More On Foreclosures

Here is a link that contains some valuable information about short sales and foreclosures. http://realestate.msn.com/article.aspx?cp-documentid=20773062>1=35000
Do not accept everything as gospel but it does provide some guidance for planning if you're in trouble.
We hope you trust us enough to call for advice when you need help. In advance I can say that if you ask us if you should consider or actually take either of these steps, we'll advise consultation with a competent attorney and/or a CPA. Real Estate and Mortgage Brokers are neither licensed nor legally qualified to counsel on these matters. Where we can offer some valuable help is when your informed decision has been made to sell your home through a short sale, or you have determined to keep your home and want help modifying your mortgage to an affordable level. I urge you to call us. We'll help you where we can and refer you to appropriate counsel where we can't. Calling costs nothing, failing to call could. Visit the foreclosure link at http://newagerealty.biz/
or http://chicorealtymortgage.com

You can get a good view of the probable current and future value of property by considering the number of properties likely to be coming on the market in your area, maybe even on your street. In the current financial market the chances are very good that you can get a satisfactory modification of your mortgage, keep your home, get rid of the worry. No Up-Front Fees. Call us.
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Foreclosures

The last blog dealing with appraisals and the difficulty appraisers have identifying legitimate comparable sales results in large measure from the subject of this blog, foreclosures and properties in default in ever growing numbers. I'm going to list some statistics taken from the Foreclosure Radar data base, which we have included on both of our web sites for your continued use. The numbers are frightening and reflect, but do not adequately describe, the emotional and financial trauma being visited upon so many of our neighbor families. Still waiting to enter this more serious level are the approximately 12% of mortgages in the country that are delinquent by 30 or more days.
In this list REO=foreclosed, NOD=notice of default filed.
Chico, REO 68, NOD 171; Paradise, REO 31, NOD 64; Red Bluff, REO 32, NOD 80; Orland, REO 20, NOD 43; Oroville, REO 79, NOD 167; Willows, REO 13, NOD 16, and the last, Yuba City, REO 143, NOD 358.
I'm trying to position our offices to be of some help in this tragic mess. Although we're a loan broker, I'm not particularly interested in being an advocate for the lenders, but will negotiate very hard for buyers of foreclosed properties. We will reduce fees to the minimum for those wishing us to list and sell their distressed property through a "short sale". We will reduce our fees for those in a position to refinance in advance of the wave of resetting mortgages expected in late '09 and 2010. Finally we will provide a no up-front fee mortgage modification program to those wanting to keep there homes. Guaranteed results or no fee. The Federal Home Affordable Mortgage program has given lenders some inducement to cooperate and it is likely that upwards of 75% of people facing default or in default can restructure their mortgages to make it realistic to keep their homes. If you work with us we'll work for you.
Not meant for this to be a doom and gloom blog, just a reality check. We're a long way from the end of this mess.
As usual,
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Appraisal Problems

Our industry is in some turmoil because of many things, banks unwilling to lend, uncertainty as to the possible bottom of the steady decline in home values, uncertainty as to the future level of interest rates, and now, added to the problems, a dramatic change in the appraisal process which now requires appraisers be selected under a program called HVCC, Home Valuation Code of Conduct. Under this system appraisers are no longer selected and hired by brokers like me, or by the wholesale lenders with whom we do business, but instead by companies to whom we submit our appraisal requests who then select, or designate, an appraiser from a pool of appraisers. The result of this is a removal of possible influence on the appraiser by the broker or lender, also it represents an additional fee to the borrower since these companies are taking a very large slice of the fee, and a reduction in income to the appraiser, plus a greater likelihood the appraiser will be of lesser skill or quality than under the previous system. Because appraisals have been coming in below expectations nationally there has been a great deal of concern about the effectiveness of the new system. The National Assoc of Realtors has been lobbying hard to get a change in the rules because they feel the market is being adversely impacted by a too conservative approach by appraisers, and at the moment there is a bill being presented to cause an 18 month moratorium in the new program. This bill is a joint effort by Childers, a Mississippi Democrat, and Miller, a California Republican. The perception is that appraisers are running scared under this new program, which resulted from the excesses of the recent past in appraising to too loose a standard. Certainly there are transactions which have been blocked by low appraisals and real estate and mortgage people are upset at this interference in their income stream, but whether the appraisals are unrealistic is another question altogether. The appraisal process depends on finding a number of representative comparable properties that have recently changed hands between informed buyers and sellers. Not that easy to do when a significant number of sales are of a distress nature, foreclosed properties or "short sales", and when the number of transactions is reduced, and when the market is declining. Every time the government becomes involved in the business process some form of calamity follows. Lenders were induced to make bad loans, appraisers cooperated, now we're led to believe the same government can correct the problem. Changing underwriting standards is well beyond the expertise of government. All that really needed to happen to correct the problem of the recent excesses was to let the investors who pushed for looser and looser lending suffer the consequences of their cupidity and not reward them with a bail-out. If a loss is the result of bad judgement, then judgement soon improves. If gambling is risk free then it will continue. The change in appraisal regulations is typical government response. The appraisers didn't cause the problem, they were a symptom. Possibly the NAR is right to want a review of the new HVCC rules, but I'm sceptical of the motives in their request.
On a local note. Chico has enjoyed a niche environment in the real estate market, because it's a nice place to live, and because there are some above average incomes available in the area. As a result the price decline in home values has been more modest than surrounding communities. That may be about to change. The high end employers are beginning the process of furloughing and laying off, and unemployment is rising at all levels. The condition of the economy in California is desparate because of profligate spending and lack of fiscal responsibility, and the federal government is racing to demonstrate that they can be even more inefficient and thoughtless. Not to be a viewer with alarm, but be prepared for a long recovery period after the recovery begins.
If you're thinking of buying or selling, or need to talk about a mortgage, we're here to help. Your interests come first, always.
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