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Redlands Real Estate Blog

Blog from the Lon Mapes Team at Orangehill Realty

By Lon Mapes | Broker in Redlands, CA
  • Bankrupt San Bernardino Hires New Manager for California City

    Posted Under: General Area in Redlands, Market Conditions in Redlands, In My Neighborhood in Redlands  |  February 17, 2013 10:44 AM  |  605 views  |  No comments
    This news effects us locally in the Redlands area...

    Crisis-hit San Bernardino, California, picked a new city manager on Friday at a critical time in its quest to get bankruptcy protection from a federal court.
    San Bernardino was forced to look for a new city manager after its acting city manager, Andrea Travis-Miller, quit.

    Her resignation coincides with the departure of the city's finance chief. Both had been the key officials overseeing the city's bankruptcy application and their departures threaten the city's ability to achieve it. They had more knowledge than anybody else of the city's finances and the experience to answer questions from the court and creditors.

    The city council voted to hire Allen Parker to replace Travis Miller. According to his resume provided to the city, Parker has been an economic development consultant since 2006.

    From June 2001 until December 2006, according to his resume, Parker was chief administrative officer of the Morongo Band of Mission Indians, a federally recognized tribe in California. Before that he was village manager of Maywood, Illinois.

    The federal judge overseeing San Bernardino's bankruptcy application said in a court hearing on Tuesday that the new city manager would be confronted with a steep learning curve.

    Various creditors are demanding a wealth of financial documents from the city. The city must also produce a detailed bankruptcy blueprint to explain how it intends to deal with its creditors, a key part of proving its eligibility for bankruptcy.

    The city council considered two applicants for the job, and voted unanimously to hire Parker.
    "Allen Parker brings a wealth of city management experience to San Bernardino," the mayor, Pat Morris said. "I have great confidence in his ability...to guide San Bernardino through the difficult decisions we must make in bankruptcy."

    San Bernardino, a city of 210,000 about 60 miles east of Los Angeles, filed for bankruptcy protection on August 1, citing a $46 million deficit for the current fiscal year and little scope to meet its day-to-day expenses. It was the third California city to file for bankruptcy last year, following Stockton and Mammoth Lakes.

    The city's biggest creditor, the California Public Employee Pension Fund (Calpers), has opposed San Bernardino's quest to seek bankruptcy protection. Without it, the struggling city will likely face multiple lawsuits in state court for unpaid bills, at a time when its officials say it can barely make payroll.

    The city pegs its debt to America's biggest public pension fund at $143 million.
    San Bernardino has not made its $1.2 million, twice monthly payment to Calpers since its bankruptcy declaration last August.

    No city has ever unilaterally suspended payments to Calpers, which manages pension plans for state government employees and many municipalities and local government agencies around California.

    The bankruptcy could be a test case as to whether the pensions of government workers take precedence over other payments in a municipal bankruptcy - a high-stakes issue for pension plans and their beneficiaries, and for the Wall Street bondholders who lend money to governments.

    In a statement, Calpers said: "We are very pleased to have Mr. Parker stepping into his new role as city manager of San Bernardino and our executives have already reached out to him personally to welcome him and begin a dialogue with Calpers."


    Lon Mapes - Redlands Broker/Owner & Consultant

    Multimillion Dollar Sales Producer
    (909) 726-5935

    http://www.OrangehillRealty.com
    Follow me on Facebook
    http://www.facebook.com/orangehillrealty
  • Mortgage Debt Forgiveness Averts ‘Cliff’

    Posted Under: Home Selling in Redlands, Foreclosure in Redlands, In My Neighborhood in Redlands  |  January 4, 2013 7:52 PM  |  418 views  |  No comments

    The settlement by Congress to avert the “fiscal cliff” didn’t only keep some tax hikes at bay for middle-income America.

    The 2012 American Taxpayer Relief Act continues to exempt from taxation mortgage debt that is forgiven when homeowners and their mortgage lenders negotiate a short sale or loan modification — including any principal reduction — on primary property.

    Extension of the tax exemption to Jan. 1, 2014, has many in California breathing more comfortably.

    “We’re relieved because it gives homeowners a sense of relief,” Molly Silva Gurrola, of Riverside-based Silva Group, said as she put finishing touches on a mid-century modern home she is listing for an equity-sale. “Now, everyone can make a decision based on their individual needs.”

    Don Faught, president of California Association of Realtors and managing broker of Alain Pinel Realtors in the San Francisco area, notified state trade association members of the “good news” through an e-mail blast on Wednesday, Jan. 2.

    He advised Realtors to:

    Tell their clients to keep their short-sales on the market.

    Encourage clients to consult with their own tax advisers about the impact this tax break can have on their situation.

    Congress also raised capital gains rates from 15 to 20 percent for high-income earners, he advised, but the capital gains ceiling on the sale of a principal residence remains at the first $250,000 for single taxpayers and at $500,000 for married couples.

    “This extension has given us much encouragement,” said Nancy Carmon Petrone, a broker in San Bernardino, where reports suggest that nearly 50 percent of homes with mortgages there are “underwater,” a status given to a property valued at less than the note.

    Petrone said there was a lot of stress before the holidays to close a deal on time.

    “A lot of homeowners didn’t know what would happen, and held off on doing anything.”

    Now that California homeowners have one more year to complete a short sale or loan modification to benefit from the federal tax break that otherwise would have expired Tuesday, analysts say homeowners will be in a better position to think through 2013 strategies with clearer heads.

    Faught said he spoke with two agents before New Year’s who expressed concern that a lender was delaying the close of escrow on short sales, in case the extension did not occur.

    “The short-sellers were going crazy,” he said. “At one point they considered going into foreclosure, instead.”

    Those two deals closed today, Faught said, and one seller called to express thanks for lobbying to keep the exemption intact.

    The act has saved individual homeowners thousands of dollars since it took effect in 2007.

    “Our surveys tell us that if the principal is reduced by $100,000, it can save a homeowner anywhere from $15,000 to $35,000” on the phantom income under 2012 tax rates, Faught said. “That’s not an insignificant amount.”

    Steve Silva, principal of the Silva Group, said he’s already seeing a spurt of short sales coming onto the market. “People’s attitudes are different than a year ago — more positive,” he said. “I think the government made a wise decision to continue this. I see no let-up right now.”

    With short-sales fetching higher amounts than a foreclosure, Molly Silva-Gurrola sees yet another emerging trend: Borrowers who are underwater on their loan may begin to come up for air.

    She said she planned to meet a client in Corona this week who is at a break-even point on a $475,000 mortgage, but held off on listing her home six months ago because it would have put her underwater on the sale by the time she paid commission and fees. “We’re going to re-analyze that to see if we can now go through a regular sale.”

    Faught said these scenarios are a significant reversal from foreclosure activity. Statewide, foreclosure levels fell to 12 percent in 2012, down from 25 percent of all sales.

    “Foreclosures are not good for banks or home values,” he said. “We’re not in a housing boom, but we are on a road to recovery.”


    Lon Mapes - Redlands Broker/Owner & Consultant

    Multimillion Dollar Sales Producer
    (909) 726-5935

    http://www.OrangehillRealty.com
    Follow me on Facebook
    http://www.facebook.com/orangehillrealty

  • Inland Empire Foreclosure Market Update (I was quoted in the Article)

    Posted Under: Agent2Agent in Redlands, Foreclosure in Redlands, In My Neighborhood in Redlands  |  November 17, 2012 6:39 PM  |  239 views  |  1 comment

    I was honored to be quoted in the article from Saturday's Redlands Daily Facts.

    http://www.redlandsdailyfacts.com/ci_22014229/upland-foreclosure-market-drying-up?source=rss_viewed


    Lon Mapes - Redlands Broker/Owner & Consultant

    Multimillion Dollar Sales Producer
    (909) 726-5935
    http://www.OrangehillRealty.com

    Follow me on Facebook
    http://www.facebook.com/orangehillrealty

 
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