California Homes Foreclosures
Short Sales - Foreclosure - General Information Real Estate News and Videos

The California housing market’s troubles continue. Nearly 1000 Californians a week are losing their homes because they can’t afford to pay the mortgage compared to about 100 a week a year ago.

Many of these mortgages required the borrowers to put little or no money down, and lenders took their word for whatever income they said they made.

In the first three months of 2008 there were over 11,000 foreclosures, which is an increase of 800% over the same period a year earlier. Over 46,000 homeowners were sent default notices in the first quarter, according to DataQuick Information Systems. A default notice is a warning from a lender to catch up on payments immediately or face eviction.

Foreclosures and default warnings in California are at their highest points in nearly a decade.

As the number of move-outs, evictions and forced sales continue to increase, some economists say they will soon start to push prices down. First to fall are the low income communities where marginal loans proliferated. The trend may then spread to more affluent neighborhoods.

Most of the loans going into default now were made at the peak of the housing boom in 2005, when some thought the good times would continue forever and lending standards were lax. Nearly 80% of loans made in the state in May 2005 for the purpose of purchasing houses had adjustable rates

In Riverside and San Bernardino counties, the combined volume of foreclosures rose to 2,369 in the first quarter from 255 in the same period last year. The Central Valley, which includes Sacramento County, jumped to 3,039 from 286.

Another problem spot is San Diego County, where the 1,183 foreclosures is the highest since DataQuick began tracking this information in 1988. The county’s market peaked earlier than the rest of the state.

Los Angeles County, the largest housing market in the state, is surprisingly strong. The default rate is almost 60% below the first-quarter 1996 peak, DataQuick said.

The short sale process can be significantly less expensive and a good alternative to foreclosure for both lenders and homeowners. For homeowners in trouble, it doesn't help them keep the home, but it can keep the foreclosure mark off their credit report. It's also less expensive than going through the court system in a foreclosure lawsuit. A short sale is an alternative to bankruptcy or foreclosure proceedings.

Bank Owned or REO Real Estate offers buyers the quickest response to legitimate offers. Once a bank forecloses on a home, condo or any real estate, they need to sell it as quickly as possible to recoup as much of their loan loss as possible.

A pre-foreclosure or bank owned property is the keyword when you're searching the best real estate deal.

The continued rise in foreclosures has become a political issue, with Congress debating methods of aiding those underwater.

The Mortgage Forgiveness Debt Relief Act, made it even cheaper for owners of primary homes. Before the legislation, homeowners who persuaded a lender to accept a short sale had to pay income tax on the loan amount forgiven by the lender. Under the new law, they won't have to pay taxes on the forgiven amount, up to the original mortgage amount on the purchase of the home. Review The Mortgage Forgiveness Debt Relief Act of 2007 Click Here

From 2002 thru 2006 the West Coast real estate market was hot. Buyers were getting loans that were very risky. In many cases they were not qualified for the amounts. Some were not for homes as a permanent residence, but for townhomes, villas or condos to rent out as a secondary residence while waiting to flip it for a much higher price. Teaser Rate Loans and 100% stated products were sold and people that were not qualified financially to pay for a traditional loan. The real estate market was growing so fast that these people would take out a home equity line of credit, when they needed more money. They assumed that since their current home had gone up in value...so would their investments. As time went on...the real estate market came tumbling down because of sub prime and exotic loans to poor credit risks.

Sellers who are forced out of their homes are usually not pleasant to work with. The bank employees who are just doing their jobs follow procedures that many times keep the buyer in suspense. Because of the large amount of foreclosures, banks are overloaded with work and their response time could be lengthy. Even though they want to sell a home, they will push to get the best price to minimize their losses. They might not play by your rules, they have their own paperwork and time frames. Unlike real home sellers, they’re not really attached to the properties they sell. They could take 1-3 months just to respond to your offer, and it could take sometimes 6 to 9 months to close a transaction. In most of the cases, their counter-offer to the buyer will be the actual appraised value which could be much more than the asking price you saw in the (MLS) Multiple Listing System. There is no guarantee that a lender who accepts the short sale will not legally pursue a borrower for the difference between what is owed to them and the amount that was paid to them. A real estate attorney should determine if your loan qualifies for a deficiency claim or judgment.

Whether they call it a foreclosure, pre foreclosure, bank owned, short sale or a distressed sale, a pre-foreclosure or bank owned property is the keyword for searching the best deal. The East and West Coast Real Estate Market continues to offer homes and condos for sale at prices the buyers are benefitting from.

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RESPA - Real Estate Settlement Procedures Act  U.S. Dept of Housing & Urban Development
 

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