Wednesday, August 3, 2011

Loan Modification to Avoid Foreclosure

Thursday, June 2, 2011

9 Options Facing Foreclosure

 If you’re facing foreclosure, then you are probably under stress. You don’t know what is going to happen. How long will it take before the bank kicks us out on the street? Will I owe my lender any? Will I ever get my life back? That’s why I put this blog together. You need to know what your options are. So, let’s go thru them here.
Option #1: Do nothing and the lender forecloses on the house. Your credit report will show this damaging information for years to come. Please be aware that the foreclosure process can take some time. I’ve seen it take some lenders up to a year to foreclose on a house. Some banks have better and faster process and can get a foreclosure done in 3-4 months. This is certainly not the best option!
Option #2: Deed-In-Lieu of Foreclosure. A “Deed-in-Lieu” is disposition option in which you voluntarily deed your home to the lender in exchange for a release from all obligations under the mortgage. It has certain eligibility requirements and may not be accepted from homeowners who can financially make their mortgage payments. What benefit does it give you? None. Do not consider this option unless the lender gives you something in return
Option #3: Loan Modification to reduce your mortgage payment. If you want to keep your home, then it is a good option. Many lenders will reduce your interest rate, or extend the term of the loan. To qualify, you often have to send your lender all of your pay stubs, bank statements, and other financial documentation. If you need loan modification kit, let me know.
Option #4: Reinstatement. This is when you pay the lender entire default amount plus interest, attorney’s fees, late fees, taxes. After that you start making normal monthly payments. This restores your account to its former current status. The only problem is that it requires you to come up with all the back payments and other fees.
Option #5: Payoff or Refinance is completely pay off your old loan plus any default amount and fees. However, the new loan may have a higher interest rate and there may be a pre-payment penalty because of the recent default, plus your credit history and score. If you owe more than your home is worth, then it will be impossible to find a lender willing to pay everyone off. This is a good option if you still have equity in your home.
Option #6:
Forbearance is an agreement made between you and your bank in which your bank agrees not to exercise its legal right to foreclose on your home and in which you agree to a payment plan that will bring you loan current over a certain short time period. Information will be required from your bank to show that you are able to meet the new payment plan requirements.
Option #7: Rent the property. This is a good way to earn some extra money. However, many mortgages are written with legal clauses that force you to forward any rent proceeds to the lender. In addition, governments have recently written laws forbidding you form renting a property unless the mortgage is current.
Option #8: Bankruptcy is an option that can liquidate debt and/ or allow some time to stay in your home This could be a great option for a fresh start. There are several types of bankruptcy and you would need to consult a qualified Bankruptcy attorney for more information…
Chapter 7- [Liquidation]: Completely settles personal debt.
Chapter 13- [Wage Earner Plan]: Payments are made toward a plan to pay off debts in 3-5 years. Many people find themselves stuck under the same burden of debt that caused the problem in the first place. Only this time, they have to pay all the extra costs associated with the bankruptcy.
Chapter 11- [Business Reorganization]: A business debt solution.
Option #9: Sale.
Sell with Equity: If your home has equity (money left over after all loans and monetary encumbrances are paid), you may sell your home without lender approval through a conventional home sale. In this case, you could get cash from the sale proceeds.
 Short Sale. If you can’t afford your house anymore or your property value is upside down, then this is a good option to consider. A short sale is when you owe more than your home is worth. You sell it with the assistance of a licensed real estate agent. It costs you nothing. The agent gets paid by your lender. It is well known that a lender will net more money on a short sale than taking a home back thru foreclosure. Why? A lender saves money on interest, attorney fees, and other related foreclosure costs.
If you have any specific questions or need help to evaluate your situation to see which options you qualify for and which one will most benefit you and your family give me a call at (323) 316-3300. Remember I’m here to help you in any way that I can. 

Monday, May 16, 2011

Home values continue to decline

San Francisco, Los Angeles and San Diego are included in the nation’s top ten metropolitan areas with the biggest drop in home values since the Great Recession. The latest Standard & Poor/Case-Shiller Home Price Index indicates the composite price of single family residences (SFRs) in the ten cities decreased 2.7% last year. Their composite values are now 30% below levels from the housing market’s peak in April 2006. Worse, no sign exists that price levels will rise soon.
California price levels in 2010 decreased near 2% for Los Angeles. Prices dropped month on month 0.6% in Los Angeles in the month from December 2010 to January 2011.
Prices continue to slip downwards toward their true dollar value and the illusions of past are honored at one’s peril. The current price decline we are witnessing was fully expected to follow the premature home purchases induced by government subsidies in 2009 to mid-2010 ― by its end the public was not buying homes on their own volition. Market momentum of the artificially-inflated home prices built up and culminating with the housing price peak in 2006 was ill-fated to collapse, forcing home prices to return to historical trend levels. The continual drop in prices is a result of the real estate market correcting itself as property prices stabilize at their lower and more accurate evaluation. A reversal of the current decline in consumer confidence would be helpful.
The price adjustment will likely run into 2013 and our relatively jobless recovery underway will not make it quicker. When the California economy does begin to produce 400,000 plus additional jobs annually in California, it is imperative for real estate brokers and agents to steer the thinking of buyers and sellers away from the illusory sticky price of Boom years past. Until these jobs are created and this advice is taken, the housing market will simply not get up and start running.
p.s. If you want to find out your property value, simply click on the top right side link

Friday, May 13, 2011

April Statistics

2011 Home Sales Volume (March)

36,417 new and resale homes closed escrow in California during March 2011, down 2.4% from one year ago when 37,295 sales closed escrow. Single family residence (SFR) sales volume broke its recent downward trend. The Bay Area recorded its highest number of March home sales since 2007.
Real estate owned (REO) resales accounted for an estimated 38% of all resales in the fourth quarter 2010— up from 37% one year earlier.
Absentee homebuyers (a group generally composed of speculators and investors) accounted for 26% of Southern California (SoCal) resales (near the historic record of 26.4% set in February 2011) and 22% in the Bay Area. “Jumbo loans” (here represented by all loans of over $417,000) accounted for 16% of sales in SoCal, unchanged from last year, and 30% of Bay Area sales, slipping slightly from 31% last year. 2010 saw a sharp rise in the use of Jumbo loans, likely attributable to an increase in foreclosures among high-tier properties, but Jumbo use remains far below its height in the boom times of 2006 and 2007.
Federal Housing Administration (FHA)-insured loans represented 32% of SoCal mortgages recorded in March 2011, down from 37% one year earlier, and at the lowest level since August 2008. FHA-insured loans made up 22% of Bay Area mortgages recorded, a slight fall from 24%, recorded one year earlier. The current proportion of FHA-insured loans remains abnormally high by historical standards, although it has dropped in recent months. This downward trend will continue in the future, as other government agencies and private mortgage insurers (PMIs) are now guaranteeing almost all conventional loans, including loans with lower down payments and down payments from unconventional sources (such as gifts).
Adjustable rate mortgages (ARMs) made up 8% of all SoCal mortgages, relatively unchanged from last month, but up significantly from last year’s level of 5%. ARM use in the Bay Area has increased even more dramatically in recent months, rising from 9% one year ago to a current 14%. ARMs peaked across California in May 2010, and any drop in ARMs is a good indicator the market volume and pricing will not increase over the next 12 to 24 months. The increase in the use of ARMs in the Bay Area is to be watched, as any increase over the next six months will very likely artificially sustain or push prices of high-tier homes upward excessively.
Cash purchases represented 31% of SoCal and 28% of Bay Area sales in March 2011. Although these numbers are down slightly from February 2011’s record high, they remain abnormally high in both districts, indicating speculators are still at work, probably flipping under land sales contracts or let-to-buy arrangements called lease-option sales, which go unrecorded. These transactions remain, for the most part, invisible to the public. The recent spike in cash purchases indicates that speculators are once again optimistic about a potential recovery in real estate sales and pricing, but both have shown only torpid growth thus far.