Denver Real Estate Blog

While Banks and Savings and Loan institutions nationwide have been busy lining up to the public trough for bailout funds, another institution has been busy writing home mortgages, your neighborhood credit union!  Surprised?  Don’t be, since credit unions have been writing home mortgages for years- they just have a different business model than the big boys.

Credit unions are non-profits that exist to make money, just not profit.  Their basic business plan is simple: credit unions receive deposits, and use that money to make loans.  They then charge more on those loans than is paid on deposits. Ta-Da!  A business that thrives.   And of course, they are very conservative when it comes to their lending standards.  Subprime and option ARM mortgages have never been in their portfolios, nor did they sell and repackage loans as investments on the secondary market.

What credit unions did do is loan only to credit worthy members on mortgages that truly were not greater than what the member could afford.  They also did this without creating fraudulent applications and wildly inflated appraisals-just like banks used to do in the old days!

Joining a credit union is generally based on membership requirements such as living in a certain area, working for a particular employer or industry, or belonging to a certain group.  The largest advantage of credit union membership is that loan rates are lower and returns are greater on savings and CD’s than usually found at banks.  Unlike banks, credit unions are member owned with excess earnings either passed back to members in the form of lower rates, greater earnings, or shares paid.

They hold most loans to maturity, and fewer than 1% of credit union mortgages are 60 or more days late according to the Credit Union National Administration (CUNA).  While their mortgage business is a fraction of that of other mortgage lenders, credit union originations increased 10% in the first 6 months of 2008 (according to CUNA), while mainstream lender originations dropped 18% during the same period as reported by the Mortgage Bankers Assn.

Not surprising, with car sales down and the difficulty dealers are having arranging financing, especially for the used car market, credit unions are more than willing to once again step up to the plate to assist.  As a result, credit union membership is growing by leaps and bounds, all thanks to sound business practices.

                                                                                              Check out Denver Real Estate here

Homeowners Disclosure

With the passage of SB100, Colorado statues now require that every Homeowners Association in the state deliver at least annually, within 90 days following the end of each fiscal year, the following information to all owners upon reasonable notice:

• The date upon which the  fiscal year commences and the operating budget for the current fiscal year.
• A list, by unit type of the owner’s current assessment, including both regular and special assessments.
• Its annual financial statements, the results of any audits, and a list of all Association insurance policies.
• The Association’s bylaws, articles, and rules and regulations.
• All minutes of the executive board and member meetings for the fiscal year preceding the current annual disclosure.
• The Association’s responsible governance policies

This information must be readily available at no cost to the owners at their convenience.  Availability means it may be published on a web page as long as an accompanying notice is sent via first class or e-mail; it can be maintained as part of literature table or binder at the Association’s place of business; or it may be mailed or personally delivered to the homeowners.  The cost of any distribution is to be accounted for as a common expense liability.

Home Buyer Disclosure by Seller

SB 100 states that, except in the case of a foreclosure sale, the seller of a property in a common-interest community must mail or deliver to the purchaser the most current copies of the following documents:

1. the bylaws and rules on the Association;
2. the covenants;
3. the Association’s operating budget;
4. the declaration;
5. the association’s annual income and expenditures statement;
6. minutes from the most recent annual owner’s meeting and any executive board meetings that occurred within the six months immediately preceding the title deadline; and
7. the Association’s balance sheet.

This law requires the seller to provide the outlined HOA information to the buyer by title deadline, or, in the case of a for sale by owner, no later than 10 days prior to closing.

The new law states also that “written notice of any unsatisfactory provision in any of the documents listed above shall be cause for termination of the contract, if signed by the buyer or on the buyer’s behalf and given to the seller on or before the governing documents deadline.”  Time share units are not included in these requirements.

HOA Responsibility

The association must use its best efforts to accommodate a seller request for documents.  The Association may charge a reasonable fee, not to exceed the Associations actual cost per page, and must make documents available within 5 days of receipt of notice.

Disclosure Documents/ Receipt of Documents

Additionally, the seller must provide the buyer with a disclosure statement in bold-faced type.  It is the seller’s responsibility to obtain from the purchaser a signed acknowledgement of receipt of this information and disclosure statement at closing. This signed form must also be sent to the HOA in a reasonable time frame.

Check out denver Real Estate Here

Each year Remodeling Magazine, in cooperation with REALTOR® magazine, produces the Cost vs. Value report detailing the average return of value for selected home improvement projects.  This report is further refined for each major regional area of the country.

The full 2008-2009 report will be available in December, but here are some early observations. Like last year’s report exterior remodeling projects lead the pack for recovery on dollars spent.  In fact those projects that boost curb appeal give you the greatest chance for recouping money spent, and still compare well with kitchen remodels.

From a national level here is what you can expect, showing expected recovery:

·        Upscale fiber cement siding (86.7%)

·        Midrange wood deck (81.8%)

·        Midrange vinyl siding (80.7%)

·        Upscale foam backed vinyl siding (80.4%)

·        Midscale minor kitchen remodel (79.5%)

·        Upscale vinyl window replacement (79.2%)

·        Midrange wood window replacement (77.7%)

·        Midrange vinyl window replacement (77.2%)

·        Upscale wood window replacement (76.5%)

·        Midrange major kitchen remodel (76.0%)

Home owners often wonder where their money will be safest during a sour financial market and as it has always been, investing in your home always pays off!  These numbers reflect a payback upon sale one year after the remodel, and are only averages. If you provide most of your labor the recovery will be even stronger

Many regions, the west coast in particular, often see recovery greater than 100%, while on the flip side Midwestern cities such as Cleveland, Chicago, and Milwaukee have some of the lowest recovery numbers.

Does it make sense to perform a major remodel just prior to a home sale?  Depends.  If the cost recovery is less than 100%, not really.  If your work will actually produce a gain, or a sale at a reasonable price is being hampered due to the lack of the project, then it may be to your advantage to proceed.  Your best direction is to always consult a Realtor to assist with which path to take.

Jerry Hart                                                                  Check out Denver Real Estate here

Adverse Possession is a method to acquire title to land that is owned by another through use.  Examples of use might include a fence, driveway, footpath or even a structure being placed on the property of another party.  The person claiming ownership must prove the following elements exist in order to have a case:

• The possession must be OPEN and NOTORIOUS, that is it must be open for all to see.  This includes the owner, even if he/she has never actually seen the possession.
• The possession must be HOSTILE to the actual owner, and must conflict with the owner’s rights and interests in the property. The possession must also be EXCLUSIVE in use to the possessor.
• The possession must be CONTINUOUS and UNINTERRUPTED.  For Colorado the statutes specify at least 18 years, and may also be combined with the same possession by a prior owner.

If this all sounds criminal (for some it may be), the legal theory is that by not disputing a neighbor’s use of your property by way of a lawsuit, you, as the actual owner have abandoned your rights to the property, either right or wrong.

The Need for Change

A land dispute by two neighbors in Boulder, Colorado in late 2007 that made national headlines and stirred public opinion prompted state legislators to change the law that allowed it to happen. The whole story as reported by The Daily Camera can be read here.

Two State Representatives, Rob Witwer of Evergreen and Ron Tupa of Boulder co-authored a bill to stop what they determined to be outright abuse of the current law.  Witwer said “the current law was out of balance and needed to be fixed.  It was clear that abuse of adverse possession was much easier in Colorado than in most, if not all jurisdictions.”

The New Law

On July 1, 2008 HB 2008-1148 was signed into law by Governor Ritter, and applies to all adverse possession cases following this date.

In addition to the current requirements, the following is also required:

“The person claiming adverse possession had a good faith belief that the person in possession of the property of the owner of record was the actual owner of the property and the belief was reasonable under the particular circumstances.”

Also included in the law, judges will have the power to force adverse possessors to pay for the land they do win in court, and to compensate the original owners for back property taxes, and interest.

With the new law the burden of proof will lie with the possessor to prove they have evidence they were the actual owner which should reduce the number of cases appearing before the court.  Unfortunately the new law was a little late to apply to the Boulder case.

And, One Other Law-

In the Boulder case, the possessors were a former judge and an attorney.  This fact prompted another law to be passed which will restrict judges from hearing cases involving other judges from the same jurisdiction, in an effort to avoid conflicts of interest or the appearance of favoritism.

Jerry Hart

 Jerry is a full time Realtor serving the needs of Buyers and Sellers in the Denver Real Estate market.

Editors note: this article is not meant to provide any legal advice.  Always consult an attorney for a particular application.