Timely Articles
Proposition 13 Base Year Value Transfers to Replacement Properties

Under certain conditions, persons aged 55 and older or severely disabled persons of any age may transfer the Proposition 13 factored base year value of their principal residence to a residence acquired or built as its replacement (ref. Prop 60 & Prop 90, Revenue and Taxation Code 69.5).

Persons, whose property has been subject to an eminent domain taking, or other governmental acquisition, may also qualify to transfer their Proposition 13 factored base year value to a replacement property.
Proposition 60: Principal Residence Intra-County Base Year Value Transfers
Property owners of at least 55 years of age may transfer the Proposition 13, factored base year value of their principal residence to a replacement principal residence. The replacement must be of equal or lesser current market value and located within the same county. Click for Prop 60 "Question & Answer" guide.

The California Board of Equalization has also provided a useful discussion regarding Proposition 60 and Proposition 90 Exclusions. Click the following link to view that information: http://www.boe.ca.gov/proptaxes/pdf/lta06010.pdf
Proposition 90: Principal Residence Inter-County Base Year Value Transfers
The base year value of a principal residence may be transferred between different counties, but only if the county where the replacement home is located has adopted an ordinance permitting such transfers. Sacramento County has not adopted a Proposition 90 ordinance; hence a transfer from another county to Sacramento County is prohibited. However, in some cases you may be able to transfer your base year value from Sacramento County to another county. As of 2009, counties accepting inter-County Proposition 90 transfers were: Alameda, Los Angeles, Orange, San Diego, San Mateo, Santa Clara, and Ventura.
FHFA, Fannie Mae and Freddie Mac Announce HARP Changes to Reach More Borrowers

The Federal Housing Finance Agency, with Fannie Mae and Freddie Mac (the Enterprises), today announced a series of changes to the Home Affordable Refinance Program (HARP) in an effort to attract more eligible borrowers who can benefit from refinancing their home mortgage. The program enhancements were developed at FHFA’s direction with input from lenders, mortgage insurers and other industry participants.
“We know that there are many homeowners who are eligible to refinance under HARP and those are the borrowers we want to reach,” said FHFA Acting Director Edward J. DeMarco. “Building on the industry’s experience with HARP over the last two years, we have identified several changes that will make the program accessible to more borrowers with mortgages owned or guaranteed by the Enterprises. Our goal in pursuing these changes is to create refinancing opportunities for these borrowers, while reducing risk for Fannie Mae and Freddie Mac and bringing a measure of stability to housing markets.”
Fannie Mae and Freddie Mac have helped approximately 9 million families refinance into a lower cost or more sustainable mortgage product, approximately 10 percent of those via HARP.
HARP is unique in that it is the only refinance program that enables borrowers who owe more than their home is worth to take advantage of low interest rates and other refinancing benefits. This program will continue to be available to borrowers with loans sold to the Enterprises on or before May 31, 2009 with current loan-t0-value (LTV) ratios above 80 percent.
The new program enhancements address several other key aspects of HARP including:
• Eliminating certain risk-based fees for borrowers who refinance into shorter-term mortgages and lowering fees for other borrowers;
• Removing the current 125 percent LTV ceiling for fixed-rate mortgages backed by Fannie Mae and Freddie Mac;
• Waiving certain representations and warranties that lenders commit to in making loans owned or guaranteed by Fannie Mae and Freddie Mac;
• Eliminating the need for a new property appraisal where there is a reliable AVM (automated valuation model) estimate provided by the Enterprises; and
• Extending the end date for HARP until Dec. 31, 2013 for loans originally sold to the Enterprises on or before May 31, 2009.

An important element of these changes is the encouragement, through elimination of certain risk-based fees, for borrowers to utilize HARP to refinance into shorter-term mortgages. Borrowers who owe more on their house than the house is worth will be able to reduce the balance owed much faster if they take advantage of today’s low interest rates by shortening the term of their mortgage.
The Enterprises plan to issue guidance with operational details about the HARP changes to mortgage lenders and servicers by November 15. Since industry participation in HARP is not mandatory, implementation schedules will vary as individual lenders, mortgage insurers and other market participants modify their processes.