This is HUGE!

FROM THE DESK OF THE MORENOWORKGROUP:

A new law signed by Jerry Brown in California has now made it easier for Californians suffering from the Real Estate dip to short sell their homes. The new law prevents the second lein hold nor the investors behind them, including any insurer to seek any type of deficiency judgement against the seller once the deal is closed. 

HERE IS THE LAW FOR THOSE WHO CAN NOT SLEEP AT NIGHT (like me).

http://ca.opengovernment.org/system/bill_documents/001/221/782/original/sb_458_bill_20110516_amended_sen_v96.html?1310498614

BILL NUMBER: SB 458 AMENDED
BILL TEXT

AMENDED IN SENATE  MAY 16, 2011
AMENDED IN SENATE  APRIL 4, 2011
AMENDED IN SENATE  MARCH 21, 2011

INTRODUCED BY   Senator Corbett
   (Principal coauthors: Senators Correa and Vargas)
   (Coauthors: Assembly Members Blumenfield and Skinner)

                        FEBRUARY 16, 2011

   An act to amend Section 580e of the Code of Civil Procedure,
relating to mortgages, and declaring the urgency thereof, to take
effect immediately.



LEGISLATIVE COUNSEL'S DIGEST


   SB 458, as amended, Corbett. Mortgages: deficiency judgments.
   Existing law prohibits a deficiency judgment under a note secured
by a first deed of trust or first mortgage for a dwelling of not more
than 4 units in any case in which the trustor or mortgagor sells the
dwelling for less than the remaining amount of the indebtedness due
at the time of sale with the written consent of the holder of the
first deed of trust or first mortgage. Existing law provides that
written consent of the holder of the first deed of trust or first
mortgage to that sale shall obligate that holder to accept the sale
proceeds as full payment and to fully discharge the remaining amount
of the indebtedness on the first deed of trust or first mortgage.
Existing law specifies that those provisions would not limit the
ability of the holder of the first deed of trust or first mortgage to
seek damages and use existing rights and remedies against the
trustor or mortgagor or any 3rd party for fraud or waste if the
trustor or mortgagor commits either fraud with respect to the sale
of, or waste with respect to, the real property that secures that
deed of trust or mortgage. Existing law makes these provisions
inapplicable if the trustor or mortgagor is a corporation or
political subdivision of the state.
   This bill would expand those provisions to prohibit a deficiency
judgment upon a note secured solely by a deed of trust or
mortgage for a dwelling of not more than 4 units in any case in which
the trustor or mortgagor sells the dwelling for a sale price less
than the remaining amount of the indebtedness outstanding at the time
of sale, in accordance with the written consent of the holder of the
deed of trust or mortgage if the title has been voluntarily
transferred to a buyer by grant deed or by other document that has
been recorded and the proceeds of the sale are tendered as
agreed. The bill would also provide that, in other circumstances,
when the note is not secured solely by a deed of trust or mortgage
for a dwelling of not more than 4 units, no judgment shall be
rendered for any deficiency upon a note secured by a deed of trust or
mortgage for a dwelling of not more than 4 units, if the trustor or
mortgagor sells the dwelling for a sale price less than the remaining
amount of the indebtedness, in accordance with the written consent
of the holder of the deed of trust or mortgage . The bill would
provide, following the sale, in accordance with the written
consent, the voluntary transfer of title to a buyer, as
specified, and the tender of the sale proceeds, the rights, remedies,
and obligations of any holder, beneficiary, mortgagee, trustor,
mortgagor, obligor, obligee, or guarantor of the note, deed of trust,
or mortgage, and with respect to any other property that secures the
note, shall be treated and determined as if the dwelling had been
sold through foreclosure under a power of sale, as specified.
The bill would prohibit the holder of a note from requiring the
trustor, mortgagor, or maker of the note to pay any additional
compensation, aside from the proceeds of the sale, in exchange for
the written consent to the sale. The bill would provide that
these provisions are inapplicable if the trustor or mortgagor is a
corporation, limited liability company, limited partnership, or
political subdivision of the state. The provisions would also be
inapplicable to any deed of trust, mortgage, or other lien given to

secure the payment of bonds or other evidence of indebtedness
authorized, or permitted to be issued, by the Commissioner of
Corporations, or that is made by a public utility subject to the
Public Utilities Act. The bill would provide that any purported
waiver of these provisions shall be void and against public policy.
   This bill would declare that it is to take effect immediately as
an urgency statute.
   Vote: 2/3. Appropriation: no. Fiscal committee: no. State-mandated
local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 580e of the Code of Civil Procedure is amended
to read:
   580e.  (a) (1) No deficiency shall be
owed or collected, and no deficiency judgment shall be
requested or rendered for any deficiency upon a note secured
solely by a deed of trust or mortgage for a dwelling of
not more than four units, in any case in which the trustor or
mortgagor sells the dwelling for a sale price less than the remaining
amount of the indebtedness outstanding at the time of sale, in
accordance with the written consent of the holder of the deed of
trust or mortgage. mortgage, provided that
both of the following have occurred:
   (A) Title has been the voluntarily transferred to a buyer by grant
deed or by other document of conveyance that has been recorded in
the county where all or part of the real property is located.

   (B) The proceeds of the sale have been tendered to the mortgagee,
beneficiary, or the agent of the mortgagee or beneficiary, in
accordance with the parties' agreement.
   (b) Following the
   (2) In circumstances not described in
paragraph (1), when a note is not secured solely by a deed of trust
or mortgage for a dwelling of not more than four units, no judgment
shall be rendered for any deficiency upon a note secured by a deed of
trust or mortgage for a dwelling of not more than four units, if the
trustor or mortgagor sells the dwelling for a sale price less than
the remaining amount of the indebtedness outstanding at the time of
sale, in accordance with the written consent of the holder of the
deed of trust or mortgage. Following the sale, in accordance with the
holder's written consent, the voluntary transfer of title to a
buyer by grant deed or by other document of conveyance recorded in
the county where all or part of the real property is located ,
and the tender to the mortgagee, beneficiary, or the agent of
the mortgagee or beneficiary of the sale proceeds, as agreed, the
rights, remedies, and obligations of any holder, beneficiary,
mortgagee, trustor, mortgagor, obligor, obligee, or guarantor of the
note, deed of trust, or mortgage, and with respect to any other
property that secures the note, shall be treated and determined as if
the dwelling had been sold through foreclosure under a power of sale
contained in the deed of trust or mortgage for a price equal to the
sale proceeds received by the holder, in the manner contemplated by
Section 580d.
   (b) A holder of a note shall not require the trustor, mortgagor,
or maker of the note to pay any additional compensation, aside from
the proceeds of the sale, in exchange for the written consent to the
sale.
   (c) If the trustor or mortgagor commits either fraud with respect
to the sale of, or waste with respect to, the real property that
secures the deed of trust or mortgage, this section shall not limit
the ability of the holder of the deed of trust or mortgage to seek
damages and use existing rights and remedies against the trustor or
mortgagor or any third party for fraud or waste.
   (d) (1) This section shall not apply if the
trustor or mortgagor is a corporation, limited liability company,
limited partnership, or political subdivision of the state.
   (e)
   (2) This section shall not apply to any deed of trust,
mortgage, or other lien given to secure the payment of bonds or other
evidence of indebtedness authorized, or permitted to be issued, by
the Commissioner of Corporations, or that is made by a public utility
subject to the Public Utilities Act (Part 1 (commencing with Section
201) of Division 1 of the Public Utilities Code).
   (f)
   (e) Any purported waiver of subdivision (a) or (b)
shall be void and against public policy.
  SEC. 2.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
   In order to mitigate the impact of the ongoing foreclosure crisis
and to encourage the approval of short sales as an alternative to
foreclosure, it is necessary that this act take effect immediately.

cont. .......I was having a conversation with my son about the housing economy the other day and he brought up Quantitative Easing ...or QE3. I had never heard of this term (QE3 or QE2) , I am ashamed to say until he brought it up. I knew about the FEDs plan to print more money and use this strategy to slow down the hemorraging that was happening in our economy. Yet I never heard it described as quantitaive easing.

So my little baby boy (32 years old) shared with me his knowledge. As he spoke he shared that he felt this would help for a couple of reasons. Simply put: First he explained that the banks are pretty flush and have their reserves pretty filled up and are feeling more secure. With this he felt that the FED executing another QE or QE3 it would open up the banks to loan out more money across the board, not only in housing monies but for all consumer goods. This he felt would be a good jump start to the economy as it would also drive the job market in the right direction...more monies means more spending means more products...means more jobs, means more houses sold means economy getting stronger.

It would make sense seeing as how we have an election year coming up and the DEMOs need to do something or Obama may be seeing his last days in office. So with this in mind your comments are invited. Please read the articles and let me know your thoughts. With all the negative "double dip" news I am trying to keep a more optimistic outlook...

LOOKS LIKE THE FEDS ARE HOLDING BACK ON THIS .....OR ARE THEY JUST WAITING FOR THE RIGHT TIME?

The Overnight Report: No QE3

June 7, 2011 9:13 PM EDT

By Greg Peel

The Dow closed down 19 points or 0.2% while the S&P lost 0.1% to 1284 and the Nasdaq was basically square.

It was a strong opening on Wall Street last night after successive miserable sessions based on weak US data, suggesting to commentators that bargain-hunters were being sparked into action at levels below previous technical support in the S&P 500 at 1295. However, any buying early in the session was always going to be a risk given Fed chairman Ben Bernanke was due to make a speech about half an hour before the closing bell. Given the apparent sudden deterioration of the US economic recovery, there was much anticipation of what the Fed's response would be.

In other words, expectations had grown that Bernanke would announce QE3 is ready to be rolled out as soon as QE2 expires this month. While the Fed has spent much time discussing inflationary pressures and exit strategies from QE and a near-zero funds rate of late, it had always added that were conditions to deteriorate notably, the central bank "stands ready" to do what it has to.

So it was that just after 2pm in New York, the Dow was up 90 points. But then it began to drift lower, possibly as day-traders took profits ahead of the speech. The drift soon turned into a steep drop such that by the time Bernanke opened his mouth, the Dow was almost back to flat on the day. As he spoke, the average fell sharply to the closing bell, at which point Bernanke was still speaking.

It looked like Wall Street had squared up before it learned what Bernanke had to say but copies of the speech were issued to the media prior and embargoed until speech time. Hence the guts of the speech was quickly disseminated before Bernanke even rose from his seat. It seems Wall Street responded beforehand to the fact traders didn't hear what they wanted to hear.

What the chairman said was that while the most recent data looked poor, the US economy was still recovering modestly. There will always be bumps in the road, oh ye of little faith, he suggested, but most importantly the Fed still expects the recovery to pick up again in the second half of 2011. Yes, the latest jobs numbers were bad, but if you look at the longer trend from 2008 you'll find that jobs growth is accelerating. It's just a frustratingly slow acceleration and the unemployment problem will not be resolved quickly.

There in a nutshell was the "no QE3" call. Bernanke reiterated that QE2 would end as planned this month but that maturities and coupons would continue to be reinvested, which we have dubbed QE two and a half. From the other side of the argument he reiterated that inflation expectations remained low and that recent spikes in commodity prices would prove "transitory". Food price movements in particular could simply be put down to unusual weather conditions prevailing across the globe in the past twelve months, meaning a normalisation of weather should lead to a pullback in prices.

The chairman went to very great lengths to address the common accusation that global headline inflation ? oil and food in particular but also base metals ? was simply due to a weak US dollar which in turn was due to accommodative Fed policy. He pulled out the charts, figuratively, to point out that the fall in the US dollar was minimal compared to the rise in commodity prices, and he also suggested the fall in the US dollar was mostly due to the withdrawal of the "flight to safety" which occurred in 2008-09.

The rises in commodity prices, he noted, were almost entirely due to the legitimate growth of demand from emerging markets. Add the recent supply disruptions (Libyan oil loss, weather problems for food) and the propensity for futures traders to anticipate increased demand (speculation) and what we have is price-spikes that will adjust themselves in the shorter term. In the longer term, Bernanke noted that the growth in global oil production is simply not keeping up with the growth in global demand. This means watching inflation carefully, albeit no immediate risk is seen for the US.

So the upshot is, the Fed funds rate will remain exceptionally low for an extended period but there will be no QE3. Bernanke did, however, warn that Fed monetary policy could be thrown into disarray by Congress. He agreed that the US deficit had to be addressed but pleaded that any resolution to sharply cut the deficit must have a longer term objective. To violently slash fiscal spending now would provide a negative shock to the US economy which could quickly derail the modest, bumpy, recovery.

Before Bernanke's speech, there were signs of an accelerating recovery from across the pond. Surprisingly good eurozone retail sales and German factory orders numbers sent the euro higher, and traders are now expecting the ECB will hint at a July rate rise to counter inflation when it has its June meeting on Thursday night. The stronger euro sent the US dollar index down 0.6% to 73.54.

The Aussie is steady after 24 hours at US$1.0719. The Aussie dipped yesterday when the RBA didn't raise and suddenly sounded a lot less hawkish than it did a month ago (RBA Backs Down) but last night's US dollar fall corrected the balance.

For commodity markets it was a largely steady night ahead of Bernanke's speech. Gold was as good as square at US$1544.60/oz while silver and base metals were mixed on mostly small movements. The exception is lead, which was up another 2%. It appears someone is trying to corner the lead market given one account represents 90% of long LME positions.

And a funny thing happened in oil. Having established a fairly consistent spread of around US$15 over past months based on storage cost discrepancy, Brent-WTI suddenly blew out to over US$17 last night as Brent rose US$2.30 to US$116.78/bbl while West Texas rose only US8c to US$99.09/bbl. I'll address that issue in a story today.

Ahead of the speech, the US Treasury auctioned US$32bn of three-year notes and despite the low yield, demand was buoyant with foreign central banks taking 36% compared to a 32% running average. The benchmark ten-year yield fell after the auction but recovered after Bernanke spoke to be little changed at 3.01%.

The SPI Overnight rose a fairly individual looking 21 points or 0.5%. One presumes that having had more time to absorb yesterday's RBA statement, the market is now confident there won't be a rate rise until at least August, and then maybe not even in August.

I was having a conversation with my son about the housing economy the other day and he brought up Quantitative Easing ...or QE3. I had never heard of this term (QE3 or QE2) , I am ashamed to say until he brought it up. I knew about the FEDs plan to print more money and use this strategy to slow down the hemorraging that was happening in our economy. Yet I never heard it described as quantitaive easing.

So my little baby boy (32 years old) shared with me his knowledge. As he spoke he shared that he felt this would help for a couple of reasons. Simply put: First he explained that the banks are pretty flush and have their reserves pretty filled up and are feeling more secure. With this he felt that the FED executing another QE or QE3 it would open up the banks to loan out more money across the board, not only in housing monies but for all consumer goods. This he felt would be a good jump start to the economy as it would also drive the job market in the right direction...more monies means more spending means more products...means more jobs, means more houses sold means economy getting stronger.

It would make sense seeing as how we have an election year coming up and the DEMOs need to do something or Obama may be seeing his last days in office. So with this in mind your comments are invited. Please read the articles and let me know your thoughts. With all the negative "double dip" news I am trying to keep a more optimistic outlook...

Nuff Said...    Robert Moreno

Quantitative Easing: What is it and why is it?

• October 10th, 2010 9:44 pm ET

Robert Kulak

• Hartford Independent Examiner

Ruminations, October 10, 2010

Quantitative Easing: What’s that?

When you want to institute a policy that is sure to arouse suspicions, the best thing to do is to use a new name for it. The Federal Reserve has recently announced that it is seriously contemplating instituting a policy of “quantitative easing.” Who could be against a policy of quantitative easing – that is, unless you realized that it is just a term for printing money and lots of it.

Now, we all know that printing money can lead to inflation or even hyperinflation (as in post World War II Hungary where prices doubled every 14 hours or so). So, why would the Fed even consider a policy of quantitative easing? They’re not stupid. There are upsides to that method, they believe – especially today – and here are they are:

1. The Fed is able to take on an expanded role of trying to help stimulate economy as well as stabilizing the currency. In days gone by, the primary role was stabilizing the currency and ignoring the economy.
2. Quantitative easing, some at the Fed feel, would avoid the risk of deflation – which we have not experienced since the Great Depression. They call the current inflation rate in the U.S. (virtually nil) “disinflationary” and posit that continued slowness of recovery could lead to deflation. In a deflationary economy, prices drop and continue to drop. Consumers postpone purchases reasoning that prices will be cheaper in the future; this action leads an acceleration of the economic downturn. And then there is the debt repayment problem; when an asset diminishes in value, such as in our housing market, people may abandon these assets.
3. By printing money and then purchasing government securities, the Fed increases the balances that member banks have in the Fed and thus the assets that banks have available for lending. With additional assets, it is assumed that banks will lend more to individuals and businesses, which will lead to a growing economy.
4. Trade balances improve. Printing money lowers the value of the dollar and, therefore, cheapens the price of U.S. goods. This can lead to increased exports and more jobs; hence, a rebounding economy.

So, it looks like a good idea and one that should be implemented. And, in fact, William Dudley, president of the Federal Reserve Bank of New York, said last week “We have tools that can provide additional stimulus at costs that do not appear to be prohibitive. Thus, I conclude that further action is likely to be warranted…”

 Is there a downside? Everything has a downside. Let’s look at some of the potential downsides.

1. The dual role of stimulating the economy and supporting the currency: You may recall that when Paul Volker assumed the position of Fed Chairman, he halted runaway inflation but, at the same time, contributed to the 1982 recession. Still, Volker’s actions contributed to the long-term stability of the dollar and the economic growth that followed for 25 years. This contrasts with the times when President Richard Nixon ordered Fed Chairman Arthur Burns and when President Jimmie Carter ordered Fed Chairman William Miller to print more money to stimulate the economy; the effects on the economy were virtually negative in that the money supply contributed to inflation and little else.
2. The risk of deflation: There are some economists (notably Robert C.B. Johnsson) who believe that the impact of deflation is relatively benign. Often the steps taken by a government to counter deflation, as in Japan from 1995 to present, prevent a free-market adjustment and can prevent or prolong a recovery.
3. The Fed’s purchasing government securities and increasing bank funds available for loans may not work. With banks sitting on a high number of non-performing loans (a euphemism for loans that a bank made that will never be repaid), it is likely that banks will hold-on to these new assets. Futhermore, in order to issue loans, there must be a demand. Given that businesses are currently sitting on almost $2 trillion of cash that they are reluctant to spend because of uncertainty in markets and with government policies, it is hard to see how this bank infusion of funds will help.
4. Quantitative easing may not help with trade balances as it is hoped. Countries depend on the value of their currencies to survive in the international market and, at the same time, the dollar serves as the world reserve currency and all countries have a stake in the dollar. When the U.S. acts counter to currency stability (i.e., lowering the value of the dollar) it can throw the world into potentially a disastrous situation by setting in motion a scenario where many countries devalue their own currencies. Between 1929 and 1933, when countries rushed to devalue their currencies, world trade fell by two-thirds.

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There are other concerns. Al Broaddus, former president of the Richmond Federal Reserve Bank, says that the amount of expenditure of quantitative easement may not produce much of a result. And add to that the psychological effect of printing money – it may indicate to people that the economy is in horrible shape and that investment and, therefore, expenditures should be avoided and resources should be invested in commodities.

And we can’t overlook one of the key commodities: oil. The Organization of Oil Exporting Countries (OPEC) currently prices oil in dollars. OPEC has discussed that, with the falling dollar, other currencies or a basket of currencies should be considered as a pricing mechanism. If we do adopt a policy of quantitative easement, the issue could be raised again. If the price of oil is linked to a more stable currency, then the dollar-price could rise to new heights and that would have exert upward pressure on our prices and downward pressure on our economy.

Upsides and downsides: Every policy has them but it seems as though the downsides quantitative easement would hurt a lot more than the upsides would benefit.

Will the last one out, turn off the incandescent light bulb?

When Congress passed legislation in 2007 banning the sale of incandescent light bulbs by 2014, they thought that they were making a cleaner environment and creating green jobs. Alas, they have evidently accomplished neither but have instead lost jobs and increased imports.

With decreasing demand, GE closed its last incandescent bulb factory in Winchester, Virginia, and laid-off 200 workers. GE had thought about converting the factory to manufacturing compact fluorescent light bulbs (CFLs) but found the conversion cost would be prohibitive. So, the bulbs will be made in China.

Well, at least the environment will be cleaner, right? Maybe not. In 1987 the town of Traer, Iowa, handed out CFLs to everyone. When people found out how cheap they were to operate, they left their lights on all the time resulting in an 8 percent increase in energy consumption.

It seemed like a good idea at the time.

Quote without comment

Polish central bank governor MarekBelka, prior to a meeting of the International Monetary Fund, October 8: "If you want to strengthen your competitiveness by devaluing your currency, this is a sign of despair, this isn't a policy,"

Can new home buyers afford a 20% down payment? Could you? Can you envision what this will do to limit the buyer pool  if new regulations governing Qualified Residential Mortgages (QRM) take effect this year?

Neither can we. And neither can many elected officials in Congress who did not intend for these regulatory provisions to be so narrowly defined. We must continue our efforts to explain how detrimental the new QRM rules would be to the ongoing housing and lending crisis in America.

According to NAR Research, 60% of recent home buyers made less than a 20% down payment, and it would take 14 years for a typical person to save up a 20% down payment to buy a median-priced home.

Please contact Congress today and ask them to make it clear to the regulators that this proposed regulation was not their legislative intent and to instead implement a more reasonable Qualified Residential Mortgage (QRM) that will keep credit-worthy buyers in the market and able to acquire a loan.

May 16, 2011

Guest post from Sean O’Toole, ForeclosureRadar.com

Over the past month we noticed that Bank of America has been resuming foreclosures on loans originated by Countrywide. As you may recall in October BofA voluntarily imposed a foreclosure moratorium following the robo-signing scandal. We actually expected an increase in activity as lenders began to catch up after these delays and were instead surprised to see foreclosure activity drop in April.

Even more surprising is just how old some of the foreclosures being resumed are.

In Contra Costa alone there are 123 homes now scheduled for trustee sale, with loans originated by Countrywide, where the foreclosure process began in 2008.  That is 3 years of missed payments, interest and fees. In just this one county that totals $71.5 Million in original loans with balances now nearly $19 Million higher.

Although all of these 123 properties have active sale dates many are still being postponed. In fact the largest loan, where the total debt now exceeds the original loan amount by more than 1 Million dollars, has been postponing since January, and was just postponed again until June.

We remain as convinced as ever that these delays are simply part of the current game of Foreclosure Roulette. Hopefully someday soon lenders stop playing games and begin really dealing with the looming shadow of delinquent and underwater borrowers. Whether through loan modifications, short sales, or even foreclosure it’s time to move forward.