With the median price of homes in California rising two consecutive months for the first time in nearly two years, some of you have been wondering if the time is right for you to take the money out of your home & get a great deal on a move up purchase. The answer is YES!
As your Real Estate Agent in “The Trenches” I will give you a bird’s eye view of what is truly happening in the Orange County Market!
Contrary to what the news is telling you… the market is in a “Supply and Demand” Crisis! There was so much inventory last year, it became a buyer’s market! With so many homes on the market, it extended our market time and prices fell, dramatically! Unfortunately, for normal seller’s like yourselves, if you had some equity and wanted to sell, the market would not allow you to! The Federal Government, in an attempt to help homeowners stay in their homes, froze all foreclosures from November 2008 until March 31, 2009. During this time, and still today, homes have been selling and inventory has dried up. Now there are more buyers’ than homes for sale; which in turn, it’s becoming a seller’s market again!
Last week, something good happened for homeowners; California placed a new 90 day moratorium (freeze on foreclosures) to help homeowners continue to modify their loans to help them stay in their homes! In the meantime, buyer’s are still searching the market for their dream home!
With the inventory at all time low, prices of homes are increasing! Multiple offers are back! Therefore, this is a great time for seller’s to capitalize on the market while Supply is low & Demand is high!
Who do you know looking to sell?
Wednesday, June 24, 2009
Friday, June 19, 2009
Thursday, June 18, 2009
Business Leaders Push To Expand Housing Tax Credit
Business Leaders Push To Expand Housing Tax Credit
In yesterday’s edition of the online edition of the Wall Street Journal, it was reported that a group of business executives issued a set of recommendations for the White House and Congress that are aimed at jump-starting the housing market in order to stimulate a broader economic recovery. How is this important in the Tallahassee Real Estate Market?
Business Roundtable Wants Tax Credit For All Home Buyers
We have written quite a bit here lately about the First Time Homebuyers Tax Credit, so this is directly related to that program. The Business Roundtable, an association of chief executive officers of leading U.S. corporations, feels that the best way to boost the economy is to stimulate the demand side of the real estate market.
In their press release, they stated “We believe targeted, demand-side solutions – such as the ones Business Roundtable is recommending today – will provide a critical next step for a housing recovery that will help create jobs and boost the economy as a whole.” So, what exactly are their recommendations?
Demand Will Strengthen If Mortgage Rates Are Kept Low
The Business Roundtable’s recommendations are as follows:
- Keep mortgage interest rates at historically low levels (below 5 percent) for at least one year;
- Expand the current First-Time Homebuyer Tax Credit incentive from the lesser of 10 percent of the purchase price of the home or $8,000 to a higher limit of either 10 percent or $15,000 for all homebuyers, remove the income restrictions and include all primary residence purchases for one full year;
- Conduct a thorough review of current foreclosure mitigation and loan-modification programs in light of rising loan-modification re-default rates;
- Make permanent the current temporary conforming loan limits; and
- Continue to review and strengthen government efforts already underway to review and refine mortgage lending practices.
Housing Related Industries Account For More Than 20% Of The Gross Domestic Product (GDP)
The group feels that the economic recovery of our country is tied as much to housing as any other industry. According to Richard A. Smith, the Chairman of the Housing Working Group, ”housing-related industries account for more than 20 percent of the U.S. gross domestic product, the recovery of the residential housing market is vital to the recovery of the U.S. financial markets and the overall economy. Stimulating the housing market from a demand-side perspective is key to putting America back on the path to economic growth. Business and government must work together to find immediate and long-lasting solutions that address the challenges facing the U.S. economy.”
Fix Housing And You Will Fix The U.S. Economy
Ultimately, the group argues that economic recovery in the United States is not going to begin until the housing industry starts to recover. They feel like they have outlined a plan for that recovery to begin this year, but I’m curious what our readers think?
Is more government involvement going to help, or just compound the problem? Is this just “propping up” an economy that was based on housing valuations out of control? Please give voice to your opinions in the comments area below.
How To Find Homes For Sale With Seller Financing
How To Find Homes For Sale With Seller Financing
I was looking through a list of reader questions and found one that really stood out. This reader was wondering how to find homes for sale where the seller was offering some or all seller financing.
Seller financing is a topic about which many people could benefit from learning. Most real estate agents will never do a transaction involving seller financing, and most homebuyers would never even think about asking for this type of assistance. And finally, most home sellers would never even realize the benefit to themselves to offer some level of owner financing.
The purpose of this post is to explore the benefits of seller financing for both home buyers and home sellers.
Homes For Sale With Seller Financing
Often times, we hear the term “creative financing” being used in real estate, yet few people really understand what this really means. For the sake of simplicity, I refer to “creative financing” as anything that occurs in financing a home purchase that falls outside of just working with a lender’s standard loan product.
Seller financing (or owner financing) is one great creative financing technique. In a seller financed transaction, the current owner of the home will lend some or all (typically only some) of the money required for the purchase of the home to the buyer by using what is called a “purchase money mortgage.”
But it’s the seller’s home, why would he or she lend money to a buyer to buy it? There are quite a few answers that work here, but right now the best answer is because by offering to assist buyers in the purchase of their home, home sellers are making it available to more buyers. The more people who are willing and able to buy a home, the higher the value of that home will be.
How Home Buyers Can Benefit From Using Owner Financing When Buying A Home
Most people do not realize that even buyers with perfect, plentiful credit can benefit from seller financing when they purchase their next home. I try to counsel home buyers into understanding that the real estate transaction is much more than just “purchase price,” rather it is about the entire structure of the terms of the deal. Consider this question …
“Would you buy a $10M home if I could show you how to finance it for just $500 per month?” While I do not know what your answer is, but mine will always be “heck yeah!” I would love to live in a big castle for only $500 per month. Unfortunately, I do not know how to do that at this time, but it does demonstrate that price is only one element of the deal.
Owner financing, with some creative application, can help many people buy some or more home. The owner financed portion of the deal could be an amount equal to what is required by a mortgage lender for the down payment (for example, on a $250K sale, the owner could hold a $50K second mortgage while a mortgage bank does a new first mortgage for $200K).
With no down-payment needed, many more people can qualify to buy that home. Don’t forget, this year in Tallahassee, we are seeing a failure rate of homes on the market exceeding 80%! Every special skill or tool a home seller can implement might be the difference between selling their home or just being another statistic on the failed to sell list.
How Home Sellers Can Benefit From Offering Financing For The Buyer
Most home sellers never even consider offering seller financing to the prospective buyers of their home. This is a shame. It is too bad that their real estate professional did not spend whatever time required to get them to understand the importance of offering seller financing as one option for all prospective home buyers. All prospective home sellers should educate themselves on creative solutions for selling a home.
Different Types And Levels Of Seller Financing
One key piece of information about owner financing is that there are no rules or specifically defined specifications for what we call seller financing. Any method of thinking outside of the box when selling a home is an acceptable solution. Here are a few to stimulate your thinking:
- The seller holds a 2nd mortgage in an amount equal to 23% of the sales price (down payment plus closing costs).
- The seller requires no payments on the 2nd mortgage until a balloon date in the future (allowing the buyer to make payments on the portion of the home that he or she can afford).
- The seller holds a 2nd mortgage with an interest rate that brings the total mortgage payment to the level the buyer can afford.
How To Find Homes For Sale With Seller Financing
By now, I hope that you have considered that the best way to find homes for sale with seller financing is to “create them.” We already addressed the fact that most sellers do not understand the benefits of utilizing owner financing to sell their home. Because of this, we need a great real estate professional to present offers to home owners and explain to them why they should consider financing all or a portion of their home.
That’s right, every home on the market is a home for sale with seller financing, if you work with a great real estate agent. Rather than run out and talk to every home seller that advertises “Owner Financing,” first start with somebody who will work for your best interests and find you the single-best home to buy!
Wednesday, June 17, 2009
The Truth About The California 90-Day Foreclosure Moratorium
Taken From C.A.R. (California Assn. of Realtors) Legal Forum
Recent news headlines have caused confusion by mischaracterizing the new California Foreclosure Prevention Act as a “90-day moratorium” and incorrectly stating that the lender must modify delinquent loans before it begins foreclosure. In reality, the foreclosure process for certain owner-occupied residential first trust deeds has been extended by 90 days, effective June 15, but an exemption is available for lenders with comprehensive loan modification programs as defined by the Act.
90-DAY EXTENSION TO FORECLOSURE PROCESS
Q 83. What, in a nutshell, is the new law extending the foreclosure process by 90 days?
A Under the new California Foreclosure Prevention Act, lenders foreclosing on certain loans are prohibited from giving a notice of sale until the lapse of at least 3 months plus 90 days after the filing of the notice of default (see Question 88). A loan servicer can obtain an exemption from this requirement by demonstrating that it has a comprehensive loan modification program (see Questions 89 to 94).
Q 84. What is the purpose of this law?
A The purpose of this law is to try to stem the tide of foreclosures and their adverse consequences by providing additional time for lenders to work out loan modifications with borrowers as well as creating an incentive for lenders to establish comprehensive loan modification programs.
Q 85. When will this law be in effect?
A This bill, which was enacted into law on February 20, 2009 along with the state budget, will go into effect 90 days thereafter which will be on or about May 22, 2009. The appropriate commissioners must adopt regulations to carry out this law no more than 10 days after the date this law takes effect (Cal. Civil Code § 2923.53(d)). The law becomes operative 14 days after the issuance of such regulations (Cal. Civil Code § 2923.52(d)).
This law will stay in effect only until January 1, 2011 at which time it will be repealed, unless it is deleted or extended by statute (Cal. Civil Code § 2923.52(d)).
Q 86. How does this new law affect the foreclosure timeline?
A Under preexisting law, a lender who files a notice of default in the foreclosure process must wait at least 3 months before giving a notice of sale (Cal. Civil Code § 2924). The new law extends that 3-month period by an additional 90 days.
Also under preexisting law, the general rule of thumb is that the entire foreclosure process takes a minimum of 4 months from the filing of a notice of default until the final trustee’s sale. Under the new law, that general rule of thumb is extended by 90 more days for a total of about 7 months, unless the lender is exempt. For more information about the foreclosure process, C.A.R. offers a legal article entitled Foreclosure Timeline.
Q 87. Under the new law, is the minimum time frame from the filing of a notice of default to the notice of sale a total of 6 months or 180 days?
A Neither. The way the law is written, the minimum time frame from the filing of the notice of default to the notice of sale is technically “3 months plus 90 days.”
Q 88. What type of loan falls under the new law extending the foreclosure process by 90 days?
A Unless otherwise exempt, the 90-day extension to the foreclosure process applies to loans that meet all of the following requirements:
• The loan was recorded from January 1, 2003 to January 1, 2008, inclusive;
• The loan is secured by a first deed of trust for residential real property;
• The borrower occupied the property as a principal residence at the time the loan became delinquent; and
• A notice of default has been recorded on the property.
(Cal. Civil Code § 2923.52(a).)
Q 89. What are the exceptions to the new law extending the foreclosure process by 90 days?
A Most notably, a loan servicer is exempt from the 90-day extension to the foreclosure process if the loan servicer has obtained an order of exemption based on the implementation of a comprehensive loan modification program (Cal. Civil Code § 2923.53(a)) (see Questions 89 to 94). The order of exemption must be current and valid at the time the notice of sale is given (Cal. Civil Code § 2923.52(b)).
Other exceptions to the 90-day extension include the following:
• Certain state or local public housing agency loans (Cal. Civil Code § 2923.52(c)).
• When a borrower has surrendered the property as evidenced by a letter confirming the surrender or delivery of the keys to the property to the lender or authorized agent (Cal. Civil Code § 2923.55(a)).
• When a borrower has contracted with any person or entity whose primary business is advising people who have decided to leave their homes on how to extend the foreclosure process and avoid their contractual obligations to the lenders (Cal. Civil Code § 2923.55(b)).
• When a borrower has filed a bankruptcy case and the court has not entered an order closing or dismissing the case or granting relief from a stay of foreclosure (Cal. Civil Code § 2923.55(c)).
Q 90. What constitutes a comprehensive loan modification program?
A A comprehensive loan modification program that may exempt the loan servicer from the 90-day extension to the foreclosure process includes all of the following features:
• The loan modification program is intended to keep borrowers whose principal residences are located in California in those homes when the anticipated recovery under loan modification exceeds the anticipated recovery through foreclosure on a net present value basis (Cal. Civil Code § 2923.53(a)).
• It targets a 38 percent or less ratio of the borrower’s housing-related debt to the borrower’s gross income (Cal. Civil Code § 2923.53(a)). Housing-related debt is debt that includes loan principal, interest, property taxes, hazard insurance, flood insurance, mortgage insurance and homeowner association fees (Cal. Civil Code § 2923.53(k)(2)).
• It includes some combination of loan modifications terms as specified (Cal. Civil Code § 2923.53(a)) (see Question 91).
• The loan servicer seeks long-term sustainability for the borrower (Cal. Civil Code § 2923.53(a)).
Q 91. What are the loan modification terms that must be included in a comprehensive loan modification program?
A A comprehensive loan modification program that may qualify for exemption from the new law extending the foreclosure process by 90 days must include some combination of the following features:
• An interest rate reduction, as needed, for a fixed term of at least five years;
• An extension of the amortization period for the loan term to no more than 40 years from the original date of the loan;
• Deferral of some portion of the unpaid principal balance until loan maturity;
• Principal reduction;
• Compliance with a federally mandated loan modification program; or
• Other factors that the appropriate commissioner determines.
(Cal. Civil Code § 2923.53(a)(3).) See also Question 92.
Q 92. Does a loan servicer have to modify loans to get an exemption from the 90 day extension to the foreclosure process?
A No. A loan servicer is not required to modify a loan for a borrower who is not willing or able to pay under the modification. Furthermore, a loan servicer is not required to violate any contractor agreement for investor-owned loans. (Cal. Civil Code § 2923.53(i).)
Q 93. How does a loan servicer obtain an order of exemption from the new law extending the foreclosure process by 90 days?
A A loan servicer may apply to the appropriate commissioner (see Question 94) for an order exempting loans that it services from the new law extending the foreclosure process by 90 days (Cal. Civil Code § 2923.53(b)(1)). Upon receipt of an initial application for exemption, the commissioner must issue a temporary order exempting the mortgage loan servicer from the 90-day extension to the foreclosure process (Cal. Civil Code § 2923.53(b)(2)). Within 30 days of receipt of the application, the commissioner must make a final determination by issuing a final order exempting the loan servicer or denying the application (Cal. Civil Code § 2923.53(b)(3)). If the application is denied, the temporary order of exemption shall expire 30 days after the date of denial (Cal. Civil Code § 2923.53(b)(1)).
Q 94. To which commissioner does a loan servicer apply for exemption?
A A lender or loan servicer would apply for an exemption to the following commissioner as appropriate:
• Commissioner of the Department of Financial Institutions for commercial and industrial banks, savings associations, and credit unions organized in California to service mortgage loans;
• Commissioner of the Department of Real Estate for licensed real estate brokers servicing mortgage loans; and
• Commissioner of the Department of Corporations for licensed residential mortgage lenders and servicers, licensed finance lenders and brokers, and any other entities servicing mortgage loans not regulated by the Department of Financial Institutions or Department of Real Estate.
(Cal. Civil Code § 2923.53(k)(1).)
Q 95. How does a homeowner ascertain whether his or her loan servicer is exempt from the 90-day extension to the foreclosure process?
A The Secretary of Business, Transportation and Housing must maintain a publicly-available Internet website disclosing the final orders granting exemptions, the date of each order, and a link to Internet websites describing the loan modification programs (Cal. Civil Code § 2923.52(f)) (see also Question 96).
Q 96. Does a loan servicer have to inform the borrower as to whether the loan servicer is exempt from the longer foreclosure timeframe?
A Yes. A notice of sale must include a declaration from the loan servicer stating both of the following:
• Whether the loan servicer has obtained a final or temporary order of exemption from the 90-day extension to the foreclosure process that is current and valid on the date the notice of sale is filed; and
• Whether the 90-day extension to the foreclosure process under the new law does not apply.
The law requires the loan servicer’s declaration of exemption on the notice of sale, even though it may have been more helpful for the borrower if the declaration was on the notice of default. This requirement will stay in effect only until January 1, 2011 at which time it will be repealed, unless it is deleted or extended by statute. (Cal. Civil Code § 2923.54.)
Q 97. What is the penalty for violating this law?
A Anyone who violates this law shall be deemed to have violated his or her license law as it relates to these provisions (Cal. Civil Code § 2923.53(h)).
Q 98. Where do I find this law?
A This law is set forth at sections 2923.52 to 2923.55 of the California Civil Code. The full text of this law is available at the California Legislative Counsel website at www.leginfo.ca.gov.
Friday, June 12, 2009
Sunday, June 7, 2009
Corona Del Mar- Just Listed Bank Owned Property
Aggressively priced single story home in lovely Cameo Highlands. Some remodeling newer master bath w/tasteful granite and marble accents. Distressed hardwood flooring. Quiet location on lightly traveled street. Large, private front yard. Private access to beach below. Needs some sprucing-up but a real bargain! Most of the homes in the area sell for high million dollar to two million dollar range.Offered at $1,568,000
CALL 949.307.5944 For More Info
Saturday, June 6, 2009
The O.C. Coastal Market Is Not Immune To Foreclosures
Bank Owned Homes for Sale in Laguna Beach
Even the coast has been hit with distressed properties this year. Since January, twelve Bank-Owned homes have sold in Laguna Beach. Listed below are the two remaining active foreclosures.
1) Great panoramic
views of the Ocean, canyon & hills views. 2 bedrooms & 2 baths, large living room with fireplace & great views, step down dining area & kitchen at main level & large area-added/unfinished 3rd bedroom, bathroom, steam room & large walk in closet at lower level addition can be completed at buyers choice/discretion, great potential for Laguna Beach with ocean views!!!
2)
This is a sign of the times. There are sure to be more Bank Owned homes in the high end, coastal real estate market to enter the game. This will undoubtedly put pressure on prices, and hopefully stimulate the sales cycle. Of the 77 homes sold in Laguna Beach this year, 12 were Bank-Owned.
For information on these or other market conditions, or to receive a Personalized Market Blueprint, please don't hesitate to call me at 949.307.5944
Friday, June 5, 2009
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About Me
- Mark Gundlach (This Week In Real Estate)
- South Orange County, CA, United States
- Mark Gundlach has been a resident of South Orange County since 1986. For Mark, giving back to the community is a high priority. As a member of the Newport Beach Junior Chamber organization, Mark participates and raises money for charities such as the American Cancer Society and Rebuilding Together. Gundlach comes to HÔM Real Estate Group with a strong background in client service. Typically his clients are new to the market and have not worked with a real estate professional before, or those that may have had a challenging experience in the past. Mark provides his clients with a personalized blueprint of the real estate market, and details how they can benefit. Adapting to the changing market, Mark has extensive training in Short-Sale negotiations and has successfully assisted many clients in these specialized sales. Mark would love the opportunity to meet you and assist you in any way he can. If you or someone you know is in need of real estate services, contact him first. Conversely, if you think Mark could be a referral source for you, let him know how he can help you grow your business.