If You Got a Home Loan From the Bank, Are You Its Client?

No. You're the borrower. And as the borrower, you voluntarily took the loan from the bank, and according to the usual circumstances of an arms-length loan transaction, there is no fiduciary relationship.

However, Bank of America's investors, for example, include Pimco of Newport Beach, TCW Corp. of Los Angeles, BlackRock, Inc. of New York, and Federal Reserve Bank of New York. Bank of America has about 500 investors, all of whom it may owe a fiduciary obligation because of their investment/purchase of funds. Banks in these cases are the servicers for these investors, with whom they have agreements or contracts. Those contracts are known as PSA's, Pooling and Servicing Agreements, which guide the specific demands made on loan modifications or short sales requested by the borrower. It may not be easy to find out the exact terms  in those agreements, and in fact, it's often difficult to find out what investor holds the note due to the use of MERS in the last few years. But those servicing agreements spell out the relationship of the Bank to the investor, and ultimately, the course of your short sale or loan modification request. The servicer may actually have leeway in negotiating for the investor, but if the investor is able to accuse the servicer it did not act in the investor's best interest, the servicing bank could have a lawsuit on its hands. So you might be told the "investor" is making demands, but is that really the full story?

The banks/servicers frequently require the use of their bank addendums to be added to Realtor contracts--adding another layer to interpret in the transaction.  Here is another use of the term "fiduciary"--On a recently published Purchase Contract Addendum by Wells Fargo in July/August of this year, the following language definitely confuses the issue: "It is the Brokers’ fiduciary responsibility to present the highest and best offer to the servicer." To be very clear, 1) the seller's broker has a fiduciary duty to the seller, not to the seller's bank, and 2) offers are presented to the seller, not to the bank. The "highest and best offer" (and the best offer may not necessarily be the highest price) is presented to the seller, who ideally accepts an offer when it then becomes a contract, which is than submitted to the bank for its approval to accept less than the outstanding loan amount. Naturally, the bank is interested in recouping as much money as possible, but the issue of fiduciary relationship--the person to whom you owe the greatest care--is clearly laid out for brokers in agency law, and that person is your seller if you are the listing broker, not the bank. The broker cannot be the servant of both because the broker already has a contract (the listing agreement) with the seller who owns the property, not with the bank--or investor--which owns the note.

Sellers would like a clear, black-and-white outlook for their property, and it's rarely easy, and full of complications. It's very important for the seller to read the letter issued by the bank when a short sale has been approved--the seller should not assume the bank is issuing language that is completely in the seller's interest without taking the time to examine it, or have it looked at by a tax or legal advisor!

FHA Loan Right After Short Sale?

Short sales are a problem for sellers who want to get into a new home right away. Besides the probable impact to your credit score and the issue or rebuilding it, there are normally the mortgage loan guidelines that require a waiting period of 2 or more years after a short sale, depending on the buyer and the loan.

But for certain buyers, there could be an option:  If you are a borrower who has not suffered delinquent loan payments, but has suffered a market devaluation of your current home, you could be eligible for an FHA loan immediately upon sale of your current home IF:

1. You aren't selling your home and buying a new one simply to take advantage of today's lower prices;
2. You purchase at a reduced price a similar or superior property within a reasonable commuting distance;
3. The short sale is for your primary residence.
4. You are current on your mortgage payments and no 30-day late payments.
5. Your home is not pre-foreclosure (with a Notice of Default recorded against it).
6. You have no late payments on installment debt prior to the short sale.

The borrower's reasons for selling would have to be approved on the new loan's underwriter, but for example, if you're moving for school reasons for your child, or job relocation reasons for yourself, perhaps this loan is for you.
Please give me a call or e-mail me to see if this would work for you!

What Happens to Your Sale If You Don't Pay Your HOA Dues?

Many owners these days are having financial problems, and decide to stop making payments on both their mortgage and their homeowner association dues. They may later decide to sell as a short sale, do all their document submission to the lender, list their property, find an eligible buyer who is willing to wait, and look forward to opening escrow and getting it sold. And, common to many sellers, they stopped making payments several months prior, so now a significant dollar amount in delinquent HOA dues has built up--hundreds and even thousands of dollars are in arrears.

In California an HOA may initiate foreclosure on a property after 18 months of nonpayment (but then they take over all associated mortgage and other costs of that unit), but before that, an association after a few months of nonpayment may instruct its attorneys to file a lien. If a lien exists at the close of escrow, then it will raise the issue of getting it paid off prior to close, or delaying the close of escrow--and in a short sale, lenders may impose additional fees for not closing by the specified date. If the seller does not have the money to pay it off--this will include the dues, late fees and attorney fees--then perhaps the buyer would be willing to contribute, but if the buyer cannot or will not, then that particular escrow will not go forward. And if you have a Notice of Sale on your property already, the lender may no be willing to extend and wait for a new buyer--it just depends on the lender.

Another wrinkle for a closing is even if delinquent dues can be paid off at closing, the number of delinquent owners in the association may exceed the lender's guidelines, and now there's another reason it may not close escrow--for any owner. Non-payment of dues may force other HOA members to pay special assessments to make up for the loss of income, which may be a hardship for many owners who are struggling to stay current because of their own loss of income or job cutback issues. This may actually increase the number of delinquent owners.

Contrary to what many short sale sellers assume, lenders will not pick up all HOA costs, and many banks completely disallow any HOA costs in their approval, and that includes move-in, move-out fees, and provision of HOA documents to escrow as asked for in the contract, a total potential cost of up to $500 or more per transaction. Another potential outcome is that the owner will be pursued later by the association with a judgment filed against them. And I've also read that some bank approval terms are "requiring" buyers to pay the delinquency at closing, which is driving them away from the transaction.

So if the seller can't pay now because of all their financial problems, one option would be 1) to approach the association with a request to negotiate them down to what is possible, or 2) request a forbearance agreement and work out a payment plan over time. These are much better options for an owner who wants to do a short sale and avoid foreclosure.

The last piece of advice is that the homeowner should obtain legal advice. But unfortunately many people don't do that because that would be another bill to pay, so they look up information on the internet instead, which won't tell them about their specific situation. Find a legal clinic or some source of local legal advice which will be a resource. If you just decide to stop paying your HOA dues, it could ultimately cost you more than you think.

Owners Have Options, But What is Best?

There have been numerous programs designed to assist the distressed homeowner launched under the Obama Administration. Most recent is the July 1, 2010 Home Affordable Unemployment Program (HAUP) designed to reduce, or suspend mortgage payments for at least 3 months, in coordination with the loan servicer's guidelines. The loan must be under $729,750 and originated on or before January 1, 2009, and must be in default already, or almost there. Monthly mortgage payment must be reduced to less than or equal to 31% of the borrower’s gross monthly household income and may be suspended in full. Borrowers who went through the Home Affordable Modification Program (HAMP) are not eligible, but a loan modification program may be put in place for the HAUP borrower once a job is found.

The programs available to borrowers are:

• Home Affordable Unemployment Program (HAUP)
• Home Affordable Refinance Program (HARP) - among the requirements is that the existing loan cannot be more than 125% of the current market value of the property, and must be an owner-occupied 1-4 unit property.
• Home Affordable Modification Program (HAMP) - A prime requirement, among several, is that it can be a property with either one or two loans on it, but the payment on the first loan (P.I.T.I.) must not exceed 31% of the gross monthly income of the borrower. Many borrowers have had trouble meeting that payment-to-income percentage figure, and then do not qualify for that loan mod.
• Home Affordable Foreclosure Alternative Program (HAFA) - This is a program with specific forms, guidelines and timelines and must be offered to the borrower by the participating bank if the HAMP loan mod has failed. There are certain protections and benefits to the qualified borrower under this program, but one problem has been the 2nd lien holders who refused to participate because they may not receive as high a payoff under this program. The buyer of such a property must also cooperate with certain timelines.

Lenders who chose to participate in one program are required to participate in all of them, which is currently about 140 lenders. IMPORTANT: To find out if your lender is, go to http://www.makinghomeaffordable.com/contact_servicer.html. Read about other aspects of these programs at http://www.makinghomeaffordable.com/.

If you have an FHA or VA loan, those loans will have their own version of this program.

Last, but definitely not least: Borrowers in distress who understandably do not want to give up their home, normally have a very difficult time "putting their foot down" on the subject of just how long they will attempt to pursue a loan modification with their bank before giving up. While some servicers are more responsive and are actively working with their borrowers, there are many others who are falling between the cracks.

 If a borrower has lost their job and is concurrently in a job search while attempting to pursue a loan mod that's already been started, or if a borrower keeps hearing that the bank needs an item that the borrower has already submitted, perhaps multiple times, or if the bank or servicer keeps adding new items required before it can give an answer to the borrower, my advice is: BORROWER BEWARE. The fact is, time is slipping away--you have no loan modification, plus you may now have a notice of default recorded on your property, and then the notice of sale will be posted to your door shortly before your 121 days are up. Some banks are taking their time recording a Notice of Default, but others are very unforgiving and will NOT extend your sale date without either the loan modification in place or an accepted contract from a buyer, because they need to move forward with that property. For most people, selling their property under short sale conditions has less severe long-term impact than going through foreclosure. Please contact me for more information about those conditions.

Please, don't let foreclosure sneak up on you while you keep telling yourself you're going to get the loan modification after you just send in one more piece of requested information. You must meet the servicer's requirements, and many people don't qualify due to financial circumstances. Before you get to that stage, investigate an optional short sale possibility early while you still have time to find a buyer, negotiate the contract, submit your short sale package, and get through escrow. This could make the difference between 2-3 years' impact on your credit record vs. 7 years' impact due to foreclosure.

There Ought To Be A(nother) Law

Short sales have been here and are here in large numbers for quite a while into the future. Many lenders are getting better in certain respects about speeding up their responses, even if it's not a HAFA program which does have numerous requirements, in their regular short sales. There can be many aspects and issues in a short sale depending on the bank or servicing company involved, if a notice of default has been filed, if a notice of sale date is already set, if the HOA dues are delinquent, how many lienholders there are, to name a few.

But what is one thing that's going on a lot? Second position mortgage lienholders who are refusing to accept the payoff from the first, and decide instead they would rather have their investors get nothing rather than something. So typically these 2nd lien negotiators, who are probably looking at a computer screen bearing instructions from their bosses, are allowing the entire property to go into foreclosure over a failure of $5,000-$10,000. Many do not want to deal with the HAFA program, due to the few thousand dollars obtainable under that program, nor even 10% payoff offers from the first, so their response is to say they will take nothing rather than something, and let it go into foreclosure, presumably under the belief they will be able to come back and get it later. What many servicers may not understand is that in certain states, such as California, they have no deficiency rights after foreclosusre when the loan was original purchase money mortgage on a principal residence.

And so what do we need? I know we have plenty of laws, but we need another one. We need another law that prevents junior lienholders from obstructing the successful completion of a short sale:

"...passing legislation barring junior lien holders from preventing a short sale and forcing a foreclosure would be wildly beneficial to the heart of America. It would keep homes occupied, free up capital, curb the slide in property values and it wouldn’t cost the taxpayers, or anyone else, a dime."

Also, as Lawrence Belland says on Foreclosure Radar:

"... in 37 other states the investor could accept the offer and still have the right to pursue the deficiency. That’s why forcing the foreclosure doesn’t make sense to me; it defies logic."

Second lienholders always knew they were just that, in second position. They were all too willing to make loans, and others have been very willing to buy them up, based on the continuing inflation in the subprime market. They just don't like to face reality now.
.

Short Sale Sellers and Sellers with 2nds, Take Heed

Some sellers of short sale properties could be feeling the impact well into the future. Some lenders have been selling unpaid second mortgages and home equity lines to collection agencies, to later go after the borrowers with repayment plans. Many of these are part of the "80/20" zero down loans, where the second was a huge chunk of the original equity, and now could very well be gone as a $500,000 house value has shrunk to $400,000. A seller should obtain a written release of full satisfaction when short pay approval has been granted, which a knowledgeable negotiator, whether it's your Realtor or another licensed individual, can obtain. California has certain protections already concerning purchase money mortgages, however, second liens may be a future problem.

But, even if you did sell short sale and obtained release and satisfaction, every seller of a short sale should now know that California has previously followed federal law concerning the Mortgage Debt Relief, but this year that relief is threatened due to certain unrelated provisions in a tax bill currently under consideration which Gov. Schwarzeneggar has said he will veto, thereby eliminating tax protections for those whose properties were "underwater" in a short sale. If this bill is not signed, short sale sellers will be on the hook for their California tax for a short sale come April 15th. This is the time to contact your California legislative representatives.

Yet another California Senate Bill 1178 (Corbin), if passed, would protect holders of second mortgages who refinance and stay in their homes, against future collections by banks which could be attempting to regain their lost funds. And, a new Obama Administration program which takes effect on April 5th also aims to protect owners with second mortgages by requiring lenders to send notice to short sale borrowers that partial sale proceeds were used in full satisfaction to pay off the second lien holders. This release, however, only applies to sales conducted under the Home Affordable Foreclosure Alternatives program, or HAFA, the program taking effect April 5th. It is complex and lengthy, demonstrated by the 43 pages in the link, and servicers participating can be found at this HAFA participant servicers link. A HAFA short sales fact sheet outlines the basics.

Have Your Documents Ready When You Call Your Lender

Are you at the critical point of "do I stay or do I go?"

In California, there are currently about one-third of all mortgages "under water", so many borrowers are contacting their lenders concerning loan modifications, or payment catch-up, their pre-foreclosure status, or a combination of all three. Borrowers are frustrated with the amount of time it takes when they contact their lender. Some banks are gradually become more efficient as they are assigning more people to their loss mitigation and loan modification efforts. Banks are still very swamped, and the average consumer is unaware of their low staffing and high demand.

To find a faster answer on which point of action you need to take, and to save yourself and your mortgage servicer precious time, when you call you should have ready:

• The most recent monthly mortgage statement


• Pay stubs or other documents showing your household's monthly pre-tax income


• Most recent tax return


• Second loan or home equity line of credit statements


• Account balances and minimum monthly payments on credit cards, car loans, student loans or other debt.


• A short, concise description of the financial hardship that is causing - or leading to - a mortgage delinquency.

See this Freddie Mac video posted on their site and on YouTube: Stop Foreclosure--Documents Your Lender Needs -- it's had over 4,000 hits in the last 30 days.

If you have decided you need to consider selling as a "short pay" (not all loan modification requests are granted by banks), please contact me for a market valuation and information on how I can help you with the process. Typically, different bank personnel involved in a short pay approval are other than those you may already have been dealing with on your loan modification effort, but your information you have gathered up to this point may save you some time.
Contact me for more information.

Are You Looking Into Selling Your Property as a "Short Sale"?

Although the terms "short pay" or "short sale" are heard frequently, some people are still asking what they mean: It means the property owner owes more on his/her property than it can be sold for, or sold for after paying all the standard closing costs. In other words, the seller is "under water". Briefly, the mortgage holder(s)--there may be more than one loan on the property--must agree to accept the lower payoff amount, which means the bank is losing money on the seller's outstanding loan amount. The owner must "apply" for that approval by submitting financial information and a written statement about the reasons for their situation. As more and more properties are involved in this situation, some banks are finally, at long last, gaining some level of efficiency at dealing with all the short pay applications. Guidelines for the seller include submission to the bank of a signed and dated financial worksheet (usually in a standardized format), and signed and dated hardship letter, as well as a copy of the listing agreement, and letter of authorization for the party helping you with your short sale to communicate with the bank about your loan.

The sale generally must be an "arms-length" transaction; you cannot sell to someone you have a close personal relationship with, i.e., family member, personal friend, even a neighbor.

Different banks have different approaches about when to best receive submission of the seller's package for approval; and these approaches have changed from one time period to another, even in the last several months, so it may be difficult to know what to expect. Some mortgage holders will want the seller's package up front; other banks seem to respond faster when an offer has been obtained and is sent with the seller's package so that the seller's package does not "sit" at the bank and get lost.

The contract terms between the buyer and seller is negotiated as if it were a normal sale, but it's important to note that all disclosure about the short sale status must be given, and the buyer must in almost every case be willing to wait at least 60 days for the entire process. Even though the bank is not the seller, its role is key in whether the property gets sold and for what price. And, the bank will want an accounting of all costs of sale, and may not approve certain costs in order to preserve its bottom line. Banks have also been known to "approve" in advance a certain amount as the selling price, hoping that a buyer will be found at that price and they will therefore lose less money, but the market may decline, so the actual selling price may be less the longer it takes to find a buyer, or the approved price may not be realistic for the specific area of the property.

The Obama Administration will soon be issuing short sales guidelines and standardized forms--the outcome for all lenders to participate is yet unknown. It is hoped these guidelines will prevent future unrealistic negotiations among all parties, and faster treatment of short sales to assist stabilizing the real estate market.

As more loans entered into 2-3 years ago come up for their reset dates, the short sale process will continue to be a "staple" in the market, making a more uniform process mandatory. Some areas are completely dominated by either short sale/pre-foreclosure properties on the market, or bank-owned properties that have already been through foreclosure.

Any seller contemplating this as the only possible way to sell their property should also seek any legal and tax advice at the same time, especially if also contemplating bankruptcy.

Short sales generally have less impact on one's credit (assuming there are no or very few missed mortgage payments) than does a foreclosure, which will stay on the credit report for a much longer period of time and be a more severe "hit". Even with the FICO hits of missed mortgage payments, a short pay may be preferable for several reasons, including that the IRS has allowed debt forgiveness on mortgage amounts involved in the short sales. Foreclosure carries a longer period of impact on one's credit, something to think about when FICO scores are used in insurance applications, employment promotions, and of course, credit application.

There are many related and complex issues with these situations, and much confusing information which seems to change or modify on a monthly basis, and even legal and tax advisors are not totally familiar with impacts on credit scores in these two situations. For the most accurate information and opinion, contact a reliable loan professional who is in contact with borrower's credit reports on a regular basis.

More recently, per National Association of Realtors website:

On May 14, 2009, the Obama Administration announced its upcoming Foreclosure Alternatives Program, expected to launch in late July. Among other things, the new program:

Establishes financial incentives for servicers, sellers, and second lien holders to encourage the completion of short-sale transactions.

Requires that a timeline, of no fewer than 90 days, be set to allow a homeowner to sell a home, without threat of foreclosure action.

How Many REO and Short Pay Properties Are There in Belmont, Alamitos Heights?

The filing of notices of default increases each quarter in California, per Dataquick on October 23rd, "Foreclosure resales have emerged as a major market factor, accounting for 47.6 percent of all California resale activity last quarter" but not all areas are impacted as heavily as others:

So far, for areas falling in the 90803, 90814 zip codes, the MLS listings are showing, out of 257 residential properties up to 4 units listed, there are 27 "short pay" and "NOD" listings, 3 in bankruptcy, and 11 REOs (bank-owned properties). The 4-bedroom, 2100+ sq ft Alamitos Heights single family home at right is an REO property that has been on the market for 8 days, and is competitively priced at $679,900. Looking for your next home? This is a great residential area close to the coastline, Cal State Long Beach, the 405 and 605 Freeways, and a few blocks from a major grocery chain store, bank and eateries.

BUT, did you know that we (meaning Realtors) have an REO Advisory that goes along with your offer on a bank-owned property? Be sure and ask for this important disclosure because you the buyer should know that owners of bank-owned properties are not legally required to provide you with certain information that you would expect from a "equity" seller, and you may even be asked to sign the bank's addendums, and in some cases, the bank's own contract form, that are not the same as the standard Realtor contracts. They are exempt from the transfer disclosure statement, the natural hazard disclosure statement (although the listing agent is not exempt from this), the supplemental property tax notice, Mello-Roos lien disclosure, the 1915 Improvement Bond Act notice (that's how you learn about other taxes affecting your property), and notice of private transfer fees, or the earthquake guide book. After all, they never lived in the property, and took it back in foreclosure, so they just want to sell it. Also, they often will do no repairs, including termite repairs, or so they say. As time goes on, though, I'm hearing that banks are more willing to contribute towards buyer closing costs.

Unlike the last recession, REO properties in this market are not well-prepared for sale, may need a lot of repairs, or just plain smell bad requiring the buyer to use a lot of imagination to see the ultimate potential. The issue in some communities has been such that laws have been passed forcing banks to maintain their properties and drain the swimming pools.

So, buyer beware, but if you can get past the physical condition and the disclosure issues, or lack thereof, you may find a great home.

The same story goes for a "short pay" property, and indeed, there are a growing number these days. If you make an offer on one, be sure you receive a "short pay" advisory with your contract--this details conditions surrounding the bank's approval of the seller's market value of the property vs. the mortgage amount owed and how it may affect you, the prospective buyer. You may be in a for a wait just for an initial response, especially if there is also a second lender whose approval must also be obtained. Banks vary in their efficiency handling these offers, and much depends on the completeness of the seller's package, along with the growing number of properties affected.

One thing that's immediately affecting the number of Notices of Default filed right now is that lenders are required to contact borrowers in advance of filing default notice. Just how much this is affecting the market, and how far into the future, is unknown:

"It's unclear just how much foreclosure activity will be time-shifted into future months. We'll know more when we have fourth-quarter numbers. What's interesting is that the surge in activity certainly did level off during the second and third quarters. A lot of the market's distress is working its way through the system and the spectacular jumps in activity may be behind us. Or it may be that those processing the default paperwork are just maxed out," said John Walsh, DataQuick president.

So, when all is said and done, take advantage of the opportunity before you.

Foreclosure or Short Pay Debt? New Laws

Starting September 25, 2008, the federal income tax exemption for debt forgiven on a home loan now partly applies to California's state income taxes.

Federal law provides a tax exemption for debt forgiveness on a loan incurred for acquiring, constructing, or substantially improving a principal residence up to $2 million if the debt is discharged from 2007 through 2012.

Under the new California law, the maximum qualifying debt is $800,000, and the maximum exclusion is $250,000. The California law only applies to a debt discharged in 2007 or 2008. (Info by California Association of Realtors)

Distressed Listings in Long Beach, Cerritos and Huntington Beach

Some buyers are thinking that foreclosure and/or short sale properties (they owe more than they will net from the sale) are in every neighborhood where the buyer would most like to live. Not true, and it's been the source of misunderstanding, and sometimes frustration, for people who might otherwise make a move right now. A short sale is not necessarily the way to go: There are "normal" listings of non-distressed properties priced just as advantageously; plus, a short sale is in the hands of the bank, not the seller, and the bank. Fathom7's 3/31/08 entry on the Redfin site says, "Add to this the matter of the short sale taking a long (sometimes interminable time to complete) and these properties become amazingly undesirable. What I don't understand is that rather than take a rational offer for the home, the bank and the still-present-owners appear to prefer foreclosure over accepting a short offer on the short sale. somebody is getting something but nothing gets accomplished for the buyer," (It's true, some banks are not clearly understanding that foreclosure is usually a more expensive process than accepting a buyer's offer and taking a loss), and,
"Here's one example of what I have been dealing with: I have had interest in a particular house – the asking was outside of what I wanted to spend for that house (too many compromises for the premium price). Then , the price took a drop. No sooner had I discovered this when I learned that it too is a short sale. The “listed” price is also short of what is owed and thus is not the real price the bank is going to take. This one too is likely on it's way to foreclosure."

First of all, the short sale status should always be disclosed up front in the MLS so that it's not a surprise to the buyer (however, the price reduction could have been the beginning of the short sale), and second, Fathom7's observation that it's on its way to foreclosure is probably very accurate, because if there's a non-distressed property at or near the same list price, it's going to be an easier pick; third, there are plenty of distressed properties in some areas, but maybe not in the ones you want.

Distressed properties may be ranging from 1.5% of the market up to a 33% or more, in different areas.

Market samples:

Zip code 90803 (Bluff Park, Belmont Shore, Belmont Heights, Naples) - Single family: 5 properties listed as short pay and/or pre-foreclosure, out of 109 single family listings, or 5.5% of the MLS listings are distressed. Condos: 6 properties listed as short pay/NOD (notice of default), out of a total of 55 listings, or about 11% are distressed condos.

Zip code 90802 (downtown Long Beach, Alamitos Beach) - Single family: 8 properties listed in short pay and/or NOD, out of 19 houses, or 42% are distressed. Condos: 36 short pay properties, an additional 6 also as pre-foreclosure, are listed out of 278 condos, or about 15% are distressed properties. (This zip code has a higher percentage of multi-unit housing compared to other areas in Long Beach.)

Zip code 90807 (California Heights, Bixby Knolls and adjacent areas) - Single family: 26 short pay/NOD properties out of 115 houses, or approximately 23% of houses are distressed listings. Condos - About 14 short pay/NODs out of 42 listings, or 33% are distressed condos.

Zip code 90814 - (Bluff Heights, part of Belmont Heights, Carroll Park, Rose Park South) - Single family: About 7 out of 45 MLS listings are short pay/NOD listings, or 16%. Condos - 1 short pay/NOD listing out of 39, or less than 1.5% is a distressed property.

Long Beach - There are a total 1158 single family listings (including the above zip codes) for the entire city in the MLS, 291 are listed as short pays, or 25% are distressed listings.

Huntington Beach - For the entire city, 462 single family homes are listed, 67 are short pays, about 15% of the total market -- this is spread across 4 zip code areas, where some zips may have a higher percentage. Condos - 256 listings, 27 listed as short pays, about 11% of all condo listings.

Cerritos - 90703 zip code - Single family: 112 listings of which 25 are short pay, or 22% are distressed listings; 26 condo listings, 5 are short pays, about 19% are distressed listings.

Long Beach long beach real estate 'Voice this!

East Long Beach Still Sells

Zip code 90815 (excluding Park Estates and Bixby Hill areas) closed 37 transactions since January 1 to today's date in prices ranged from $355,000 to $715,000 for a single family home (data from the Southern California MLS)--one property reflected as a short sale (this data is only recently being reflected in the MLS). The same period last year closed 51 sales ranging from $476,000 to $930,000.


Currently, in these same 90815 areas of east Long Beach, Los Altos, Stratford Square, Lakewood Plaza, the Ranchos, La Marina, and Artcraft Manor, there are 83 active listings ranging in price from $380,000 to $1,095,000.


About 18 of these are impacted by short pay situations (meaning the seller is requesting the lender to accept a loan loss), however this area is far less impacted on the whole than other areas which may be as high as one-third of the active listings will require lender approval of the seller's short pay request.


It's opportunity time if you're ready to make a move! For a buyer- or seller-directed property search, please go to http://www.longbeachrealestate.listingbook.com/, or go to http://www.juliahuntsman.com/ to search properties on the market by zip code, or price!



Long Beach long beach real estate 'Voice this!

What Happens If You Are In Foreclosure?

Recently, California has experienced an increase in property owners who cannot seem to make payments. If you are one of those people who has received a Notice of Default from your lender, please read this.

You still have time to find solutions and avoid losing your property. Maybe your property isn't a mansion, but to you, it is. You should consult with your attorney for complete information on the foreclosure process, and your accountant for tax advice.

A non-judicial foreclosure under California Civil Code section 2924 allows lenders to foreclose upon real property without going to court. It takes approximately four months from start to finish. Once the sale auction is completed, it is final, but an IRS tax lien can cause a delay in the finality of the sale. The borrower must then vacate.

1. Your trust deed functions as the lender's security device for its loan. Lenders may hire a new trustee to replace the trustee named in the trust deed and then instruct the new trustee to issue a Notice of Default, and "NOD", in which you, the borrower, are warned to act or face the consequences. The NOD is recorded at the County recorder's office, and sends copies to the borrower and to any party who requested a Notice of Default form, to holders of junior trust deeds, to the borrower's successor in interest, and anyone else legally entitled, no later than one month following the recordation of the NOD.

2. You have the right to reinstate the loan by tendering to the lender or trustee your delinquent loan payments, plus the trustee's fees and costs. Upon receipt of that payment, the trustee is obligated to rescind the NOD, and the loan is reinstated to normal status, as long as it is reinstated until five business days before the scheduled foreclosure sale. Otherwise, the lender is not required to stop the sale, and the lender may demand the borrower pay-in-full the total outstanding principal balance and accrued interest on the loan, plus trustee's fees, right up until the moment before the sale is completed.

3. If three months pass following recordation and the borrower does not reinstate the loan, the trustee is instructed by the lender to set a time, date and place for the sale, usually three to four weeks from that time, hence, the total time of about four months.

4. The borrower will receive a Notice of Trustee's Sale, along with other entitled parties. The NOS must be mailed, posted in a public place, published in a newspaper of general circulation in your property city--all 20 days before the sale date-- and recorded at the County recorder at least 14 days prior to the sale date.

5. At the appointed time, the trustee conducts the sale at public auction.

You may have time to refinance (there are hard money lenders who will loan even though an NOD has been recorded) and even if at a higher rate, that is better than losing your home. When your situation has improved, you may be able to obtain a better loan. You may also contact your lender for arranging a "short sale". Lenders don't really want to take back properties, and are often willing to make an arrangement with the borrower who might otherwise be able to sell the property rather than going into foreclosure.

Above all, you should not ignore your situation, as difficult as it is at the time.

Please know that this is one of my most frequently read posts. Many people are facing this issue. If that could be you, or it is you, please know that (1) you may be able to refinance your way out of your situation, (2) you may be able to negotiate a short sale with your bank. If you need immediate loan qualification, or are considering negotiating a short sale, PLEASE CALL ME.
If you would like a market analysis of your property to try to sell it, please call me at 562-896-2609 or e-mail me ocean@surfside.net immediately.


Long Beach, CA, Foreclosure