What Do You Do After Finding Out About the Notice of Default?

What if you have a Notice of Default recorded on your property? What then?
This is what happens when your bank or loan servicer no longer is receiving your mortgage payments, and they initiate legal action as stated in your loan documents, and according to California state law.

Once you start down this path, it can be a tough course to change unless you have the financial resources to pay the bank past due payments, plus interest and penalties.

Non payment can occur because your income has been reduced, you lost your job, your payment is going to increase above your means, and last, but not least, you wanted to get a loan modification and you were advised to stop making your payments.
The last reason is a common one, but it can lead the borrower down the wrong path. By the time he/she is behind 2-3 months in payments, it may turn out the homeowner does not qualify for the loan modification program. We hope you didn't pay anyone fees up front, because that's illegal now. PLEASE do not pay anyone an upfront fee for a loan modification, and get a second opinion at least before you stop making payments.
Your credit score will drop and the effect will continue as long as payments are not made, because every month the bank is reporting another 30-day late payment.
You have about 111 days from the recordation date until the time of the foreclosure sale. If your loan was made between Jan. 1, 2003 and Dec. 31. 2007, there is an additional 30 days for the lender to contact the borrower.  The Notice of Sale is usually recorded 20 days before the end of that period.
What can you do? 1) Pay your loan and make it current. 2) Put it on the market to sell it, either as a "regular" sale or a short sale depending on your loan-to-value plus costs of sale. 3) Rent it out, if you think market rent will cover the monthly costs, or your income will be able to make up the difference. 4) Try giving it back to the bank if there's only a first mortgage--if there's a 2nd with a different lender a deed-in-lieu will probably not work.

If you have considered all your options and you can't keep the property and your funds don't cover the deficient amount, please investigate a short sale. In most cases you will be able to obtain a future mortgage sooner than if you have a foreclosure--or a deed-in-lieu--on your credit report. More banks and servicers have become more efficient and able to deal with the volume of short sales in the market, and more buyers are willing to wait out the time period involved. Depending on the lender and the program, some short sales are being approved and closed within 90 days and less.  But remember, you have just a certain amount of time to obtain a buyer and get short sale approval, and then close escrow. Banks may extend the sale date one or more times, but usually they want an accepted offer in hand by a qualified buyer. So it's back to the loan modification point-in-time: think twice about not making your payment unless you know what's on the road ahead.

It will cost you nothing to weigh your options, a fact that more people should remember in spite of it being such a difficult thing to think about while you're in it. In fact, a lot of people let their properties go into foreclosure without having tried to sell it. Please don't do that without consulting with a real estate professional who's had experiernce with distressed properties.

Please contact me for a printed format on your foreclosure timeline, and for more information about the your options, and the difference between short sales and foreclosure. You may also go my distressed property page and also here for more information on foreclosure timelines and prevention.

The House Market in Long Beach Has Increased Last 3 Months



Long Beach Sales of Single Family Houses last 6 months

The Long Beach single family home market has been busy, especially in the last 3 months. Both the average sales price and the number of sales of houses has gone up.  The chart to the right is based on a group of about 1100 listings in the entire city, from November 2010 to the April 26, 2011, where the average price has risen from $379,515 to $419,100:

Month, #of Sales, Avg Price

Nov 2010 150  $379,515

Dec 2010  143  $387,407

Jan 2011   166  $374,575

Feb 2011  184  $404,359

Mar 2011  223  $435,699

Apr 2011  226  $419,100

LB condo avg price last 6 months

The news about condos is not the same: based on results of 330 condo listings in the same time period, the average condo price in Long Beach as a whole has dropped $225,042 to $133,969.

Figures for certain homeowner associations and certain local markets may vary, because of the concentration of sales data in the distressed property markets in certain geographic locales, which impact the overall city-wide results.
Data for Los Angeles County also shows a year-over-year drop for March of about $26,000 in the median sale price from March, 2010. In general, the condo market has been impacted strongly because they were the entry-level property by buyers who were vulnerable to the economy, a distressed property market which now attracting cash investors. However, for zip code 90803, Belmont Heights, Belmont Shore, Bluff Park and Naples, for the last 6 months, the stats show an upward trend--based on 42 listings--the sale price has increased from an average of $291,400 to $390,000. For 90802, we are back to the decrease in average selling price for the last 6 months: $225,000 in November to $100,000 in April, based on a group of 120 listings. Zip code 90814 has also decreased in its condo prices (Bluff Heights, parts of Belmont Heights, Rose Park areas).

For an evaluation of your house or condo, contact me, especially if you are not certain if your loan value is higher or lower than the market price for your home. There are options, and you should know your options now.
All chart data from CRMLS Matrix.

10 Flooring Options For "Fantastic Floors"

I really liked this article in REALTOR(R) Magazine Online today about the pros and cons of 10 different types of flooring--I wish it was a video to embed, but if you click on the link below you will go to an interactive display.

Often people make a choice because they love the way certain flooring appears, but don't consider the setting, or their own physical needs.

Have you ever considered leather tiles on your floor, or which part of your home where cork would make a good covering? These days everyone is thinking about eliminating allergens, and so they often think of removing their carpeting. But if you like carpeting, have you thought about the best kind?

Depending on the climate zone you live in, and your preferred maintenance plan, and longevity, choosing the right flooring may save you money--or not. Take a look at your options for linoleum, seagrass, bamboo, ceramic tile, concrete and stone.

Fantastic Floors - REALTOR(R) Magazine

How To OutBid the All Cash Buyer

The real estate markets in many areas, and not just in the United States, have much to be thankful for in the all-cash buyer. The all-cash transaction will be able to avoid a buyer's loan and appraisal requirements, in a market where appraisals alone have held up -- or killed -- some transactions completely. Appraisal issues, due to guideline changes, have eased up a little, but this does not lessen the desirability of the all-cash buyer in the eyes of the seller. This is especially true for "difficult" properties, such as major fixers, and condominiums in HOAs where the association may have other legal or financial challenges, including too many owners who haven't paid their monthly dues on time.
But it's a knife that can cut both ways. Some all cash buyers traditionally have believed that the seller will sell for a lower price in order to avoid a buyer's loan process. While that strategy may apply for certain cases, sellers are still just as concerned as ever about their net cash at closing. In a tougher market however, some sellers do prefer to get to a faster closing if they can accept the buyers terms. Buyers with loans who are attempting to compete with all-cash buyers should take a look at the percentages below, and also learn the specific neighborhood where they are likely to compete. The National Association of Realtors states that all-cash buyers made up 33% of all buyers in February, 2011. In 2010, the total was 59% nationally.

All Cash 1st Quarter 2011 Closings for Single Family Homes and Condominiums:

• Long Beach (23%) - 155 Cash out of 665 Total:  $254,091 average price, up to $1,800,000.
• Cerritos      (23%)  - 19 Cash out of  84 Total:     $382,210 average price, up to $990,000.
• Seal Beach   (32%) - 8   Cash out of 25 Total:      $440,706 average, up to $800,000 .
• Lakewood   (9.59%) -  17 Cash out of 163 Total:  $330,173 average, up to $500,000.
• Huntington Beach (20%) - 69 Cash out of  344 Total:  $452,409 average, up to $1,500,000. 

Therefore, buyers need to prove their strength to the seller, because if your seller has a lot of equity in their property, they are less likely to be interested in a "low-ball" cash offer.

Before shopping for a new home, go to a recognized lender and get completely pre-approved, by allowing your credit to be run and submit all requested to documentation to the loan officer.
Learn what the list-to-sell percentage is in your neighborhood of interest so that you can make a good offer that applies to the true value of the home.
Submit your lender's pre-approval letter and contact information with your offer.
Write in a strong deposit amount, at least 2% or higher, with your offier--this shows your commitment to the seller.
Understand the terms and conditions which may be associated with a short sale or and REO property: they are not the same negotiating experience as with an equity seller.
Be prepared to act quickly--you may not have days to decide if you want the property or not.
Have the patience and fortitude to keep looking if you lose an offer in the beginning, but asking some questions up front through your agent may help to avoid the worst calamities, and may help you find out what's important to the seller. If you can be flexible, your chances may improve.

And also remember, sometimes the cash deals fall apart also.

A Lower Assessment?, or, Have You Checked Your Property Tax Data Lately?

During the 1990s recession, many property owners filed for a re-evaluation of their property taxes because of the falling market prices, which meant a lower property tax. To do that--then, as now--there were certain forms and a procedure to follow to apply for that lower assessment. That information, by the way, is posted on the County Tax Assessor's site. One thing to know right now, though, is that the Los Angeles County Tax Assessor's office has been diligently pursuing the market trends and automatically lowering property assessments during this latest downturn.

If, however, you think you are still not getting the correct assessment, you should know that deadlines must be met, or you wait until the following year to make an appeal. Review your property data for square footage, number of bedrooms and baths, etc., to make sure it compares correctly with the real configuration of the property.

If you believe your property data as entered in the tax records does not represent the property, documentation will be required in the form of an appraisal (if you have one) or other documentation. For instance, if your home shows as a 3 bedroom on the tax records, but it was later modified and is functionally a 2 bedroom, this will require documentation to present to the Tax Assessor's office.

Be able to provide recent comparable sales (usually about 3) in your area to show current market values. If you need help with this, please contact me for information on filing deadlines, or the sold listings provided through the MLS that would be a comparable for your property.

And, while you're at it, you should make sure you've taken your $7,000 Homeowner Exemption, which also saves you a little more because it lowers your tax basis by $7,000.

By lowering your assessment, you save money.