Worth reading today: An interesting and timely piece from Voice of San Diego exploring this thorny question: When a homeowner renegotiates a mortgage to a lower amount -- effectively reducing the price they are paying for their house -- should the new loan amount be a matter of public record? Or should work-outs be private?

The article reports that mortgage workouts that reduce the amount of the mortgage can be kept secret -- unlike new purchase loans, or refinance loans that increase the total outstanding debt:

"You would think that should be a requirement because all the other ones are public record," said Fred Eckert, a local title representative with Chicago Title. "If [a lender] records a modification, you have an accurate picture of what's happening with that property. If things weren't recorded, how would you know what's happening on the street?"

... Unless a loan's balance is increasing, the lender isn't required to file a public change. Because the modification is between a lender and a private consumer on an existing loan, the lender is not legally required to attach news of the modification to the property record, experts said. In some cases, even when the balance is decreasing, lenders do attach a notice that the loan has been modified.

The result, though, is that information is kept out of the market, to the potential disadvantage of future buyers, who might base their offer on the last publicly recorded purchase price, when in fact the lender and the buyer know there is newer information: a lower price they have agreed on to keep the house out of foreclosure. More, from Kelly Bennett:

if a prospective buyer could see to what level a handful of homeowners on a certain street had just negotiated their mortgages, that buyer's psychology could be altered and he might offer less for a nearby home than he would have otherwise.

Your thoughts? Comments? E-mail story tips to Peter Viles

--Peter Viles

Hat tip: Guillermo, via e-mail, from Patrick.net

Inspired headline and photo combo, no? Hat tip to Calculated Risk, who was wider awake than yours truly this morning.

--Peter Viles

All homeowners should periodically have their insurance policies reviewed to make sure they have enough coverage. Consider this week's fires as a reminder to do just that and to conduct a photo or video inventory of your home. Such documentation will simplify the task should you have to file a disaster claim.

After a fire, flood or other disaster, some homeowners opt to work with an independent or public adjuster rather than directly with their insurance companies.

Your insurer may be cool on this idea -- such adjusters invariably come up with larger damage estimates than do insurance company adjusters. More information is available at the website of Policyholders of America, a nonprofit consumer group that advises homeowners on insurance matters. Click on "Wildfire Victims" on the home page.

Such adjusters typically earn 5% to 15% of homeowner settlements and must be licensed in California.

-- Lauren Beale

Thoughts? Comments?

Photo: The Sky Terrace Mobile Lodge in Lake View Terrace was a scene of utter devastation Monday in the wake of the Marek fire, driven by intense Santa Ana winds. Credit: Irfan Khan / Los Angeles Times

Median listing prices in L.A. County dipped by $1,000 during the last week to $398,000, continuing a pattern of relatively flat listing prices over the last six weeks. Inventory also dipped and is now running 14% below year-ago levels, according to Housing Tracker's weekly analysis of MLS listings.

Date              Median listing price                        Inventory

4/06               $579,666                                      27,251
4/07               $545,000                                      35,489
5/07               $545,000                                      38,297
6/07               $540,000                                      40,766 (up 20.4% y/y)
7/07               $535,000                                      42,685 (up 14.5% y/y)
8/07               $529,000                                      44,483 (up 13.6% y/y)
9/07               $520,000                                      46,414 (up 16.9% y/y)
10/07             $510,000                                      46,603 (up 15.6% y/y)
11/07             $499,900                                      46,503 (up 19.0% y/y)
12/07             $495,000 (down 10.0% y/y)           43,174 (up 28.2% y/y)
1/08               $479,900 (down 12.6%)                40,850 (up 33.3% y/y)
2/08               $475,000 (down 13.5%)                43,625 (up 38.3%)
3/08               $464,900 (down 15.5%)                42,098 (up 31.4%)
4/08               $450,000 (down 17.4%)                42,430 (up 16.7%)
5/08               $449,900 (down 17.4%)                42,532 (up 11.1%)
6/08               $440,000 (down 18.5%)                42,398 (up 4.0%)
7/08               $425,000 (down 20.6%)                44,636 (up 4.6%)
8/08              $410,000 (down 22.3%)                 42,279 (down 5.1%)
9/08              $399,900 (down 23.1%)                 42,553 (down 7.9%)
10/6/08         $399,000 (down 22.5%)                  40,137 (down 13.2%)
10/13/08       $398,000 (down 22.0%)                  40,093 (down 14.0%)

-- Peter Viles

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Owners who suffered damage to their homes in this week's wildfires must now begin the daunting insurance claim and rebuilding process. Among immediate tasks will be fending off looters by boarding up and fencing the property, contacting their insurers and finding new places to live after leaving emergency shelters. Then they will begin the long process of working with claims adjusters and contractors.

Be wary of contractors who show up and offer to do repairs on the spot for a large cash deposit. Under state law, the down payment cannot exceed $1,000 or 10% of the price, whichever is less.

Always get a written contract that details the work and ask to see the contractor's state license and other identification. Get a minimum of three bids and check contractor references.

Some resources for homeowners:

-- Lauren Beale

Thoughts? Comments?

Photo: The Sesnon fire in Porter Ranch started Monday morning on Oak Mountain and had scorched more than 5,000 acres by nightfall. Credit: Mel Melcon / Los Angeles Times

In case you've seen blue framing like this and were wondering ... Bluwood is a relatively new wood product being used on a number of projects in San Diego County, by Brad Pitt on houses in New Orleans and now in several projects in L.A. County.

The Village at Northridge, a 240-unit assisted-living complex on Corbin Avenue, is using the product, which the maker says eliminates termites, fungus mold and rot and is "green." In fact, the company slogan is: "Bluwood, the new green."

According to SC Bluwood Inc., headquartered in Carlsbad, the "blue" wood preservation process acts as a primer for paint and stain topcoats. You can check it out at Lowe's among other places.

No termites. Now that would be fantastic.

--Lauren Beale

Thoughts? Comments?

Photo: Bluwood being used at 9222 Corbin Ave. in Northridge. Credit: Kevin Milam / Bluwood

A buddy passed this along. It's a political ad in the Kansas U.S. Senate campaign, in which Democrat Jim Slattery is accusing "rich executives" of, well, urinating all over ordinary Kansans.

-- Peter Viles

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A new state law requiring lenders to contact homeowners prior to foreclosure filings has led to a dramatic drop in foreclosure activity in California in September, according to the website ForeclosureRadar.  The impact of the state law is so dramatic, the website says, that it will make monthly foreclosure statistics worthless as barometers of housing market conditions.

Foreclosure Radar reports that the number of notices of default filed in September dropped 61.8% from August levels, and the number of notices of trustee sale filings -- which mark the end of the foreclosure process -- dropped 47.3% in a month.

The website, which had previously predicted that such a slowdown was coming, says the cause is California Senate Bill 1137, which requires lenders to make a series of attempts to contact homeowners, and then wait 30 days before filing foreclosure notices. In a news release today, Sean O'Toole, founder of ForeclosureRadar, says the new law has made month-to-month foreclosure statistics "useless in understanding market conditions."

More, from O'Toole: "We expect SB 1137 to have no long term impact beyond delaying the foreclosure process for homeowners, and slowing the overall recovery."

The new California law encourages loan modifications as an alternative to foreclosure, a common goal of various government programs. O'Toole, however, is doubtful that loans can be successfully modified on a broad scale in California:

Given the significant negative equity now occurring in most California foreclosures, modifying loans to affordable levels either requires large principal balance reductions or extending the unsustainable teaser rates that created the foreclosure crisis in the first place. Wide scale adoption of large principal balance reductions also pose significant risks, as they are likely to encourage non-defaulting homeowners to default in the hopes of securing similar reductions. As such, either type of loan modification is likely to result in increased default, and/or foreclosure activity in the future, a consequence clearly not intended.

-- Peter Viles

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Photo Credit: Bloomberg News.

News item from the campaign trail this morning, from the A.P. via KTLA.com:

"Democratic Barack Obama on Monday called for more immediate steps to heal the nation's ailing economy, proposing a 90-day moratorium on home foreclosures at some banks and a two-year tax break for businesses that create new jobs."

More on the foreclosure freeze part of the proposal:

"Obama said that banks participating in the federal bailout should temporarily postpone foreclosures for families making good-faith efforts to pay their mortgage. 'We need to give people the breathing room they need to get back on their feet,' he said, adding that families living beyond their means share some of the responsibility.

I'll add to this post with more details as they become available.

--Peter Viles

Your thoughts? Comments? E-mail story tips to Peter Viles.

Photo Credit: A.P.

Here's an investor heads-up from longtime syndicated newspaper columnist Ken Harney that ran over at Realty Times.

If you're planning to buy investment property and financing it through a lender who sells to Fannie Mae, keep the date Dec. 1 in mind. Nail down your mortgage commitments quickly -- in the next six weeks if you can.

That's because Fannie -- who's traditionally been a key source of funding -- plans to load on extra fees across the board for investor loans purchased after Dec. 1 because of market conditions. Freddie Mac is imposing similar fees, but its increases take effect Nov. 7.

There are also other rule changes. The article is worth a look if you are considering buying investment property anytime soon.

-- Lauren Beale

Thoughts? Comments?

Good morning, Joe Torre. It is a crazy age we live in, with banks failing and governments flailing. Maybe that's why I've found baseball so comforting this summer and now fall. Baseball, and Pieter Severynen's Tree of the Week, which remind us of the things that last long after the teaser rates expire.

Brazilian Pepper Tree – Schinus terebinthifolius

Imported as an ornamental tree in Florida in the 1840’s the Brazilian Pepper Tree thrived in its new homeland. With its clean look, brilliant green leaves and attractive red berries in winter this native from Argentina, Brazil and Paraguay was a great success. Its ugly side appeared only much later: aided by birds and mammals that spread its seeds, the tree is aggressively invasive. In Florida and Hawaii it is  overtaking native landscapes. Even here, in our drier climate, this frequently planted ornamental readily escapes given the right conditions, such as irrigated freeway embankments or stream banks. It should not be planted (although some people advocate planting male trees only).

The tree grows moderately fast to a 30-by-30-foot roundhead. Typically it only lives for some 30 years. It is very attractive when pruned, but messy if neglected, with thick evergreen foliage hiding the short, coarsely furrowed trunk or trunks. Branches are subject to breakage. The 5-8 inch long, non-pendulous, pinnate (featherlike) leaves are coarser, with larger, (1-2 inch) leaflets than those of the tree’s cousin, the California Pepper Tree; they smell somewhat like turpentine. Clusters of tiny white flowers in summer and fall are followed by red berries, sometimes used for Christmas ornamentation. The tree loves full sun, will take most soils, but needs water; it is not drought resistant.

The Brazilian Pepper Tree is a member of the Anacardiaceae family, the same family that houses poison ivy, poison oak and poison sumac. Many people are allergic to all or parts of the tree, which can cause dermatitis. Use of its seeds as a pepper substitute is not advisable.

Thanks, Pieter.

-- Peter Viles

Your thoughts? Comments?

Photo Credit: Pieter Severynen

Forget the stock market; maybe it's time to invest in some memorabilia. Collector's items from the life, career and estate of Bob Hope will be sold during a live televised auction Oct. 18 and 19. The auction will be held at the Beverly Hilton in Beverly Hills and conducted by Julien's Auctions.

Among the highlights: a letter from Bette Davis to Hope, dated Oct. 23, 1943; the red and white feathered headdress Hope wore on the cover of Life magazine in 1962; and a turquoise Western suit that he wore on several TV shows.

Want more? For the golfer on your holiday shopping list, there's Hope's Dunlop Bogie Busger golf bag and a white, pink and blue striped golf shirt that Hope presumably wore. The contents of his Burbank office of 50 years will also be auctioned.

Items may be viewed by the public from 10 a.m. to 6 p.m. daily starting Monday through Oct. 17. Or take a peek at the online catalog.

-- Ann Brenoff

Thoughts? Comments?

Photo: Bing Crosby, left, and Bob Hope in 1941's "The Road to Zanzibar."