Jeanean Gendron, Your Shasta County Real Estate Specialist: February 2010

If you are like many buyers who have been reading the real estate section of your local newspaper, you probably think a foreclosed house may be the best deal. According to the NAR, these houses often sell for about 15 to 20 percent less than comparable homes in the same neighborhood.

Despite the seemingly great deals however, anyone considering buying a foreclosed house should heed the classic warning: Caveat emptor, or let the buyer beware.

First, getting a contract on a house in a desirable neighborhood can be hard to do. Many buyers are outdone by all-cash bidders. Buyers also need to search more aggressively for the foreclosure listings, consistently checking the market updates and then quickly visiting the properties. Buyers also need to be careful that the house is not a money pit - since most of these homes are sold as is. Remember, the banks that own them have no idea about the condition of the property or their past history.  The banks are exempt from any state mandated disclosures in the DC metro area.

If you want to buy a distressed property, you have several choices. You can buy it through a preforeclosure sale, at a public auction or through a bank or other entity that has taken ownership of the home.  There certainly are lots of opportunities to buy in this way.  Through October, foreclosures and short sales accounted for nearly 37 percent of all home sales.

I discourage buyers from  buying homes at auction because there are so many risks. Primarily, you usually can't see the inside of the home.  Talk about buying blind!  In addition,  the home won't necessarily have a clear title, which means there may be tax liens or other debts against the property. And when you buy the home, you buy those issues, too.

One of the benefits of buying a property from a bank is that the bank typically clears any title issues before it puts the house on the market.  There is a price already established. You can go inside the house with your Realtor;  you can inspect the property and make an estimate for repairs; and then you can write your offer and go.

But you need to do your research. Check out the listings in your target area. All R.E.O.'s are sold through an agent. You can find their listings directly on the big banks' Web sites, like Bank of America and Wells Fargo, as well as regional banks like SunTrust. Fannie Mae offers its listings through the HomePath Web site and Freddie Mac through HomeSteps.

Most R.E.O.'s are sold as is, so buyers should make their offers contingent on a home inspection.  Putting too many contingencies in your offer, however, is likely to derail your bid.  Buyers also need to be prepared to lose to buyers with all cash.

You may be able to increase your chances by making your best offer from the start. But you don't wnat to overpay either, so you need to research comparable sales.  Obviously working with your realtor will save you alot of time and effort here. Your realtor will be able to help you with analyzing those comparable sales and may even know of some that you weren't aware of.

Fannie Mae does give prospective homebuyers a leg up. Last month, it introduced a program that shuts out investor buyers for the first 15 days a home is on the market.  Good Luck!

If you live in the DC Metro area and want to buy a bank owned property, give Lise Howe a call at 240-401-5577 and put her and her team to work for you!

OneWest Bank Releases Their First Year Profit Statement $1.6 Billion- You Won't Believe This One!

Kudos to Scott Reckard with the LA Times.  He wrote an article today that is sure to open some eyes.  The article, titled "OneWest Bank Profit: $1.6 Billion" does an excellent job of pointing out some very interesting observations.

According to the article, OneWest paid the FDIC $1.55 Billion for the failed IndyMac Bank, and turned a profit of $1.57 Billion in it's first year.  The article specifically addresses the shared-loss agreement that was also put in place by the FDIC, which is expected to cost the FDIC nearly $11 Billion.

The reason I'm posting this article is that it dovetails perfectly into my blog titled "Is The FDIC Killing OneWest IndyMac Short Sales" in September/2009.  The blog, which ended up being the basis of the recent video produced by Think Big Work Small (without my knowledge or consent, by the way) deals with a transaction I handled for one of my clients with OneWest Bank.  Rather than go into all of the details of the blog you can read it here.  But basically, it centered on shared-loss deals, and how they are creating a disadvantage for consumers trying to accomplish loan modifications or short sales.

The FDIC was so upset with the video that they decided to issue an official press release on Friday, February 12th.  The LA Times article specifically states that the FDIC refused to comment today on the profit statement released by OneWest today.  

So let me get this straight...  The FDIC issues an official press release on a YouTube video, but doesn't want to talk to anyone about the profits OneWest just reported today, and the possible effects of the shared loss agreement they have in place with them?  Interesting.  Anyway, enjoy the article.  This story is beginning to "grow legs", as they say.  With 93 other loss share agreements in place, according to a recent Business Journal article, I'm sure this is something we will all hear more about in the very near future.

Oops, I spoke to soon!  While writing this article, I just found out that the FDIC just issued ANOTHER press release, this time announcing that they just sold La Jolla Bank in La Jolla, CA to, guess who?  You got it, OneWest Bank!  And guess what?  That's right, they signed yet another Loss Share Agreement with them as well.  Well, that makes a total of 95 loss share agreements, and counting!

Folks, it's time to stop this madness.  The LA Times article shows what this program is costing the American Taxpayer.  Some, like the FDIC (and their banker buddies) will tell us time and time again that the FDIC receives no taxpayer dollars, and is funded wholly by the FDIC premiums charged to the banks.  Think about it... When banks have to pay more for increased premiums, where do you think they get the money?  Quite simply, they raise their rates to YOU, the consumer, to cover these additional expenses.  And, when they finally run out of money, they have a nice little $500 Billion "Credit Card" they can use at the U.S. Treasury.  Where do you think this money comes from?  Correct...  YOU, the taxpayer.

So do your part and help spread the word.  It's time to stop asking questions, and start demanding answers from our fearless leaders in Washington.  Don't just read this and get mad.  Read this and share it with all you know.

Bob Hertzog

www.foreclosureuturn.com

 

Fresh off the presses....new information for you that reinforces our belief that the Obama Administration is about to open the flood gates for short sales.

In other words, as we have been advocating for well over 3 years now...and as many of you will agree...

Short Sales are THE solution!

Here is what we have just learned:

Seth Wheeler, Senior Advisor to the Treasury Department discussing the Obama Administration’s Home Affordable Modification Program, (which isn’t working at the level needed or intended) indicated that the Obama Administration may be shifting focus from modifications to another program which simply gets troubled borrowers out of their homes as quickly and cleanly as possible.

In other words, Short Sales are the solution.

Wheeler, “Short sales, deeds in lieu are other ways to prevent foreclosures to help achieve stability [in housing],”  “Modifications are only for a certain subset of distressed homeowners.” Translation: not many want to mod their loans or can mod their loans.

As you will recall last November  the Treasury launched the Home Affordable Foreclosure Alternatives program which specifically targets short sales and deeds in lieu of foreclosure.

Watch the video about HAFA Now.

So, here is how it works….’troubled borrowers’ are sent to the HAMP program first. In other words, the first thing the lenders will do is offer mortgage loan modification. Next, if the borrower can’t or won’t do a loan mod…then…they are directed to the HAFA program. Here is an overview of this process: (Note: expect changes to this program)

Servicers must consider HAMP eligible borrowers for HAFA within 30 calendar days of the date the borrower:

- Does not qualify for a Trial Period Plan;

- Does not successfully complete a Trial Period Plan;

- Is delinquent on a HAMP modification by missing at least two consecutive payments; or

- Requests a short sale or DIL. This last point is interesting. You need to be aware that when your client calls their lender and the lender attempts to ‘force’ them to their loan mod department under these new guidelines the borrower can request to go directly to the short sale department. Kind-a confusing but, you get the idea.

Here is what you need to know about HAFA. Remember, the video that we created for you last year about HAFA is HERE.

- The HAFA program offers incentives in this program “upon successful completion of the short sale” or Deed in Lieu.

- Borrower receives  relocation assistance of $1500. Yep, seller/ borrower will receive $1500 for doing the short sale. Oh, how things are about to change!...but, it gets better....

- Servicer incentive of $1000 to cover administrative and processing costs and investor reimbursement of $1000 for subordinate lien releases. That’s when the investor allows up to $3000 in short sale proceeds to go to subordinate lien holders.

- Participating lenders can NOT pursue a deficiency judgment post short sale (or DIL) closing. This will be the end to all the mickey-mouse lenders try to get borrowers to agree to post closing. Like, paybacks.

- Commissions....6%, thank you very much!

Bottom line, expect the HAFA program to be front and center starting this April once the new guidelines are in full effect. Its our believe that these new guidelines will usher in what we have been advocating for years…the streamlined short sale! Agents, 2010 IS the year of the short sale. Watch the FREE Harris Real Estate University Agent Short Sale Secrets CDPD video and download the FREE BOOK NOW!

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DON'T WAIT.  CALL YOUR REALTOR NOW!

It had to happen.  The New York Times news alert headline says Federal Reserve Raises Interest Rate Charged to Banks, In First Move Since 2008.

Is it a big deal?  That remains to be seen.  If you locked your loan yesterday, be happy.  The rate you got isn't available today.

An Example From History
(You can't call it a lesson unless something has been learned...)

To put things in perspective, when Jimmy Carter defeated Gerald Ford in 1976, the discount rate stood at 5.25%.  Two years prior, under Nixon, it had been higher, at 8%.  Commodity prices were through the roof.  (Google "oil prices 1973.")  Inflation had taken hold, and the Federal Reserve decided that enough was enough.

The Fed started raising the Discount Rate to combat inflation. 

In four short years, the discount rate rose from 5.25% to a staggering 13.00%.  Remember that the discount rate is the rate banks pay to borrow the money they lend to you. You pay more.

What did that mean to consumers?  I was a homebuilder in the 1980's.  My buyers back then had first mortgages as high as 17%.  (And we still sold new homes at the Jersey Shore.)  Second mortgages were available at 21.5%.

Parallel to today...

Nixon was winding down the Vietnam war, and bringing home the troops.  The NY Times headline on March 29th (the day the last of the US forces were out of Vietnam) was Nixon Sets Meat Price Ceilings at Both Wholesale and Retail; Asserts Costs 'Should Go Down'. 

Congress was trying to force an outcome on the free market. 

The result was inflation. 
Rates had to go up to kill the monster, and economic results of the next decade were a template for for our current dilemma.

Moral of the story?

If you intend to finance the purchase of a home, better do it now!  I recommend a 30 year fixed rate.

p.s.  If you intend to qualify for the $8,000 first time homebuyer tax credit or the $6,500 credit, you must be in escrow by April 30. 

Call your REALTOR now.

___________________ 

I'm Mike in Tucson, your preferred Tucson Mortgage Lender.

NMLS #223495

SUNSTREET MORTGAGE llc ~ Mortgage Bankers, Not Brokers!
Offices in Scottsdale, Tucson, and Nogales, AZ, and Albuquerque, NM.

Call me on my Blackberry  (520) 349-9090

photo courtesy Kevin Chauvin, Flickr

 

CitiMortgage rolled out a new program for delinquent homeowners and homeowners who are in foreclosure in Florida. CitiMortgage says:

"Give us the keys and we will let you stay for six months for free." 

Before you jump on this so called deal here are some facts about Florida Foreclosures followed by our Real estate agent take on this.

Is there really an advantage to you, the homeowner in this offer from CitiMortgage? According to most attorneys we have spoken with, their answer is not really. 

Once you are served a summons and complaint which would be in this instance CitiMortgage filing a law suit complaint against you as the homeowner- you have 20 days in which to respond to the complaint. If you hire an attorney or go to the legal aid society if you can not afford an attorney- they will file a defense or a counter complaint in court. 

At that point, there will have to be a hearing scheduled. Most of the time here in the state of Florida- you will be able to have your foreclosure postponed for much longer than 6 months.

We know people who have not made a mortgage payment in over 24 months and are still living in their homes. 

Take that in consideration before jumping on CitiMortgage's offer. They make it sound very good but they are not in business to protect you or to help you. They are in the business to cut their losses and what is in the best interest of their company and their shareholders, although the latter is questionable at best. 

Turning in your keys is called a "Deed In Lieu of Foreclosure".

Remember too, there are rules that must be adhered to even in Deed In Lieu and unless CitiMortgage is also going to change the rules you may not even qualify for the Turn in the Keys program. 

If you have a second loan on your property or a HELOC on your property, your second lender has to be taken care of before a Deed in Lieu can be processed. If you don't have the money to pay your mortgage payment you most likely don't have money to pay your second note off either. 

Also, if you do a Deed in Lieu- the mark on your credit report is the same as a foreclosure. 

A Deed in Lieu is nothing more than giving up your rights to a judicial foreclosure. It is a foreclosure without going to court. 

There is most often a much better way to deal with your foreclosure filing and that is to do a SHORT SALE. 

First, let me say to CitiMortgage that we as agents have had a solution to your foreclosure problem for years now and it is called a SHORT SALE!

All you have to do is relieve the homeowners of a deficiency and release the lien and give clear title to a new purchaser thereby circumventing you having to own yet another property.

Why can you not give the same deal to a SHORT SALE as you are offering to a DEED IN LIEU?

Therein lies the mystery.  

This gets us to thinking, why is it that you want to own all these properties? Is there something you are not telling us? 

 

There are qualified short sale Realtors® in the state of Florida who are ready to help you solve the foreclosure problem you are complaining about. 

CitiMortgage's CEO of CitiMortgage- Sanjiv Das says: "We're committed to finding every solution possible to help families facing foreclosure. Not every homeowner has the financial stability to remain in their home." No S&%# Sherlock! 

THEN CITIMORTGAGE: Embrace the SHORT SALE! It will save your shareholders money. You won't have to keep holding on to Phantom Inventory. You won't have to be a landlord. It will help home values. It will stabilize neighborhoods. It will help the economy. But then again, is there something here that we don't see? 

In Florida CitiMortgage has over 12 % of their loans in a 90 days or more delinquent status. Nationwide that number is 6%. 42% of all the loan modifications that CitiMortgage approved in Florida are now 60 days one year after their loan modification was approved. 

We will go into further detail about the follies and idiocies of the loan modification programs and how those are set up for failure from the onset. 

This post does NOT constitute legal advise. You should seek the legal advice of a qualified attorney who works in the foreclosure field. We are not attorneys and we don't play them on TV either. This post is informational only. 

Avoid Foreclosure! Call Nestor and Katerina Gasset for Short Sale Information Today- 561-753-0135 or learn more at Short-Sales-Florida.com.

 

   

 

To  view Florida Short Sales- Click here. We know Palm Beach County Short Sales and Port St Lucie Florida Short Sales and will help you get your home Sold if you need to Sell your home and help you buy your home in Palm Beach County Florida: Call us today.

 

   

 

 

        

 

Copyright © 2010 By Katerina Gasset, All Rights Reserved.*CitiMortgage Rolls Out A New Program For Delinquent Homeowners- Give Us The Keys...*