Posts Tagged ‘California real estate’

Mortgage Payments Too High? Here is What You Need to Do

Friday, September 8th, 2017

Believe it or not, there are MANY homeowners who are underwater, still, years after the mortgage meltdown. According to Core Logic, 6.1% – 3.1 millions homes – of all mortgaged CA homes have negative equity, as of the first quarter of 2017. Short sales are also increasing recently as many variable mortgages that were obtained back in the heyday before the crash recently reset.

If you are underwater, delinquent with your mortgage payments, or about to be, or if you are making payment on a loan(s) that reset and the increased payments or rates are a struggle, you need to be proactive, and act sooner rather than later.

Here are some options to help you start thinking and researching:

1. Call your lender(s). If you are late on payments or are about to be, you need to call your lender asap. They can help you figure out a plan. They likely will start with the possibility of a loan modification, where your payments can be reduced if you qualify.

Note here that depending on how much your payments are and how deeply underwater you may be, a loan modification may not make sense, but it is still important to go through the motions as a first step to try options.

2. Refinance. This is great in theory but if you are underwater and there is no equity in your home it is not possible. If there is at least 10% equity in your home then definitely find a good mortgage professional (call me if you need a referral) and go this route.

3. Sell the house if you have enough equity. This will allow you to move on and make a smart purchase that fits into your budget, or rent. Of course if you are underwater chances are you do not have equity in your home so this would not be an option for you. But if you can sell your home and make a little money to pay down some debt and get into a rental or inexpensive replacement property, it is best to do that sooner rather than later.

4. Short sale. This is a great option if you are underwater and the loan modification does not work or provide enough financial relief. It will effect your credit but not as badly as a foreclosure. Make sure you speak with a real estate agent who is familiar with short sales and knows how to negotiate with the bank(s), and that you really understand the process and consequences – click here for more information on short sales. There is a timeline for short sales that can help you figure out how long it might take before you would have to move out – click here to access the timeline for California.

4. Other options. If a short sale is not right for you for whatever reason, there may be other options (such as a deed in lieu of foreclosure and possible lender or government programs – there are also specific programs for military members and possibly others so you need to do thorough research) that could work depending on your circumstances. Again, it is important to find an expert who can provide appropriate counsel that will allow you to make informed decisions.

4. Foreclosure. This is a final option if you have exhausted others and there is no relief in sight for getting out of your mortgage obligations. Make sure that before you go down this road you have investigated other options that may apply to you. Foreclosures can seriously affect your credit scores for years.

6. Credit counseling. If your debt issues extend to other areas or credit, such as high credit card balances or trouble paying bills, you should seek counseling to help you get back on track so you can pay down your debt and move on. Don’t focus on the trouble you have, but on improving it so you can be sure not to make the same mistakes again down the road. There are some amazing credit counseling programs and helpers out there – I know of a wonderful attorney who handles this so let me know if you need the referral.

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The bottom line is that if you are in trouble with your mortgage and other debt, do not wait until it is too late. The door for other options could close on you, forcing you to foreclose on your home. If you act early you can usually come to a better solution that will allow you to move on without taking such a hard hit to your credit score.

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California Love

Monday, July 16th, 2012

Most people who live here, love it here. I am a 100% California girl, have lived here since the day I was born, and have no desire to leave. See what others think of California via moving trends.

 

Infographic courtesy of C.A.R.

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Real Estate News REcap

Monday, February 20th, 2012

In case you haven’t been following the news lately, there is a lot of real estate-related news making headlines right now. Here are some of the big stories:

1.  Underwater homeowner refinancing to include non-Fannie and Freddie backed loans? Many people are aware that the new version of HARP will reach out to help homeowners who are underwater (see the previous blog), but still many more have been asking whether they will be able to seek similar refinancing possibilities if they do NOT have a loan backed by Fannie and Freddie. There have been rumblings about this, and last week I saw a few articles on this topic. HARP2, which is expected to roll out in a few weeks, is expected to open up the refinancing option to many homeowners who are underwater. Once that ball gets rolling, look for more information on applying similar relief to those who are underwater but do not have loans backed by Fannie and Freddie. This could change the housing situation and prevent many future foreclosures.

2. Home purchasing is the most affordable in decades. According to an article published last week by CNN, the National Association of Home Builders/Wells Fargo Housing Opportunity Index, housing price declines and low mortgage rates have created a rare opportunity for those who earn national median salaries – 75.9% of all new and existing homes for sale fell within that affordability range during the last quarter of 2011. The number has not been this high in the 20 year history of the index. Of course, whether one can afford a home versus whether one can actually buy one are not one and the same – obtaining loans are still tricky for many borrowers.

3. Distressed inventory is keeping California home prices low. Despite the increase in housing inventory last month, prices in California remain low due to the number of distressed inventory on the market, according to the California Association of Realtors. The Association reported that the median price of a single family detached home dropped 6.7% in January from December, and that compared to January of 2011, the median dropped 3.9%. With inventory rising and heading into the Spring sales season, it will be interesting to see what happens to prices, as some areas seem to be on the upswing.

4. Delinquency rate is dropping (but is that telling?). The rate of delinquencies has been dropping, as reported by the Mortgage Bankers Association, and is currently at only 7.6% of all mortgages. Still, about 44% of all homes in the U.S. are currently in foreclosure proceedings, which doesn’t really make the first figure sound too promising. Although California is ahead in clearing it’s backlog of distressed inventory quicker than many other states, now that the robo signing lawsuits have been settled we may see more properties go into foreclosure – a large percentage of these were waiting in the wings while the settlements were being negotiated. Also, we need to factor in HARP2, which will come into play in a few weeks – this could also have a big effect on preventing foreclosures, especially if the administration extends it to non-Fannie and Freddie backed loans, as planned. So, stay tuned – it will be an interesting year for distressed inventory.

5.  Property valuation fraud increases. The recently released Mortgage Fraud Risk Report indicated that property valuation fraud increased 8% in the fourth quarter of 2011. Arizona was ranked the riskiest state for fraud, with Nevada in close second. California ranked fourth. The report studies four specific types of fraud risk: property valuation, occupancy, identity and employment/income.

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Real Estate News REcap for January 12, 2012

Thursday, January 12th, 2012

There is a lot of news out there in the real estate market, and much of it is very positive in pointing toward a market recovery. I am not putting a spin on things – this is what is going on now and the news looks good.

Mortgage Delinquencies Down. The number of mortgage delinquencies is lower than it was back in January of 2010 – 25% lower, according to LPS (Lender Processing Services). What does this mean? Many say this means the market is starting to recover, and they are predicting a decent year for housing. With less delinquencies there will be fewer foreclosures. The states with the highest percentage of non-current loans are Florida, Mississippi, Nevada, New Jersey and Illinois. Those with the lowest percentage of non-current loans are North Dakota, Arkansas, Wyoming, South Dakota and Montana. You can read the entire report here.

Mortgage Applications Rise 4.5%. Continuing on with the premise that the market is recovering, mortgage applications are on the rise, according the the Mortgage Bankers Association. Refinancing also rose, and with low interest rates continuing it could be a boom to the Spring home buying season. Click here to read the entire story posted by Housing Wire.

Lowest Reported Lender Owned Inventory Since 2007. Lender owned inventory, or REO properties, has dropped 34% since 2010, and is at the lowest rate since 2007, according to a year-end report by Realty Trac. 804,423 homes were repossessed by lenders in 2011.

Fannie Mae Extends Mortgage Forbearance Program for Unemployed Borrowers. Fannie Mae just released new guidelines to help unemployed borrowers. The servicer will reduce or suspend mortgage payments to those who qualify, for a specified period of up to 6 months if requirements are met. At the end of the period the servicer will evaluate to see if the borrower is eligible for up to another 6 month extension. No foreclosures will be filed during these forbearance periods. The program is slated to begin March 1, but servicers are being encouraged to begin helping borrowers right away.

And some California real estate news…

Keep Your Home California Program Adds More Lenders. Keep Your Home California, the program dedicated to helping borrowers avoid foreclosure, has added more lenders to the program roster, bringing the total to 55 servicers who have pledged to assist struggling homeowners. According to a Union Tribune article, the servicers are amongst the biggest names in the mortgage industry, holding 90% of all California home loans. For more information on the program you can visit the website.

Mello Roos Taxes No Longer Deductible. A new tax law will create more tax liability for homeowners with mello roos taxes. Until now, a homeowner was able to deduct his entire property tax bill, including mello roos assessments, from his state income tax. Starting with the 2012 tax bill, the Franchise Tax Board will require property tax bills to be divided into deductible and non-deductible portions. Mello roos taxes will be non-deductible. Since the 2012 taxes are not due for over a year there are groups that will be fighting this tax increase, citing a bad move on behalf of the state in difficult financial times. If the law sticks it could create problems in selling homes with mello roos taxes, leading to losses in property values. We will have to wait and see if the FTB reverses this one.

 

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