A “buy and bail,” is when a buyer buys a new house before their credit rating is ruined by walking away from their old house. It’s an attempt to escape payments on a property that is already “underwater”, and move into a new home with a more affordable loan. The practice is fraud and usually used by people who have a job and low debt. It is still a problem even though Fannie Mae and Freddie Mac, the biggest U.S. mortgage-finance companies, have taken serious moves to prevent it.

There are many homeowners who would like to sell but aren’t financially required to do so. Many of these people are waiting in the wings for the opportune moment to jump back into the housing market. In fact,  Zillow.com reported about 7% of homeowners surveyed said they were very likely to put their home on the market this year if they believed the housing market was improving. In addition to this already existing group, the number of homes with equity has grown this year, from 52% last year to 63% this May. This could pose a problem since many of these sellers will have unrealistic views about how much their homes are worth which in turn could influence the housing market.

Attached are 2 articles from CoreLogic.  The first article ranks Stockton #2 after Las Vegas for negative home equity.  The 2^nd estimates that the hardest hit areas will not see positive equity until after 2020.  I am afraid it is going to be a long and bumpy ride for the Stockton market.  If you are considering listing your Stockton home for sale I recommend listing it sooner rather than later.  Please call Pat Holkesvig at (209) 471-0285 to start the process for a Stockton short sale or traditional sale.

Fannie Mae announced this week that it will pursue deficiencies in some cases of strategic defaults.  It’s getting nasty!  Make sure you discuss your potential short sale or foreclosure options with a real estate attorney.  Your Home Team can walk you through the short sale process.  We specialize in Central Valley Short Sales!

A recent AP story suggests that short sales and foreclosures are expected to increase as the number of loan medications fail.  To date 27% of loan modifications have succeeded. If you have any questions regarding the short sale process or any real estate related issue please contact Pat Holkesvig at (209) 471-6516 or complete our Contact Form.

Santa Clara County has seen an annual decline in foreclosure notices for the past consecutive six months.  Yet, Foreclosure Radar reports that these types of declines don’t make any sense. They speculate that lenders may be holding on to the foreclosure inventory longer to avoid flooding the market.  There is no evidence to support that these foreclosure numbers are being dramatically influenced by a strong increase in short sales or loan modifications. However, more at risk homeowners are pursuing these options up front and as a result may be delaying the foreclosure process by overwhelming loan servicers with work out requests which require lenders to document the borrower’s earnings and assets.