Category

Economy

Dec 12
0

Foreclosures… How is our market?

By | Buyers, Economy, Foreclosure, Sellers, Short Sale, Sonoma County info, Visit WineCountry | One Comment

Only articles with spectacular-read bad news- titles sell. Quite often the perception is that every home sold is a foreclosure or a shortsale.  Our MLS keeps track of this and guess what??? In 2010 in Sonoma County,  about 50% of all the sold properties were distressed. While that is still not the way we like it to be, it brings perspective. Other fact to share: we already have a pretty stable real estate market in the last 3 years. Prices have remained fairly stable and it looks like it will stay that way. The higher end might come down some more, but the lower end of the market has been pretty much the same in the last 3 years, as a matter of fact, it has gone up a little bit. Numbers to follow.

Other myth: buying a distressed property is a better deal. While that is true in some situations, a foreclosed property is appraised as to the market value and then put on the market by the bank. And as to short sales: when a seller accepts your short sale offer, the bank needs to approve the loss and guess what? They have the property appraised to make sure it is sold at market value. So with this in mind, a regular sale might up being a ‘better deal’

Coming on the market in JC area in a few weeks fro now: it is a foreclosed property, we are waiting for the valuation -price-. This means that 2 local realtors will do a market

 Foreclosure in JC area

analysis and give the bank their opinion of the market value of the house. I will keep you posted.

2010 is not finished yet, the stats for 2010 will follow in the coming weeks. There are quite a few agents who do not sell distressed properties. Yours truly has specialized in foreclosure alternatives so 80% of the homes I sell are distressed/short sales.

Fun restaurant to try in Santa Rosa: Starks Steakhouse. Great bar area, great ambiance.

Mirjam

Nov 28
0

I want to buy your house! But…

By | Buyers, Disclosures, Economy, Mortgage, Sellers, Sonoma County info | One Comment

Ahh the ‘buts’ or the contingencies. As a proud home seller, you received the offer and if everything goes well, you’ll close escrow  in 30 days…

99.9% of all offers are made with contingencies: Inspection contingencies and loan contingencies are the usual mile stones. While inspection contingencies are easy to negotiate, the loan contingency can be a very different story. About 5 years ago, acquiring a mortgage loan was a very easy process and just about anyone could qualify. Today, with more than 1 in 7 mortgages 60 delinquent or worse, banks have begun to tighten lending qualification requirements, making the simple loan approval a thing of the past.

What this means to buyers and sellers is a potentially longer escrow process with more challenges and hurdles to jump through along the way. Many buyers schedule the moving truck and pack their bags, only to come to a sudden and screeching halts days before closing due to additional pre closing lender conditions related to income, credit and appraisal. New last minute lender conditions have become especially prevalent with conforming loan amounts over $417,000 and Jumbo loan amounts over $655,000. Ironically in my personal experience, traditionally difficult FHA loans have become easier and quicker to close.

In our area, just about everything happens on the day of closing.  The loan gets funded on the eve of closing, the escrow closes/records, the sellers moved out and buyers move in. While that has been the traditional picture, sellers might consider a different strategy. One option to consider is to deliver possession to the buyers 1 or 2 weeks after close of escrow. This means that the seller has more latitude in coordinating their packing and moving process, with less pressure to vacate the day of the sale. While this may not be the ideal situation for all buyers and sellers, it does lessen the potential stress that could occur if there were any last minute lending or funding issues that delayed the closing date.

Of course, the above applies to a regular sale, in case of a short sale, the majority of the home owners have stopped paying their mortgage anyway so in their case it would mean that they can stay in a home ‘for free’ longer.

To keep everything in perspective, the above are just hurdles in the sales process, things to expect and opportunities to find good solutions for all parties. In the grand scheme these are minor.

Mirjam

Oct 03
0

Loan Modification, just in name?

By | Economy, Foreclosure, Making Home Affordable, Short Sale, Sonoma County info | No Comments

Do you know people  who have been living in their house for a few years now without paying their mortgage? Wondering when something is going to happen? Well I see the trend changing. Recently I have been talking to home owners who have diligently been working on their loan modification,and nothing is happening so far and now all of a sudden a Notice of Default is filed. It seems like investors are getting fed up with loan servicers -the bank you are talking to to get your modification done- who take so long to make a decision. In our area, this means that if you are not careful, the bank will sell your house -foreclose- while you are still under the impression that you are working on a loan modification. Last year, when a homeowner was receiving a Notice of Default, nothing was going to happen within a short period of time. This has changed, now I see it happening more and more that a bank will move forward with the Notice of Trustee sale 3 months after the Notice of Default has been filed. And 3 weeks after the Notice of Trustee sale, the Trustee Sale will take place -> this is what we call the foreclosure.

If you want to avoid a foreclosure, a short sale is a good alternative for a lot of distressed home owners. One of the benefits is that you are more in charge of the situation, you can negotiate the deficiency,

A few months ago, CDEP posted that Freddie Mac reported its short sale volume was up 600%. Today, REOInsider reported that “short sale volume is up more than 150% from volume in 2Q09, according to the Federal Housing Finance Agency’s second quarter government-sponsored enterprise (GSE) ‘Foreclosure Prevention & Refinance Report.’”

Short sales are on the rise nationwide. More and more agents are receiving training in assisting distressed homeowners, and there is a movement to provide solutions to these homeowners facing foreclosure.  Your truly did some extensive training to be able to help distressed home owners with alternatives to foreclosure.

Mirjam

Sep 24
0

Your credit score, how do you improve it?

By | Buyers, Economy, Sellers, Sonoma County info, Visit WineCountry | No Comments

We all live our lives and don’t think to much about our credit score, however it is important to have a good credit score and it is important to keep track of it for many reasons: when you want to buy real property, make sure you are not a victim of identity theft and many more… Something we just need to do, if your credit is ruined, there is no easy fix to increase it. But there are things you can do to stay on top and to start with in case your credit score is ‘not that great’:

1. Pull your reports online — get them for free, no strings attached, at the government-authorized website AnnualCreditReport.com. This doesn’t get you your actual FICO scores, but it does get you the content of your report.

Look for errors that could be lowering your score: accounts that don’t belong to you, balances that are actually lower than reported, old debts that are paid off that should have been removed entirely (seven years for credit cards, 10 years for bankruptcies).

2. Consider reopening accounts you thought were open but have been closed because you haven’t used them in so long — it will help boost your utilization ratio, one element of your credit score that is dependent on how much available credit you have.

3. Pay down some debt. This both decreases your debt-to-income ratio (36 percent is the goal, including the proposed mortgage payment) and increases your credit score, if you do it right (see the next tip).

4. Don’t close any accounts. Instead, spread your debt out. The ideal utilization ratio is about 20-30 percent of your available credit overall, and on any given account. Closing accounts reduces the amount of credit that is available to you, so it makes it look like you’re closer to being maxed out.

So if you have one card that’s near its max and several others that have zero balances and you’re trying boost your score a bit, quickly, consider balance transfers to spread our your debt more evenly, aiming for 20-30 percent of the available credit on each card.

5. Use your credit regularly — and pay it on time, every time. FICO scores are not simply about making sure you have no debt. They are meant to be a measure that shows that you have a history of responsibly using and managing and repaying your debt.

6. Finally, if you are thinking to buy property in the coming years: check in with your mortgage broker. Have the broker pull your report and score, as the report she pulls is the one she’ll have to go by in the final analysis. If you’re really close to a score level that would empower you to qualify for a lower rate, the mortgage broker can actually run a credit diagnostic on your score and generate some recommendations for which actions you could take to raise your score by the needed few points.

None of these tips will get someone with a 500 credit score to a 700 (other than a massive debt reduction program). But if you’re trying to get a little boost to get you over a credit score hump, these can be potent and save you beaucoup bucks in interest.

And… don’t forget to smell the roses, grape crush is starting, many wineries have events going on in the coming time. Fall colors are beautiful!

Mirjam

Aug 29
0

Wondering why a loan modification is so dificult?

By | Economy, Foreclosure, Making Home Affordable, Sellers, Short Sale | No Comments

This was earlier this week on Inman’s website:

“Nearly half of the 1.3 million homeowners who have accepted loan modifications under the Home Affordable Modification Program have washed out of the program, according to the latest report from the Treasury Department. At the end of July, there were 421,804 homeowners enrolled in permanent HAMP loan modifications, and another 255,934 borrowers in active trial loan modifications.All told, a total of 677,738 homeowners were in permanent or trial HAMP modifications. But almost as many borrowers had already washed out of the program — 629,751.
Many analysts expect that more than half of HAMP loan mods will end up redefaulting. With fewer homeowners entering the HAMP pipeline — only 24,577 new trial modifications were reported in July — it’s considered unlikely that the program will meet its initial goal of helping up to 3 million borrowers avoid foreclosure.
In releasing its “Housing Scorecard” for August, the Obama administration nevertheless offered a positive outlook on the overall housing picture, saying the HAMP program represented “just one, targeted piece of the administration’s larger efforts on housing.”
From April 2009 through the end of June 2010, the Federal Housing Administration (FHA) has also entered into 472,000 loss mitigation and early delinquency interventions, and loan servicers modified 1.4 million mortgages outside of the HAMP process, the scorecard noted.
The 3.15 million mortgages modifications started during the period was more than double the 1.24 million completed foreclosures.”

Time will tell, right now I see longer times with the trial payments. It is of utmost importance to keep your trial payment, you miss one, you are out.

When BofA started with their loan modifications 2 years ago, they had an 80% default rate. As it looks right now, the default rate will stay high, around 50%.  On the bright side, the other 50% is able to stay in their house and they would have lost their house otherwise.

Usually when I sit down with my clients I can pretty much tell whether a loan modification is doable or just an extension in staying in the house. For some people, going through the loan modification process means that they can stay longer in their house and that was what they wanted. As a whole I see that as part of a ‘strategic short sale’. My website has a link with more information about short sales.

Have a great day!

Mirjam