San Diego's real estate market is slowing down

I was looking for a stat to confirm what is going on in our real estate practice.  The banks are sending out agents to do BPOs.  The agents are looking at comps from the spring and then asking us to counter the buyers offers.  The buyers are then walking away from the deals. 

I wonder how the lenders can be so poorly run and regulated? 
How did they get so big in the first place?
Why can't any of these people understand that to make money you have to get ahead of the curve not behind it? 

News Room - Trulia.com - Press Releases

Western U.S. Leads with Price Reduction Increases

In the first half of 2010, cities in the Western U.S. were experiencing a decrease in reductions. This month, the same cities experienced some of the largest surges in price reductions compared to the previous month. Oakland increased 38 percent month-over-month and San Diego saw reductions increase by 25 percent.

San Diego short sales

Foreclosure Sales Account for 31 Percent of All Residential Sales in First Quarter According to New Report From RealtyTrac

foreclosure homes accounted for 31 percent of all residential sales in the first quarter of 2010, and that the average sales price of properties that sold while in some stage of foreclosure was nearly 27 percent below the average sales price of properties not in the foreclosure process.

A total of 232,959 U.S. properties in some stage of foreclosure — default, scheduled for auction or bank-owned (REO) — sold to third parties in the first quarter, a decrease of 14 percent from the previous quarter and down 33 percent from the peak during the first quarter of 2009, when sales of foreclosure homes accounted for 37 percent of all residential sales.

When a Default becomes Strategic

A Strategic Default may not be very Strategic if you have not created what we call an upside down analysis. 

Now that Fannie Mae and other lenders are pursuing deficiency judgments it may be time to consider that Strategy is part of Strategic Default .

Checklist of Strategic Default considerations:

1.  To get released from the deficiency or loan balance. 

     a. some loans may state they are non recourse loans in writing.   

     b.  see if you are protected from the deficiency by operation of state law.  CA has two major anti deficiency statutes.  Most people are aware of CCP 580b and the one action rule.  However there are other judicially supported doctrines which may help the defaulting homeowner.  

           

2.  Does your lender consider workout options which are useful?

     a.  will they release the deficiency in writing as part of a short sale?

     b. will they release the deficiency in writing as part of a deed in lieu?  (most banks do release the deficiency as part of a deed in lieu… the tough part is getting the lender to accept the offer of deed in lieu on terms you find acceptable.

    c.  is there a short pay  or short refiannce option? 

Note… our commercial real estate group has closed commercial refinance’s .  If you have the funing commercial refi’s are met iwth few obejections. 

   d. There are other options to consider.

3. Is your default part of Bankruptcy planning?  Please note Bankruptcy is not nearly as useful as it once was for most people with average or better jobs or other assets

4. Has your default consider credit rebuilding and repair consequences

5. Assets or Salary Preservation.  If you have recourse loans you might decide it is too risky to give your lender a current road map to your assets or salary.   

6. Choice of Creditors. With some lenders it is sometime beneficial to deal with their likely collection arms.  With other lenders it is much better to deal with the servicing arm of the lender. 

 

Fannie Mae has said that they are going to seek a judgment against strategic defaulters.  This is why we have always advised people to do an upside down analysis prior to going into default or accepting a foreclosure. 

Short Sale near Carlsbad in San Marcos, community of San Elijo

San Elijo Real Estate, san marcos short sale near carlsbad

Short Sale update, Bank of America releases deficiencies - sometimes

Bank of America seems to have changed or at least added a new short sale template for their approval letters.

for more on san diego short sales

They may now agree to release the deficiency even on recourse loans.

For a video on short sale and deficiencies.

It may be too early to tell but this could be great news for underwater home owners.

Do you need a CA Real Estate license to negotiate short sales in CA

HAFA Short Sales

HAFA is it is a government program subsidized home affordable foreclosure alternatives program.

Under HAFA, a participating lender will pre-approve the terms of a short sale and live the borrower evry four months to market and sell the property using a licensed real estate professional.

To be eligible for the program but property must be in the borrower's principle residence the loan must have picked up  originated before 2009, it must be a first or senior loan, the loan must be $729,750 or less. The borrower must be eligible and able to complete a loan modification under the home affordable modification program. Finally the property must be a single family home. 2 to 4 unit properties may be eligible for the home affordable mortgage program. Check me rules. For more information on HAFA Short sales please go to www. upsidedownrealestate.com. 

 

Financial Incentives

The government is giving incentives to the lenders to pay $3000 towards the borrower's relocation expenses. The government is also paying $1500 to the loan servicers for each successful short sale and one dollar to the investor for every two dollars paid to extinguish Junior lens up to $2000 and not to exceed 6% of the unpaid balance.

This program announced in December 2012.

This is how the program is supposed to work in theory. So far we have seen Bank of America preapproved to of our short sales. However they were not able to provide us with a short sale price. They seven we should call back in about 10 days.

 

Procedures

step one - lender evaluates lower for a loan modification under the home affordable mortgage program.
Step two - lender evaluates borrower to complete modification or short sale.
Step three -  lender issues short sale agreement.
Step four -  Barro listen property for sale using a licensed real estate.
Step five - borrower in agent license and so property.
Step six  - borrower borrower submits to lender a request for short sale approval steps seven lender approves

Step up to the - 7the request for approval of short sale within 10 business days.
Step 8 -  sale closes answer