Los Angeles Times – About half of the $410 million flowing into California’s coffers from the national mortgage settlement with major banks will be pumped into the state’s housing counselors and legal services agencies that help struggling homeowners.

Read the full story

DS News – It will take 46 months to clear the market’s supply of distressed homes, or the shadow inventory, according to estimates from Standard & Poor’s Rating Services based on first-quarter 2012 data.

Read the full story

Editor’s Note: We don’t agree with this. Renting is definitely NOT the way to go in San Francisco. Please read the recent blog post from Divita Mortgage on this topic here.

Wall Street Journal – There’s no place like a rented apartment.  That may be the mantra of U.S. households for the next three years, according to a new study released Tuesday by the Demand Institute division of the U.S. Conference Board.

Read the full story

Los Angeles Times – The Mortgage Bankers Association’s latest delinquency report shows that 7.4 percent of all loans on 1-unit to 4-unit properties were past due at the end of the quarter, down from 7.58 percent at the end of the fourth quarter and 8.32 percent a year earlier.

Read the full story

CNN Money – Bank of America is offering some struggling homeowners payments of up to $30,000 if they sell their homes in a short sale and avoid ending up in foreclosure.

Read the full story

Los Angeles Times – Borrowers considering inflating their income, even just a tad, checking the box to indicate they plan to live in the home when they’re not, or exaggerating their job description better think twice. Lenders are turning to websites and other tools to help nab fraudulent borrowers and perjurers looking to bilk lenders out of hundreds of thousands of dollars.

Making sense of the story

• During the height of the market, borrowers could get away with lying about their income, debt obligations, and the like to obtain financing.  But not anymore.  According to a representative from the Mortgage Bankers Association, there are “more fraud checks than ever, and it’s on every loan, not just a sample.”

• More important, perhaps, the focus now is on preventing fraud rather than dealing with it after the fact.

• Sometimes the fraud check is as simple as a quick call to the customer right before the loan is closed to verify information supplied on the loan application.  Such a call to an otherwise unsuspecting borrower can sometimes uncover a lie perpetrated by a corrupt loan officer who’s in it for the commission – or more.

• In other cases, lenders are using sophisticated databanks to spot fraudsters.  One website, for example, provides salary data on various industry positions so the lender can determine if the borrower is overstating his income.

• Another site provides historical wage data, and yet another checks the information supplied by self-employed borrowers, including whether the borrower’s company exists, who the principals are, the number of employees, and the annual revenue.

• There are also sites that will tell lenders where there are judgments against the borrower or liens against other properties the borrower might own.

Read the full story

Nuisance Politics #1. I noticed you did not mention how much Mitt Romney was going to spend on his campaign. -Laura B.

RESPONSE: The information about spending came from Public Radio International. The report did not include any estimates on how much Romney would spend. If it did, I would have included it. The report did, however, project spending for all races nationwide, which I added. The numbers are staggering. This important election cycle will be quite intrusive.

Nuisance Politics #2. I wanted to thank you for taking the time to devote a portion of your weekly newsletter to political campaigning. You are right, we are in an “election year.” And I feel that the 2012 Presidential election is going to be quite critical. I happen to be a third generation political activist, so I always encourage everyone to get out and vote. My grandmother was the first woman to run for congress in Pennsylvania during the Great Depression. My niece Lindsay is carrying on the family tradition, she’s the campaign manager for California State Assemblywoman Betsy Butler and you bet I’m proud of her! I always enjoy your take on Davis-Stirling issues. Keep up the good work! -Ellen M.

RESPONSE: Thank you Ellen. You have good reason to be proud. Go Betsy Butler! (Oops, that might be viewed as political.)

Nuisance Politics #3. Can any member in good standing request a copy of the membership list with all pertinent information that management has such as address, phone, email? I realize they probably will want to charge for the cost of producing it. -David A.

RESPONSE: Any member, whether in good standing or not, can inspect and copy the membership list. Members do not have a right to phone numbers, and their right to email addresses is uncertain. Associations can bill the requesting member for direct and actual cost of copying the membership list. Civ. Code §1365.2(b). Any person who misuses a membership list is liable for any damage caused by the misuse, including punitive damages for a fraudulent or malicious misuse. Corp. Code §8338(b).

Nuisance Politics #4. Do you recommend that the prohibition of fliers door-to-door and posting of fliers in the common ares be in the association’s governing documents? -Patsy O.

RESPONSE: When you say “governing documents,” that covers CC&Rs, Articles of Incorporation, Bylaws, Rules & Regulations, etc. Adding a restriction to your Rules is sufficient. The board must give proper notice before doing so.

Adrian J. Adams, Esq.
ADAMS & KESSLER LLP

REMINDER: For those who want to attend, I will be participating in a webinar with reserve specialist Robert Nordlund presenting the legal side of reserve studies. The webinar is open to everyone with an interest in the subject.

Sign-Up. Select a time and then sign-up by clicking on one of the following links: Tuesday, May 15th at 11am (2:00 p.m. EST) or Tuesday, May 15th at 1:30pm (4:30 p.m. EST).

Adrian J. Adams, Esq.
ADAMS & KESSLER LLP