneficiaries interest by assignment or may obtain legal and equitable title from the trust
DEATH	On co-owner’s death, ½ belongs to survivor in severalty. ½ goes by will to descendants devisee or by succession to survivor	On co-owner’s death his/her interest ends and cannot be disposed of by will. Survivor owns the property by survivorship	On co-owner’s death his/her interest passes by will to devisee or heirs. No survivorship rights.	On partner's death, his/her partnership interest passes to the surviving partner pending liquidation of the partnership. Share of deceased partner then goes to his/her estate	Successor beneficiaries may be named in the trust agreement, eliminating the need for probate.
SUCCESSOR'S STATUS	If passing by will, tenancy in common between devisee and survivor results.	Last survivor owns property	Devisee or heirs become tenants in common	Heirs or devisee have rights in partnership interest but not specific property	Defined by the trust agreement, generally the successor becomes the beneficiary and the trust continues
CREDITOR'S RIGHTS	Property of community is liable for debts of either spouse, which are made before or after marriage. Whole property may be sold on execution sale to satisfy creditor	Co-owner’s interest may be sold on execution sale to satisfy creditor. Joint tenancy is broken. Creditor becomes a tenant in common	Co-owner’s interest may be sold on execution sale to satisfy his/her creditor. Creditor becomes a tenant in common	Partner's interest cannot be seized or sold separately by his/her personal creditor but his/her share of profits may be obtained by a personal creditor. Whole property may be sold on execution sale to satisfy partnership creditor	Creditor may seek an order for execution sale of the beneficial interest or may seek an order that the trust estate be liquidated and the proceeds distributed
PRESUMPTION	Strong presumption that property acquired by husband and wife is community	Must be expressly stated	Favored in doubtful cases except husband and wife case	Arise only by virtue of partnership status in property placed in partnership	A trust is expressly created by an executed trust agreement

Everyone has been waiting for the conventional loans to go up but the result is not as good as hoped for. The conventional loans will be available to the public in approximately 1 month. The amount went up from 417,000 to 729,500( in certain areas) which is a great but it maybe only good for the rest of the year.

That is only part of the problem! People were hoping to refinance there house with the new conventional laon. The rule states that this new loan is only good for purchases and not refinance. The other problem is that the rates have been steadily climbing since the news of the new conventional loan. Freddie Mac and Fannie Mae have not given their blessing to the loan but had no choice in the matter. Freddie Mac and Fannie Mae are worried that people will not be able to pay these loans back either so the rates are on the rise to lessen the blow. The 30 year conventional loan was down to 5.35 just a few weeks ago. Now the 30 year is up to 6.30 and rising. It is  hard to buy a house in the San Fernando Valley for under 417,000 but that said the prices are coming down and certainly more in specific areas. The 30 year loan at 6.3 is not that bad historically but then again raising the rate a point and more than likely higher is not helping at all. More and more buyers are finding it difficult to get a loan and if the rates keep going up more buyers will be alienated from the housing market!

Despite the many programs gearing up or in place to help homeowners resolve problems with their mortgages, foreclosure related activities continued to increase in January. But, perhaps partially because of these programs, the rate of increase appears to be slowing from the pace of previous months.

In a report released Tuesday, RealtyTrac®, a company that provides foreclosure data to a number of media markets, stated that foreclosure filings which include default notices, auction sales notices, and bank repossessions increased 8 percent in January from the December numbers. One year ago the January figure was 19 percent higher than that for December.

There were a total of 233,001 properties against which foreclosure actions were taken during the month; 45,327 of these homes were actually repossessed by the lender, 90 percent more than in January 2007.

The January 2008 filings increased nearly 57 percent over January 2007. Last month's report revealed that the December pace of filings was 7 percent higher than the month before but nearly double the figure in December 2006.

RealtyTrac CEO James J. Saccacio said "January's foreclosure numbers demonstrate that foreclosure activity is continuing on its upward trend, substantially increasing from a year ago in many states. However, the 8 percent monthly increase in January is not as precipitous as the 19 percent spike we saw in January of 2007, and several key states actually experienced decreasing foreclosure activity from the previous month. It could be that some of the efforts on the parts of lenders and the government - both at the state and federal level - are beginning to take effect. The big question is whether those efforts are truly helping homeowners avoid foreclosure in the long term or if they are just temporarily forestalling the inevitable for many beleaguered borrowers."

Nevada, in spite of the fact that foreclosure activity decreased 45 percent from December, still had the highest foreclosure rate in the country with 6,087 actions, a 0.597 rate. California, Florida, Arizona, and Colorado rounded out the top five.

In actual number of foreclosure actions, California led all other states. Filings were reported on a total of 57,158 properties in the state in January. This was a 7 percent increase from December and 120 percent higher than one year earlier. Florida's activity was down 3 percent from the previous month but the state was still second in the nation with 30,178 filings. This figure was 158 percent higher than one year earlier. Texas, Ohio, Michigan, and Georgia each had more than 10,000 actions reported during the month.

San Fernando Real Estate Agents are hoping that with the conventional loans going up that the market will get a shot in the arm. The President signed an increase in the conventional loan but Fanny Mae and Freddie Mac are still trying to figure how it will work.

Buyers don't realize that even though there are alot more foreclosures coming on the market the banks are still trying to get fair market value for the properties. The banks are not giving them away!

Reuter's news agency was announcing late Thursday morning that the U.S. economic stimulus package being hammered out in Congress would include a temporary up tick in the size of loans that Freddie Mac and Fannie Mae would be allowed to purchase.

Republicans on the Hill have agreed to raise the current loan limit of $417,000 for a single family home for one year although there is not yet agreement on how high the limit should go. Proponents, who feel that a higher ceiling would be one way to add liquidity to the mortgage market, frequently mention $625,000 as a new loan limit.

It looks as though Congress has also agreed to a tentative deal to allow tax rebates of $300 to $1200 per family and enact business tax cut to get the economy moving again.

One of the rumored compromises behind the package was an agreement on the part of Democrats to drop increases in food stamps and unemployment benefits in return for gaining rebates for virtually everyone earning a paycheck, perhaps a minimum of $3000 per year, even if they do not make enough to pay income taxes. The Republican proposal would have limited the rebates to taxpayers.

The minimum rebate to those eligible is likely to be $300 with an additional $300 for each child with a family limit of perhaps $1,200. Eligibility would be capped by income of maybe $75,000 for an individual and $150,000 for couples.

Rebate checks would probably not arrive until probably June.

Calling the outlook "unusually uncertain," the Federal Reserve cut its forecast for economic growth and raised the possibility that "substantial" interest rate cuts might be needed if financial conditions don't rebound.

Minutes of a Dec. 11 Fed meeting, released Wednesday, show the central bank staff now expects the economy to grow "noticeably below its potential in 2008" as high oil prices, lower incomes, a deteriorating housing market and constricted credit markets take a toll.

The Fed governors and regional bank presidents who make up the central bank's Federal Open Market Committee further point to slower consumer spending and note that credit market problems, which began with rising mortgage foreclosures, are spreading to other areas.

Credit card and auto loan delinquency rates have been rising. The commercial real estate bond market is showing "deterioration," the Fed said. "Strains in financial markets … could persist for quite some time," the Fed said, adding that the housing slump looked "deeper and more prolonged" than expected.

Some Fed officials worried about a possible negative "feedback loop" in which lenders, by tightening credit, cut growth and prompt a further reduction in lending.

"Such an adverse development could require a substantial further easing of policy," the minutes said. Fed officials also said credit markets might rally faster than expected, which could force a rate increase.

On Dec. 11, the Fed cut a key rate target a quarter-point to 4.25%. It was the third reduction since September, when the federal funds rate, what banks charge each other for overnight loans, was 5.25%. The rate is a benchmark for many business and consumer loans.

The central bank noted that the inflation outlook had worsened, because of rising oil and food prices, as well as the falling value of the dollar, which makes imports more expensive. That was underscored Wednesday when crude oil prices touched $100 a barrel. Still, Fed officials expect the inflation rate to decline in coming months.

The Fed did not spell out its next move, promising to "remain exceptionally alert" to conditions.

The Fed "is more sanguine about the inflation (outlook) than they are about the growth prospects," says Steven Wood of Insight Economics. He expects the Fed will cut rates when it meets Jan. 29-30 and continue until the fed funds rate is 3.5% or even lower.

The economy grew at a 4.9% annual rate in the third quarter of 2007, but fourth-quarter growth is expected to be negligible. The Fed forecasts growth of 2.5% as sustainable.

If you don't have a TV, a radio, or a newspaper, you may have missed all of the negative press surrounding the mortgage and housing markets. The severity of the situation has created a sort of panic that has paralyzed the consumer. Rather than deal with any aspect of the problem, we wait for someone to yell: "it's OK to come out now!" If you are waiting for a "bottom" to the overall crisis, and for all the news to turn positive, don't hold your breath. But where there's tragedy, there's opportunity. Let me show you why it is, in fact, "OK to come out now," and why you might be sorry if you wait too long.

The Pendulum Effect.

Depending on the data you are looking at, national average home prices are down significantly. On average, this trend will continue, but consider three things. First, the hardest-hit markets drag down the average depreciation. Second, mid to high priced homes were more inflated than entry level housing. When those homes depreciate, they have farther to fall than a lower priced home. This also brings down the average. Finally, because panic can create a knee-jerk reaction among sellers, and market perception can create a hesitance among buyers, prices can be lower on the way down than they will be at the bottom.

What does this all mean? It's a GREAT time to shop for a moderately priced home. When the market has found a solid bottom and the demand returns, there will be a lot less ambiguity about what a home in your area is really worth. Sellers will be less willing to entertain offers, and selection will decrease.

Mortgage Meltdown?

The news might have you thinking that no one can get a loan these days. This is far from true. Hindsight has given us a clear picture of the kinds of loans that shouldn't be offered again. But the loans that have performed more consistently are still abundantly available, and you might be surprised what you can qualify for.

Banks like to see to see strength in at least 2 of the 4 areas:

1. Credit Score
2. sufficient verifiable income for the payment amount
3. equity in the property or down payment
4. Liquid assets (money in the bank, stock market, IRA's, 401k's, etc...)

The items that will make your loan more difficult to obtain:

1. Non-Owner Occupied (investment property)
2. Stated or No Income (meaning you can't prove it with W2's or Tax Returns)

Bottom Line: If you can legitimately afford to make a regular house payment, there's a very high chance that this can be proven to a lender, who will in turn be happy to give you an excellent loan.

To make things better, interest rates are historically low. At the very lowest point in mortgage rate history, a 30 year fixed conforming loan danced around the 5.5% range. In the last several weeks, it has dropped to 5.75%. 

There's even further impetus to act on this information. Even if prices decline another 10%, due to the market panic, there are sellers out there right now selling for 20% under current appraised value. So you might find a house for $400,000 today that will end up being worth $420,000 when the market bottoms out. A paradox, but true. This also means that your value is likely to be at it's highest as far as refinancing is concerned, and remember that EQUITY is one of the positive factors banks consider.

If you think you might be in your current home for more than a few years, have an adjustable rate mortgage, or have an interest rate that's over 6%. Or if you are a potential home-buyer, it is "OK to come out now," and doing so could save you lots of money.