Sales in new-home communities of 10 units or more in California declined 11 percent in September compared with a year ago, according to the monthly California Building Industry Association report.  Sales of single-family homes declined 17 percent, while sales of townhomes and multiple-unit homes decreased 11 percent.  Condominium sales, however, rose 12 percent compared with a year ago.

The California median home price in September 2009 was $296,090 according to the California Association of REALTORS®.  The highest median home price was in the Santa Barbara South Coast at $750,000 while the lowest median home price was the High Desert at $117,820.  The California First-time Buyer Affordability in the second quarter of 2009 was 67 percent.

A REALTOR® and real estate appraisers are the best sources of information on current market conditions.  Consumers should begin the home valuation process by consulting with their REALTOR® or a local real estate appraiser. 

Industry estimates find that half of all homeowners who lose their homes to foreclosure have no contact with their loan servicers.  Homeowners at risk of default or those who already are behind on mortgage payments are advised to contact their servicer at the first sign of trouble.  Consumers should request to speak with someone in the home retention department and expect a long wait time.

When working on a loan modification, short-sale, or repayment plan, servicers likely will ask the homeowner to explain the reasons they can no longer make their mortgage payments.  Borrowers should be honest and realistic.  The servicer also will need to verify the borrower’s current income, unemployment benefits (if any), household expenses, tax returns, property taxes, hazard and flood insurance premiums, and condominium and home owner association dues.

Whether the loan servicer requests it or not, borrowers should include a letter authorizing the servicer to speak with their REALTOR® or another family member, as this can help speed up the process.

The Federal Trade Commission (FTC) has extended to June 1, 2010, the date for “financial institutions” and “creditors” to comply with the FACT Act’s identify theft red flags rule.  Included in the definition of “creditor” is one who “arranges for credit.”  The latest extension will allow FTC staff to finalize further guidance for “low risk entities” such as real estate agents.  In addition, the FTC will create a special link on the FTC website for small businesses and low-risk entities to assist them in achieving compliance.

The federal government is offering some financial incentives in the form of a tax credit to homeowners making home improvements.  The credits can be claimed on income taxes for the year in which the improvements were purchased—either 2009 or 2010.  With a tax credit, the amount is deducted from the taxes owned.

Upgrades such as insulation, windows, doors, roofing, heating and air-conditioning systems, and water heaters qualify for a federal tax credit of 30 percent of the purchase price of the product, up to $1,500.  More-costly improvements, including solar water heaters, solar panels, small wind-energy systems, and geo-thermal heat pumps, offer a credit of 30 percent of the purchase price, but with no cap.

Details on which products qualify can be found on the Environmental Protection Agency’s Energy Star program Web site at http://www.energystar.gov/.

The Buyer’s Choice Act prohibits an REO (real estate owned) lender selling residential property up to four units from directly or indirectly requiring the buyer to purchase escrow services or title insurance from any particular company.  A buyer, however, who has received written notice of the right to make an independent selection, may agree to the REO lender’s escrow or title recommendations.  An REO lender that violates this law can be held liable for three times the charges the buyer incurred, whereas a violation by the seller’s agent may be subject to license disciplinary action.  This law expires on January 1, 2015.  Asssembly Bill 957.

On January 1, 2010, a mortgage broker will be deemed a fiduciary with a duty to place the borrower’s economic interest above his or her own.  This fiduciary duty pertains to a mortgage broker who makes loans secured by residental property of one-to-four units.  Also starting January 1, 2010, the law will strictly regulate higher-priced mortgage loans as defined, including requiring upfront disclosure if a mortgage broker only arranges higher-priced mortgage loans, restricting prepayment penalties and yield spread premiums, prohibiting negative amortization, and prohibiting mortgage brokers from steering borrowers to higher-cost loans.  Assembly Bill 260.