Burbank Real Estate Blog: May 2011

Ever wonder what grasscycling is?

I didn't, but I did find out that golf courses, school districts, parks, commercial landscapers and city landscape crews are doing it!

All it entails is leaving grass clippings on your lawn.  It's really the best way to use your clippings as grass clippings contain nitrogen, phosphorous and potassium, which are the same nutrients that fertilizers provide.  This approach helps to build your topsoil, reduces water demand and reduces the need for synthetic fertilizers!

When doing this it's recommended:

• That you use a mulching blade on your mower
• Mow your grass high
• Cut when dry
• Water after cutting

It's great for the environment and really helps your lawn!

If you are behind on your mortgage payments, you do have options.   The best advice I can give you is don't delay and get in touch with your lender as quickly as possible.  The more you procrastinate the more likely that you will make your situation worse.

When you call your lender they may try to send you to their collections department, be firm that you need to talk to someone in the loan modification or loan work-out department.  Be persistent and keep calling until you get someone who is willing to talk to you.

Don't wait until the lender initiates the foreclosure process by sending a Notice of Default.  Loan workouts often take months to complete, so it is important to contact the lender before you miss the first payment, having said this I do know of lenders that will ask you to call back after you have missed a payment, don't give up.

Be persistent as lenders don't have to wait until the borrower misses a loan payment.  Do keep in mind that they are swamped with workout requests and past-due borrowers are receiving priority.  If the employee at the bank isn't helpful, call back and you will probably get someone else who may be more helpful.

Make sure you have your finances in order.  The bank's loan-servicing agent will ask you to provide information about your income and expenses such as credit cards, utility and auto payments, and any other revolving debt.  You must prove financial hardship to get a loan workout.

Once you contact your lender, and are speaking to the appropriate person, what are your options? 

TYPES OF LOAN WORKOUTS

•  Revised Repayment Plan:  Borrower is allowed to make up past-due payments over time by adding them on to future payments.

• Forbearance: The lender re-apportions the payout by temporarily forgiving past-due payments to bring the borrower current and then extending the loan's payoff schedule by the number of months in which the payments were missed.

• Loan modification:  The lender reduces the borrower's monthly payments by adjusting the terms of the loan, such as lowering the interest rate.  This is usually a temporary measure for a definite period of time.

• Short Sale:  The lender agrees to let the borrower sell the property for less than the remaining loan balance.  Usually the short amount is forgiven but sometimes the lender may take the short amount and set it aside in a separate obligation such as an unsecured promissory note. 
• Short Refinance:  A special loan modification in which the lender agrees to refinance the loan at a lower rate and reduce the principal.  The federal housing bill approved in July proposes short refinancing to a fixed-rate FHA loan at no more than 90% of the original loan's value.
•  Loan Assumption:  A new borrower assumes the original borrower's loan debt in exchange for the property.  Be advised that while conventional adjustable loans are usually assumable, conventional fixed-rate loans are usually not.  FHA and VA loans are assumable.  Also, be advised that loan assumptions almost always require a "formal" assumption where the borrower must qualify to assume the loan.
• Deed in Lieu of Foreclosure:  The borrower surrenders the property to the lender in exchange for forgiveness of the debt.  (Note: many lenders do not like this option) Often the lender will offer the borrower nominal funds and allow the borrower to live in the property and pay rent until they dispose of the property.  Sometimes investors will offer a lender the same option.  Both this type of transaction and Short Sales are "Pre-Foreclosure" sales.

Other options you have available include:

Talk to a HUD-approved foreclosure intervention specialist.  Their services are free and they understand how to work with lenders.  Another advantage is that they won't let emotions get in the way. 

Consult with the loan officer that originated the loan.  If he/she is still in the business and with the same lender, they may be able to provide assistance in getting the loan adjusted.

Ask an attorney to send a letter to the bank with the request for a loan workout.  Some lenders will pay more attention when the request is on an attorney's stationery.  Another suggestion is to have it delivered by FedEx or DHL.  That will call attention to it.

This is not a good situation for anyone, the borrower or the bank, but being informed and making sure you are persistent will help you!

The term HPOZ refers to Historical Preservation Zone or a historic district.  The idea is to preserve nieghborhoods with very distint architectural elements.  The regulations impose restrictions on what homeowners are allowed to change, including windows, paint, roof tiles etc.  All in order to safeguard the integrity of the architectural designs.

City of Burbank has no HPOZ's, however they do have historic preservation regulations in order to preserve the city's heritage and specific landmarks.

In City of Los Angeles the City Council adopted an ordinance in 1979 to enable the establishment of HPOZ's.  The first one was Angelino Heights in 1983 and there are now 27 HPOZ's throughout the city.

Recognizing the importance of preserving these culturally rich neighborhoods, the City has developed an expansive program of Historic Preservation Overlay Zones (HPOZs), which includes review of proposed exterior alterations and additions to historic properties within designated districts.

While most districts are primarily residential, many have a mix of single-family and multi-family housing, and some include commercial and industrial properties. HPOZs are established and administered by the Los Angeles City Planning Department (in concert with the City Council).

Maybe.  Today the MBA Purchase Application data came out for this last week.  The number rose 1.5%, as compared to the previous week's decline of 3.2%, but so far the month, overall, is pointing to some gains.

The Mortgage Bankers Association compiles how many loan applications are taken out at mortgage lenders.  This indicator is considered to be a leading indicator when it comes to single family home sales due to the fact that people don't apply for a mortgage unless they are feeling pretty good about their employment situation.  New home builders will look to this and other indicators when deciding how many homes to build. 

The data may be pointing to a stronger June or July in terms of closed sales, but let's not overlook the fact that some of these sales will fall through for various reasons.  Still, it's a good indication that things may not be as bleak as the national news media is making it out to be.

The stats I posted yesterday for Burbank real estate sales, suggest a growth of monthly inventory and days on market which point to a market has slowed down from the month of April. 

Stayed tuned and we'll have to look at the full month of May to see if we can get a clear picture of current home sales in Burbank Ca.

Following on the heels of last week's disappointing numbers today new home sales came in at a higher than expected 323,000, jumpiong 7.3% for the month!

On the local front, average sale prices have risen slightly over the last 6 months as shown below:

MonthSale Price, Average

Days on market are trending slightly higher:

MonthDays to Sell, Average

Overall the volume or number of sales is down:

MonthSales, Number of

Data for May is not complete, however we're seeing a slowdown in number of sales as well as a lengthening of days on market.  This may be pointing to a slower summer sales season, but it's a bit early to tell.  We'll keep our eyes on economic and jobs news as well as the lending arena.  Overall the data is pointing to a possible slowdown.

The Rancho Equestrian Neighborhood or "The Rancho" as it's commonly referred to, is bordered by Griffith Park to the south, Victory Blvd. to the east, Olive Avenue to the west and Alameda Ave. to the north.  What makes this community so popular is that it's zoned for horses and it boasts beautiful winding, tree lined streets!

There are roughly 785 single family homes and many of those have stables.  The community is represented by the Burbank Rancho Homeowners, a group formed in 1963 to represent the interests of the residents.

Rancho real estate is very sought after and tends to sell at a premium.  In addition to the equestrian zoning, other amenities include it's adjacency to the Los Angeles Equestrian Center, connection to riding trails in Griffith Park and numerous parks.

It's common to see people on horseback along Riverside Drive, it's main thoroughfare.  This scenic street is lined with Sycamore and Oak trees, some more than 70 years old.  The Rancho, coincidentally, was the home to T.V. star and talking horse "Mr. Ed" along with Ava Gardner, Ronald Reagan and Tab Hunter as well as Bette Davis in the adjoining Glendale Rancho area.

The rancho is very desired for it's parks and open space. This includes Mountain View Park, Johnny Carson Park, Los Angeles' Griffith Park and Equestrain Center, Bette Davis Park (in the adjoining Glendale Rancho) and the neighborhood's Polliwog area, which extends along Disney Studios' animation building is used by local residents to exercise their horses.

It's been a favorite neighborhood of mine for many years and I highly recommend a look if you are exploring Burbank real estate.

One of City of Burbank's jewels is the DeBell Golf Course.

This venue offers a regulation eighteen hole course and a par 3 course. The layout of the Regulation Course is very tight and hilly, but enjoyable for beginners. Its ideal for the family to play. The women often play from two sets of tees on this course, while the men play from the same tees.

The 18-hole course at the DeBell Golf Club facility in Burbank, California features 5,633 yards of golf from the longest tees for a par of 71 . The course rating is 68.8 and it has a slope rating of 114 on Kikuyu grass.

The course was opened in 1959 and designed by William F. Bell, Richard Bigler and William H. Johnson.  William F. Bell was a prolific designer and is best known for the design of Torrey Pines(with William P. Bell), Bermuda Dunes Country Club, the sandpiper and Industry Hills golf clubs.

If you want some good eats after your round of golf, check out the Clubhouse Grill.  Open 7 days a week it offers cocktails and a great menu.

With short sales making up a significant amount of current listings in our area and nationally, it's important to understand the short sale process and talk about some of the myths surrounding these transactions, especially if you are considering a short sale on the sale of your home:

1. You must be in default on your mortgage, or have missed mortgage payments to negotiate a short sale.  Short sales are the result of the bank weighing their options and trying to mitigate a potential default situation that, in the long run, will cost more money to the investors if the home goes into foreclosure.   When I reference investors it refers to the actual owner of the mortgage as many banks are only servicing the loan and it's not a part of their loan portfolio.

2. Listing your home as a short sale is embarrassing.  Let's face it, this is not an easy situation to be in for anyone.   It is important to keep in mind that the most critical element is to get proper advice from a knowledgeable real estate agent,  CPA  and possibly an attorney.   Know your options and weigh them carefully, but do look at them as waiting until your home goes into foreclosure may bring far worse consequences than a short sale.

3. Short sale properties are difficult to sell.   Short Sale properties are not for the weak as they often involve a long timeline, anywhere from 5-12 months and some emotional ups and downs along the way.  On the plus side  short sale properties can be very well cared for and have not had to endure the deferred maintenance of a REO property, so they are attractive to many buyers.   While some buyers shy away from short sales, many are finding that the wait is worth the end result.

4. There's not enough time to negotiate a short sale before foreclosure.  The answer here is, it depends and many times the foreclosure process can be stopped or paused while the short sale is being negotiated.   The only way to know for sure is to try.

5. The bank would rather foreclose than complete a short sale.  Banks do weigh their options, as I mentioned earlier the bank may stand to lose significantly more going through the foreclosure process.   Once the bank owns that property as an REO they will need to carry it on the books until it is sold.

6. Short sales are impossible and never get approved.  Short sales are complicated, but not impossible.  I personally have had short sale approvals over the last year and can say that while not easy, they can be achieved.

If you are thinking about selling your home and you are considering a short sale, be prepared to be honest and completely transparent about your financial situation, in order for you to get appropriate advice.   Short sales can be difficult psychologically, but may be a good option.  My advice is to choose an agent that has the proper training and understands how to navigate the process.

Bob Hope Airport, to me, represents one of the cool things about living in Burbank.  There is a nostalgic feel to the airport, not just in some of the historical and architectural elements but the fact that it's one of the few airports where you board the plane from the tarmac.  Maybe it's the kid in me, but I love that!

The airport was opened on Memorial Day weekend in 1930, so I thought it would be appropriate to write a bit about it's history.   Built by United Airports Company of California (hence it's original name of United Airport), it became the primary airport for the Los Angeles region.  The airport was frequented by famous aviators such as Amelia Earhart, Charles Lindbergha and early aviation heroes connected to Lockheed Aviation.

In 1940 Lockheed purchased the airport, expanded it's operations for World War II and changed the airport's name to Lockheed Air Terminal.  While it continued to operate as a commercial airport, thousands of B-17s, Hudson bombers, and P-38 fighters rolled off the Lockheed assembly lines and onto the runways to join the war effort.

After WWII, LAX took over as the region's primary airport.  In the 1960's the airport went through a transition and airline service returned to Burbank, when jet airliners capable of using Burbank's short runways came into being.  The airport's name was again changed to Hollywood-Burbank Airport, and the airport quickly became a hub for quick flights along the West Coast.

1978 marked the year that Lockheed sold the airport to an airport authority created by Burbank, Glendale and Pasadena, who soon renamed it the Burbank-Glendale-Pasadena Airport.

In December, 2003 the airport, was again, renamed in honor of  the legendary Bob Hope.  The airport serves 5 million passengers a year, and it is certainly not without it's controversies.

For many years the Airport Authority and local residents have been trying to get the FAA to impose a mandatory 10pm-7am curfew as opposed to the voluntary one that is now in place.  To it's credit the Authority has been aggressive in it's efforts to curb noise by mandating quieter Stage 3 jets in 1987, long before the national noise policy guidelines, imposing the voluntary curfew(followed by more than 95% of airline flights) and aggressively lobbying for federal funds to insulate schools and homes located inside of the noise impact area.

For those who are interested in more information, the airport does issue a quarterly report with the results of their noise monitoring and flight contour map.  This is an important report, especially if you are thinking about buying a home that is in the flight path.   Many of the homes have received the updated insulation and windows and it makes a huge difference!

The full history, amazing early pictures and much more information is available on the Bob Hope Airport website. 

Existing home sales came out today for April and they came in down .8%, while year over year, sales were down 12.9%.  Supply on market rose to 9.2 months from March's 8.3 months.  Very disappointing, to say the least, but not totally unexpected.

The one bright side of the report was prices.  The median rose 2.4% to $163,700, while the average rose 3.4% to $214,600.

In looking at these numbers it's probable that the higher inventories will put downward pressure on prices in the coming months.  Even though mortgage rates are at all time lows with credit conditions still being very tight the housing market will continue to feel the pressure.

Par for the course until we see a loosening of credit and the jobs market and economy improve(I know, I'm a broken record on this).

The other positive news was that although jobless claims are still above 400,000, they did come down this week.  Traditionally the summer months do gain some momentum so it will be interesting to see how this summer compares to last year.  In the Burbank area sales volume did slow down considerably last year from September to January.

New home sales will come out on Tuesday.