Tag Archives: foreclosure

How do I Protect a Vacant Home That I’m Trying to Sell?

July 20, 2009 jd

To make a long story short, if possible don’t leave your home vacant if you are trying to sell it. However, if you do have to vacate your home, here are some guidelines that will help you.

To begin with, if you leave your home vacant for thirty days, your homeowner’s insurance policy may expire or be cancelled. Check with your insurance agent to protect yourself. You know how Insurance companies are, they are notorious in finding ways not to pay on your insurance policy. Remember, it could be considered fraud if you leave your home vacant for a long period of time and then say you have occupied it if something happened to your home in your absence

• Have your real estate agent (like myself) advise you on how to make your house look occupied and have him check your house on a regular basis.

• Again if at all possible, don’t move out until you’ve sold the home. If you are one of a couple, consider staying behind, or living there occasionally until the home is sold.

• You can rent out the home. Not only will the home be lived in, the rent will help cover your carrying costs. You may still have to change your homeowners’ insurance policy to reflect the property’s new rental status — say to reduce your contents coverage — but it’ll be cheaper than vacant home insurance.. Of course, renting carries its own problems, making sure that you get a good tenant to start with. Then there is a law which states that you have to give the tenant 24 hours notice before you can show the home. This could result in a lost sale. Otherwise, hire a house-sitter or let someone you trust live there until it’s sold.

•If you must move out make the home look lived in. No matter what you do, you still have to keep the home maintained by cleaning the yard and gutters, trimming trees, clearing the gutters, checking for leaks, shoveling the sidewalks and driveway, and winterizing or summer-izing as necessary.

• A good way to protect your home if you must vacate, is to install a home security system that is monitored. Our local Beam Center provides excellent service and I have used their services for years.

• Give the lived-in look some redundancy. Have an acquaintance bring in mail (Security experts say to stop mail and other deliveries when you are away). Ask your neighbors to keep an eye on your home and to report any suspicious activities to the police. Ask a neighbor to park their car in the driveway. Install timers on lights and leave window coverings and some furniture in the home.

Foreclosed Homes Trashed by Previous Owners

July 18, 2009 jd

Not too long ago I wrote an article about people trashing their homes during the foreclosure process. Somehow, they feel that its the mortgage company’s fault that the home they bought is now in foreclosure.

httpv://www.youtube.com/watch?v=Ms6IzSSfcoI
(Note, if you cannot see the video, download Adobe Flashplayer)

Although this video is a few months old, it’s still shows what happens to many of the homes that have been foreclosed on. The reason I’m reposting about trashed forclosed homes, is because just the other day I know someone that moved out of their condo which will soon be in foreclosure. Abandoning the condo, they decided to take the kitchen stove, built-in micro wave, the dishwasher and some of the light fixtures, none of which is personal propery and is an integral part of the condo. The condo will soon be in foreclosure, since they are not making any more mortgage payments. They decided that the place was not worth the price they paid for the condo. So much about honoring any part of your debt.

I’d appreciate your comments on this article.

Real Estate

Value of Home Goes Down, Home Owners Walk Away

July 8, 2009 jd

foreclosed-home

A study of the Massachusetts housing market by researchers from Northwestern University and the University of Chicago concludes that a home owner’s propensity to default increases the further their loan goes under water.

The study found that home owners begin to walk away after declines of 15 percent or more. More than 17 percent of households would default, even if they can afford to pay their mortgage, when the equity shortfall reaches 50 percent of the value of the house.

The researchers found:
• People under the age of 35 and over the age of 65 are less likely to say it is morally wrong to default compared to middle-aged respondents.

• People with a higher education (8 percentage points) and African-Americans (14 percentage points) are less likely to think it is morally wrong to default, whereas respondents with a higher income are more likely to think it is morally wrong.

• Default is considered less morally wrong in the Northeast (6 percentage points) and West (8 1/2 percentage points).

• There was little difference in the moral view of strategic default among Republicans and Democrats, but independents are less likely to say defaulting is immoral.

• Respondents who supported government intervention to help homeowners were 12 percentage points less likely to say strategic default is immoral.

So what do you think, is it OK to walk away if you are still able to make your monthly payments on your mortgage?

Real Estate

Victoria Gotti Home in Foreclosure

July 6, 2009 jd 1 Comment

victoria-gotti

The bank has started foreclosure proceedings on Victoria Gotti, daughter of the infamous John Gottie, palatial estate on Long Island — the same used in the TV reality show “Growing Up Gotti” — saying she owes a whopping $650,000 in mortgage payments, according to court papers filed recently.

Gotti’s lender, JP Morgan Chase, claims the daughter of the late Gambino crime family boss John “Dapper Don” Gotti — owes them that staggering amount after she failed to make payments starting in September 2006, court records reveal.

The bank said in court records that the mafia princess owed them $25,000 a month in mortgage payments.

The home, which Gotti once tried to sell at $4.8 million but lowered once she put it on the market this past January for $3.2 million, became known to TV viewers across the country after A&E filmed the reality show, “Growing Up Gotti” there in 2004 and 2005.

From August 2004 until December 2005, she was the star of Growing Up Gotti, an American reality television on the A&E Network. The show, which was short lived, also featured her three sons. The Smoking Gun launched a parody of sorts entitled Blowing Up Gotti, which consisted of family visits to John Gotti while he was in prison that prison officials routinely taped.

A&E faced exceptional criticism for the show. Some viewers complained that A&E was showcasing a family living in luxury that was purchased by blood money made by her father, John Gotti. They felt the network was glorifying organized crime. Many have also complained about the foul language used on the show, as well as the dysfunctional relationship between Victoria Gotti and her sons. Film.com said about the show: “Victoria Gotti has the warmth of an ice pick and her sons the charm of, well, thugs.”

Real Estate

Frank Sinatra’s Resort in Foreclosure

June 16, 2009 jd

Having gone a few times to the Cal-Neva Resort, owned by Frank Sinatra for three years in the 1960’s, it’s sad to see the historic resort in foreclosure. Unique in that part of the resort is in Nevada and part in California, you could jump in their swimming pool which has the state line bisecting the pool in two. You could swim from California to Nevada in just a few strokes!

The resort was up for auction and the result—zero bids. The recession is taking a big bite out of tourism around Lake Tahoe. Indian gaming in California is keeping day trippers closer to home. And Ezri Namvar, the hotel’s most recent ex-owner, was forced into bankruptcy amid several dozen lawsuits, many from the tight-knit Iranian Jewish community in Los Angeles, which alleges that he ran a $500 million real estate fraud.

Marcil’s company, National Hospitality Holdings, specializes in turning around hotels in trouble. It was hired by Canyon Capital Realty Advisors, the Los Angeles company that foreclosed on the Cal Neva.

Canyon officials said their April 8 auction flopped because of the resort’s unique location: The border between California and Nevada splits the property. “It’s the only place,” Sinatra joked, “where you walk across the lobby — and get locked up for violating the Mann Act” (which bans interstate transportation of women for immoral purposes).

The odd division required simultaneous auctions in Reno, Nev., and in Roseville. The complicated process “masked” the resort’s real value, a Canyon spokesman said.

The resort was once a watering hole for elite seekers of quickie Nevada divorces.

Over the years, it was raided by Prohibition agents and shuttered by the IRS. Today, the property once known as the “Lady of the Lake” is showing her age.

In 1983, Ron Cloud, a Fresno, Calif., plumbing contractor who had acquired the Cal Neva, lost his license for allegedly rigging the slot machines and strong-arming debtors

Source Steve Chawkins Los Angeles Times

Real Estate

California Imposes Statewide 90 Day Foreclosure Moratorium

June 14, 2009 jd 2 Comments

really-you-got-to-stop-sign

California is imposing a 90-day moratorium on housing foreclosures under a new law that takes effect Monday, June 15, 2009.

The law is expected to make lenders try harder to keep borrowers in their homes. Loan companies must prove they tried to modify the delinquent loans before they can begin foreclosing.

But supporters acknowledge the California Foreclosure Prevention Act won’t stop thousands of foreclosures from eventually happening. There have been more than 365,000 foreclosures in California since early 2007, with many more already scheduled.

The law will largely press lenders to follow the Obama administration’s Making Home Affordable Program that began in March. That encourages lenders to cut interest rates or rewrite loans to 40-year terms to get payments below 38 percent of a borrower’s monthly income. Other options include reducing principal and tacking missed payments to the back of the loan. Under the law, California officials also can encourage short sales or deeds in lieu – options in which banks accept less than owed – for borrowers who want to leave or don’t qualify for modifications.

In summary, here’s what will happen starting Monday:

• Lenders will submit applications to the state outlining their loan modification programs. That gives them a 30-day exemption from a moratorium.

• If the state OKs a lender’s program, the firm is permanently exempt from the 90-day delay on foreclosures.

• If the state rejects the program as inadequate, a lender has 30 days to upgrade it and be reconsidered.

Leyes said consumers will be able to see a list of lenders that comply with the state’s requirements by mid-July.

Source: The Sacramento Bee

Real Estate

Want a Bank Loan, Just Sign Here!

June 7, 2009 jd

chasebank-mortgage-ad-2002

Wonder why we have so many foreclosures now? Here’s an advertisement from “Home & Land” a Monmouth County, New Jersey real estate promotional magazine from the summer of 2005. Reading the ad, you can see how loose the lending standards were.

Chase’s “Simply Signature” mortgage program involved nothing more than your signature, a mirror placed under your nose to make sure you were breathing and wonders of wonders; you had a mortgage to buy your home!

Chase was not the only one’s making “Simply Signature” loans, Washington Mutual, (gone), Countrywide (gone), and since 2006 – 345 banks have “imploded” due to their loose lending practices.
So this is the reason we are in the mess we’re in.

Total deregulation of the banks, where they made loans, forgetting the safe practices they had used before, in which the requirements were; good credit, a reasonable amount for a down payment, and good appraisal practices. That was all thrown to the wind, in a mad dash to make as many mortgages as possible, then selling them off in bundles called derivatives to un-wary investors so they could make more unsafe loans.

You can thank the politicians, along with the banks, with their strong lobbyists paying off both sides of the aisle for the deregulations that have led to the present recession. Some blame the Fed for loose money standards, but no one made the banks drop all their safe lending practices. If you think of what you would do if you had 500 thousand dollars to loan out as an investment… would you just give it out to anyone? I wouldn’t if I really wanted a safe return on my money!

For a list of the failed banks go to Implote O Meter. This site keeps track of failed banks

Failures of Savings & Loans Crisis due to de-regulation Wikipedia

And, of course the banks are STILL fighting deregulation, see New York Times article: Crisis, Banks Dig In for Fight Against Rules

Real Estate

More Signs of Housing Recovery

June 1, 2009 jd

california-map-increase-dec

While there may be another storm of foreclosures on the horizon, at least for now there are some signs of recovery for our housing market. California is the bell weather of the economy for the nation. Any sign that the housing market in California is recovering is a sign that the economy is recovering.

It’s the first back-to-back increase in the state’s housing prices in two years, following an increase in the median price of homes in March from February. The median price of $256,700 for single-family homes in April is up from a median price of $253,040 in March, according to estimates by the California Association of Realtors. (In Nevada County for the month of May the median has ranged from $295,000 to $280,000)

Overall the housing values in California increased 1.4% statewide.

The April prices were still off 36.5% from the same month a year ago, but the sales of 540,360 homes on a seasonally adjusted, annualized basis represented a 49.2% rise over the same time, the Realtors group reported Thursday.

April also marked the eighth consecutive month of single-family-home sales above 500,000 units. The inventory of unsold homes continued to shrink, to 4.6 months’ supply from 9.8 months a year ago. “It appears that the median price is now at or near the bottom,” said Leslie Appleton-Young, chief economist for the Realtors’ association, who has previously made more subdued comments.
“At best, some markets have at least temporarily leveled off in price,” said Andrew LePage, analyst at MDA Dataquick Information Services, a market-research firm in La Jolla, Calif. “I don’t see any markets that have clearly bottomed out.”

In general, the best-performing markets across the state in terms of sales volume were in lower-priced, inland areas that had seen some of the steepest declines in prices. Sales in the high-desert region outside Los Angeles, for example, more than doubled in April from the same month a year ago, after price declines of 49.5% over the same time. Median prices, even month to month, continued to fall there amid a glut of foreclosures.

But in several more densely populated areas, the median price was stronger. Los Angeles County’s median rose 1.9% in April from March, after falling 31% over the past year. In Silicon Valley’s Santa Clara County, the median price rose 3.6% after a year-over-year fall of 38.2%, the Realtor’s group said. Boosting sales are some of the best affordability rates in almost a decade, say economists.
Realtors’ officials said sales remain weaker for more-expensive homes. Inventories of unsold homes in the under-$500,000 segment, for example, shrank to nearly three months’ supply in April from about 10 months a year ago. But the inventory of homes priced at more than $1 million rose to about 17 months from 10 months a year earlier.

The problem for the higher end of the market is that lending has tightened greatly for the jumbo mortgages that are often needed to buy a home costing more than $500,000, say economists. Some lenders now require down payments of as much as 30% to 40%. As a result, sales have remained anemic in pricey markets like San Francisco

Source: The Wall Street Journal

Real Estate

Foreclosed Homes a Buying Feast for Investors

May 26, 2009 jd 1 Comment

foreclosure-chart

Foreclosed home sales are going up here in Nevada County and elsewhere. The price of many of the foreclosed homes are making it affordable for investors to buy homes, do minor repairs and resell them for a profit. In many cases, mom and pop buyers are in the market to get a few rentals. But the big boys are into the market now, knowing that this is a buying opportunity a lifetime.

According to the Wall Street Journal:

“The pace of housing sales has been rising in many markets this year, but it is only partly because families seeking affordable housing are returning to the market.

It also is because of investors like former Deutsche Bank managing director Matthew Cooleen, whose firm has spent $30 million buying pools of foreclosed houses from banks.

His newly formed Greenwich, Conn.-based firm, HudsonCross Financial, is betting it can make a profit reselling in beaten-down markets in states like Nevada, Arizona and Florida and in Southern California because it is paying so little for the homes.

In Phoenix, Mark Allen, a former division president at D.R. Horton, the nation’s largest home builder, is reselling homes he is buying at courthouse auctions with funding from Gorilla Capital, an Oregon-based firm that targets foreclosures. “It’s the only way to make money in Phoenix residential real estate right now,” Mr. Allen says.
After mostly retreating from the housing market after the bubble burst, investors are returning in droves, hoping to take advantage of the distress. In many cases, Realtors say, investors also are outbidding first-time home buyers and other would-be occupants because they often come to the table with all-cash offerings.

“Foreclosures are low-hanging fruit at the moment,” says Laurence Pelosi, who helped close big land and housing-development deals for Morgan Stanley before he left the bank earlier this year and joined McKinley Partners, a small investment firm that is buying foreclosures in California.

McKinley and a partner are in contract to buy four homes in Pittsburg, a small city east of Oakland. The firm is buying one house, which was valued at $412,000 near the peak in 2005, for $84,000. McKinley plans to rent out the homes for as much as $1,200 a month. After paying to manage the property and other expenses, it expects 5% to 7% returns on its investment from the rental income and, hopefully, a big payoff from a resale when the market improves.”
“Foreclosures are low-hanging fruit at the moment,” says Laurence Pelosi, who helped close big land and housing-development deals for Morgan Stanley before he left the bank earlier this year and joined McKinley Partners, a small investment firm that is buying foreclosures in California.”

By the way, if you are in the market to buy foreclosed homes, please contact me at E-Mail John O’Dell or use the contact page. Thanks

Real Estate

We’re Getting Back to a “Real” Home Market at Last

May 17, 2009 jd

Housing affordability among first-time Californian home buyers in Q109 improved more than 20 percentage points from the year-ago period, according to survey results released Thursday by the California Association of Realtors (CAR). This is good news for us here in Nevada County. The more people who can afford to buy a home, the sooner home prices will stabilize.

Home prices became out of reach for over 86 percent of the people in California, when real estate was selling so fast and furious. The only reason home sales kept going was the easy lending practices. Buyers who really couldn’t afford a home were able to get home loans, resulting in the large number of foreclosures that we have at the present time. Now we are getting back to a “real” home market.

The data suggest the potential for a significant increase in first-time buyer presence on the market, although it’s unclear how many of these households will actually participate. The increased housing affordability indicates substantially lower home prices, likely affected by foreclosure sales in the state.

CAR found 69% of California households could afford to purchase an entry-level home in Q109, compared with only 46% in the same quarter last year.

The median entry-level price for a home in California was $213,040 in the first quarter, making the estimated monthly payment $1,270. A California household needs a minimum $38,090 yearly income to purchase under these circumstances, CAR said. These households typically purchase a home equal to 85% of the prevailing median price.

Californian households might enjoy some new affordability due to the state’s high foreclosure sales volumes. A monthly report released this week by ForeclosureRadar saw foreclosure notices ease by 18% in the state during April, while sales at auction rose 35% overall and a record number of properties sold at an average 28% below the estimated market value.

Areas like California with high volumes of so-called “distressed” sales — which traditionally fetch 20% less than non-foreclosures — also tend to show the first signs of recovery, National Association of Realtors economist Jed Smith tells HousingWire for the upcoming June magazine issue.

“We’ve seen some phenomenal strength in California, Arizona, Nevada and Florida recently, largely because prices in those markets got bid down to such a point that the first-time home buyer and probably many others have seen a real opportunity there…to come back into the market,” he says