Is the Home Owners Relief Act to little too late?

There are many home owners, not just those with long beach real estate, that have been facing tough issues with their homes and their home loans. The government for the state of California has been working to pass a bill that would help the home owners and not hurt the banks at the same time. This is obviously a delicate balance act.

The act that was passed is called SB1137. So what does SB1137 mean to those who are facing foreclosure? Well it means that lenders now will be required to attempt a workout with you prior to being foreclosed upon.

The bill basically mandates that the lenders or servicing companies attempt to work out with the home owners their loan 60 days prior to issuing a notice of default. So is this really a new process? The vast majority of lenders and service company's were doing this anyway. This law puts the process as mandatory for those who weren't doing it on their own.

The bill also provides additional protection for tenants who are living in properties facing foreclosure and gives them 60 days to vacate a property instead of the traditional 30 days.

I hope that more lenders choose to work things out with home owners who want to stay and work hard with those who want to proceed with a short sale as having a city full of foreclosed properties isn't good for current home owners, future home owners, or the banks.

More information on the bill can be found at the California Progress Report website.

If you want to know how many short sales or foreclosures exist in your neighborhood check out our free mls or use the contact form provided and we will e-mail you right away with what is happening in your neighborhood.

Related Posts

• Short Sales are 26.6% of the Long Beach Market
• Mortgage Relief Act Becomes Law

5 items of "Reality" for Today's Buyer

This market has presented quite a bit of opportunity for buyers. Whether you are a first time buyer, a move-up buyer, a relocation buyer, or maybe an investor there certainly are some great options out there.

As the general thought out there is that there is an abundance of inventory many people start with the idea that every seller is desperate and they would be "crazy" not to sell if there is an offer in writing. Now, I really would like to believe this as I represent buyers throughout the city of Long Beach, but unfortunately many of the sellers have missed the memo that they are desperate.

In this vein, I thought I would share some thoughts for buyers to consider as they look for their piece of Long Beach real estate.

1. Not every seller is desperate - I know it's shocking to think, but not every seller has to sell, and some are prepared to ride out this time to higher prices. Be aware that some sellers have a "bottom" price and it may be above what you are willing to pay.
2. The Worst they can say is "no" - Ok, now that is probably the worst they can say, but if you want the chance at the property and they say no, then you may not get a 2nd change to make a 1st impression.
3. Banks aren't giving properties away - Many of the banks have foreclosures. The banks may be in the money business, but they aren't in the business of giving it away. Many banks are pricing their bank owned properties so well that they are getting more than 10 offers! Catch the bank owned properties early when they are listed and be prepared to qualify with the bank as well for their chance to earn your loan business.
4. Multiple Offers Happen - Yes in this market the well priced properties are still getting multiple offers so make sure your offer is well documented so your offer can stand out. We make sure to include personal letters, proof of funds, FICO scores, and pre-approvals so our client offers stand apart from the crowd even when they aren't the highest price.
5. Escrows can be long - Due to the changing loan environment we are often experiencing longer escrows. Sure some finish right on time at day 30, but make sure you stay in touch with your loan officer to find out what is going on. Many lenders haven't done FHA loans in a long time so you may run a little late. Watch your timelines carefully.

Being a buyer in today's Long Beach real estate market is going to go down as one of the best in history. Great prices with great loan rates. Understanding the above 5 items will make the trip to your property much more pleasant. Have fun shopping and remember you can always use the Long Beach MLS for FREE to find the right Long Beach home or condo.

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Stalemate in Long Beach Real Estate

Bank Owned Homes under $500,000

After the great response that we got from the post on Monday in regards to Long Beach Condos under $200,000, we thought we would share about another price range and a different area here in Long Beach. For those interested in their first Long Beach Home and willing to do some work, here is your post! You can always use the Long Beach MLS to find out all the details, as we just summarize the best of the data here for you.

For the information here we searched Bank Owned properties under $500,000 in the Long Beach neighbhorhoods of Los Altos and the Lakewood Plaza and Rancho area. Again, we searched ALL properties, so these aren't necessarily our listings, but we always want to make sure you get the best deal in town.

You would think (according to the media) that there would be just tons of properties available, but actually there are just 3 homes available! So since there are just 3 I thought I would put up information about each of them.

This home on Studebaker is bank owned and requires that you pre-approve with Countrywide as well. It is 3 bedrooms, 3 bathrooms, and over 2,100 sq ft. It is in decent shape, but could probably use some updating. The lot is over 5,000 sq ft and you get a 2 car garage to store all of your stuff. It is listed for $464,900.

This home on Stearnlee is showing available. I will check to make sure if anyone is interested because at $450,000 and being a 3 bedroom, 2 bathroom, I almost doubt that there wouldn't be a few offers on this one (maybe someone hasn't updated the MLS as they should). With an 8,200 sq ft lot this is a heck of a deal if it is actually still available for purchase.

This cute home on Walton St is another 3 bedroom and 2 bathrooms. It is just over 1,200 sq ft and is on a 6,000 sq ft lot. It needs some love to bring it back to it's glory, but it is available for just $459,000 so it is well priced. They do state that they will not help with closing costs unless a full price offer is given. You have to be prepared to pre-qualify with Wells Fargo to get your offer accepted so be prepared for an extra step. It has been on the market for 33 days.

So contrary to the media you can see that if you want that deal on a Long Beach home you better act quickly. Get our Hot List of foreclosures if you want to make sure to stay on top of the best deals throughout Long Beach.

5 Tips to Ensure a Successful Foreclosure Purchase

The news media is constantly reminding all of us that "foreclosures are up". Well it shouldn't be a surprise that foreclosures are up considering we had the hottest real estate market in the past 30 years with historically low foreclosures during that time period. Currently Long Beach foreclosures are less than 5% of the total real estate market. So although they are a small amount of the market, it is important to be aware (and prepared) of what you need to purchase a foreclosure property.

Here are 5 items you need to know to be prepared for the purchase of a foreclosure:

1. Offer Preparation - Each bank is different and may require different information, however it would be a safe bet to have the following: copy of a check, proof of funds to close, pre-approval letter, copy of FICO scores. Know that if you do not have this ready they listing agent will probably not even submit your offer to the bank because the bank only wants to look at complete offers.
2. Contracts - Understand your contract! Most banks will have you sign an "Addendum" to the traditional real estate purchase contract. This Addendum usually overrides aspects of the real estate purchase contract and can shorten important items like inspection periods.
3. Discounts - The banks aren't in the business of giving away their assets. So, even though you are just positive it is a "buyers market" the bank is unlikely to take 50 cents on the dollar. Have your real estate broker show you the active inventory and the closed sales so you can see how well it is priced.
4. Don't be late! - The banks want to sell their property and they don't care that you couldn't get your paystubs over to your lender in time :). The banks will usually charge $100+/day for every day you run late on your escrow so make sure you are prepared with all items dealing with your loan.
5. The leaky faucet isn't getting fixed - You are getting a deal so know that those annoying items that came up on your inspection report aren't getting fixed. The bank complies with items like water heater strapping and smoke detectors (usually), but don't think they are changing the carpet for you.

Keeping these items in mind will help you to have a successful process. Foreclosures are out there, you just have to hunt, use the Free Long Beach MLS and pour through the inventory to see what is there, or contact your local Long Beach real estate agent so they can set you up a customized search.

Banks Not Giving Houses Away

Contrary to the media's belief that inventory levels of bank owned properties are so high that the banks will take anything we have found a bit that banks are holding their ground on many of their properties.

Bank owned properties (also known as REO's and Foreclosures) are currently being priced about 10% below the rest of the traditional resale inventory. This price point has enabled them to get showings, but many consumers feel that since it is bank owned they can offer whatever they want. Although we do empower our customers to write competitive offers for discounts there does appear to be a threshold that the banks will take.

On properties offers from Long Beach to Riverside we have found that the banks:

1. Will still discount off of their current list price (sometimes another 3-5%)
2. If it is a new listing the bank is usually less likely to give up big ground on price
3. Banks will counter offer! They aren't desperate enough to take anything
4. They have been willing to provide termite clearances in some situations
5. They like thorough offers with pre-approvals, FICO scores, and proof of funds like a traditional seller

Keep your eye out for the foreclosure, but act quickly. The well priced foreclosures in prime areas are often receiving multiple offers.

It would be great to hear what situations others have come across in their experience. We look forward to the comments!

Truth Behind Foreclosures in Long Beach

Although the amount of Foreclosures in Long Beach is much smaller than the media would have you believe, they are still available. People think of traditional foreclosures as "great deals" and of purchasing them at the court house for just pennies on the dollar.

Now as a matter of practicality you can purchase them at the foreclosure sales, but you better bring your cashiers check! For those who don't have a few hundred thousand in the bank ready to spend on a property you can still get a deal using a traditional search in the Long Beach MLS.

Here are some items to watch for to understand your purchase of a foreclosure in Long Beach.

• Each bank can have a different purchase contract. This can be an addendum to the traditional purchase contract or replace it entirely. Read the contract so you know what they require as many put in penalties for closing late.
• They are usually priced below "retail" inventory. They can be priced 10% below most inventory, but don't expect to get it at 50 cents on the dollar
• They are sold "as-is". The bank has already lost quite a bit of money on the deal so don't expect them to fix anything
• Make sure your offer is complete with FICO scores, proof of down payment, and a pre-approval letter. They want to see that an escrow will succeed like any seller.

Looking through the Long Beach MLS you can find a few foreclosures. Knowing the prices in an area will help you to spot the deals. Remember there are other people looking too so act quickly when you find that deal.

6 Tips to Know When Purchasing Foreclosures

The common vision of purchasing a foreclosure property (also known as REO or Bank Owned) is purchasing a home at pennies on the dollar in the most desireable area possible. The reality of purchasing a foreclosure is quite a bit different and needs to be understood. Here are some tips to consider if you are looking for a foreclosure:

1. You DON'T have to pay for a service like realtytrac if you don't want to
2. Foreclosures are listed in the traditional Long Beach MLS
3. Foreclosure properties are sold as-is, meaning what you see is what you get
4. Banks often penalize you (from $100+ a day) if you go over the period that you agreed upon for the escrow period (so be prepared to get that escrow done in 30 days! :) )
5. Foreclosures that make it to the general public are generally not in high-end luxury communities but can be in some pretty nice neighborhoods
6. Strong discounts of 10-20% of retail can be expected but don't expect to get one for 10 cents on the dollar

Have fun searching for foreclosures as you can get some great deals on them, but just be aware of what you are getting into.

How Long Does Foreclosure take?

It is important to know how long the foreclosure process takes. Once you know how long it takes, it will make it easier to avoid the foreclosure process. One of the issues with foreclosure is there are some rules but they are more of minimums than maximums and we will do our best to point that out.

1. Foreclosure begins once you are in default of your mortgage - now as soon as you are late on your mortgage you are technically in default. If banks worried about the process every time someone was late it would be unmanageable. Banks typically file the required Notice of Default after a home owner has missed 3 consecutive payments or 90 days late.
   
2. Notice of Default - This is a document recorded at the county that your home is located in. If you live in Los Angeles county it is recorded in Norwalk. Banks do not always file this after you have missed 3 payments. They don't really want to take this step and most will work with you to avoid this step. This is the step where the clock starts going.
   
3. Time for Notice of Default - A home owner at any time can bring the mortgage current with all back payments and penalties. Often banks may be able to waive penalties if you have been in dialogue with them and inform them of your situation. The NOD (Notice of Default) states that you have 90 days before they can set a sale date.
   
4. Sale Date - This is where the home owners home can be sold. The date cannot be set any earlier than 21 days after the 90 day time period of the Notice of default. Once again the bank does not want to send the property to a trustee sale and they do not want this to happen. One can still bring the property current throughout this process. Once someone is within 48 hours of the sale date it becomes very difficult to delay the process but it can be done.
   

So a home owner has 90 days where if they have missed payments an NOD will likely be filed, 90 days for the NOD to be active for, and a minimum of 21 days for the earliest sale date. This gives a total time frame of 201 days for a home to foreclosure and be sold. We have seen the process take 9-10 months and banks still work with individuals. The earlier you contact your banks the better or have your real estate professional who is a trained loss mitigation specialist speak with them to delay the process.

5 Tips to Working with Banks on a Short Sale

Now often times real estate professionals and buyers are scared of submitting offers on short sales because of the fact that banks are involved and the time frame that they take. These situations can often be beneficial for the buyer, seller, and the bank. Banks do not want to go to foreclosure. I know we have stated that in previous posts but they do not. It costs them more money, time, and effort to go to foreclosure. As banks work on their process of short sales there are things you can do as a buyer, a seller, and have your real estate professional do that will help improve the process for everyone.

5 Tips to Working with Banks on Short Sales

1. Have a well documented offer - An offer from a buyer must be so complete that there are no questions that can be asked that an answer is not readily available. Make sure that the buyer has taken time to get pre-approved. Ensure that they submit credit scores (with sensitive data deleted), bank statements, and any other information that a lender would want to do. They want to make sure that things go through successfully.
2. Communicate with the bank regularly and kindly - Banks have people who work for them who are people and not robots. Be kind and call at least once a week to see if anything is needed or missing. This is generally done by the seller or the listing agent as they are the ones who generally have signed authorization to speak to the bank.
3. Make sure the sellers packet is complete!!! - Nothing is worse than having the seller forget to give ALL their information to the bank. Ask the selling agent if the sellers packet is complete and ready to submit.
4. Be patient - The banks are assisting many home owners and are working hard at things. Understand that these things take weeks and sometimes longer than promised. If you are the agents regularly communicate
5. Be Understanding - This is for all parties involved. More than likely commissions will be reduced, repairs may not be authorized or approved, and time frames will extend. It is still a situation that helps out all parties and prevents foreclosure.

These tips will help make the short sale experience as pleasant as it can be for all parties involved.

The Reality of Foreclosures in Long Beach

As many people search the web for "Foreclosures" or Short Sales to find that beach home for $200,000 or respond to the ad for "Buy a home for $1,000" it is important to realize the reality of the market.

1. If the Naples Island Home or Belmont Shore Home is available for $200,000 instead of $2,000,000, the general public (including realtors) won't get access to the deal. Investors who have relationships with banks often buy notes from the bank, but rarely could they even get a home for 10 cents on the dollar.
2. You can buy a Foreclosure property using a real estate broker! Yes, they are listed on the MLS and it takes a little digging to find them, but ask your real estate broker for what is available. The banks like prepared offers so make sure to include your FICO scores, pre-approval, and proof of funds.
3. Closing Costs - With a well prepared offer, you can get the bank to help you with your closing costs if it is a Foreclosure that is on the MLS. They may not give you all of your costs, but they certainly may help, especially as they are selling the property "as-is" they might help to get you in the door!
4. Buying at the Court house - Yes you can purchase a foreclosure at the court house steps when it goes to auction, but remember these are cash purchases! You don't get an inspection period so be prepared and remember to contact your Title Officer ahead of time so you can find out if there are any other liens on the property.

Looking for the deal can be a challenge, but having a professional real estate broker, title officer, and lender can sure make it a much more enjoyable experience. Make sure you learn as much as you can so you can make your purchase one that is filled with success!

Avoid Foreclosure - Government to Help Home Owners

President Bush announced earlier this week that the government would step in and help some home owners to refinance their loans. They want to do this through FHA or the Federal Housing Authority. So how many people are affected by the potential adjusting loans? The government estimates that over 2 million home owners are near or facing foreclosure. So how does this help home owners in Long Beach California? Well first of all let's look at who, what, and how many are likely to get help.

1. The government estimates that about 80,000 will be affected by this new change. That is a very small amount in comparison to what is outstanding in the market currently.
2. They are going to help home owners refinance. Now they are helping those who currently can't get refinanced. This will mean your loan amount must be conforming or under $417,000 so home owners in long beach california may not get much help out of this program.
3. The government will not be bailing lenders out or home owners out with cash or any type of subsidy at the moment.
4. The biggest part of this plan is that President Bush is trying to get the IRS to not tax home owners on the debt relief. Currently if you are working to avoid foreclosure through a short sale or in foreclosure the lender can and probably will issue you a 1099 for the amount that they lost on the sale of the property. This means you will owe taxes on that amount. In some cases that number can be astronomical. This would allow people to work more closely with the lenders and with less fear.

If you want to avoid foreclosure today make sure that you call your lender and ask for a short sale packet or that you ask to speak to the loss mitigation department.

Top 4 Reasons to Ask for A Short Sale

When things get tough, as they are now, in the long beach real estate market some home owners find themselves getting behind in payments. Often through no fault of their own home owners have lost jobs, health reasons, helping family, and rising rates make it difficult to pay the mortgage on their piece of long beach real estate. So what is a short sale and why should you ask your bank for one if you get behind? Well let's get into this.

1. The bank doesn't want to foreclose - Truly banks like to lend money. They have no desire to actually be property owners.
2. It is bad for business - It costs the bank a tremendous amount of time and effort to foreclose on a piece of property and long beach real estate is no different. The average cost of a foreclosure is over $42,356!
3. The number one reason for foreclosure is the bank can't speak with the home owner - That's right lack of communication is the reason behind the majority of foreclosures. So speaking with the bank and asking them to work with you is highly in your benefit.
4. It is better for your credit - Getting a short sale where the bank works with you to sell a property is better for your credit than a foreclosure. The bank has more options on how to report it to the credit agencies.

Remember a short sale is when you are selling a property for less than it is owed. In future posts we will talk about how this can affect you. For now if you are behind on payments, can't refinance, and just need out consider a short sale instead of letting the property foreclosure.