Foreclosure Information

Is it time to buy my first home? How about real estate foreclosures. This are the few questions many people are asking in today’s market.

I would have to say, for now it is not the best time to buy unless you have plenty of cash hidden around or can afford to take home price fluctuation in the coming few months or year. Wait towards until the end of 2008 or early 2009 to see where the Home prices have gone. Last thing you want is to buy a your home at say $370k, then to find out it’s worth only $340k at the end of the year. Keep an eye on real estate prices on the desired neighorbood you want to buy into and if a deal comes, decide if it’s a good price for you to get/buy.

Things to know in the real estate market today : 

1. Don’t let anyone tell you it’s the best time to buy now without proper research.

2. Home Prices probably won’t see an upward trend (Home Price Appreciation) for another 3 to 4 years, maybe longer.

3. If you have to buy, be aware that home prices are still in the downward motion. The correction are not over yet.  

4. If you see a deal of 20% to 50% off the market value, do some research into the homes, check for problems, school data, crime states etc… if it’s minor problem, decide if it’s really the right home for your family.   

Good Luck with Your search for foreclosure homes

Martinez, the county seat of Contra Costa County, in California has a population of 35,866 at the census of 2000. With it remarkable number of heritage buildings, Martinez is situated on the southern side of the Carquinez Strait of the San Francisco Bay Area, facing directly the Benicia city. Being a suburban county Contra Costa has a population numbering 948,816 at the 2000 census.
 
With the rise in the foreclosures, California is placed sixth with 11.5 fillings per 1000 households. Current listings contain dozens of foreclosures in Martinez. On the other hand Contra Costa County scores a listing of 9136 foreclosure properties. 4346 pre-foreclosure properties, 1435 properties on auction, 2134 properties owned by bank, 36 properties for sale by owner 740 resale homes and 265 properties in the category of new homes defines the segregation of the total number of foreclosures
         
The starting value for bid is usually the mortgage value. The trustees of foreclosures in California have the right to ask the bidder to pay the entire bid amount, either in check or cash. Hence the bidder should be ready with cash if he wants the property. The California law enables the lender to fix the schedule for the foreclosure sale as soon as three months after the default notice is received by the borrower. The notice usually goes out to the borrower after he has failed a couple of repayments. With this the foreclosure case usually starts.

We all want a beautiful home of our own but sometimes affording that home is a big problem. Nevertheless, foreclosures allow for individuals to buy homes at a major discount and then either choose to live in them, rent or sell. It’s up to you what you do with the home once you purchase it, but the good news is you will save a pretty penny buying at foreclosures. But, you must know that the foreclosure market is competitive. There are a lot of people out there who want to own real estate within your local area and buying it at a discount is even better. So, how do you go about finding foreclosure that is a good deal? The answer is to change how you are approaching the purchase of a foreclosure.

You may be searching out foreclosure auctions or homeowners and find the auctions are very close and the homeowner is working with a potential buyer already. So, what do you do? The answer is to have homeowners in foreclosure proceedings come to your rather than the other way around. There are quite a few ways you can get homeowners in foreclosure proceedings to seek you out. One of those is to post signs in your yard saying you help homeowners avoid foreclosure. You can also choose to buy a large magnet for your car that says the same or place ads in the newspaper. Making flyers and distributing them at the mall or a large shopping center is a great way to reach people as well.

The next way you can make connections with homeowners who are in default is to get a copy of the Notices of Default listings as soon as it is printed. This information will allow you to seek out the homeowners and make them offers.

The important thing to understand is that you can buy any foreclosed home for a very affordable price if you simply take the competition away. This means you market yourself and have the homeowners come to you. That way you can pick and choose the homes you want to buy in your local community and you can also avoid an auction many times where you have no control over how high prices will go. Your best bet to buying affordable foreclosures is to create relationships with the homeowners so you can get the best possible deal.

It is undeniable that the mortgage world is a world of chaos lately.  All of the statistics out there are staggering, and sobering, and it is forcing more and more lenders and homeowners to look at other options.  With the number of default letters at its highest level in ten years just in the state of California, lenders have to start looking outside of the traditional methods of doing business and homeowners need to look outside the box or they’ll lose their homes.

 Lenders are dealing with more delinquencies than they know what to do with and they are willing to do almost anything to avoid foreclosure.  Many lenders are being forced to accept short sales, something that is not generally done in the lending business.  When we say short sales we are referring to a situation where the balance of the loan will actually go beyond the actual value of the house.  This is done only to avoid foreclosures and until 2005 was rarely considered. 

Forecasting the Mortgage Market

Many were able to forecast that when the sub prime mortgage rates bumped up that it would cause distress and they started planning ahead, forming a specialized market of people who were able provide homeowners short sales to help to avoid foreclosure.  For many lenders, short sales are the only thing keeping them in business and many homeowners would be out in the cold without them, as well.  Many realtors have started taking on short sales to fulfill the market need and experts report that we’ll see many more years of this as there will be another reset of sub prime loans.

Today short sales are more common than ever before, but they do require more time and effort than your traditional sale.  Everyone should be ready and willing to do more paperwork, and they should also be ready for a clear cut timeline as a homeowner generally has just 122 days from the notice of delinquency to take advantage of a short sale opportunity.  Lenders will not offer short sales to just anyone, for instance they may extend the sale to those that have suffered the loss of a job, illness, death, divorce or change in family status, but they wouldn’t offer a short sale to someone who simply decided they didn’t want to work or someone who decided that playing poker was more important than paying the mortgage.

How to avoid Foreclosures with short sale

Many believe that short sales are simple and easy and they simply need to sign on the dotted line to have it all done with.  While a short sale is not all that different from a traditional sale, there are some legal differences and some considerations that one should make to protect themselves.  Of course, this applies to California law only, but the potential legal ramifications of short sales should be considered wherever they take place. 

Short Sale Considerations

The first thing that buyers need to understand is recourse and non-recourse loans.  Owner occupied properties that are purchased through a lender are considered non recourse, and what this means under the law is that there is that if there is any deficit in a foreclosure the borrower cannot be forced to come up with this shortage.  This may sound good on one hand, but the problem is that many trained individuals in short sales will attempt to have you sign a note for the unsecured balance to try to invalidate the fact that it is a non-recourse loan.  Luckily, you have the law on your side here, and you can legally refuse to sign the note, explaining that it is a non-recourse loan that you are not responsible for any deficit.

Buyers should make sure that they have an understanding of California civil codes that pertain to real estate, though this can be hard if you are faced with the option for a short sale on short notice.  The civil code sections that you may want to look into are 1695 as well as 1995.17.  The code weighs heavily on real estate professionals saying that investors in a property that is owner occupied have to be represented during the buying process by a real estate agent that has a license and is also bonded for twice the value of the property at hand.  The problem lies in the fact that bonds aren’t available, which means that technically the buyer cannot be officially represented by a real estate agent during the buying process.

Another process that you should be aware of as an investor is that by law an investor of a one to four unit owner occupied property has a legal requirement to offer a five day rescission right to the seller.  It is a good idea to use C.A.R. forms NODPA, HEAA, and HENC because all of these forms comply with all of the requirements of the investor that wants to buy a property from a seller who has received a notice of delinquency on a property.