Many buyers, especially first-timers, hope to purchase a foreclosed property at a bargain price. While purchasing a foreclosed home can be a wise choice for some buyers, it is important that buyers understand the differences in buying at different stages of foreclosure and be prepared to take on the challenges typically associated with each.
KEEP THIS IN MIND
• There are three basic stages of foreclosure in California: Pre-foreclosure, trustee’s sale, and repossession, often called an REO or real estate owned by the bank.
• Pre-foreclosure homes are in the foreclosure process, but have not yet been auctioned. Owners of pre-foreclosed homes often try to sell the properties because they are “underwater,” meaning they owe more on the mortgage than the home currently is worth. Many homeowners attempt to sell via short sale, where the lender must agree to accept less than the amount owed on the mortgage. Buying at this stage of foreclosure often is a complicated and slow process. However, buyers of pre-foreclosed properties often are given the opportunity to inspect the home prior to purchasing, whereas this is not always the case when buying at other stages of foreclosures.
• The second basic stage of foreclosure is the public auction at a trustee’s or foreclosure sale. Homes in this stage often are well priced, but also come with challenges to buy. These homes may not be available for inspection and buyers may later discover the property needs numerous repairs. As a result, many of the homes at auction are purchased by investors and contractors who have experience working with homes needing numerous repairs, or taken back as REO by the foreclosing lenders.
• If a home does not sell to a third party at the trustee’s auction, the bank takes the property–the final stage of the foreclosure process. Although homes in this stage typically do not offer buyers the best prices, buyers generally can perform a thorough inspection of the property prior to closing.
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http://money.cnn.com/2010/05/04/real_estate/how_to_buy_a_foreclosure/index.htm?source=cnn_bin&hpt=Sbin
It took banks 27.9 percent longer, or 225 days, to foreclose on a property in California last month than it did in March 2009, and 0.45 percent longer than it did in February, according to data tracked by foreclosure data company ForeclosureRadar.com.
The foreclosure process is likely to take longer in the future, the report said, since banks delayed sending notice of trustee sale filings to borrowers until an average of 188 days had passed since the notice of default, up from 142 days in February.
That extra delay pushed ForeclosureRadar’s preforeclosure inventory estimate up 12.6 percent to 157,768, compared to February. The inventory estimate fell 12.1 percent year-over-year in March.
The inventory of bank-owned properties (REOs) in California dropped 26.5 percent year-over-year and 1.4 percent month-to-month, ForeclosureRadar reported.
Foreclosure filings have dived since last year, “when lenders caught up on a backlog of filings after delays caused by new notice requirements introduced in California Senate Bill 1137,” ForeclosureRadar’s report said.
The bill prevented lenders from issuing a notice of default before contacting the homeowner to explore options to avoid foreclosure and delayed filings for 30 days after that first contact.
Home sales decreased 11.7 percent in February in California compared with the same period a year ago, while the median price of an existing home rose 14.1 percent, per the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).
“The federal tax credit for home buyers, low mortgage rates, and affordability at record levels have contributed to an unprecedented opportunity for many first-timers in the market for a home of their own,” said C.A.R. President Steve Goddard. “Although sales have declined from the unusually strong levels we experienced a year ago, they’ve remained above the 500,000 unit threshold for 18 consecutive months, while home prices continue to firm in the regions of the state most attractive to buyers taking advantage of today’s favorable market conditions.”
The median price of an existing, single-family detached home in California during February 2010 was $279,840, a 14.1 percent increase from the revised $245,230 median for February 2009, C.A.R. reported. The February 2010 median price decreased 2.4 percent compared with January’s $286,600 median price.
“Sales of distressed properties to investors and first-time buyers continued to drive the market in February, although at a lesser rate than a year ago,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “Supply continues to lag demand at the more affordable end of the market, with a 3.9 month supply of homes for sales priced below $300,000, compared with the long-run average of more than seven months. This contrasts sharply with the nearly 15-month supply of homes for sales priced at $1 million or more at the upper end of the market.”
Note: Large changes in local median home prices typically indicate both local home price appreciation, and often, large shifts in the composition of housing market activity. Some of the variations in median home prices for February may be exaggerated due to compositional changes in housing demand. The DataQuick tables listing median home prices in California cities and counties are accessible through C.A.R. Online at http://www.car.org:/marketdata/historicalprices/2010medianprices/feb2010medianprices/.
Historic Placerville’s gold country now offers a multitude of colors. Trees, shrubs and native brush come alive with fall’s vivid palette. Highway 50 from Shingle Springs through Placerville to Camino is an excellent tour base, offering numerous side loops and historic sites.
“Apple Hill” orchards, farms, ranches and their restaurants welcome visitors with bakeries and fall harvest treats. Trips can vary from short jaunts to day-long tours from Placerville to the Camino areas north of Highway 50. Gold Bug Mine and the many shops on the Main Street of Placerville offer other attractions. It’s also worthwhile to just drive through the scenic side roads going one way, then back another.
Maps and other tourist information are available on web sites or contact us for any questions or assistance. We’ve served the “Mother Lode Country” for over 45 years with all types of real estate services.
Feds Treasury Department announced today, government will buy securities issued by Fannie Mae and Freddie Mac backed by new loan revenue bonds. These would be issued by state and local housing finance agencies. The initiative includes a second component in which Fannie and Freddie will assist state and local agencies to refinance existing bonds to lower their cost.
California Housing Finance Agencies acting executive director, Steve Spears, said the initiative will “help revive CalHFA lending programs and give California first-time home buyers a chance to take advantage of the highest affordability levels that have been seen in almost two decades.”
So is this an indication the current $8,000. credit for first-time home buyers is not going to be extended? Why is the “Housing and Economic Recovery Act” passed last year seemingly only going to first-time buyers?
SAN FRANSICO, August 31, 2009, Realty World has been selected for the 2009 Best of Business Award in the Real Estate category by the Small Business Commerce Association (SBCA)
The Small Business Commerce Association (SBCA) is pleased to announce that Realty World has been selected for the 2009 Best of Business Award in the Real Estate category.
The SBCA 2009 Award Program recognizes the top 5% of small businesses throughout the country. Using consumer feedback, the SBCA identifies companies that we believe have demonstrated what makes small businesses a vital part of the American economy. The selection committee chooses the award winners from nominees based off information taken from monthly surveys administered by the SBCA, a review of consumer rankings, and other consumer reports. Award winners are a valuable asset to their community and exemplify what makes small businesses great.
Small Business Commerce Association (SBCA) is a San Francisco based organization. The SBCA is a private sector entity that aims to provide tactical guidance with many day to day issues that small business owners face. In addition to our main goal of providing a central repository of small business operational advice; we use consumer feedback to identify companies that exemplify what makes small business a vital part of the American economy.
SOURCE: Small Business Commerce Association
How do job losses correlate to economic recovery?
The “next round” of foreclosures, now beginning?
Are delinquent loans being helped by congressional actions?
JOB losses are the primary causes for foreclosures. A huge number of adjustable-rate loans of “prime” (not subprime) borrowers is now beginning to “reset to higher loan payments”. Many of these are job holders of “White Collar Workers” facing or already unemployed. Therefore, future monthly record delinquency rates are likely, until the right answers are discovered by Congress.
Government “Fix” programs are not making a dent in resolving the real problems. “Loan modifications”, one of the pipe dreams, is one of the classic examples. Home owners who want to pursue affordable payments and conditions believed available seek this choice. Months later, they are waiting for approval but find out the lender foreclosed.
Other options considered also typically encounter chaos, frustration endless delays or no responses! Foreclosures add thousands of dollars to the lenders losses. Typically, when they get the home back, it may be worth half the original loan amount. Plus, the borrower often remains in the home for over a year, not making payments. (Good for them!)
Obviously, jobs must be retained and created! Additionally, let’s face reality. Unemployment nationwide for many months has not been under 10%. True unemployment is at least 20% when including the “self employed and independent contractors” who are not entitled to unemployment benefits!
Behind on monthly payments?
What information and options are available?
How could your “credit scores” be impacted?
The “Homeownership Preservation Foundation” is an excellent FREE resource. Their website www.995hope.org offers a diversified amount information and solutions for your alternatives. Whether you’re in your in Placerville or any part of the USA, this will help. Online counseling, videos and other educational resources cover about any scenario.
Contact your lender to see what kind of advise or assistance they may offer. Many are beginning to have customer service or mediation departments. This will not be a quick or easy process so, be patient. Keep notes, names and phone numbers.
Professional counselors can be helpful but check their experience and expertise. Be cautious, there are a lot of scammers out their, so do not pay up front fees.
Here’s the likely options you may consider and how will your “credit scores” be affected:
“Loan Modifications” depending on the exact conditions of changes may not have much impact. This is an excellent choice if you want to keep your home.
“Short sales” according to research, can reduce your credit scores by as much as 130 points.
“Foreclosure” can cause a fall of 200 points or more. Negative marks on credit bureau files may last 5 to 7 years.
“Bankruptcy filings” on the average drop you scores around 300 points and reflect on credit bureau files for 10 years.
Cap and Trade passed the House. Now the Senate is working on their version of the Waxman-Markey bill. It appears the final result may include a new “National Building Code”. Homes would have to undergo and pass an “environmental inspection” when sold.
Mandated compliance of these new energy efficiency standards would make selling more expensive and difficult. Older homes and fixer uppers could represent cost prohibitive situations for sellers. Buyers would lose an opportunity to remodel, repair or upgrade with their options and desires.
Obvious other ramifications from this will only further delay economic recovery. Other government regulations forced on home sales and the loan industry this year, have already had negative impacts. The “American Dream of Home Ownership” is only being contradicted by much of this legislation.
