For more information, and to see more videos, go to http://411RealEstateTV.com. To learn more about how to avoid foreclosure, or to contact a pre-foreclosure specialist, please visit http://411NOD.com or call us at 661-290-3765.

For more information, and to see more videos, go to http://411RealEstateTV.com. To learn more about how to avoid foreclosure, or to contact a pre-foreclosure specialist, please visit http://411NOD.com or call us at 661-290-3765.

What Happened?
Many experts draw the same conclusion that 2007 was the year that changed the housing market from an exponentially positive market to what some consider a total market crash. The finance industry’s  manipulation of Asset-Backed Securities (ABS), Collateralized Debt Obligations (CDO),  and subprime mortgages were all fueled by historically low interest rates. Many homeowners and home buyers took advantage of the ever increasing market to purchase or refinance to cash-out equity in their homes without taking into account what might happen should the market shift in a negative direction. When median home sales (along with home prices)  began to stall in the middle of 2006, interest rates hiccupped, causing a domino effect. Many of the easy-to-underwrite loans had already been done, and the first of the subprime adjustable rate mortgages were about to reset.  Investors were increasingly shaky about putting their money into CDOs and other packaged mortgage securities, resulting in a credit crunch for both consumers and mortgage companies alike. many  mortgage lenders, having run out of secondary markets or investment banks to sell their loans to, were cut off from what had become a main funding source and were forced to shut down operations. Simultaneously, homeowners whose ARMs had reset were increasingly defaulting on their mortgages. This negative synergistic effect caused ripples across the entire nation’s economy, resulting in record numbers of mortgage defaults and foreclosures that still continue.

Despite goverment intervention with TARP (Troubled Asset Relief Program) in 2008 and the Federal Stimulus Package signed in 2009 which, along with the Homeowner Recovery Act was to help stabilize the economy and help stem the foreclosure market, homes are still being taken by the banks at record numbers. Banks and lending institutions, overwhelmed by foreclosures and requests for loan modifications scrambled to put programs into place to accommodate both. Recently, a GMAC loan officer named Jeffrey Stephan gave a deposition where he admitted to signing off on up to 10,000 foreclosure documents a month without reviewing them (known as ‘robo-signing’). This led to questions regarding the foreclosure practices of many lending institutions, especially in judicial states (IE: States that require a court-ordered foreclosure before the bank can begin proceedings).

How will this impact the real estate community?
A foreclosure freeze will impact banks and lending institutions in that they will not be able to clear their books of bad loans. That being said, their revenues will drop, negatively affecting their bottom line, which might be a detraction to potential investors. Potentially we could face a resurging credit crunch which will affect consumers and home buyers.

Professional predictions state that if this indeed becomes a crisis that it will be temporary, allowing for banks to reorganize their foreclosure review methods to insure proper discharge of distressed inventory, and compelling them to insure recourse in their actions. In the meantime however, the real estate community may be in a for a few bumps in the road.

How does this affect the homeowner?
Homeowners who pay their mortgage on time, have equity in their property, and are not facing financial hardships most likely won’t be affected. Distressed homeowners may find their foreclosure proceedings delayed, but inevitably the banks will prevail and continue with foreclosures. It is important to note that only a few lenders such as Bank of America have frozen foreclosures, and others such as Wells Fargo are not extending short sale periods. If you are behind on your payments or may be facing foreclosure, you will still need to find a solution. If you are upside down on your mortgage and cannot make your payments, a foreclosure freeze will not make your problems go away.

If you or someone you know are behind in your mortgage payments or may be facing foreclosure, we can help answer your questions and provide solutions discreetly and professionally. Please contact us by clicking here, or call us at 661-290-3765 for a free consultation. Or visit us online at http://411nod.com.

The U.S. Senate Banking Committee announced it will begin hearings on November 16th regarding allegations of improper and fraudulent mortgage servicing and foreclosure processing.

Bank of America will still track late payments and pursue deliquent accounts during the suspension, but will stop short of foreclosure until further notice.

Ally Financial’s GMAC Mortgage and JPMorgan Chase and Co also said last week they were suspending foreclosures in the 23 states requiring judicial foreclosure proceedings.

Wells Fargo will not implement any foreclosure suspension as they state they are “confident” in their foreclosure paperwork. Wells Fargo recently implemented a policy of not allowing extensions on short sale transactions.

What does this really mean to the distressed homeowner?

By no means does this mean that a homeowner is relieved of his or her obligations to their mortgage under the law. Nor does it mean that a homeowner will avoid foreclosure if they are delinquent in their mortgage payments. Bank of America mortgagees will still be pursued by other legal means short of foreclosure until the ban is lifted. If you or someone you know are behind in their mortgage or are facing foreclosure, it is important you contact us for a free, discreet and compassionate pre-foreclosure consultation so that you understand your rights as a homeowner as well as provide you with alternative avenues to avoid foreclosure.

For more information, please click here to contact us or call 661-290-3765. We’re here to help!

What does this mean to the distressed homeowner?

Prior to this law being enacted, lenders could file for a deficiency judgment against homeowners who sold their home via a short sale transaction. This means that when a homeowner sold his or her home for less than the loan value, the lender could attempt to collect the remaining balance from the homeowner after the sale, otherwise known as a deficiency judgment.

SB 931 prevents lenders from pursuing deficiency judgments on all first mortgages. For distressed homeowners facing foreclosure this is good news as they may now short sell their home to avoid foreclosure without worrying about owing thier bank the difference on their first mortgage, even if the seller has refinanced or leveraged their equity.

The law will take effect on January 1, 2011 and will affect any short sale transactions that close after that date.

If you or someone you know may be facing foreclosure, please contact us to find out how you can avoid a bank foreclosure through a short sale.  Click here for details.

Here are some facts: Unfortunately only about 9% of all loan modifications applicants are approved for a modification on their existing mortgage. Also a loan modification can take as little as 45 days, and yet we hear all the time of homeowners waiting months, and in some cases, over a year for an answer from their lender as to whether they qualify for a loan modification or not. The government’s Making Home Affordable program requires lenders to reduce your loan payment to 31% of your gross income, but the loan still has to qualify under Fair Market Value (FMV), and if your modified loan payment based on the new Fair Market appraisal of your property is higher than 31% of your gross income, you will not qualify under the Federal program.

In the long run, there really is no great incentive for your lender to modify your loan if:

A) You are able to qualify for a loan refinance
B) The value of your loan far exceeds the value of your property
C) You cannot qualify for a modified loan based on your income

Many of our clients have told us that while awaiting word on their loan modification, the lender filed a Notice of Default on their property. Some have claimed that while their lender did not specifically tell them to skip mortgage payments, they were urged to consider the fact that the lender’s loan modification division won’t look at loan modification packages unless the homeowner was behind on their mortgage.

So what happens? The homeowner is urged by their lender to file a loan modification package. The homeowner complies, and waits…and waits…and waits. The homeowner gets further and further behind on their mortgage, and in between repeated requests from the lender to send ‘updated paperwork’, the lender files a Notice of Default and begins foreclosure proceedings on the homeowner’s residence. These aren’t contrived scenarios, these are stories actually told to us by some of our clients.

So, knowing that you have a less than 1 in 10 chance of obtaining a modification on your current mortgage; and knowing that you may be facing foreclosure, what do you do? By the way, if you let your home go to foreclosure you will not be able to qualify for a fixed rate loan from Fannie Mae or Freddie Mac for seven years.

Many of the foreclosure avoidance options offered by your lender are not that enticing. A repayment option doesn’t solve any of your problems if you are unable to pay your current mortgage, and many lenders require a large sum up front before they will work with you on a short-term repayment plan. Either way, you are back to square one and, unless your financial situation has greatly improved, you will soon face foreclosure again.
Filing for bankruptcy can forestall a foreclosure through what’s called an ‘automatic stay.’ During the bankrupcty filing process the lender is forbidden to attempt to collect on your loan until the bankruptcy is discharged. However, the lender may file for a removal of the automatic stay before your discharge.
A Deed-in-Lieu of Foreclosure is better than having your home go to auction, but you must still qualify and that means usually putting your home up for sale to show the lender that you have made an effort to repay the loan by selling your property.

So, your best option, if you are behind on your mortgage, cannot qualify for a loan modification, and you are facing foreclosure, is to short sell your property…period!

We understand that homeowners can have emotional ties to their property, but consider this: Aside from purchasing your home as part of the American dream; aside from purchasing your home as a place to put down roots; you purchased your home as an investment, right? That being said, if you lost money in any other investment to the point where it caused you great stress and hardship, wouldn’t you strongly consider getting out from under that investment before it did you in completely? There are other homes to be had, and there are better times ahead. Now is the time to think for yourself and your family to make the best decision to make things better now; and if you cannot continue to make your mortgage payments, or your mortgage payments on your upside-down loan are so large that it is eating away at your financial stability, it is time to let go. It is time to look at the larger picture and understand that home values are not going to instantly rise in the short term to the point where you will recover your equity loss. If you are holding on and can make your mortgage payments long term that’s one thing, but to put yourself and your family in the position of overwhelming hardship just because of an emotional tie to your home doesn’t make good financial sense. If you are facing foreclosure, remember: It will be SEVEN YEARS before you will be able to purchase a home again. But with a short sale? You can be qualified to purchase a home in as little as 24 months.

So if you’re upside down in your mortgage; if you’ve been denied a loan modificaton, or are still awaiting an answer and are getting further and further behind on your mortgage, please contact us. We are compassionate, understanding, and will help you avoid foreclosure. We have the experience and a great team working with us to insure you understand the foreclosure avoidance process every step of the way. We are very successful in helping distressed homeowners avoid a bank sale on their property, while helping them maintain their dignity, self-respect, and remain in control of their destiny through a short sale.

For a free, confidential pre-foreclosure consultation, please contact us by clicking here, or call 661-290-3765. And please visit http://411nod.com for more foreclosure avoidance information.

Foreclosures of million-dollar-plus homes on the rise
The number of homes in the $1-million-and-up slice of the market that have become bank owned has tripled during the last three years in Los Angeles County, and the trend has shown little sign of slowing.
August 29, 2010|By Lauren Beale, Los Angeles Times

Foreclosure is blind.

After the mortgage meltdown and the plunge in home prices, record numbers of ordinary houses tumbled into foreclosure across Southern California as borrowers became unable or unwilling to pay their mortgages. But the rich aren’t so different after all: Million-dollar-plus homes have reverted to lender ownership in increasing numbers — previous sales prices, prime locations and even celebrity pedigrees have provided no immunity.

Earlier this year, Oscar-winning actor Nicolas Cage’s English Tudor joined the foreclosure fraternity. The nearly 12,000-square-foot house, once marketed at $35 million, now is listed for $11.8 million; the seller, Citibank.

The Bel-Air mansion wasn’t even the most expensive lender-owned property — known in the industry as REO, or real estate owned — in Los Angeles County, according to a records search of houses on the Multiple Listing Service in the county’s most posh ZIP Codes.

Higher priced still was the alleged Wells Fargo party house, which was listed nearly a year ago at $21.5 million and sold this month for $14.95 million. The beachfront house in gated Malibu Colony became the center of controversy when neighbors complained that it was being used by a Wells Fargo & Co. executive for social events; the executive was subsequently fired.

Although the pace of foreclosures has slowed in the general housing market in Southern California and much of the nation, it’s still rising for upper-tier homes.

The number of homes in the $1-million-and-up slice of the market that have become bank owned has tripled in the second quarter compared with the same period three years earlier in Los Angeles County, which has the majority of Southern California’s high-priced REO houses. And the trend has shown little sign of slowing, according to data from ForeclosureRadar.

By comparison, the number of homes reverting to banks in all price ranges combined peaked in the third quarter of 2008.
Many of the reasons the rich lose homes to foreclosure are no different from those of moderate- or low-income borrowers — poor financial management, the loss of a job, a drop in home value — said Mark Goldman, a foreclosure expert and loan officer who teaches about real estate investments and finance at San Diego State University. That the top of the market is still seeing increased foreclosures may reflect the staying power of owners with deeper pockets who could hold on to their homes when the economy first faltered, he said.

Some well-heeled homeowners were hit particularly hard when the stock market tanked and the financial scene fizzled. Others, such as the original owners of the Wells Fargo beach house, saw their investments wiped out by Bernard Madoff’s massive fraud scheme.

But none of that unsavory association was apparent in the polished staging and marketing materials about the 3,800-square-foot home prepared for Wells Fargo by listing agent Chad Rogers of Hilton & Hyland. (“Walls of glass create an unparalleled indoor/outdoor environment…. Wake up to the gleaming Pacific in the sumptuous master suite.”)

In fact, unless one reads the fine print, it is sometimes hard to identify a pricey property gone bad.

Rogers’ Hilton & Hyland colleague David Kramer, however, takes a different approach when selling bank-owned property. A 12,000-square-foot contemporary Mediterranean he has listed with other agents recently hit the market at $8.595 million. Included in the MLS remarks describing the property: “lender owned” and “originally listed at $16.95 million.” Who doesn’t want to know they are getting 50% off?, he said.

Not every REO is owned by a bank. Sometimes the new owner is a private money lender.

One such corporate-owned REO in the Beverly Hills Post Office area is an 11,000-square-foot Mediterranean on more than two acres with a tennis court and swimming pool that is priced at $7,999,000. The original owner had purchased the property in the 1990s, but after borrowing against the property for a business that didn’t survive the economic downturn, he couldn’t support the payments, said listing agent Danny Batsalkin of L.A.-based Boulevard Realty.

Unlike the bank-owned competition, the house comes with an offer of financing — 20% down at a 5.99% interest rate and three years of interest-only payments. “This does make it more attractive,” Batsalkin said.

Changes in banking requiring full-documentation loans have altered the financing picture in the upper end of the market, Goldman said.

“In 2006, you could borrow 70% to 80% on a $10-million house,” he said. “Today you might need 50% down.”

Working with a seller that is a bank can present challenges.

“In general, my experience has been that banks are really bad at managing real estate,” Goldman said. “You probably have to go through three or four good offers before someone will sign on the line to sell the asset.”

The lender is not motivated to let the property go at a discount, because it still shows a higher value while it’s on the books, he said.

That opinion, however, is not shared by Karen Caskey, an REO property specialist with RS Capital who is based in Beverly Hills.

The bigger lenders all have specific documents and forms to file, such as proof of cash, said Caskey, who has worked with REO buyers and sellers since 1993. “If all their requirements are met, I’ve had an answer the same day.”

Caskey says she is sometimes competing against multiple offers for multimillion-dollar REOs.

Other lenders are lowering prices. A bank-owned property in Beverly Hills listed at $3.1 million that Caskey has been tracking was dropped to $2.65 million this summer. “There’s good savings in the $2-million- to $4-million range,” she said.

Though there has been much speculation about a so-called shadow inventory of REOs ready to hit the market and depress prices further, Goldman is not concerned.

“We’ve been waiting for a year and a half for the deluge of bank-owned properties, and it hasn’t happened yet,” he said.

Another reason to be less concerned about shadow inventory, Goodman said, is that now there’s more interest from banks to modify loans or go for a short sale, in which the house sells for less than the lenders are owed.

Some high-end homes have not returned to the market and instead are being leased back to their former owners.

“The banks will sell them in four or five years” when prices have rebounded, Caskey said.

In the current market, it can take years to get a new owner into a property that went into default. Retired pro ballplayer Jose Canseco lost an Encino home in 2008 to Washington Mutual. He had purchased the property for $2.785 million. A sale finally is pending on the REO, listed at $2.125 million.

Whether luxury REOs represent bargains that won’t be available again for years remains to be seen.

Bryan Ochse of Media West Realty in Burbank, which works with 11 lending institutions and specializes in REO sales, isn’t betting on it.

“We believe the high end is ready to fall apart,” he said.

Goldman is more optimistic about the market’s recovery.

There has been a lot of talk recently “about a double-dip” in the housing market, Goldman said. “I’ve been thinking of the housing market as a light airplane landing and it kind of bounces. Until things stabilize, we’re going to see some up and down here.”

If you or someone you know may be facing foreclosure, please contact us or visit http://411nod.com.

The company has seen an increase in the percentage of its properties that it is unable to market for sale in 2010 compared with 2009. As of June 30, 2010, approximately 36 percent of the company’s properties that it is unable to market for sale were in redemption status, which lengthens the time a property is in REO inventory by an average of four to six months. Additionally, as of June 30, 2010, approximately 36 percent of the company’s properties that it is unable to market for sale were in occupied status, which lengthens the time a property is in REO inventory by an average of one to three months.

Many homeowners fall victim to foreclosure because they do not have the tools or knowledge available to them to understand how to prevent their home from being taken by the bank, thus becoming another statistic not unlike what has been stated above. If you have exhausted all other avenues of rendering your loan current with your lender, and have received, or are about to receive a Notice of Default (N.O.D.), you still have options available to you to avoid your home falling victim to foreclosure and Fannie Mae statistics.  Learn more about Notice of Default and foreclosure proceedings by clicking here.

If you are facing foreclosure, a short sale can help you avoid your home being sold at auction. A short sale allows you to sell your home for less than the fair market value (FMV) based on your lender’s approval. You can learn more about short sales by clicking here.

If you have questions about Fannie Mae, the foreclosure process, bank-owned properties or foreclosure prevention, feel free to contact us for a free, private consultation. For more information, please visit http://411NOD.com.

Nearly 7.5 million loans are in default today. Please join Patrick Lopez and Associates  for a COMMUNITY TOWN HALL MEETING where we will discuss the current real estate climate and offer information on such important topics as:

Loan Modifications
Bankruptcy (When is the right time?)
Refinancing in a Down Market
Short Sales
Cash for Keys
Insolvency
Tax Implications
Legal Implications
And more…

Interact with an expert panel including a real estate attorney, CPA, bank negotiator, realtor, loan officer and ASK YOUR QUESTIONS AT NO CHARGE!

This is a great opportunity to understand the marketplace and your options as a homeowner in this current economic marketplace.

When? Wednesday, July 28th at 6PM
Where? Valencia Library-23743 W. Valencia Blvd. Santa Clarita, CA 91355
RSVP by clicking here or call 661.290.3765.

THIS IS A FREE EVENT!!