His 2011 Foreclosure Market Observations

Need help stopping foreclosure or negotiating a short sale? Los Angeles short sale expert Dave Rozansky shares his favorite tips.

Question: Dave, you’ve lived in Los Angeles about five years now, what have you seen change in the foreclosure and short sale market?

Dave: Well, as you know, the real estate market is very soft right now, so if you bought your house any time within the last 5-10 years, it can be hard to sell it for enough to pay off your mortgage. This makes it really difficult for sellers to unload their properties. Many houses are languishing on the market because the real estate agents have priced them too high.

What that means is that if you get into financial trouble (many are due to the recession, or personal circumstances like job loss, divorce, car accident, etc.), you can have a really difficult time selling your house. You can’t just put it on the market and have it snapped up right away like you could a few years ago.

What that means is that when people go through hard times, they are much more likely to go into foreclosure now.

And having the glut of foreclosures on the market (which banks tend to be somewhat willing to liquidate at lower prices) means that the prices of real estate just stays low. It’s a vicious circle.

Question: What should a Los Angeles, CA home owner do if he finds himself facing foreclosure?

Dave: That’s a question that I help people answer every day. Many of the people that I work with would prefer to keep their properties and keep living in their homes. I help a lot of people negotiate short sales in Los Angeles, but only if they decide that’s the best choice for them. I never try to pressure anybody.

If they have the income (say they were temporarily out of work and are now on the job again) and or can come up with the cash or get a loan from a friend or family member to bring the back-payments current, it is often possible to reinstate the loan.

And some banks are working with people, too, if they are back earning income, but can’t make up the back payments in a lump sum, for example.

Plus, there are some government programs out there now, too – HAMP, Hope For Home Owners – that can help. Although those have some hidden kickers you need to be aware of.

Each person’s situation is different. But the worst thing that you can do is to do nothing. The earlier you take action and call your bank to talk through the options, or talk to a foreclosure expert who can advise you, then the better your results are going to be. The more options you’ll have.

Dave Rozansky is a Los Angeles short sale negotiation expert and licensed real estate agent. He is available for a no-obligation consultation by calling this phone number: 1-877-766-3275 ext. 317.

You can also download a FREE Special Report on how to avoid short sales. It’s called the Los Angeles “STOP FORECLOSURE” Handbook & Short Sale Guide. It will step you through what you need to do to stop foreclosure or execute a Short Sale In Los Angeles.

In addition, if you’d like to get to know Dave a little better, check out this Short Sale Los Angeles video that he made telling you his story (Hint: He’s more like you than you could ever believe…) and exactly what to do next to help stop your foreclosure in Los Angeles.

Article Source: http://EzineArticles.com/?expert=Serena_N_Ericson

That’s right, last year The Treasury Department spent $4.3 million in HAFA short sales as incentives for homeowners to complete a short sale through the HAFA program. Of the hundreds of thousands of short sales done nationally only 661 are estimated to have gone through successfully.

The Treasury launched HAFA in April to provide an incentive for short sales and deeds-in-lieu of foreclosure. The program was designed as another solution for borrowers who qualified for the Home Affordable Modification Program trial but failed to get a permeant modification either by re-default during the trial stage or failing to send in the required documentation.

According to HAFA program guidelines, the Treasury pays $1,500 to mortgage servicers for a short sale and up to a $2,000 match for mortgage investors for allowing up to $6,000 in short sale proceeds to be distributed to subordinate-lien holders. The Treasury also pays $3,000 for borrower relocation assistance.

If the Treasury paid the maximum $6,500 for each short sale done so far, and the Treasury has paid $4.3 million so far, that means roughly 661 short sales have gone through the HAFA program in eight months.

In October, the Special Inspector General for the Troubled Asset Relief Program reported servicers and investors had cleared only 342 short sales or deeds-in-lieu of foreclosure as of Sept. 30.

If this information is disheartening, don’t worry. We at Noah’s Ark Properties can help you with your short sale and help find you a new home. Call Dave at 877-766-3275 ext. 7 or visit our website here.

New research from PEW Local Trends goes into great detail about Strategic Defaults.

What will be surprising to many is the dramatic increase in the number of homeowners willing to walk away from their underwater home.

It seems that the worst housing downturn in American History can distort a lot of previously held views.

I am not a proponent of walking away. I don’t think Anyone should be advocating strategic defaults. With that said, its happening anyway and it is our Company’s job to work with owners who are walking away for financial reasons vs a true..traditional…hardship. There are methods to help hardship…and non-hardship owners who are considering walking away. Clearly, a short sale is the best solution for the owners, their neighborhoods, the lenders…and of course…the real estate industry.

Read this article and share your thoughts on strategic defaulting.

A majority of Americans say it is “unacceptable” for homeowners to stop making their mortgage payments and abandon their homes, according to a Pew Research Center survey. But more than a third (36%) say the practice of “walking away” from a home mortgage is acceptable, at least under certain circumstances.

Nearly six-in-ten (59%) believe it is wrong for homeowners to deliberately stop paying their mortgages and surrender their homes to the mortgage lender, according to the survey of 2,967 adults conducted May 11-31.

But two-in-ten (19%) say it’s acceptable and an additional 17% volunteer that it depends on the circumstances.1

As the housing market continues to flounder in many parts of the country, more than one-in-five homeowners (21%) say they owe more on their mortgages than their home is worth, the survey finds.

Some homeowners in this situation stop making their mortgage payments and let the bank foreclose on their homes.

In July alone, lending institutions foreclosed on an estimated 93,000 properties, according to data compiled by RealtyTrac Inc.; this was the second-highest monthly total since the firm began tracking foreclosures in April 2005.

Not surprisingly, how people fared financially during the Great Recession is linked to their views on walking away from a mortgage.

Nearly half (48%) of all homeowners say the value of their home declined during the recession, and as a group they are more likely than those whose home did not lose value to say it’s acceptable to renege on a mortgage (20% vs. 14%).

Renters are even more likely to say it’s okay to stop making house payments: Fully a quarter (25%) say it is acceptable to walk away.

Those who have had financial problems during the recession are more likely than others to say that walking away from a mortgage is acceptable.

Nearly one-in-four adults (24%) who say their families are just able to pay their monthly bills or can’t meet expenses say it’s okay to stop paying a mortgage, compared with 14% of those who say they “live comfortably.”

But homeowners who say their homes are worth less than what they owe are not more tolerant of the practice than those who would break even or make money on a sale (18% vs.17%).

While some demographic groups are more likely than others to say it’s okay to walk away — among them, Hispanics, adults younger than age 65 and those living in the West — these differences are mostly modest.

For example, nearly a quarter (24%) of all Hispanics say it’s acceptable to abandon a mortgage, compared with 17% of whites and 21% of blacks. However, roughly similar majorities of Hispanics (58%), blacks (56%) and whites (61%) say it’s wrong to do so.

There are sharp differences by partisanship. Democrats are about twice as likely as Republicans to say it is acceptable to walk away (23% vs. 11%).

Under Water and Upside Down
As the housing market collapsed and the Great Recession took hold, sinking home values have left many homeowners owing more on their mortgages than they could collect if they sold their property. In real estate argot, their mortgages are “under water” and their home loans “upside down.”

According to the survey, about one-in-five mortgage-holders (21%) are currently “under water.” Black homeowners are more likely than whites to be in this circumstance (35% vs. 18%); lower-income homeowners are more likely than upper-income homeowners to face this problem (33% for those with family incomes of less than $30,000 vs. 15% for those earning $75,000 or more). Middle-aged homeowners are more likely than either younger or older homeowners to be in this situation.

Caught between big mortgages, sinking home values and the financial strains associated with periods of high unemployment, many homeowners have stopped making mortgage payments and opted to “walk away” from their loans and their homes. The practice has grown so common that the mortgage finance giant Fannie Mae, reeling from mounting losses, is now suing so-called “strategic defaulters” — those who can afford a mortgage but bail anyway.

The Current State of the Foreclosure Crisis
The latest mortgage industry data paints a mixed picture of the nation’s foreclosure crisis. According to the closely watched Mortgage Bankers Association National Delinquency Survey, the delinquency rate for all mortgage loans outstanding declined to 9.85% during the second quarter of 2010, the first quarterly drop since 2006. The percentage of loans currently in foreclosure stands at 4.57%, a decrease from the first quarter of 2010 but an increase from a year ago. The proportion of new foreclosures started during the second quarter is at 1.11% of all mortgages, down from 1.23% during the first quarter. Taken together, the combined percentage of all loans in foreclosure or with at least one payment past due was 13.97 percent, a slight decline from 14.01% in the previous quarter.

More ominously, the rate of short-term delinquencies—loans that are one payment behind—has increased from 3.31% at the end of 2009 to 3.51 in the second quarter of 2010. The rate of short-term delinquencies had peaked in the first quarter of 2009 at 3.77% but had declined through the first quarter of this year.
Data from the firm RealtyTrac Inc. suggests that lenders repossessed nearly 93,000 properties in July 2010 an increase of 6% from July, 2009. This was the second-highest monthly total since the firm began tracking foreclosures in April 2005. Overall some mortgage experts estimate that more than 2½ million homes have been lost to foreclosure since 2005.

Since short-term delinquencies are closely tied to the unemployment rate, analysts suspect that the rise in first-time unemployment claims during the first few months of the year has now pushed the new delinquency rate higher. “Ultimately the housing story, whether it is delinquencies, homes sales or housing starts, is an employment story,” said Jay Brinkmann, MBA’s chief economist, in a statement that accompanied the release of the latest MBA survey. “Only when we see a consistent increase in employment will we see an increase in sales and starts, and a sustained improvement in the delinquency numbers. Until we see the increase in the number of households that comes with an increase in the number of paychecks, all measures of the health of the housing industry will continue to be weak,” Brinkmann said.

Financial Problems and Walking Away
Some homeowners may view defaulting on a home loan as a smart economic decision. But for others, the survey suggests it is the act of a financially pressured homeowner who has been laid low by the Great Recession.

As the number of financial hardships a person suffered during the recession increases, so does tolerance for walking away from mortgage payments.

But even among those who faced multiple hardships, solid majorities still say it is unacceptable to quit making house payments.

Fully a quarter (25%) of those who report they had problems paying their rent or mortgage say it is acceptable to stop making mortgage payments, compared with 18% who did not have problems paying for housing.

Similarly, those who had to borrow money from friends or family during the recession are more likely than those who did not to say it is okay to walk away (25% vs. 18%).

Americans who found it difficult during the recession to pay medical bills or find adequate care also are somewhat more accepting of abandoning a mortgage (25% vs. 17%) than those who did not have problems with health care.

When these three problems are analyzed together, the relationship between recession-related financial problems and attitudes toward walking away becomes stronger.

Only about one-in-six adults (16%) who faced none of these three problems think it is acceptable to forego making house payments and surrender the property. In contrast, nearly three-in-ten adults (28%) who experienced all three hardships say it is okay to bail on a mortgage.

For most Americans, financial hardship is not a good enough reason to stop paying the mortgage. Even among those who faced all three recession-related problems, a 57% majority say it is unacceptable to walk away from a mortgage and 13% say it depends on the circumstances.

A similar pattern is apparent on the employment front. Those who suffered a spell of unemployment during the recession are somewhat more tolerant of walking away from a mortgage. Slightly less than a quarter of the ever-unemployed (23%) say it is acceptable to quit making mortgage payments, compared with 18% of Americans who did not lose their jobs during the recession.

Demographic Differences
Even in the worst of economic times, most Americans believe in paying their bills. Majorities of every core demographic group measured in the Pew Research survey agree that walking away from a mortgage is unacceptable. What differences that exist between demographic groups are modest, at best.

According to the survey, men are more likely than women to say it’s okay to abandon one’s home mortgage (22% vs. 17%).

A larger share of Hispanics (24%) than whites (17%) say voluntary foreclosure is an acceptable option-a view shared by 21% of blacks.

Hispanic men in particular accept the practice: 31% find it acceptable compared with 17% of Hispanic women. Hispanic women, on the other hand, are more likely than Hispanic men to say it depends on the circumstances (18% vs. 8%).

The relationship between age and attitudes toward walking away from a mortgage is complex.

On the one hand, older adults are significantly less likely than young people accept walking away (13% for those 65 and older, compared with 21% of adults younger than 65).

But that doesn’t mean older Americans categorically reject the practice while younger people who are more likely to tolerate it.

In fact, it is those younger than 30 who are the most likely to say walking away is unacceptable: 68% say this, compared with 57% of adults 65 or older.

Instead, older adults are more measured in their views. They are more likely than younger adults to volunteer that it depends on the circumstances (22% of those 65 and older vs. 9% of those 18 to 29 years old).

When taken together, slightly more than a third of older adults (35%) and nearly as many younger people (30%) believe it okay to walk away from a mortgage or say it is acceptable under certain circumstances. (The survey did not probe to find out under what specific circumstances people thought walking away was acceptable.)

Other Differences
Americans living in the West-Ground Zero in the real estate market meltdown-are significantly more tolerant of walking away from a mortgage than residents of other regions. A quarter (25%) of all westerners find the practice acceptable, compared 19% of respondents living in the Midwest, 18% in the South and 16% in the East.

City-dwellers also are about twice as likely as rural residents to accept walking away (24% vs. 14%),while 18% of all suburbanites residents agree.

Renters are somewhat more likely to find it acceptable to walk away from a mortgage than homeowners (25% vs. 17%).

Attitudes toward home ownership also are associated with the willingness to tolerate those who decide to default on their home payments.

A lop-sided majority of Americans say a home is the best long-term investment a person can make. Perhaps not surprisingly, those who see a home as a growth asset are significantly less likely to accept intentional foreclosure than those who do not value a home as highly as an investment (17% vs. 29%).

While helping financially strapped homeowners is popular with both Republicans and Democrats in Congress, the partisan divide opens wide when it comes to judgments about walking away from a mortgage.2

Overall, Democrats are nearly twice as likely as Republicans to say the practice either acceptable, or acceptable under some circumstances (42% vs. 24%). Political independents also are more tolerant of walking away than Republicans (36%).

These partisan differences remain when each element of the question-acceptance vs. qualified acceptance-is analyzed. Democrats are twice as likely as Republicans to tolerate homeowners who abandon their mortgages (23% vs. 11%). They also are significantly more likely to say the practice is acceptable under certain circumstances (19% vs. 13%).

About the Survey
Results for this survey are based on telephone interviews conducted with a nationally representative sample of 2,967 people ages 18 and older living in the continental United States. A combination of landline and cellular random digit dial (RDD) samples was used to represent all adults in the continental United States who have access to either a landline or cellular telephone. A total of 1,893 interviews were completed with respondents contacted by landline telephone and 1,074 with those contacted on their cell phone. The data are weighted to produce a final sample that is representative of the general population of adults in the continental United States.

If You or Someone You Care About is Having Trouble with Their Mortgage
I CAN HELP – 877-766-3275 ext.107
CONFIDENTIAL – NO COST – DISCREET – NO OBLIGATION

Article Source: PEW Research Center

The big lenders have waited to see what President Obama rolled out today as a life preserver to help the 10,000 American going into foreclosure each day. This life preserver is to help the millions more that are barely getting by. Although lenders have stepped up to help homeowners in this market, they have not been able to keep up with the flood of default loans.

More than 2.3 million homeowners faced foreclosure proceedings last year, an 81 percent increase from 2007, and analyst say that number can soar as high as 10 million in the coming years, depending on the severity of the recession.

Fannie Mae, Freddie Mac, JP Morgan Chase, Morgan Stanley and bank of America are halting foreclosures through March 6. Citigroup said they would extend their halt through March 12 or until the administration has completed the details of the loan modification program, whichever is earlier.  The banks pledges apply to owner occupied homes not those owned by investors.

Freddie Mac and Fannie Mae guarantee half of the home loans in America, their evictions and foreclosure have been halted through the holidays. The government is pledging $400 billion to these two giants in an effort to refinance “under water” loans.

The plan that President Obama revealed today ($25 billion more than initially anticipated) is earmarked to help 9 million homeowners from being evicted and to stabilize the housing market which is at the core of the ever-worsening U.S. recession.

There are a lot of incentives for lenders to work with borrowers, although it is of my opinion that this band aid will simply ease the economical conditions which really needs to ride this out. Although these funds should help many homeowners there are going to be plenty that won’t be able to take advantage of this as it simply is not enough.

Times are tough for all right now consumers face foreclosure, the wise will short sale their home and the credit card companies are in as much of a tough position as many consumers. Faced with borrowers who are unable to pay back their debt, some collectors are settling for less then the balance owed just so they can get anything they can.

In an effort to protect themselves as best they can, lenders and credit card companies are vying for the top position for who will get paid first as they prepare for a wave of defaults in the first half of 2009.

In a time when banks cut consumer credit lines, raise card fees, and pull back on lending, some banks like B of A are waiving late fees, lowered interest charges and in some cases reduced loan balances for more than 700,000 credit card holders in 2008.

American Express and Chase are taking similar actions as consumers fall behind on their bills. Every major credit card company is giving their collection agents more leeway for consumers in financial distress.

Debt collectors, who are typically paid on the amount of money they recover, have reported a double in the number of people getting extensions in the last six months. In some cases consumers are being able to discount their debt between 20 and 70 percent.

Credit card lenders are preparing to write off $395 billion dollars of soured loans over the next five years according to projections from the Nilson Report. Compare that to the $275 billion in the last five years!

In the past credit card companies relied on consumers taping into their home equity to pay down credit card debt, now that source has dried up and they are taking what they can.

$17 Million Aid for San Diego County will help up to 300 low and middle income households. The funds designed to aid the clean up of neighborhoods plagued with foreclosures and provide affordable housing opportunities.

The money is expected to turn hundreds of renters into homeowners and deeply subsidize rents for the lowest-income households.

The money comes from a $4 billion pot set aside by the federal housing and urban development for “neighborhood stabilization” contained in the Housing and Economic Recovery Act signed into law last summer by President George Bush.

The city of San Diego has been the largest recipient of these funds with $9.4 million, $5.1 million going to the county and Cula Vista receiving $2.8 million.

The housing agencies have all had their plans approved by the federal government but haven’t formally launched their programs. The funds are expected to be released in the Spring and all funds must be committed to within 18 months.

Of all homes listed in the MLS in San Diego county, 1,675 are bank owned homes!

·     Summarized from today’s Union Tribune by Dave Rozansky of Boost Equity Corp.

We are short sale experts in San Diego! We can Stop Foreclosure! We work with foreclosures each day and work out the best solutions for people facing a difficult situation. I speak to sellers all the time that avoid calls from their lender and go on as if there is nothing wrong. They essentially put their head in the sand. It is vital to keep the lines of comunication open and let the lenders know that you are really doing the best you can, any help they can offer is appreciated. Remeber they do not want to take your home back, it’s not their business. They only loan money.

If you would like us to call your lender on your behalf and try and work out a solution, call us at 877-766-3275 x501

All the best,

Dave

I was just catching up on my weekly newspaper. In December the median home price plummeted 38% from a year earlier. This is a result of low cost foreclosures boosted sales but lowered property values. according to DataQuick.

The median price in California for houses and condos was $249,000 last month, In December 2007 the high was $402,000.

We have not seen this low a median price since February 2002 when it was $245,000, This is a 49% decline from a peak of $484,000 in the Spring of 2007.

It is not all doom and gloom, this is a great opportunity for Sellers that are having a difficult time keeping up with their payments to use this type of news as leverage with their lenders to modify their loan. Loan modifications are up and more banks are entertaining the idea of loan modifications rather than have to go through a foreclosure.

We love loan modification because it helps homeowners stay in their house, the pluses about that are not only obvious to the homeowner but the community as the home is cared for retaining curb appeal. Vacant bank owned homes attract derelicts and break-ins. We have worked with several lenders that would rather opt for a loan modification rather than a worse case scenario.

What is a short sale?

Lately we hear “Short Sale’ quite often, this term simply means that a lender agrees to accept less than the balance owed on a note or loan. Lenders agree to a Short Sale because accepting less NOW on the loan saves them more money than foreclosing on a home.  Take into account all the labor hours by employees, messengers, attorneys, holding costs and city fines, the list is long.

Who Is The Best Person To Handle A Short Sale?

A Short Sale should be handled by someone who is experienced and can work with all lenders on an individual basis. In many cases a home may have more than one loan; typically they have 2 or even 3 loans. The staff at www.AsapShortSale.com, has been well versed in working with lenders. We also work on behalf of the borrower to try and sway the lender to they do not pursue a deficiency judgment for the difference that the lender is taking a hit on.

What Happens to the Second or Third Mortgage Holder?

If the home goes to a foreclosure sale the 2^nd and 3^rd lenders are likely to be wiped out of their positions. It is to their advantage to work with a Short Sale expert so they can receive something for their loan rather than nothing.

Does a Short Sale Cost Money?

There are many people that claim they know how to do a Short Sale and may even charge the homeowner a fee. The facilitation of a Short Sale should not cost a homeowner any money. If the homeowner is unable to make a mortgage payment, then they should not be expected to pay for this type of service. At AsapShortSale.com, we never charge a fee for our service.

Are There Any Fees I Can Incur?

If you owe back taxes, these will need to be settled. Typically lenders do not incur your tax debt.  Homeowner Association Fees can sometimes be covered by the lender but not in all cases.

How Long Does A Short Sale Take?

The Short Sale process can take anywhere from 2 – 7 months depending on how quickly the lender receives all of their required information from the borrower, order a BPO (Broker Price Opinion) which is hiring a Realtor to assess the home and give the bank an opinion of the value of the home, and of course negotiating with the lender. Negotiations include how they will report the Short Sale on your credit. Once these steps have been satisfied the lender will work with their investors on your loan as well as the person discussing the Short Sale on your behalf to come to an agreement of a final sales price.

What Type Of Items Do I Need To Supply?

The Lender is going to want several items.

1. Hardship Letter (explaining what caused you to arrive to this situation).
2. 2 months bank statements (although I have had a lender ask for 6 months).
3. Last 2 paystubs for all borrowers.
4. Financial Statement.
5. Two Years of W-2 forms and/or Tax Returns
6. Authorization to Release Information

Once the lender has all items, they can look at a person’s financial situation and make an informed decision on how to proceed.

My Home is scheduled to go to a Foreclosure Sale Soon, is There Anything I Can Do?

If this is your situation we urge you to contact someone immediately, if not us then someone so the sale can be postponed until something is worked out. We have had success in postponing a sale even as near as the 11^th hour. This is not an ideal situation so we urge you to take a proactive approach to your situation and contact someone that can help you as quickly as possible.

I Heard That I Will Get a 1099 At The End Of The Year – Is This True?

On December 20th, 2007, “The Mortgage Forgiveness Debt Relief Act of 2007” was passed into Law.  If you purchased the home as your primary residence, this allows homeowners a 3 year window to avoid paying taxes on the loss the lender takes. Previously, if the value of your house declined, and your bank or lender forgave a portion of your mortgage, the tax code treated the amount forgiven as income that can be taxed. According to “The Mortgage Forgiveness Debt Relief Act of 2007” if you sell your home as a Short Sale by December 20th, 2010, the loss the lender takes will not be considered taxable income by the IRS.

If you purchased the home as an investment property, you will receive a 1099 at the end of the year for the negative amount.  If the lender forecloses on your home, they will still send you a 1099. So, in either a Short Sale or a Foreclosure on investment properties, the bank will still send out a 1099 for the difference. Please speak to your accountant for details. The amount you are liable for will depend on your tax bracket. The IRS is allowing people the option of a payment plan. If your accountant can prove you insolvent at the time of your Short Sale, you may be able to avoid a 1099.

How Will A Short Sale Affect My Credit?

One of the most IMPORTANT benefits of a Short Sale is how it will affect your credit score.  After completing a Short Sale you WILL be able to purchase a home again at a favorable rate in 1.8 – 2 years.  Your credit report (FICO score) will drop approx. 100-150 points and will show as “Debt Settled” or “Settled as Agreed”.

If you let your home go into Foreclosure, your credit report will show that you had a Foreclosure.  Your credit report (FICO score) will drop as much as 250 points. You will not be able to buy another home for 5 (FIVE) years.

If you file bankruptcy you will not be able to buy a home again for 7(SEVEN) years.

I’ve completed the Short Sale of my home.  Now What?

When everything is over, you have settled into another home, we will put you in touch with a legal firm that specialized in repairing credit and in as little as 6 months, you will begin to see results. They do charge a nominal fee for their service however they are effective.

Sellers Aide, Foreclosure and Short Sale Expert