California’s Discount Foreclosure Sales Point to Housing Bottom
Thursday, August 07, 2008
Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS®
Recent economic developments indicate that California may be the first state to find the bottom, based on the increase in sales volume in the previous three months. In June, home sales rose for the third consecutive month, following a 30-month decline. Although approximately 40 percent of the transactions were foreclosure sales, the increase is allowing the market to stabilize by depleting some of the excess inventory. Some experts believe that once a neighborhood’s median home price declines to 50 percent from the peak value that the homes in that neighborhood will no longer depreciate.
MAKING SENSE OF THE STORY FOR CONSUMERS
· Although California leads the nation in foreclosures, the state’s foreclosure process is more efficient than other states, which likely will lead to a quicker rebound. Foreclosed properties are receiving multiple bids and financial institutions are selling these homes quicker than the market would typically allow.
· The Unsold Inventory Index in June decreased to 7.7 months from 10.2 months a year earlier, demonstrating that the market is improving.
Home Ownership Preservation Loans
The FDIC is proposing that Congress authorize the Treasury Department to make loans to borrowers with unaffordable mortgages to pay down up to 20 percent of their principal. The repayment and financing costs for these Home Ownership Preservation (HOP) loans would be borne by mortgage investors and borrowers. This approach is scaleable, administratively simple, and will avoid unnecessary foreclosures to help stabilize mortgage and housing prices.
This proposal is designed to result in no cost to the government:
- Borrowers must repay their restructured mortgage and the HOP loan.
- To enter the program, mortgage investors pay Treasury’s financing costs and agree to concessions on the underlying mortgage to achieve an affordable payment.
- Treasury would have a super-priority interest — superior to mortgage investors’ interest — to guarantee repayment. If the borrower defaulted, refinanced or sold the property,
- Treasury would have a priority recovery for the amount of its loan from any proceeds.
- The government has no continued obligation and the loans are repaid in full.
Mortgage Restructuring:
- Eligible, unaffordable mortgages would be paid down by up to 20 percent and restructured into fully-amortized, fixed rate loans for the balance of the original loan term at the lower balance. New interest rate capped at Freddie Mac 30-year fixed rate.
- Restructured mortgages cannot exceed a debt-to-income ratio for all housing-related expenses greater than 35 percent of the borrower’s verified current gross income (‘front-end DTI’). Prepayment penalties, deferred interest, or negative amortization are barred.
- Mortgage investors would pay the first five years of interest due to Treasury on the HOP loans when they enter the program. After 5 years, borrowers would begin repaying the HOP loan at fixed Treasury rates.
- Servicers would agree to periodic special audits by a federal banking agency.
Process:
- Mortgage investors would apply to Treasury for funds and would be responsible for complying with the terms for the HOP loans, restructuring mortgages, and subordinating their interest to Treasury.
- Administratively simple. Eligibility is determined by origination documentation and restructuring is based on verified current income and restructured mortgage payments.
Funding:
- A Treasury public debt offering of $50 billion would be sufficient to fund modifications of approximately 1 million loans that were “unsustainable at origination.” Principal and interest costs are fully repaid.
Eligible Mortgages:
Applies only to mortgages for owner-occupied residences that are:
- Unaffordable – defined by front-end DTIs exceeding 40 percent at origination.
- Below the FHA conforming loan limit.
- Originated between January 1, 2003 and June 30, 2007.
- Home Ownership Preservation Loans: Questions and Answers
- Home Ownership Preservation Loans: Examples
- Related Link: Financial Times, April 29, 2008 – Op Ed: How the State can Stabilise Housing Market
- FDIC Chairman Sheila Bair at the Brookings Institution Forum, The Great Credit Squeeze: How it Happened, How to Prevent Another; Washington, DC – May 16, 2008
- FDIC Chairman Sheila Bair at the Brookings Institution Forum, The Great Credit Squeeze: How it Happened, How to Prevent Another; Washington, DC – May 16, 2008 – Video (Courtesy of C-SPAN – www.c-span.org)
Senate passes foreclosure rescue
Did you hear the big news? Your Senate just passed the mortgage rescue bill to give homebuyers a TAX CREDIT of up to $8,000. This tax credit will stimulate home buyers to get off the fence and buy foreclosure resale deals now, which translates into shorter investor hold times, faster resales, and bigger banked profits.
Unlike earlier versions of this bill ($7,500 credits for foreclosure buyers only) this $8,000 tax credit is good for first time home buyers (or anyone who has not owned a home in the last 3 years). And it will be much farther reaching by affecting ALL types of homes.
Jul 11, 2008 5:55 PM (3 days ago) By JULIE HIRSCHFELD DAVIS, AP
WASHINGTON (Map, News) – A mortgage rescue to help hundreds of thousands of struggling homeowners avoid foreclosure and get more affordable, safer loans passed the Senate overwhelmingly Friday, but it faces a bumpy road amid continuing turmoil in the housing market.
The 63-5 vote reflected a keen interest by Democrats and Republicans to send election-year help to distressed homeowners with economic issues topping voters’ concerns.
The plan lets homeowners buckling under mortgage payments they can’t afford keep their homes and get more affordable mortgages backed by the Federal Housing Administration. Banks that agreed to take substantial losses on those distressed loans could avoid costly foreclosures and be assured of recovering at least some money.
The new program would let the FHA insure as much as $300 billion in new mortgages, helping an estimated 400,000 homeowners. Full Story
FORECLOSURE RELIEF BILL BECOMES LAW
Friday, July 11, 2008
Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS®
This week, the State Legislature enacted foreclosure reform law to address the adverse effects of high foreclosure rates in California. The new law requires lenders to contact homeowners to explore options for avoiding foreclosure at least 30 days before filing a notice of default. It also requires owners acquiring property through foreclosure to maintain the exterior of vacant residential properties. The new law also extends from 30 to 60 days the time for residential tenants to move out of properties that have been foreclosed upon, unless other laws apply. These requirements will remain in effect until January 1, 2013. The full text of Senate Bill 1137 (Perata) is available at www.leginfo.ca.gov.
Highlights of the new law are as follows:
Contact Between Lender and Borrower
Effective on or about September 8, 2008, a lender, trustee, or authorized agent may not file a notice of default until 30 days after contacting a borrower to assess the borrower’s financial situation and explore options for avoiding foreclosure. A lender must generally contact the borrower in person or by telephone, or satisfy due diligence requirements for contacting a borrower. During the initial contact, the lender must inform the borrower of the right to request a meeting with the lender within 14 days. The lender must also give the borrower the toll-free number for finding a HUD-certified housing counseling agency. A subsequent notice of default must include the lender’s declaration that it has contacted the borrower, tried with due diligence to contact the borrower, or the borrower has surrendered the property. A lender who had already filed a notice of default before the enactment of this law must include a similar declaration in the notice of sale. This requirement to contact borrowers applies to loans secured by owner-occupied residences made from 2003 to 2007. Certain exemptions apply if the borrower has filed for bankruptcy, surrendered the property, or contracted with a person or entity whose primary business is advising people, who have decided to leave their homes, on how to extend the foreclosure process and avoid their contractual obligations.
Maintenance of Vacant Properties
Effective July 8, 2008, anyone who acquires property through foreclosure must maintain the exterior of vacant residential property. Violations of this law include permitting excessive foliage growth that diminishes the value of surrounding properties, failing to take action against trespassers or squatters, failing to take action to prevent mosquitoes from breeding in standing water, or other public nuisances. This law authorizes a governmental entity to impose a civil fine up to $1,000 per day for any violation, as long as the owner has been given notice and an opportunity to remedy the violation. A violator must be given at least 14 days to begin, and 30 days to complete, such remediation before a fine can be assessed.
60-Day Notice to Terminate Tenants
Effective July 8, 2008, a tenant or subtenant in possession of a rental housing unit that has been sold through foreclosure is generally entitled to a 60-day written notice to quit, not just 30 days. However, a borrower who remains on the property after foreclosure may be served a three-day notice to terminate. This law does not affect, among other things, rent-controlled properties with just-cause evictions. Effective on or about September 8, 2008, the lender, trustee, or authorized agent posting a notice of sale must also post and mail a specified notice of a tenant’s right to a 60-day eviction notice from the new owner, unless other laws apply. This requirement to notify tenants of their rights applies to loans secured by residential real property where the borrower has a different billing address than the property address.
Short sale & consequences
Investors in second or multiple homes stand to be among the biggest losers from the housing downturn. That’s because proposed mortgage bailout programs don’t address second homes and investment properties. Many owners of multiple properties don’t realize that investments they thought would help them build long-term wealth may in fact leave them in bankruptcy and facing a sizeable tax debt.
MAKING SENSE OF THE STORY FOR CONSUMERS
- Homeowners who borrowed against the value of their second home, or who financed the purchase of their second home and subsequent homes by pledging their primary home or other properties as security, may be liable for taxes on the difference in value should they sell any of their properties for a price less than the value owed on the mortgage.
- Under the Mortgage Forgiveness Debt Relief Act, a homeowner doesn’t have to pay taxes on forgiven debt if the collateral behind the mortgage is owner-occupied. That provision doesn’t apply to a growing number of homeowners renting out their second home or investment property. Of some 7.5 million vacation homes, only about 10 percent are considered owner-occupied, according to the NATIONAL ASSOCIATION of REALTORS® (NAR). Many of these homeowners borrowed against the ever-increasing (or so it seemed) value of these properties to finance improvements or to buy other properties.
- There may be a way out for some, one bankruptcy lawyer counsels: Get a lender to agree that foreclosure “fully satisfies all obligations under the loan.” That might protect the seller from having to pay taxes on the forgiven debt – although one attorney said, “I sure don’t want to be the one litigating it” in court.
To read the full story, please click here:http://www.nytimes.com/2008/05/30/business/30tax.html?th&emc=th
To get your short sale handled by professional team of real estate consultants and foreclosure therapists call Best Hollywood Homes Team at 310-499-1305. We provide free & no obligation consultation based on your specific situation.
Updated list of foreclosures in Los Angeles for the week of Jan 28
For detailed information on NOD, NOS and REO properties please call Best Hollywood Homes Team (assoc. with Promenade Realtors) at 310-499-1305 to schedule a meeting with one of our Foreclosure Therapists/Real Estate Consultants. We will be glad to go over all the options on how to buy foreclosures and what you need to be careful of.
Please note that foreclosed properties are not always a great deal. There is a lot of details that you need to pay a special attention to. Therefore it might be much smarter to find a real estate agent who can protect you from issues that can arise when buying foreclosures.
Los Angeles
We also have information for Orange County, Ventura, San Bernardino, Riverside, Kern, San Diego and Santa Barbara Counties. Please call for more info.
Note: If in any of the above reports you see a property that you are interested in please make sure that you provide the whole property address & APN number to our Foreclosure Therapists. That will help us to get additional info on the property faster.Best Hollywood Homes Team can be reached by phone 310-499-1305 (i.e. direct office number for Foreclosure Therapist/Real Estate Consultant Igor Korosec) or by Email BestHollywoodHomes@gmail.com
List of Los Angeles Foreclosures
For detailed information on NOD, NOS and REO properties please call Best Hollywood Homes Team (assoc. with Promenade Realtors) at 310-499-1305 to schedule a meeting with one of our Foreclosure Therapists/Real Estate Consultants. We will be glad to go over all the options on how to buy foreclosures and what you need to be careful of.
Please note that foreclosed properties are not always a great deal. There is a lot of details that you need to pay a special attention to. Therefore it might be much smarter to find a real estate agent who can protect you from issues that can arise when buying foreclosures.
Los Angeles
LA NOD Report.pdf
LA TS Report
LA REO Report.pdf
We also have information for Orange County, Ventura, San Bernardino, Riverside, Kern, San Diego and Santa Barbara Counties. Please call for more info.
Note: If in any of the above reports you see a property that you are interested in please make sure that you provide the whole property address & APN number to our Foreclosure Therapists. That will help us to get additional info on the property faster.
Best Hollywood Homes Team can be reached by phone 310-499-1305 (i.e. direct office number for Foreclosure Therapist/Real Estate Consultant Igor Korosec) or by Email BestHollywoodHomes@gmail.com
Pre-foreclosures, Auctions & Foreclosures for Jan. 11th 2008
Please find below current lists of NOD, TS, REO properties in Southern California.
Notices of Default or NOD is the written notice sent by a lender to a borrower stating that the borrower has not met his obligations under the loan contract and the lender may take legal action to enforce the agreement. The amounts that you see on this reports might be equal to 1st and 2nd mortgage amount in some cases. In the other cases the number might be equal only to one of the mortgages. It all depends what the owners are delinquent on. NOD doesn’t mean that the property will be foreclosed for certain. NOD is basically the list of pre-foreclosed properties.
Trustee Sales or TS are another option to buy foreclosures. TS is the sale conducted by a trustee (often the lender) under the terms of the deed of trust.
Real Estate Owned by the lender or REO status indicates that the property is now owned by the lender or bank as a result of a foreclosure. REO properties are usually listed by real estate agents and are posted on MLS. After the REO listing expires the lender puts the property on public auctions.
For detailed information on NOD, NOS and REO properties please call Best Hollywood Homes Team (assoc. with Promenade Realtors) at 310-499-1305 to schedule a meeting with one of our Foreclosure Therapists/Real Estate Consultants. We will be glad to go over all the options on how to buy foreclosures and what you need to be careful of.
Please note that foreclosed properties are not always a great deal. There is a lot of details that you need to pay a special attention to. Therefore it might be much smarter to find a real estate agent who can protect you from issues that can arise when buying foreclosures.
Los Angeles
LA NOD Report.pdf
LA TS Report
LA REO Report.pdfOrange County
OC NOD Report.pdf
OC TS Report.pdf
OC REO Report.pdfVentura
VEN NOD Report.pdf
VEN TS Report.pdf
VEN REO Report.pdfSan Bernardino
SB NOD Report.pdf
SB TS Report.pdf
SB REO Report.pdfRiverside
RIV NOD Report.pdf
RIV TS Report.pdf
RIV REO Report.pdfKern
Kern NOD Report.pdf
Kern TS Report.pdf
Kern REO Report.pdfSan Diego
SD NOD Report.pdf
SD TS Report.pdf
SD REO Report.pdfSanta Barbara
St Brb NOD Report.pdf
St Brb TS Report.pdf
St Brb REO Report.pdfNote: If in any of the above reports you see a property that you are interested in please make sure that you provide the whole property address & APN number to our Foreclosure Therapists. That will help us to get additional info on the property faster.
Best Hollywood Homes Team can be reached by phone 310-499-1305 (i.e. direct office number for Foreclosure Therapist/Real Estate Consultant Igor Korosec) or by Email BestHollywoodHomes@gmail.com
