Investors Kicking the Tires
May 29th, 2009 categories: Home Auctions, REO, Real Estate, Sacramento
The real numbers behind home auctions
Talking with a real estate investor the other day I was set straight about what I (and many others) assumed was happening with properties going to auction. Apparently investors once poised to take advantage of this market are scouring for bargains too. According to Foreclosure Radar approximately 94% of all the homes that get sold at a trust deed sale in our area go back to the bank! Given the moratorium on Notices of Default (NOD) filings and the hope of receiving bail out money it’s no wonder the banks are finally streamlining short sales…they need to make some money!
Recent statistics for Sacramento county reveal that there are approximately 6000 homes currently for sale. Another statistic that astounds me is that the banks have about 4400 homes being held back from the market. Now if they were to put all of those homes on the market today then we’d see an investor feeding frenzy. With the recent low interest rates and now the approval of the $8000 tax credit allowed for closing costs, buyers have a golden opportunity to beat the investors to the deal.
First time home owners finally have a chance to get into our market after being locked out for the past few years. This reminds me of the bay area right after Prop 13 passed and homes were snapped up en masse. The difference is that interest rates are hovering around 5% AND the median price of a home in Sacramento county is $212,000. With those stats you could own a home with a monthly payment of around $1500.00 including taxes and insurance! These days cash is king but FHA works just as well to buy a home so what are you waiting for?
Related articles:
http://folsomlakehomes.com/2009/05/06/foreclosures-fixer-scams/
http://folsomlakehomes.com/2009/04/28/short-sales-impact-on-credit-scores/
http://folsomlakehomes.com/2009/04/14/california-prevention-act/
http://folsomlakehomes.com/2009/02/16/loan-modifications-vs-short-sales/
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FREE Mortgage Rights Workshop
May 11th, 2009 categories: Elk Grove, Loan Modifications, REO, Real Estate, Short Sales, Special Events
Legal Forum for Homeowners in Crisis
This Tuesday, May 12th at the Elk Grove Community Library there will be a seminar hosted by two local attorney’s who specialize in real estate mortgage matters. The most impressive part is that it’s FREE and one of the speakers, Davie Pereira is a “court qualified expert in mortgage finance.”
The reason I am promoting this seminar is because as a real estate broker I am not afraid to ask the tough questions and to defer to the experts when I don’t know what I don’t know. I’ve met with Mr. Pereira and I believe his knowledge of real estate mortgage law is impressive and his willingness to share his expertise with the public is refreshing.
According to the flyer there are no commercials for his or his companies products and there will be a question and answer session after the presentation. Additionally he has told me that he does offer a free consult so if you have further questions or don’t want to discuss your situation in a public setting that is an alternative solution.
You must pre-register at 916-275-0907as seating is limited and if you have any questions concerning mortgages, credit, foreclosures, bankruptcy or other financial questions I would advise you write them out and bring them with. Opportunities for the public to ask relevant questions of mortgage professionals are rare and given his knowledge of contracts any insight he might offer is well worth the time spent.
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Related articles:
http://folsomlakehomes.com/2009/05/06/foreclosures-fixer-scams/
http://folsomlakehomes.com/2009/04/28/short-sales-impact-on-credit-scores/
http://folsomlakehomes.com/2009/04/14/california-prevention-act/
http://folsomlakehomes.com/2009/02/16/loan-modifications-vs-short-sales/
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Avoiding Foreclosures
March 11th, 2009 categories: REO, Real Estate, Short Sales
Short Sales, loan modifications and other information.
Since the government passed the new stimulus pkg there has been a lot of questions as to how much money will be devoted to helping homeowners save their homes and the reality is that very few will benefit as it stands now. The reason for that is only those loans that are government backed i.e. FHA, Fannie Mae, Freddie Mac qualify for re-structuring because they must meet the criteria outlined as a government sponsored entity(GSE). Those that do not qualify(which is the majority) are anxious to get out from under the payments so what is the best way to approach this situation? Following is an outline of some of the current methods used in California by the real estate community but please keep in mind that every situation is unique so please email me with your questions.
Short sales offer a solution to selling your home if you owe more than what it is currently worth. The way the bank sees the situation is that they stand to lose more if they don’t agree to take less than the loan balance due. The reason for that is because they will have to pay the foreclosure costs in addition to marketing your property. The banks know that the best case scenario is for them to net 85% of the sale price so a short sale profits them.
Loan modifications are few and far between. Sellers who hire an attorney to negotiate their loans are paying for a service they can handle themselves. In fact according to senate bill 1137 the banks are required to call or visit the homeowner with the express purpose of finding a way to help the homeowner keep his home. The real problem is that most homeowners don’t qualify because they don’t earn the income necessary to qualify. Additionally the GSE are for only those loans that the government insured so your first question will be what type of loan do you have? Calling your lender and finding out if you qualify for a loan modification is the best way to determine how to solve your mortgage problem.
Some people are so frustrated that they just want to walk away because they realize they will never catch up. A deed in lieu of foreclosure basically means that you mail the keys back to the lender. This isn’t really a solution and is basically the same as foreclosure but without the black mark on your credit history. Some lenders make this a difficult process and it will negatively impact your credit score so this would be a last resort. If you find yourself not able to make your house payments and don’t know what to do give me a call and let’s go over your situation. It’s never too late to figure out a solution.
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Loan Modifications vs Short Sales
February 16th, 2009 categories: Foreclosures, REO, Real Estate, Short Sales
Does hiring an attorney really help?
The past couple of years have re-introduced to the real estate community the short sale that has helped many people sell their homes and keep some semblance of credit worthiness, and now attorneys have found a niche with loan modifications.
We last saw the short sale in the mid 1990’s when the market had a similar fall due to the overbuilding and investor inflation created by a rising real estate market. In essence, the seller was able to sell his house without having to satisfy the debt he owed to the lender and the new buyer was able to purchase a home with a clear title even though the previous owner owed more than the new buyer paid.
Now attorneys are introducing their services to help homeowners obtain a loan modification. Real estate loans can be obtained from a variety of sources i.e. banks, mortgage brokers, mortgage bankers, credit unions, investment firms, private funding, etc… so is it necessary to hire an attorney to get a toxic loan re-negotiated? That depends on a couple of factors but most importantly it depends on the reason you are seeking relief from your loan obligation.
How much you owe vs. what you can afford to pay for a mortgage is the primary reason most people find themselves in this situation in the first place. There are exceptions for loan fraud and in those cases an attorney would be a good choice however, the majority of people now seeking relief accepted a loan at a teaser rate knowing it would adjust. They were hoping the market would continue to increase and that they could re-finance at a fixed rate after their minimum period expired. Your ability to qualify for a loan modification is the same criteria lenders use to qualify any buyer for a loan.
In a loan modification the goal is to re-negotiate the loan to something that the homeowner can afford. The best case scenario is to get in touch with your lender and begin the discussion of loan modification prior to missing any payments. The labyrinth of departments make this an intimating situation and can seem overwhelming. Attorneys capitalize on these fears and extract more money from the homeowner which exacerbates their financial situation.
I recently had a conversation with one loss mitigator from a bank I was working out a short sale for one of my sellers. He said his bank requires that the attorney, the loss mitigator and the homeowner have a three-way phone conversation explaining to the homeowner that the hiring of an attorney was not necessary to negotiate a loan modification. He then asks the homeowner why he hired an attorney when he could save himself the money and the usual answer was fear. This was the reason most people were willing to go further into debt with no guarantee that they would get their loan modified. Again, the primary factor in obtaining a loan modification is your ability to qualify for the loan in the first place.
Some law firms specializing in loan modifications have “working relationships” with investors who will purchase your home should you not qualify for a loan modification. Essentially, they are structuring a short sale with the law firm doing the paperwork on behalf of the seller. This is where I have a problem because the seller is being charged for services a Realtor would provide FREE. Since the seller did not qualify for the loan modification they are now forced to sell their home or face foreclosure but they now have attorney fees to pay. Talk about fear!
My suggestion to people who are upside down on their mortgages is to first talk with a Realtor who is familiar with loans and short sales. Find out if you qualify for a new loan and what your home value is in this market. If you suspect loan fraud then get a referral from your Realtor for an attorney who specializes in real estate. Paying for the learning curve of those attorneys who are exploiting people’s fears is not going to help your situation.
For more information see these articles: Now Is The Time To Renegotiate With Banks
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What Is Your Home’s Value?
January 25th, 2009 categories: Folsom CA, Foreclosures, REO
Sacramento Valley Real Estate Market Trends
There’s this great website that a client of mine sent me that shows the market trends over the past 5 years in the Sacramento Valley. It’s put out by the Sacramento Bee and you can select any area and see how much the values have changed.
This past week at the Realtors board meeting there was a presentation complete with charts reflecting the decline of our market in relation to the loans people took out on their homes. The best part was that the numbers show that we’ve been through the first wave of loan re-sets and are starting the second which some say could be the last for this buyers market.
According to the recent stats the Sacramento area has dropped to values last seen in 2001. The Folsom area has been hovering around the 2003 price point which upholds the old adage of keeping location paramount. The percentage of bank owned homes in Folsom is about 63% compared to some areas which are close to 100%.
I recently had a conversation with an agent in the bay area where there have not been any fair market sales for the past 6months. According to DataQuick prices are down 50% there and we usually follow the bay area. The upshot is that the investors are starting to come back. It’s not unusual to hear of agents writing a dozen to 20 offers hoping to get 6 houses for their clients.
Right now we have low interest rates, plenty of property to choose from and little competition…sounds like a good time to go shopping. The real key is trying to guage when & where the bottom of the market will be. There are indications that this year will be the last decline and things will begin to level off but you need to remember that there won’t be anyone who will ring a bell to alert us.
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