Setoff Against Unsecured Deficiency of Debt Owed by Creditor Contravenes Policy Underlying Antideficiency Laws

Setoff Against Unsecured Deficiency of Debt Owed by Creditor Contravenes Policy Underlying Antideficiency Laws: "Section 726 of the California Code of Civil Procedure embodies the 'one form of action' rule. In pertinent part, section 726(a) provides:

There can be but one form of action for the recovery of any debt or the enforcement of any right secured by mortgage upon real property or an estate for years therein, which action shall be in accordance with the provisions of this chapter.

Section 22 of the Code of Civil Procedure defines 'action' as follows: 'An action is an ordinary proceeding in a court of justice by which one party prosecutes another for the declaration, enforcement, or protection of a right, the redress or prevention of a wrong, or the punishment of a public offense.'

The court recognized that a nonjudicial foreclosure is not an 'action' within the meaning of sections 22 or 726; hence, a nonjudicial foreclosure does not violate the one form of action rule embodied in section 726. Nevertheless, the court found that the setoff contravened the 'economic policy considerations' underlying the antideficiency statutes.

The court looked to the policy considerations underlying section 580b of the Code of Civil Procedure. Section 580b precludes a deficiency judgment after foreclosure, judicial or nonjudicial, under a purchase money deed of trust given to the sell"

Mortgage rates, price of real estate and the fannie and freddie bailout

This is a excellent explanation or what may happen with mortgage rates going forward.
Remember is from the National Association of Realtors - so it could be biased.  But, the author's logic is solid.




Economist's Commentary: September 8, 2008

Mortgage rates will trend down over the short run. But how much of a decline will depend on how actively the government - more specifically the Treasury Department and the FHFA - loosens their mortgage liquidity spigot. For over the next 12 months at least, the FHFA has the authority to purchase more than the normal amount of mortgages from lenders to put into their portfolio holdings. That means all conforming loans, including the newly conforming jumbo loans up to $625,000, will qualify for purchase by the FHFA. That will help drive down mortgage rates. In about two year time, when the housing recovery is assumed to be well underway, the government will trim its mortgage portfolio. Then Fannie and Freddie will be completely restructured. It will be up to the next administration and Congress to determine that structure in for which NAR will make our 1.3 million voices heard.

Inflation up - Gross Domestic Product is really negative

This would explain why it is much easier to get a steak at our favorite family steak house in San Diego and it may explain why real estate agents who deal with higher end properties report a belief that prices are falling. The good times are not rolling like that did a few years ago in San Diego.

However, the are a heck of a lot better then parts of florida.


The Big Picture | GDP fails ‘commonsense sniff test’

To strip inflation out of the data, the government devises a "deflator" that subtracts inflation from nominal GDP. In the second quarter, that deflator was 1.3, a figure that was half what it was in the first quarter and tied with a 10-year low. Starting with nominal GDP of 4.6 and subtracting that 1.3 deflator, we get real GDP of 3.3.

If the government had used the same deflator as it did for the first quarter, 2.6, GDP would have only been 2.0.

Consumer inflation for July was the fastest it had been in a generation, moving up at a rate of 5 percent for the previous 12 months. Had the deflator been that large, we would have seen negative growth for the second quarter." (emphasis added)

San Diego Real Estate prices

In this blog read that the inflation rate is much higher than the 4 percent we are being told.

If we use the pre 1998 calculation we are running at a 7 percent inflation rate and if we use the pree 1983 inflation rate we are running at over 11% inflation.

Which is what it fells like.

So how will this effect real estate prices....

Well if inflation really kicks in salary will begin to inflate, the dollar will devalue and then eventually assets will probably increase in price.


The Big Picture | Inflation Abounds

Inflation Abounds
Tuesday, April 29, 2008 | 01:00 PM
in Federal Reserve | Inflation

The Federal Reserve is now in day 1 of their two day meeting. The statement we get tomorrow, and the minutes we will read next month are likely to be intriguing.

Bizinflate430

CAR explains what fannie and freddie mean to California real estate prices and sales

My response to this kind of support for a government bailout of California real estate is mixed. I believe that fannie and freddie have been subsidizing loans in a stupid manner for a long time. Making borrowing much to easy. Consequently prices were too high and now the tax payer is going to to get crushed.

The problem is - if we do not bail them out now -- we would probably see a depression.

This is why governments do not need to be involved in private businesses. Sure the should prevent monopolies but did we really need them subsidizing loans. I would be prices would have been lower - interest rates would have been higher and monthly payments would have stayed at more realistic levels if fannie and freddie did not lend on risky deals.

Sure they help home ownership for a few years - but at what cost. Look at how much this is going to cost. Plus I will bet half the people who bought a home in San Diego wish they had not paid so much.

Gmail - C.A.R. Newsline - jmcconnin@gmail.com

Under the conservatorship, both GSEs will be allowed to increase their mortgage funding over the next year and a half, then, beginning in 2010, the plan calls for a reduction in their portfolios of 10 per cent a year until they have been reduced to $250 billion. As part of this weekend's action, both CEOs were relieved of their duties and Herbert Allison, former Merrill Lynch vice chairman, and David Moffett, former U.S. Bancorp CFO, were selected to lead Fannie Mae and Freddie Mac, respectively.

In light of the U.S. Dept. of the Treasury's action, C.A.R. this week reaffirmed its support for Fannie Mae and Freddie Mac and their countercyclical roles. While the short-term impact of the Treasury's actions over the weekend served to calm the markets and restore confidence, in the longer term these entities need to be able to fulfill their historic mission. A privatized Fannie and Freddie will short-circuit the countercyclical role the GSEs have played during precarious times in real estate markets.

.....

In light of the U.S. Dept. of the Treasury's action, C.A.R. this week
reaffirmed its support for Fannie Mae and Freddie Mac and their
countercyclical roles. While the short-term impact of the Treasury's
actions over the weekend served to calm the markets and restore
confidence, in the longer term these entities need to be able to
fulfill their historic mission. A privatized Fannie and Freddie will
short-circuit the countercyclical role the GSEs have played during
precarious times in real estate markets.

Where is the price of San Diego Real Estate heading

These graphs are interesting - but remember these arguments were around on the way up as well.
As with other markets - it is all about sentiment of borrowers and the supply of cheap and easy money.




Calculated Risk

Our economy and our markets will not recover until the bulk of this housing correction is behind us."
Treasury Secretary Hank Paulson, Sept 7, 2008

So when will the "bulk of this housing correction" be behind us? Right now prices are still too high.

Here are a few ways to look at house prices: real prices (inflation adjusted), price-to-rent ratio, and price-to-income ratio.

The first graph compares real and nominal Case-Shiller Home Prices through Q2 2008 (real is current index adjusted using CPI less Shelter).

A look at home prices around the country

Housing market shows a hint of hope - USATODAY.com

New housing reports out Tuesday show some of the first glimmers of stabilization in the troubled housing market, but economists say there are still significant risks that could undermine a recovery.

Home prices fell at a slow pace for the fourth-consecutive month in June, with prices in 20 major metro areas down 0.5% for the month. The decline is far less than the 2% monthly drops seen earlier in 2008, according to the S&P/Case-Shiller home price index. And, in June, prices in nine of the 20 metro areas measured showed a gain from the preceding month, up from seven metros in May.

HOUSING HELP: Down payment aid program nears end

"The bottom of the national housing market is in view," says Mark Zandi, chief economist at Moody's Economy.com. "The rate of (price) decline is slowing, and there are signs of stabilization in some markets." But troubles persist. The decline in home prices year-over-year remained in the double digits, with prices a record 15.4% lower in the second quarter of 2008 than in the second quarter of 2007. From the housing market peak two years ago, the index report said, housing prices are off 1