New California Law Grants Foreclosure Extensions of Time When Listing and Selling a Property

 

Most of the time, banks or other holders of mortgage in default would rather work with the property owner to get a property sold, rather than go to further expense to take the property back on their books and then put it back on market.  But, there have been instances when the mortgage servicer proceeded strictly within the foreclosure guidelines in the law, and foreclosed anyway, even if the seller was still actively on the market and ready to take offers. This caused a lot of people a lot of pain, and the owners lost whatever net return they might have been able to get from any possible equity in their property. But now, there is a new California law that addresses a new timeline, after both the mortgage servicer and property owner have followed procedures as contained in the bill:

Back in September, 2024, the Governor signed a bill which would prohibit a foreclosure sale for another 45 days after a listing agreement is signed, and also prohibit a foreclosure for another 45 days after a purchase agreement with a buyer is executed. This is stating the issue simply, and as stated already, certain other guidelines must be followed. Several things must be done by the mortgage servicer, including:

"The mortgage servicer shall provide a means for the borrower to contact it in a timely manner, including a toll-free telephone number that will provide access to a live representative during business hours.

"(5) The mortgage servicer has posted a prominent link on the home page of its internet website, if any, to the following information:

(A) Options that may be available to borrowers who are unable to afford their mortgage payments and who wish to avoid foreclosure, and instructions to borrowers advising them on steps to take to explore those options.

(B) A list of financial documents borrowers should collect and be prepared to present to the mortgage servicer when discussing options for avoiding foreclosure.

(C) A toll-free telephone number for borrowers who wish to discuss options for avoiding foreclosure with their mortgage servicer.

(D) The toll-free telephone number made available by HUD to find a HUD-certified housing counseling agency.

As a borrower, you should make sure your contact information is completely current with your lender, so that if they need to contact you, you are available and are properly notified.

In Long Beach right now, there are about 203 residential and commercial properties in some stage of foreclosure, according to the property tax records; only 10 of these properties is on the market or in escrow. If you are one of these owners who are not on the market, and you haven't engaged your lender in any type of conversation, or you've received some type of notice in the mail but you haven't acted on it, you should not waste any time in contacting your lender, especially if you are interested in remaining in your home or otherwise keeping your property. Because if you don't act, you could lose your property and the equity with it.

If you are thinking of selling, you still need to be in touch with your lender, but you should also take action now in finding out what your market value is by contacting a REALTOR who can work with you on your selling requirements.  

For more information on the new required timelines and procedure affecting both the mortgage servicer and the property owner, see the link below for the new law.

 See the new law at AB2424  If you have any questions about what to do, please feel free to contact me and see how I can help you.

Julia Huntsman, REALTOR, Broker | http://www.abodes.realestate | 562-896-2609 | California Lic. #01188996

How a Listing Went From $1 Billion to A Low, Low, Selling Price

This story could be the story of many sellers, albeit on an exaggerated scale.  How did a property on the market for $1 billion dollars ultimately sell for .1% of that, or a 99.99% loss?

It's the story of an investor buyer who wanted the 157 acre parcel in Beverly Hills, and to get it he borrowed $45 million from the seller (Mistake No. 1), the Mark Hughes Estate, and bought it in 2004.  In time, the debt surged to $200 million with interest and fees added. The investor transferred ownership to an LLC controlled by the investor's partner, which was unsuccessful last month in declaring bankruptcy.  The Hughes estate could either buy the property back, but lose the $200 million it was now owed, or let it go to foreclosure auction. But any other buyer purchasing prior to the foreclosure auction would have to pay the $200 million in debt, and there were no takers. So the property went back to the Hughes estate, after 15 years, leaving it to absorb the $200 million debt.  However, the LLC, known as Secured Capital, made a last minute offer of $150 million for the property, but the estate ignored the offer, according to the company's attorney (Mistake No. 2).  So last week, the property sold for $100,000 at auction. 

So 1) don't overprice your property; 2) or do a carryback loan to a buyer who can't perform, 3) and, finally, know when to cut your losses so you don't lose out completely (the estate could have at least recouped $150 million) and then, end up selling at a below market price that you can't even buy a condo for.  And last but not least, check your days on market, and keep checking your market value.


Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

New Credit Reporting Policy Change May Affect Many Consumers Positively

Equifax, TransUnion and Experience will, as of July 1, 2017, require tax lien and civil judgment data to contain three of four information requirements in order for that information to be included in an individual's credit report.  The consumer's name, address, and either a social security number or a date of birth must be included, and current data not reflecting that information will soon be removed from credit reports.  According to Mortgage News Daily, many liens and most judgments don't currently include that information, and their removal, although sparking a controversy, will probably be viewed as happy news by many consumers.  Already, other types of negative data have been addressed in settlements of lawsuits:

It appears that the changes announced by the credit reporting companies are at least partially in response to a recent report from the Consumer Financial Protection Bureau (CFPB). 

* * * *

The Wall Street Journal reports that settlements of lawsuits brought by various states have already pushed the credit reporting companies to remove some categories of negative data from reports such as information related to library fines and gym memberships, and required changes to the timing of medical collections information.

The net effect is that many consumers will have an increase in their FICO score, perhaps an upward boost of about 20 points.

Current State of the Real Estate Market in Long Beach

Conditions for property sales have largely returned to normal, meaning there are very few distressed properties or "special condition" issues on the market.

Out of a total of 401 active listings for single family homes and condominiums in currently on the Long Beach market, as listed in the Realtor multiple listing service, there are:

• 381 standard sales
• 4 foreclosures
• 4 notices of default
• 8 real estate owned, including HUD
• 6 short sales
• 4 probate sales
• 2 requiring third party approval 

In other words, the market from 5-7 years ago which featured a minimum of 35%-50% distressed listings in many areas, both in California and across the country, has improved to a market of majority regular sales.

In the last 90 days (4th quarter of 2016), 562 single family homes sold in Long Beach as "regular" sale, at an average price of $652,936 (ranging from $199,000 to $3,790,000).

In the prior 90 days (3rd quarter of 2016), the MLS reports 563 Long Beach single family homes sold at an average price of $664,070 (ranging from $200,000 to $4,750,000).  So in Long Beach, the overall pricing has been fairly stable for a house for about the last 6 months, based on data from the MLS. As it has for multiple years now, inventory remains in the 2-3 months level, which is what creates more competition among the active buyers and a decentivized seller market which ends up staying put, not finding what they would move on to.

What will happen in 2017 in the bigger picture?  The median California house price is predicted to rise a little over 4%, housing affordability still going down, but sales volume is expected to rise over 2016. There are lots of market variables: global market changes (Brexit); increasing conventional interest rates for some (so far VA and FHA rates are still lower), but interest rates are still very low compared to earlier market cycles; foreclosed houses bought up and turned into rentals; the fact that California is delayed in construction of new units and will probably not catch up for years with the population growth; and also, affordability challenges for first-time and lower income buyers, a very big issue; plus, the baby boomers staying in place, and not moving like their parents did, which means fewer listings on the market (just one of the reasons for depressed inventory).

One thing helping buyers are down payment assistance programs, CalHFA being one, another are two-income families with documented income, and a third is the persistance to become a homeowner.

Please contact me for information about selling, I am also able to search out information in more distant markets which may help a seller in their decision to relocate.