Obama Launches New Mortgage Aid
September 7, 2010
Over the last month we have mentioned in Could This Be The End of Short Sales? and No New Ideas From Mortgage Summit that it was rumored the Obama administration was about to order the government-controlled lenders to forgive a portion of the mortgage debt for Americans who are underwater. Today the Obama administration has indeed launched a revised government mortgage relief program referred to as the “short refinance” program . However this program is not intended for Fannie Mae or Freddie Mac loans and it still faces the challenge of satisfying second lien holders. The administration still hopes that up to 1.5 million loans could be modified through the program. The intent is to focus on homeowners who are current on their mortgage payments but are at risk of default because they have no equity in their homes. It is still too early to tell how many Stockton area underwater homeowners will benefit from this program.
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Mortgage Rates Drop to New Low Record
September 2, 2010
Freddie Mac reports that the average rate for a 30-year fixed mortgage fell to another record low at 4.32%. The new 15 year fixed rate also dropped to 3.83%. These new record breaking rates show hope for a struggling housing market since the expiration of the popular home buyer tax credits. On 09-01-10 the Mortgage Bankers Association reported that mortgage applications for purchases increased last week and refinances were up 2.8%. It is too early to report on any impact these new mortgage rates will have on the local Stockton real estate market.
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US Home Sales Plummet as Inventory Rises; Great Time for Central Valley Buyers
August 26, 2010
The latest figures for existing homes sales were released this week with very discouraging results. Existing homes sales have hit the largest monthly decline in history at 27.2%. This is coupled with a record breaking 11 year peak in housing inventory. On the bright side, if you are looking to buy in the San Joaquin valley, there is no better time than the present. With great inventory to choose from and 30 year fixed mortgage rates at an all time low of 4.56% it is truly a buyer’s market.
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No New Ideas From Mortgage Summit
August 24, 2010
On August 12th in the post Could This Be The End of Short Sales? we wrote about how On August 17th the Treasury was going to be holding a hearing regarding the future plans for Fannie Mae and Freddie Mac. It was rumored that the Obama administration was about to order the government-controlled lenders to forgive a portion of the mortgage debt for Americans who are underwater.
At the end of the day, no new ideas came out of the August 17th summit and it is most likely that there will be little change to Freddie Mac and Fannie Mae for the short term. However, that means the government could continue to bail out the banks. It also leaves open the possibilities that Freddie and Fannie could go as far as writing off all remaining debt or at least refinance all existing troubled loans to current low interest rates.
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Increasing Central Valley Inventory to Cause a Decrease In Prices
August 20, 2010
Unfortunately, the flurry of buying activity Stockton real estate experienced this past spring has flittered away along with the federal homebuyer tax credits over the summer. Meanwhile the Stockton housing inventory has continued to grow as we head into the traditionally slow fall and winter months. As the number of potential buyers continue to diminish and housing inventory continues to increase, it is inevitable that prices will need to drop.
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Stockton Area Real Estate Market Prime Opportunity For Buy And Bail Fraud
August 19, 2010
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.
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TransUnion Reports Mortgage Delinquencies Increase 50% Compared to Last Year!
February 17, 2010
The percentage of borrowers at least 60 days past due on their mortgage increased for the 12th straight quarter, hitting 6.89 percent by the end of 2009, according to new data released by TransUnion Tuesday. That%u2019s an all-time high in the credit bureau%u2019s study, dating back to 1992.
This statistic, which is traditionally seen as a precursor to foreclosure, increased 10.24 percent from the previous quarter%u2019s 6.25 percent average. Compared to the year-ago delinquency rate of 4.58 percent, past due mortgages are up a staggering 50 percent, TransUnion said.
The Chicago-based company called the recent slowing in the pace delinquency increases %u201Cshort-lived.%u201D What was starting to become a trend came to an abrupt end in the fourth quarter, when the mortgage delinquency rate accelerated instead of decelerated as it had done since the beginning of 2009.
Based on TransUnion%u2019s analysis, borrower delinquency rates last quarter continued to be highest in Nevada (16.19 percent) and Florida (14.93 percent). North Dakota (1.84 percent), South Dakota (2.46 percent), and Alaska (2.84 percent) continued to produce the nation%u2019s lowest mortgage delinquency rates.
Stockton foreclosures are going to be around for awhile. We continue to receive a large number of calls from home owners interested in pursing Stockton short sales.
Foreclosure Understanding the Process and How to Avoid it
November 24, 2009
So often homeowners in danger of foreclosure are confused by the process and what options are available to them. Given the large number of Stockton foreclosures, I am frequently asked questions to explain the foreclosure process and whether a short sale is the right option. Any homeowner in danger of foreclosure should contact their attorney and accountant to fully understand the legal and financial implications.
A definition of foreclosure is the legal process used by lenders to terminate all rights, title, and interest of the trustor or mortgagor in real property by selling the property and using the sale proceeds to satisfy the liens of creditors.
There are two ways to foreclose by trustee’s sale and by judicial process. Any trust deed or mortgage with a power-of-sale clause may be foreclosed non-judicially by a trustee’s sale or judicially by a court procedure. Without the power-of-sale clause, the only remedy a lender has is a judicial foreclosure by a court proceeding. Most trust deeds and mortgages in California include the power-of-sale clause, so the lender may choose either type of foreclosure method.
Usually the lender will elect to foreclose on the loan using the trustee’s sale because it is the quickest and easiest method taking approximately four months. First, the lender notifies the borrower of default and requests the trustee to record a notice of default. The trustee must wait at least three months after recording the notice of default before advertising the trustee sale. Then the trustee advertises a Notice of Sale once a week for three weeks (21 days) and posts a notice of sale on the property. If the borrower chooses to take action to avoid the foreclosure either through loan modification or short sale, they must start the process before or during this period to allow ample time to avoid the pending foreclosure. During this time the trustor may reinstate the loan up to five business days prior to the trustee’s sale. After that, the trustee holds the sale and issues a trustee’s deed to the highest bidder. A trustor has no right of redemption after the trustee sale.
If a lender chooses to review the file for loan modification or short sale, this does not stop the foreclosure proceedings. However, during the review process, the lender may postpone trustee sale dates in order to pursue a resolution.
If a lender chooses to foreclose a trust deed or mortgage with a power of sale using a trustee sale, no deficiency judgment is allowed if the proceeds do not satisfy the debt and all costs. Since trust deeds are used almost exclusively in California to secure loans, the only security for a beneficiary is the property itself. Any other personal assets of the borrower in default are protected from judgment under a trust deed. Additionally a lender cannot get a deficiency judgment against a borrower if the loan is a purchase money loan secured by either a trust deed or a mortgage. Any loan made at the time of a sale, as part of that sale, is known as a purchase-money loan. This includes first trust deeds and junior loans used to purchase the property.
However, a deficiency judgment is allowed on hard money loans. A hard money loan is one made in exchange for cash, as opposed to a loan made to finance the purchase of a home. Typically, a hard money loan refers to junior loans used to take money out for consumer purchases, home equity loans, debt consolidation, and even a refinance. In other words lenders of hard money loans can and will seek payment from the borrower even after a foreclosure has taken place.
If you are a homeowner facing foreclosure in Stockton you may want to consider a short sale. We process more Stockton short sales than any other agent. Please call us at 209-471-6516 to discuss your options.
