The LA Times posted a great article highlighting how many homeowners facing foreclosure are being taken advantage of. The California Association of Realtors has been warning consumers for some time now against those companies that charge upfront fees to modify a loan. That is a DRE (Dept. of Real Estate) violation. Many companies get around it by connecting with a law firm and they call it something similar to a "retainer" fee, just like if you were going to hire a lawyer to handle any other legal matter. The fact of the matter is, this brings the dark cloud back to the Real Estate industry. It seems that there is never a shortage of the "fast-buck" scam artists when there are desperate people just looking for help. I am happy to read in this article that the autorities are cracking down on these scams, but the distressed homeowners are now left with very little options.
http://www.latimes.com/business/la-fi-foreclosure-scams16-2009jul16,0,1422452.story
Showing posts with label buy. Show all posts
Showing posts with label buy. Show all posts
Friday, July 17, 2009
Friday, June 5, 2009
Monday, January 26, 2009
Investing in Foreclosures
Prior to the auction
This first opportunity is called pre-foreclosure. When a property is in pre-foreclosure, the owner still has a chance to stop the foreclosure process by paying off what is owed or by selling the property. Lenders are required to advertise foreclosures in the legal newspaper for four consecutive weeks prior to selling the property at auction. During that time, the real estate investor can seek to purchase the property, either by paying cash for it, or by attempting to purchase the home contingent upon his ability to reinstate the foreclosing loan and taking title “subject-to” the existing loan.
Buying a pre-foreclosure can be a method to purchase a property with little or no money down and no credit especially if you are able to purchase the property “subject-to” the existing loan. Investors get the equity in the property in exchange for helping the property owners avoid foreclosure. The downside of purchasing a pre-foreclosure is that most homeowners are in denial, and it may be difficult to deal with them.
Purchases made during pre-foreclosure are considered “regular” sales in the sense that there will be a written purchase contract, your attorney will search title and offer you title insurance, and there will be a normal closing at your attorney’s office just as in any other home purchase.
RealQuest is one of the few sites that allow you to search for properties that are in pre-foreclosure. By you being find these opportunities faster than other real estate investors, you have the upper hand in the game. A subscription to RealQuest also delivers you the owner’s name and contact information, making it that much easier to proverbially “get your foot in the door” and make your offer to the existing owner.
At the auction
The second opportunity is in purchasing the property at the courthouse steps during the public auction. If nothing has been done to cure the event of default which led to the original foreclosure notice, the lender will, through the foreclosing attorney, conduct an auction on the courthouse steps. The property will be sold for cash. Only bank money orders will be accepted, and you must bring the funds with you. The bidding opens with a bid on behalf of the lender in the amount of the indebtedness plus all late payments plus attorney fees. Bidding continues until the highest bidder wins. Typically, all junior liens on the property are wiped out at the auction.
Purchasing a property at the courthouse steps lets you avoid having to deal with a property owner in denial. The downside is that you are most likely purchasing a property unaware of the interior condition of the property. RealQuest allows you to search the properties that are going to auction, so hopefully you can do some investigative work prior to the actual courthouse step auction date.
Lastly, this is not considered a “regular” sale because there is no contact and typically no title search is performed.
After the auction
This final opportunity is called REO. If, after the opening bid from the lender, there are no additional bids, then the ownership of the property is transferred to the lender, and the lender will typically try to sell the property as quickly as possible. Lenders will list these houses with real estate agents who will place them in the multiple listing services or they will hire auction houses to conduct another public auction. Lenders consider these REO properties to be “non-performing assets,” and want them off their books quickly; especially if they believe they have more coming in behind them. Often they will sell for substantially less than the loan amount, especially if the property is in poor condition or the lender has a large inventory of such property. Prior to the purchase the investor will be able to inspect the property.
This is a “regular” sale in the sense that there will be a contract, title search, and a standard closing in an attorney’s office.
There are multiple opportunities to purchase foreclosures and they can be purchased at these three distinct phases of the foreclosure process.
By | Jennifer Minge
This first opportunity is called pre-foreclosure. When a property is in pre-foreclosure, the owner still has a chance to stop the foreclosure process by paying off what is owed or by selling the property. Lenders are required to advertise foreclosures in the legal newspaper for four consecutive weeks prior to selling the property at auction. During that time, the real estate investor can seek to purchase the property, either by paying cash for it, or by attempting to purchase the home contingent upon his ability to reinstate the foreclosing loan and taking title “subject-to” the existing loan.
Buying a pre-foreclosure can be a method to purchase a property with little or no money down and no credit especially if you are able to purchase the property “subject-to” the existing loan. Investors get the equity in the property in exchange for helping the property owners avoid foreclosure. The downside of purchasing a pre-foreclosure is that most homeowners are in denial, and it may be difficult to deal with them.
Purchases made during pre-foreclosure are considered “regular” sales in the sense that there will be a written purchase contract, your attorney will search title and offer you title insurance, and there will be a normal closing at your attorney’s office just as in any other home purchase.
RealQuest is one of the few sites that allow you to search for properties that are in pre-foreclosure. By you being find these opportunities faster than other real estate investors, you have the upper hand in the game. A subscription to RealQuest also delivers you the owner’s name and contact information, making it that much easier to proverbially “get your foot in the door” and make your offer to the existing owner.
At the auction
The second opportunity is in purchasing the property at the courthouse steps during the public auction. If nothing has been done to cure the event of default which led to the original foreclosure notice, the lender will, through the foreclosing attorney, conduct an auction on the courthouse steps. The property will be sold for cash. Only bank money orders will be accepted, and you must bring the funds with you. The bidding opens with a bid on behalf of the lender in the amount of the indebtedness plus all late payments plus attorney fees. Bidding continues until the highest bidder wins. Typically, all junior liens on the property are wiped out at the auction.
Purchasing a property at the courthouse steps lets you avoid having to deal with a property owner in denial. The downside is that you are most likely purchasing a property unaware of the interior condition of the property. RealQuest allows you to search the properties that are going to auction, so hopefully you can do some investigative work prior to the actual courthouse step auction date.
Lastly, this is not considered a “regular” sale because there is no contact and typically no title search is performed.
After the auction
This final opportunity is called REO. If, after the opening bid from the lender, there are no additional bids, then the ownership of the property is transferred to the lender, and the lender will typically try to sell the property as quickly as possible. Lenders will list these houses with real estate agents who will place them in the multiple listing services or they will hire auction houses to conduct another public auction. Lenders consider these REO properties to be “non-performing assets,” and want them off their books quickly; especially if they believe they have more coming in behind them. Often they will sell for substantially less than the loan amount, especially if the property is in poor condition or the lender has a large inventory of such property. Prior to the purchase the investor will be able to inspect the property.
This is a “regular” sale in the sense that there will be a contract, title search, and a standard closing in an attorney’s office.
There are multiple opportunities to purchase foreclosures and they can be purchased at these three distinct phases of the foreclosure process.
By | Jennifer Minge
Wednesday, March 19, 2008
Why Now Is a Smart Time to Buy
Considering all of the negative press the housing market received in late 2007, it's more important than ever for buyers to separate fact from fiction when deciding on a time to buy a home. This report is intended to help home buyers assess the facts of the real estate market objectively.
About Inventory
FACT: The housing market is undergoing a natural cyclical correction. It's impossible to ignore the ongoing news surrounding the downturn of the housing cycle. The recent "housing boom," which lasted from 2001 to 2005, was caused by low interest rates and a rapid increase in property valuations, resulting in high numbers of renters opting to buy. Three factors caused this decade's housing boom to spiral upward:
1) A run-up in home-price valuations that spurred a high sense of urgency in home buying and selling.
2) Poor lending practices, which caused many home buyers to secure loans that they ultimately couldn't afford over the long term.
3) Speculative purchases of homes also increased, with buyers investing in real estate with the hope of a quick return on investment.
Like the dot-com bust, the housing market has begun to correct itself after a number of years of unwise purchasing, but unlike what the media would have us believe, a correction in the housing market doesn't equate to a crash. Unfortunately, the ongoing negative news about the troubled areas in the U.S. has caused a ripple effect, with home buyers and sellers on a national level exercising caution before making a decision. This has caused an overall slowdown in the marketplace.
The National Association of Realtors' chief economist, Lawrence Yun, projects that nationally, the "median existing-home price will drop about 1.7% this year. This is a small, minor adjustment after a strong run-up in housing prices."
True, the number of homes sold in 2007 will have dropped from the year before, but 2007 is still among the highest years on record, with numbers of sales for both 2007 and 2008 projected to be even higher than the levels seen in 2002.
However, with homes taking longer to sell, the number of homes on the market has grown. In markets like California and Arizona where homes are taking much longer to sell than the 11-month national average, this has caused a glut in the marketplace.
In the Pacific Northwest, where the inventory of homes on the market ranges from seven to 10.5 months as of November 2007, this equates to good news for buyers who have more homes at more price ranges from which to choose.
About Mortgages
FACT: Low mortgage rates give buyers more house for their dollar.
With the 30-year fixed rate hovering between 6-7%-a 45-year low-qualified buyers continue to have access to incredibly low interest rates. This means that although housing prices have risen, monthly mortgage payments remain reasonable for those who look at real estate as a long-term investment. For example, today if a buyer secured a 6.5% interest rate on a 30-year fixed loan for a $300,000 home (with no money down), the monthly mortgage payment would be $1,896.20. In 1991, the same monthly mortgage payment would have bought a house worth only $230,492 when mortgage rates were 9.25%. In 1982, when the 30-year fixed rate was 14.6%, the same payment would have bought a house worth only $151,657.
FACT: Heavy speculation and overbuilding result in an increase in foreclosures when prices go down.
The media has been focusing on the hardest-hit areas of the country that have seen a dramatic downturn in the market: California, Nevada, Florida and Arizona. Over the past five years, these markets have experienced an abundance of new housing, a rise in investment properties and a rise in prices that was high above the national average.
Now that home prices are starting to drop and stabilize, the areas that went through a building frenzy and experienced the largest price increases are suffering a heavy devaluation in home prices, which in turn has caused homeowners to foreclose on loans.
Those suffering the most in California, Nevada and Florida are far above the national average of foreclosure with one out of every 325, 152 and 282 homes in foreclosure, respectively. Washington, Oregon and Idaho are well below the national average of one in every 617 homes in foreclosures because fewer home buyers in the Pacific Northwest opted for subprime mortgages and because home values have continued to steadily appreciate.
Washington has seen one in 1,072 homes in foreclosure, and Oregon and Idaho have one in 1,275 and 893, respectively.
FACT: Subprime borrowers get a reality check.
Then there are the problems that are affecting subprime borrowers: those who are considered at a higher mortgage risk due to a past history of bankruptcy, delinquent loan payments and low credit scores. During the last number of years, some home buyers in the U.S. qualified only for these riskier subprime loans to fund the American dream.
But, again, unlike the media's portrayal, the reality is that subprime loans comprise only 9% of total loans nationwide and of those 9%, less than 11% of those subprime ARM and fixed borrowers have defaulted on their loans. The Pacific Northwest stands apart as its own micro-market, with more home buyers qualifying for prime loans. Homeowners in the Northwest have been able to successfully sell their homes for a profit or refinance to pay off their subprime loans.
Real Estate Cycles and Economics
FACT: Over the long-term, real estate has always appreciated in value.
The continuing appreciation of homes in the Northwest is not an anomaly. Real estate has always been one of the most solid investments in the U.S, because, after all, people always need a place to live. Real estate has less volatility than the stock market and over the historical long-term it remains a guaranteed return-on-investment. Take this example from NAR's Yun: If a buyer were to put down $10,000 for a down payment on a "typically priced home in the United States at a typical appreciation rate of 5%...(he/she) would see a return of $110,300 after 10 years. The same $10,000 invested in the stock market appreciating 10% annually will result in $23,600."
As history has shown, for those who choose to keep their home for six to 10 years (and not flip for a quick profit) real estate investments do pay off, and pay off well. In fact, what we're seeing now is a repeat of a housing cycle we've seen before. In the early 1980s and 1990s, some areas of the country experienced the worst downturn they had seen in the last 25 years, which were caused by localized economic weaknesses and loss of jobs while on a nationwide average, others, including the Pacific Northwest were barely affected at all. But even those areas that were hit the hardest in the past experienced a historic uptick in prices, and then a continuing long-term appreciation.
About Inventory
FACT: The housing market is undergoing a natural cyclical correction. It's impossible to ignore the ongoing news surrounding the downturn of the housing cycle. The recent "housing boom," which lasted from 2001 to 2005, was caused by low interest rates and a rapid increase in property valuations, resulting in high numbers of renters opting to buy. Three factors caused this decade's housing boom to spiral upward:
1) A run-up in home-price valuations that spurred a high sense of urgency in home buying and selling.
2) Poor lending practices, which caused many home buyers to secure loans that they ultimately couldn't afford over the long term.
3) Speculative purchases of homes also increased, with buyers investing in real estate with the hope of a quick return on investment.
Like the dot-com bust, the housing market has begun to correct itself after a number of years of unwise purchasing, but unlike what the media would have us believe, a correction in the housing market doesn't equate to a crash. Unfortunately, the ongoing negative news about the troubled areas in the U.S. has caused a ripple effect, with home buyers and sellers on a national level exercising caution before making a decision. This has caused an overall slowdown in the marketplace.
The National Association of Realtors' chief economist, Lawrence Yun, projects that nationally, the "median existing-home price will drop about 1.7% this year. This is a small, minor adjustment after a strong run-up in housing prices."
True, the number of homes sold in 2007 will have dropped from the year before, but 2007 is still among the highest years on record, with numbers of sales for both 2007 and 2008 projected to be even higher than the levels seen in 2002.
However, with homes taking longer to sell, the number of homes on the market has grown. In markets like California and Arizona where homes are taking much longer to sell than the 11-month national average, this has caused a glut in the marketplace.
In the Pacific Northwest, where the inventory of homes on the market ranges from seven to 10.5 months as of November 2007, this equates to good news for buyers who have more homes at more price ranges from which to choose.
About Mortgages
FACT: Low mortgage rates give buyers more house for their dollar.
With the 30-year fixed rate hovering between 6-7%-a 45-year low-qualified buyers continue to have access to incredibly low interest rates. This means that although housing prices have risen, monthly mortgage payments remain reasonable for those who look at real estate as a long-term investment. For example, today if a buyer secured a 6.5% interest rate on a 30-year fixed loan for a $300,000 home (with no money down), the monthly mortgage payment would be $1,896.20. In 1991, the same monthly mortgage payment would have bought a house worth only $230,492 when mortgage rates were 9.25%. In 1982, when the 30-year fixed rate was 14.6%, the same payment would have bought a house worth only $151,657.
FACT: Heavy speculation and overbuilding result in an increase in foreclosures when prices go down.
The media has been focusing on the hardest-hit areas of the country that have seen a dramatic downturn in the market: California, Nevada, Florida and Arizona. Over the past five years, these markets have experienced an abundance of new housing, a rise in investment properties and a rise in prices that was high above the national average.
Now that home prices are starting to drop and stabilize, the areas that went through a building frenzy and experienced the largest price increases are suffering a heavy devaluation in home prices, which in turn has caused homeowners to foreclose on loans.
Those suffering the most in California, Nevada and Florida are far above the national average of foreclosure with one out of every 325, 152 and 282 homes in foreclosure, respectively. Washington, Oregon and Idaho are well below the national average of one in every 617 homes in foreclosures because fewer home buyers in the Pacific Northwest opted for subprime mortgages and because home values have continued to steadily appreciate.
Washington has seen one in 1,072 homes in foreclosure, and Oregon and Idaho have one in 1,275 and 893, respectively.
FACT: Subprime borrowers get a reality check.
Then there are the problems that are affecting subprime borrowers: those who are considered at a higher mortgage risk due to a past history of bankruptcy, delinquent loan payments and low credit scores. During the last number of years, some home buyers in the U.S. qualified only for these riskier subprime loans to fund the American dream.
But, again, unlike the media's portrayal, the reality is that subprime loans comprise only 9% of total loans nationwide and of those 9%, less than 11% of those subprime ARM and fixed borrowers have defaulted on their loans. The Pacific Northwest stands apart as its own micro-market, with more home buyers qualifying for prime loans. Homeowners in the Northwest have been able to successfully sell their homes for a profit or refinance to pay off their subprime loans.
Real Estate Cycles and Economics
FACT: Over the long-term, real estate has always appreciated in value.
The continuing appreciation of homes in the Northwest is not an anomaly. Real estate has always been one of the most solid investments in the U.S, because, after all, people always need a place to live. Real estate has less volatility than the stock market and over the historical long-term it remains a guaranteed return-on-investment. Take this example from NAR's Yun: If a buyer were to put down $10,000 for a down payment on a "typically priced home in the United States at a typical appreciation rate of 5%...(he/she) would see a return of $110,300 after 10 years. The same $10,000 invested in the stock market appreciating 10% annually will result in $23,600."
As history has shown, for those who choose to keep their home for six to 10 years (and not flip for a quick profit) real estate investments do pay off, and pay off well. In fact, what we're seeing now is a repeat of a housing cycle we've seen before. In the early 1980s and 1990s, some areas of the country experienced the worst downturn they had seen in the last 25 years, which were caused by localized economic weaknesses and loss of jobs while on a nationwide average, others, including the Pacific Northwest were barely affected at all. But even those areas that were hit the hardest in the past experienced a historic uptick in prices, and then a continuing long-term appreciation.
Thursday, March 13, 2008
Impact of FHA Loan Limits
National Association of Realtors® Calculates Impact of Increasing FHA Loan Limits
Increasing FHA loan limits will help an additional 138,000 Americans achieve the dream of homeownership and will allow nearly 200,000 homeowners to refinance and potentially keep their home, according to NAR research.
An economic impact study conducted by NAR earlier this month estimated that increasing the conforming loan limits for Fannie Mae and Freddie Mac would result in as many as 500,000 refinanced loans and could help reduce foreclosures by as much as 210,000.
Additionally, over 300,000 additional home sales could be generated, housing inventory would be reduced and home prices would be strengthened by 2 to 3 percentage points.
-- “NAR Hails Passage of Economic Stimulus Package to Help Jumpstart Housing Market,” Realtor.org, Feb. 8, 2008.
Increasing FHA loan limits will help an additional 138,000 Americans achieve the dream of homeownership and will allow nearly 200,000 homeowners to refinance and potentially keep their home, according to NAR research.
An economic impact study conducted by NAR earlier this month estimated that increasing the conforming loan limits for Fannie Mae and Freddie Mac would result in as many as 500,000 refinanced loans and could help reduce foreclosures by as much as 210,000.
Additionally, over 300,000 additional home sales could be generated, housing inventory would be reduced and home prices would be strengthened by 2 to 3 percentage points.
-- “NAR Hails Passage of Economic Stimulus Package to Help Jumpstart Housing Market,” Realtor.org, Feb. 8, 2008.
Wednesday, March 12, 2008
"How is the Orange County Market?"
That is the standard question I am often asked when I meet someone new or when I talk to a friend, client, or past client. The truth is... Homes Are Selling!
I know that is a crazy concept to most of you due to the constant bashing we hear and read in the local media. Quite honestly, this couldn't be a better time to make a move. Whether you are a first-time buyer or an equity seller, you can not go wrong in this market. Give me a call and I'll break that thought down for you.
Call our market whatever you want (adjusting, bursting, correcting, etc.), blame it on whomever you feel must take responsibility (predetory lending, subprime meltdown, economic recession, etc). The fact remains that there is a reality to face here.
If you're looking for someone that tracks the local market, has the facts in black and white, and can provide a real-time blueprint of the market conditions and how you can benefit from it, call the ProMark Team of Coldwell Banker.
Dont forget to visit www.promarkteam.com
Mark Gundlach, Real Estate Consultant
949-768-2329/714-654-3750
promarkteam@gmail.com
I know that is a crazy concept to most of you due to the constant bashing we hear and read in the local media. Quite honestly, this couldn't be a better time to make a move. Whether you are a first-time buyer or an equity seller, you can not go wrong in this market. Give me a call and I'll break that thought down for you.
Call our market whatever you want (adjusting, bursting, correcting, etc.), blame it on whomever you feel must take responsibility (predetory lending, subprime meltdown, economic recession, etc). The fact remains that there is a reality to face here.
If you're looking for someone that tracks the local market, has the facts in black and white, and can provide a real-time blueprint of the market conditions and how you can benefit from it, call the ProMark Team of Coldwell Banker.
Dont forget to visit www.promarkteam.com
Mark Gundlach, Real Estate Consultant
949-768-2329/714-654-3750
promarkteam@gmail.com
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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.