1. Los Angeles Metro Area -24.9%
2. Stockton, CA -24.7%
3. Riverside, CA -23.3%
4. Miami-Miami Beach -22.8%
5. Sacramento, CA -22.2%
6. Santa Ana-Anaheim, CA -22%
7. Fresno, CA -21.6%
8. San Diego, CA -21.1%
9. Bakersfield, CA -20.9%
10. Washington, D.C. -19.9%

From one perspective, it looks like the worst of times. If you own a property with no equity and you need to sell…well, short sale is always an option. From another perspective, it looks like the best of times. If you’ve been waiting for a bargain on a vacation home, newer or bigger home, now is a great time to buyer. Investors can actually buy single family homes that will provide positive cash flow every month!

If you’re in Riverside County and wondering what your house is worth at Fair Market Value, give us a call. We’ll be happy to provide a free analysis. Call us at 800-895-5112.

with blessings,
Claudia

Since the Fed announced a plan to purchase $500 billion of mortgage-backed securities on November 25, mortgage rates have moved progressively lower, and the trend continued this week. Conforming fixed-rate mortgage rates dropped to levels last seen in 2003. Weak Retail Sales data and low inflation figures released during the week also supported the move lower.

As the government strives to offset the current weakness in the economy, its actions have exerted a much stronger than usual influence on mortgage rates. Programs to purchase mortgage-backed securities and to provide capital to financial institutions have been favorable for mortgage rates, while a bill introduced in Congress this week could have the opposite effect if passed. The bill would permit bankruptcy judges to modify troubled mortgages by reducing the principal and payments. The goal would be to help prevent foreclosures, which is a worthy objective. However, opponents of the plan are concerned that investors may require higher mortgage rates to compensate for the increased risk that loan contract terms may be changed. At this point, it’s not certain when the bill will come up for a vote.

Homeowners who modified loans are in trouble again

Approximately 53 percent of homeowners who modified their mortgages during the first quarter of the year redefaulted within 6 months of the modification, leading some to question whether government money may be better spent on creating jobs rather than averting foreclosures.

MAKING SENSE OF THE STORY FOR CONSUMERS

· Some analysts speculate that many borrowers with modified mortgages are in default because lenders did not modify the mortgages with terms or payments that were affordable for the borrower; however, data provided by the government does not provide enough detail about the types or quality of loan modifications made.

· If foreclosures maintain their current pace, the U.S. is on track to have 2.25 million foreclosures this year. As more companies are forced to layoff employees and homeowners find it difficult to meet their debt obligations, additional families could lose their home to foreclosure. New Jersey Gov. Jon Corzine called for a three- to- six-month halt on foreclosures while the government works out a more aggressive plan to keep families in their homes. In November, Fannie Mae and Freddie Mac announced they are halting foreclosure sales on single-family, occupied homes until at least January 2009.

· Some consumer advocates, lawmakers, and think tanks are advocating a dramatic government response, similar to the Home Owners’ Loan Corp. created in 1933 to help borrowers refinance troubled home loans. The Home Owners’ Loan Corp. was used to extend loans from shorter terms to fully amortized, longer term loans. Through its efforts, more than one million people facing foreclosure were granted long-term mortgages and were able to keep their homes. The Home Owners’ Loan Corp. turned a small profit in 1951 when it liquidated its assets.

If you need information about your options, whether to sell short, modify or walk away from your property, give us a call at 800-895-5112 and we’ll be happy to discuss your situation with you.

with blessings,
Claudia

“Be persistent during ordeal of short sale
Approximately one in five homeowners is “underwater” – meaning they owe more on their mortgage than their home is currently worth. For borrowers in default or at risk of defaulting, selling their house for less than is owed, often termed a short sale, may be the only option. However, short sale offers must be accepted by the bank that owns the mortgage, and can take as long as a few months before an offer is accepted.

MAKING SENSE OF THE STORY FOR CONSUMERS

· Some home buyers are submitting unrealistically low offers on bank-owned properties, hoping to purchase a home at a bargain price. Low offers often use valuable time and resources that could be dedicated toward more favorable offers more likely to garner bank approval. It is vital that home buyers work closely with their REALTORS® to submit appropriate offers, especially when dealing with a short sale property.

· Theoretically, short sales should be a win-win for the bank and the homeowner. Although the bank does not receive the full payment on the mortgage, it also does not incur the costs of foreclosure and/or eviction, if necessary. Many homeowners also prefer short sales because it does less damage to their credit score than a foreclosure. However, many real estate experts say that the majority of banks are reluctant to approve short sales, and often let properties go into foreclosure, even when there are reasonable offers on the property. In addition to considering the price, most lenders also take into consideration whether the homeowner can demonstrate financial hardship. If the homeowner is capable of making payments, many lenders will try to work out a loan modification, rather than a short sale.

· Short sales often are more time intensive than traditional transactions and often require additional paperwork. Due to the large number of short sale offers, many take as long as a few months to receive approval. If information or required forms are missing or incomplete, the bank may set the offer aside, which could delay the process and cause the property to go into foreclosure. To expedite the process, it is important that sellers work closely with their REALTOR® to provide all of the necessary paperwork.”

Remember–give us a call at 800-895-5112 with your short sale questions.

with blessings,
Claudia

“It was an exciting week for mortgage markets! Tuesday, the Fed and the Treasury announced a new program to purchase up to $500 billion in mortgage-backed securities (MBS), and mortgage rates dropped sharply after the news. The MBS purchases are expected to take place over the next few months. The goal of the new program is to lower mortgage rates, and the immediate reaction certainly was a big step in the right direction, as mortgage rates moved significantly lower during the week.

According to the Wall Street Journal, consumers around the country responded quickly to act on the drop in mortgage rates. In many cases, call volumes during the week were far above their recent levels as homeowners rush to refinance.

In the housing sector, October Existing and New Home Sales continued to fall modestly. On the plus side, inventories of unsold existing homes declined in October. Also, the outlook for future home sales grew more positive this week, since lower mortgage rates make homes more affordable. The chief economist for the National Association of Realtors (NAR) estimates that each 1% decline in mortgage rates could generate between 500,000 and 800,000 home sales. Combined with the recent drop in home prices, homes are more affordable now than they have been in years.”

Chart of Programs

Often the former listing agent tells me there were multiple offers on the property and they were just waiting for bank approval. When I tell an agent that the bank foreclosed, they are usually shocked.

“How can that be?” they ask me. “I’ve been working with the bank for months.”

Here are some relevant facts:

1. Bank/lender employees don’t have to tell you when they foreclose. If the property has been in default over 121 days, the bank can foreclose at their discretion.

2. Just because you or your agent are talking with the bank, it doesn’t mean that automatically the Trustee Sale date has been postponed. You have to petition the bank for an extension.

3. Not all bank/lender employees tell the whole truth. I’ve talked to many homeowners and agents who thought they were in negotiation with a Loss Mitigator. A short sale packet and reasonable offer had been submitted to the bank–and the bank foreclosed anyway.

If you, a friend or relative are considering selling your home as a short sale, be sure to hire an agent or broker who is an experienced, local professional with a proven track record. Your decision can make the difference between starting over in 2 years or less with minimal damage to your credit OR having your credit reports smacked with a FORECLOSURE that will make it challenging to get a mortgage for the next 5 years (at least).

Feel free to call us at 800-895-5112 with your short sale questions. We have a proven track record (with testimonials) and we actually LOVE helping homeowners avoid foreclosure.

with blessings,
Claudia

A couple of week ago, I attended a webinar presented by California Association of Realtors. Their economists DID have some good news. Here are highlights:

* While U.S. sales are flat, real estate sales in California are up. 2008 sales are up 12% so far over 2007, which will be the trough for California.
* California experienced a steeper decline than the nation as a whole, and we are ahead of the curve as we head towards recovery.
* From July 2007 to July 2008, California prices declined 40.3%. Some areas continue to decline even while sales volume increases. Good news? Homes under $500,000 are experiencing the sharpest decline. Homes over $500,000 are experiencing more stable pricing.
* The price peak for Riverside/San Bernardino area was July 2007. Our area is now 42.6% decline from the peak. Good news? Housing affordability in California has DOUBLED. In one year it has gone from 24% to 48%. Since first-time homebuyers drive the housing market, this is positive news.
* The peak of adjustable mortgages resetting was late 2007 and early 2008. Therefore, we are less likely to see foreclosures and short sales throughout 2008 and into 2009.
* C.A.R. economists project price stability in the second quarter of 2009. Sales bottomed out in 2007. We had a quick decline and are likely to experience a quick recovery.

Good news might be scarce, yet it ALWAYS exists in every market. If you are concerned about holding onto your home, give us a call at 800-895-5112. We’ll be happy to discuss your options and help you make the best decision for you and your family.

with blessings,
Claudia

“Senate approves revised version of Emergency Economic Stabilization Act of 2008
The Senate on Wednesday evening approved a revised version of the Emergency Economic Stabilization Act of 2008 in a 74 to 25 vote, clearing the way for full consideration by the U.S. House of Representatives. The House voted down an earlier version of the plan on Monday and is expected to consider the revised version by Friday[today].

MAKING SENSE OF THE STORY FOR CONSUMERS

· The revised plan, which is designed to shore up the nation’s financial markets, includes a temporary one-year increase in Federal Deposit Insurance Corp. (FDIC) caps for bank and credit union accounts. The cap increases are critical because they increase the funding backstop the public relies upon should their banks fail. The plan also includes extensions on several business tax breaks and adjustments to the alternative minimum tax (AMT) for individual taxpayers. These, as well as the FDIC cap changes, are amendments lawmakers believe will help bolster approval by the House.

· If approved, the financial rescue plan would allow the government to buy residential and commercial mortgage-related assets, including mortgage-backed securities and loans, in an effort to ease current credit constrictions impacting businesses across all sectors, including the housing market. Also included in the revised plan are provisions to help struggling homeowners avoid foreclosure; increased oversight of the plan; and a limit on compensation for executives of the troubled financial firms that receive assistance.

· Some analysts believe that the economy will worsen if lawmakers fail to pass the bill, which will directly impact the housing market. As obtaining credit becomes more difficult for many businesses, unemployment rates, currently standing at 7.7 percent in California in August 2008, could rise, hindering consumer spending and the demand for housing.”

Check out this VIDEO for information on what the bailout means to you.

with blessings,
Claudia

“With more homes going into default, and more homeowners unable to qualify for loan modifications, short sales are becoming a viable alternative for many. However, these transactions can be complicated and often require more paperwork and time than a more traditional sale.

MAKING SENSE OF THE STORY FOR CONSUMERS

• Short sales are designed to offer homeowners and banks an alternative to foreclosure. Generally this tactic is employed during real estate downturns, when it becomes more difficult for a homeowner to sell the property for an amount equal to or greater than the amount owed on the original loan. Short sales can be a win-win because they allow sellers to avoid foreclosure and can be less damaging to the seller’s credit score than a foreclosure. With a short sale, buyers have an opportunity to purchase a home at a more affordable price.

• Short sales often are more time intensive than a traditional transaction and often require additional paperwork. Because some banks are overwhelmed with short sale offers, it is important that the seller working closely with their REALTOR® to provide all of the necessary paperwork to ensure that the bank can accurately assess the situation and make a decision that benefits all parties. Sellers who opt for a short sale may best be served by a REALTOR® who has experience working with short sales and is familiar with the required paperwork.”

I totally agree! Short Sales are not for the faint of heart. If you are considering listing your house as a Short Sale in the hopes of avoiding foreclosure, make sure you are using an agent who knows what they are doing.

Give us a call at 800-895-5112. You’ll find out that we are local, we know what we are doing, and we can help. We’re happy to answer your questions and guide you through the process.

with blessings,
Claudia
Certified Short Sale Specialist