As home equity rises in Los Angeles and across the country, so does something sinister - mortgage fraud. This kind of white collar crime is simple: find a panicked homeowner who has missed a few payments and offer them a way out by arranging for someone to temporarily “share” title to their property. The problem is that the unsuspecting homeowner does not read the fine print closely and often signs over the title to a stranger, losing everything in the process.

It is a crime that consumer advocates fear could become increasingly common — especially in Southern California, where many homeowners have stretched themselves to their financial limits to afford the region’s record high housing prices.

“The scammers don’t create the foreclosure rates, but they swoop in at the time that someone is in distress,” said Elizabeth Renuart, a staff attorney with the National Consumer Law Center in Boston and the author of “Dreams Foreclosed: The Rampant Theft of Americans’ Homes Through Equity-Stripping Foreclosure ‘Rescue’ Scams.”

Read the whole article here (LA Times).

Confused about the difference between Freddie Mac’s mortgage rates, points, and fees, and what they mean to you (and your wallet)? David Rees gives the lowdown on what the weekly interest rate survey means. Despite rising interest rates, consumers are actually spending far less on a mortgage than in the early 1980s, when rates hovered around 18%.

…one trend is also definite: People are paying less and less in points and fees to get those rates. In fact, if you go back twenty years, the average points paid on a 30 year mortgage was 2.3 points paid on every 30 year mortgage. On average.

Clearly, consumers are paying less at the mortgage pump. Point-wise. Why? I’ve got a good guess … because rarely does paying points, or origination fees for that matter, make good financial sense. At least in getting a return from the points paid. And more importantly, consumers might just be finding out that paying points is an option and not a requirement.

Read the whole article here (Realty Times).

While we’re on the subject of wealthy communities, a survey released this week by TNS Financial Services has named the 10 wealthiest communities in the US, and California holds the most - 4 out of 10. Los Angeles County came in first, with 262,800 millionaire households, while Middlesex County, Mass. came in “last” with 67,552 millionaire households.

The survey also reports that the number of millionaire households is on the rise across the US - with the number rising for three consecutive years. This increase is due to long-term wealth accumulation, not new wealth creation or real estate investments (while real estate continues to be an investment portfolio staple, it is not the sole cause of wealth).

Forty-six percent of millionaire households own investment real estate such as a second home, third home, rental properties and undeveloped land. Thirty-four percent have a first mortgage on these residences and 25 percent have second mortgages on these additional residences, the survey reported.

Read the whole article here (California Association of Realtors).

As the Fed continues to push up interest rates, wealthy communities in the Northeast are feeling a slight chill in the air. But most communities in the US — especially those with a large proportion of “starter homes” — are not seeing much of a change in their markets.

Buyers of houses in the $1 million to $4 million range are “particularly sensitive to interest rates because the monthly payments on houses in that range are substantial,'’ says Anthony Hsieh, chief executive officer of LendingTree.com, a mortgage- provider Web site based in Charlotte, North Carolina.

In a sign that buyers are starting to gain the upper hand, pre-sale home inspections are back in vogue in Montgomery County, Maryland, says Meg Finn, a Long & Foster agent based in Bethesda. Just a year ago, buyers who insisted on inspections jeopardized their chances of getting a house in a bidding war, she says.

Read the whole article here (Bloomberg).

Long awaited restrictions on the so-called exotic real estate loans are proposed by federal regulators are coming under fire by the mortgage industry, who calls them “too restrictive.” The exotic loans, which include the incredibly popular adjustable rate and interest only mortgage have been criticized by many experts who argue that they lure consumers into mortgages that they cannot afford in the long run.

The Mortgage Bankers Association (MBA) said it believes the guidance on exotic loans is a good idea, but criticized the proposed new guidelines, released in December by the Office of the Comptroller of the Currency, as “overly prescriptive in mandating specific underwriting standards,” also saying some sections should be clarified or removed.

Read the whole article here (Inman News - subscription).

Even though the housing market has shifted in favor of buyers, smalrt shoppers can still take some precautions before hitting the pavement in search of that most perfect of homes. Luckily, a new generation of tools and some old fundamental rules are available to assist them in their search.

Fundamental rules include:
1) Get pre-approved for your loan.
2) Determine how much you can afford.
3) Don’t get caught up in a bidding war.
4) Check out the home thoroughly before going to contract.
5) Pick your sales agent carefully.

New tools include a host of real estate blogs to help you get access to news not available in your local press and appraisal sites such as Zillow.com.

Read the whole article here (CNN Money).

As the Internet with it’s massive content capacity becomes increasingly popular for selling houses, some home sellers and real estate agents wonder if they should skip the old selling mainstay - the open house. A recent National Association of Realtors polled agents and found that open houses led to only 7% of all home sales. Referrals were sited as the biggest sales factor at 29% of all sales. But 7% isn’t negligible, especially in a tight market.

The opinions of Realtors/agents are as diverse as sellers when it comes to doing the Open House. One agent said people attend open houses to compare the house to the one they really want to buy, to gain a better understanding of what is on the market before making a decision, to see what their neighbors house looks like and finally to get decorating ideas. Since none of these is valuable to the seller he recommends avoiding the hassle of open houses.

Read the whole article here (American Chronicle).

The recent run up in home prices in Southern California is making it more difficult to find an apartment, according to a study by the University of Southern California Lusk Center for Real Estate. Southern California already has some of the highest apartment rents and occupancy rate in the country, and recent economic gains should push these levels even higher.

About 97% of LA apartments are already occupied, and rent increases of between 6 - 7% above the current average of $1,416 are forecast. Renters in Orange County can also expect to see their average monthly rent of $1,390 increase between 6 - 7%.

Rent increases of 6 percent to 7 percent are forecast in Los Angeles, where the average monthly rent at the end of last year was $1,416. Orange County renters also can expect a rent hike of 6 percent to 7 percent beyond the average monthly rent of $1,390. Inland Empire rents, which averaged $1,012 per month at the end of 2005, should rise about 5% this year.

“The recent run-up in home prices makes apartment living more desirable,” said Delores Conway, director of the Casden forecast, in a statement. “And the tight supply of land coupled with more condo conversions means fewer available units. That translates into higher rents and occupancy rates for the next couple of years.” She also stated that apartment demand will benefit from the region’s increased growth in trade along with an infusion of higher-paying jobs associated with business and professional services.

Read the whole article here (Inman News - subscription).

New Hampshire homebuyers are getting a boost from the shift in the market. With inventories rising and appreciation no longer through the roof, buyers are able to take more time to find the perfect property.

There is also hope that the spring selling season will bring more leverage to buyers who have been priced out of the hot NH market for much of the past decade.

New Hampshire, a Morgan Quitno Press three-peat as the nation’s “Most Livable State,” has enjoyed home price appreciation averaging 13.5 percent during the past five years, higher than the national average of about 11.5 percent, according to Office of Federal Housing Enterprise Oversight (OFHEO).

That state-vs.-nation position flip-flopped in the fourth quarter of 2005, when the Granite State’s year-to-year average home price appreciation dipped to 9.77 percent, lower than the national average of 12.95 percent, according to OFHEO.

Read the whole article here (Realty Times).

Are you paying your fair share of taxes? If you’re like most commercial property owners, you’re paying way more than your share, and all of that extra money is going straight into the IRS’s coffers. According to a research firm, an incredible 90% of commercial real estate owners are overpaying as much as $15 billion in taxes each year, largely because they fail to take the tax deductions that are available on real estate.

In analyses of property depreciation during the past four years, consultants found that at least nine out of 10 owners of commercial real estate were improperly reporting depreciation on federal income tax returns. As a result they paid too much in tax dollars, according to O’Connor & Associates, a Houston-based firm specializing in real estate appraisals, research, and state and federal tax reduction services nationwide.

Read the whole article here (Chron.com).