There is no question there have been hundreds of tantrums regarding the control of inventory REO agents have had in the past couple of years. Many who had those tantrums failed to create the relationships early enough to get a foothold on any meaningful accounts is the main reason. Other reasons follow – many discovered that being a rock and roll REO agent requires a lot of patient capital; extremely disciplined work standards and the fact REO agents resign themselves to server side applications that keep them at the keyboard for hours on end.

Well, times are changing and I’m going to make a short explanation of why door knocking is vogue…

Lenders statistically net more money on a Short Sale than on a REO. That is the shift that is taking place and the key to capitalizing on this requires an effort similar to what successful REO agents did; simply create the relationship before anyone else!

The only way you are going to find out who these sellers are is to find them prior to the Notice of Default (NOD) being filed. Once that happens, they are open and fair game for everyone and a new target for a litany of mail. Good old fashioned shoe leather will beat out direct mail on this one. Why? Because nothing beats a face to face call on a prospect and especially on this subject. Also, direct mail cannot ask and receive referrals like you can in person. Pretty simple.

Count on NOD’s rising too. There will still be an REO market of sorts, as a result of poor documentation of liens, uncooperative subordinate lien holders, high income sellers that don’t fit guidelines and poor yield spreads that will cause the lender to elect foreclosure over a short sale.

Obtaining Due Process in Non-Judicial Foreclosure States

Things are starting to get really ugly out here on the front lines. The banksters latest tactic has them confirming in writing that the homeowner’s eligibility for a modification is being considered while secretly continuing to foreclose.

The homeowner breathes a huge sigh of relief and waits….and waits….and waits. Then comes a knock on the door and the homeowner is out on the street. And, in more and more cases, the borrowers are not even being served with notice as required by law.

Anyone, and I mean anyone, can record a notice of default, wait the appropriate amount of time, and file a notice of sale; take these two documents to court and get an unlawful detainer.

The system is being abused by third parties who’s only interest in the property is the desire to collect on credit default swaps.

One way to advance awareness of the problem of pretender lenders would be to record these notices on the homes of all of our congressmen.

There is no judicial review, no oversight and, as a result, no due process even for those who have done nothing wrong; and nowhere is anyone considering the rights of the true beneficiary.

There is no review of the legitimacy of the foreclosure, and unless the borrower is willing to go to court and fight, there is no stopping the foreclosure.

And, with more borrowers rising up to fight their illegal foreclosure, the courts are becoming more crowded and judges are becoming impatient, often dismissing the borrower’s case without even a preliminary review of the facts.

In their view, the purpose of non-judicial foreclosure is to provide a quick and inexpensive means for the lender to remedy a default. The borrower agreed to non-judicial foreclosure when the loan documents were signed. End of challenge; end of case.

California, like 29 other states, is a non-judicial foreclosure state. Rules of individual states very widely and you should only use this as a guide for examining applicable laws and procedures in your state. I cannot over state the importance of having an experienced attorney as a resource.

In California, judges have been isolating on a small portion of the California Civil Code, 2924, to the exclusion of other applicable law, and have been dismissing “produce the note defenses” on the grounds that 2924 contains “no produce the note” requirement.

The stated intention of the code is: “(1) to provide the creditor/beneficiary with a quick, inexpensive and efficient remedy against a defaulting debtor/trustor; (2) to protect the debtor/trustor from wrongful loss of the property; and (3) to ensure that a properly conducted sale is final between the parties and conclusive as to a bona fide purchaser.”

The Courts, in their haste to apply the first purpose, are ignoring the second and third purpose of the Code. There is now a substantial body of evidence of wrongful foreclosures by entities lacking both authority and justification to do so.

Homeowners who have never been late on a payment have been evicted while others, negotiating a loan modification, have met the same fate.

Noting the opportunity created for fraud in a non-judicial foreclosure state, judges should be particularly wary of the potential for organized crime. Now comes evidence that foreclosure mills are simply manufacturing and illegally backdating documents.

Courts are making the assumption, unsupported by facts, that the allegations contained in the notice of default and notice of sale are truthful.

And, how can a properly conducted sale be final between the parties if the party of interest isn’t involved. What about that individual?

2924 isn’t intended to allow a trustee to act against the interests of the beneficiary.

The court should want to protect its own interests against a fraud upon the court by simply administering the basic judicial procedure that requires parties who come before the court to identify themselves.

Nor are foreclosure statutes intended to be exclusive. It cannot be the intention of non-judicial foreclosure procedure to deny aggrieved parties access to remedies or trump other rights intended to protect consumers.

2924 by its own terms, looks outside of the statute to the actual obligation to see if there was a breach. Being entitled to foreclose non-judicially under 2924 can only take place “after a breach of the obligation for which that mortgage or transfer is a security.”

This brings us to the Uniform Commercial Code, the essence of which is replicated in almost every state.

Under California Commercial Code 3301, a note may only be enforced if one has actual possession of the note as a holder, or has possession of the note, not as a non-holder, but with holder rights.

If there is no possession of the note or possession was not obtained until after the notice of sale was recorded, it is impossible to trigger 2924.

And, if the note is unenforceable under Article 3, there can simply be no breach.

Simply rubber stamping an illegal foreclosure is a far cry from due process, and until enough judges get it, we are going to have to show judges how financial intermediaries are gaming the system and committing fraud upon the court.

Lawyers say, “If you have the law on your side, you pound the law; if you have the facts on your side you pound the facts; and if you have neither, you pound the table.”

You have the law and the facts on your side, but if you do not present them adequately, the banksters will beat you simply by pounding the table.

And, while they are pounding the table, they will be doing so with forged documents and perjured testimony, and when they pack up and leave, no one will have any idea who they are.

While the intent is to stop the foreclosure, you need to take baby steps. You want to work your way back to the true party of interest. To do that, you are simply disputing the amount you owe. You want a full and complete accounting of all monies paid and received in connection with your loan. That means, where the money came from that funded the loan, what was the amount of the service release premium, yield spread premium, credit default swaps, and tarp funds, as well as, the late charges and fees associated with the foreclosure.

You have a legal right to that information, but you will need the power of the court to compel information as to how much you really owe. Either the pretender lender will give up or a full accounting might produce evidence of fraud, predatory lending and the possibility that the obligation was satisfied by TARP funds, credit default swaps or both.

See my blog for more: http://www.realtown.com/gwmantor/blog.

George W. Mantor is known as “The Real Estate Professor” for his consumer education efforts including a long-running radio program, monthly workshop series, public appearances, and frequent articles.

During a career dating back to 1978, he has amassed experience in new home and resale residential real estate, resort marketing and commercial and investment property.

Prior to starting his own real estate and mortgage brokerage in 1992, he had been Director of Training and Customer Service for Great Western Real Estate. In addition, he has served on virtually every real estate committee, including a term as a Director of the California Association of Realtors.

George is a nationally respected authority on all areas of real estate and is frequently quoted in a wide range of publications. He is an oft invited guest of Fox Business Network and for many years, he was the host of “Keepin’ It Real…Real talk about the real thing, real estate” on KCEO radio.

The Real Estate Professional includes him in “a directory of the Nation’s outstanding authors, columnists, and speakers. His articles have also recently appeared in Real Estate Finance, The Real Estate Professional, National Real Estate Investor, Broker Agent News, and Realty Times. His blog is http://www.realtown.com/gwmantor/blog.

RISMedia welcomes your comments and questions. Email realestatemagazinefeedback@rismedia.com.

Home repos help rejuvenate some older Sacramento neighborhoods

ABOUT THIS SERIES: This is the eighth segment in an ongoing series by The Bee and Capital Public Radio examining the people and companies that will contribute to Sacramento’s recovery.

Some of Sacramento’s older working-class neighborhoods most devastated by the foreclosure crisis are seeing improvement as investors snap up properties at extreme bargain prices, fix them up and sell or rent them.

In places like Del Paso Heights, Oak Park and south Sacramento, you can now buy a fixer house for well under six figures – a price that has proved irresistible to investors, some of them contractors who can do remodeling work themselves.

They are stepping in where homeowners departed, unable to keep up with subprime loans whose payments reset to much higher levels starting in 2006.

Real estate experts say the cycle will likely continue until prices rise to a level where it no longer makes sense.

Players include people like Jeff Douglas, a former custom homebuilder who saw his business shrivel with the recession. He adopted a new strategy: rebuilding bank repos priced below $100,000.

“In the last couple of years I’ve spent a lot of time driving on these streets. It’s getting better. The houses are getting sold and they’re getting fixed, and it’s spreading,” Douglas said.

Douglas pointed to one of a dozen houses he bought in Del Paso Heights, a neighborhood that was heavily seeded with risky subprime loans that later went into foreclosure.

“This was a really nasty place,” he said of his acquisition. “It was almost a tear-down. Now it’s rented out, and across the street they cleaned up. Like blight spreads, rehab spreads.”

Rehab work continues

Make no mistake. Sacramento neighborhoods like Del Paso Heights, Oak Park and Meadowview still need plenty of fixing after suffering an epidemic of foreclosures. City code enforcement officers are kept hopping by continuing house vacancies that can become nuisances.

At this point, the evidence of improvement is mostly anecdotal. The number of building permits issued by the city in Del Paso Heights and Oak Park, for instance, actually dipped slightly to 2,083 in 2009 from 2,238 in 2008, when most bank repos hit the market. That was up from 2,164 in 2007. Douglas said many rehabs don’t require permits and noted that a lot of the “most seriously beat-up” properties were rehabbed in 2008.

Still, the ongoing work of investors is readily apparent during a drive through Sacramento’s foreclosure distress zone. There are new roofs, all-new interiors, landscaping and windows where homes were boarded up and trash marked the spot.

Some people who have worked in the area for years say they see the improvements, though with homeowners still in trouble, it can be hard to tell which trend is winning.

“I think it’s better than 10 years ago,” said Ron O’Connor, operations manager for the city of Sacramento’s code enforcement division. But the crash that followed a bloom of investment and renovation during the housing boom was ruinous, he said. And O’Connor still sees newly vacant homes even as investors buy and fix earlier repos.

The current house-by-house transformation of the city’s lower-income neighborhoods reveals the stunning rise of a new investor class that has moved in after the storm.

Its ranks include contractors, professional investors and ordinary people tapping their retirement accounts and stock funds for more lucrative returns in real estate. Some come from the Bay Area, attracted by Sacramento’s comparatively low prices.

Investors now buy 27 percent of the houses sold in Sacramento County. In February, buyers paying cash represented 34 percent of the county’s sales, according to La Jolla researcher MDA DataQuick.

Investors irk some

Some first-time buyers have come to resent the phalanx of investors, who fuel bidding wars in the city’s most affordable neighborhoods and win deals with all-cash offers. But while investors often carry a stigma as bottom-feeders and speculators, many are improving the distressed properties after buying.

Douglas and other investors handily score homes for well under $100,000, which enables them to spend more fixing them up. He said the widespread sprinkling of rebuilt houses signals an investor belief that the worst is over in these inner-ring neighborhoods. Values have fallen as low as they’ll go.

“If you buy inexpensively, and the rent covers the mortgage, you’re safe,” he said.

High-end markets have emerged as the places to avoid for investors, he said. Values in such neighborhoods continue to fall, and many owners owe far more than their homes are worth.

Bargain prices aren’t the only factor driving new investment in neighborhoods like Del Paso Heights, Oak Park and south Sacramento. The federal government also has played a role through its Neighborhood Stabilization Program. Congress steered $31.8 million to the city and county of Sacramento last year to rebuild neighborhoods plagued by foreclosures.

The Sacramento Housing and Redevelopment Agency said $9.6 million in federal funding has so far put 114 properties into the repair pipeline. The SHRA reports 33 sales of upgraded homes to income-qualified buyers. Prices average $45,000 above their values as repos, said agency spokeswoman Angela Jones.

One Sacramento investor-contractor company, the Housing Group Fund, is rebuilding 15 houses with government financial incentives, mostly in North Highlands. The firm is buying and rebuilding eight more houses privately in Oak Park and south Sacramento.

“There are some wrapped up we’re selling, some in construction and some just starting,” said co-owner Brooke Hammett. Sale prices for newly remodeled homes range from $105,000 to $139,000, she said. Hammett cited a noticeable improvement in some neighborhoods as contractors buy, fix and re-sell.

The Sacramento Municipal Utility District has invested $77,000 in three bank repo rebuilds to demonstrate energy-saving techniques in drafty older houses. Eventually, these methods will help retrofit older urban areas to use less electricity and gas.

“We think we can get a consistent 50 to 60 percent energy savings, said SMUD project manager Michael Keesee. “Some of these older homes have up to $200 a month in utility bills. You can cut that in half.”

Re-sell prices still low

Sacramento contractor Harold Maker, who is rebuilding one of Douglas’ newer repo acquisitions, said private investors are creating affordable housing by returning trashed houses to the market fixed up and still reasonably priced.

As an example, Maker pointed to a house in the 2800 block of Albatross Way near Del Paso Heights. It had a bullet hole in the front door, signaling a shot fired from inside. On the front window was a September 2009 foreclosure notice from the mortgage servicer. But the small house had a huge backyard. It was getting a one-month makeover, including a new kitchen, Maker said.

Its eventual price tag for a new neighborhood buyer: about $115,000, said Douglas.

Douglas said it’s only because prices have fallen to a “once in a lifetime” level that he can afford to buy, replace stoves, cabinets, blinds, carpet, make extensive repairs and still sell at such prices to working-class buyers.

“You can’t do this if the price is $300,000,” he said. “We just buy bank-owned houses, and the worse the better. If we buy it for the right price, we can fix it.”

North Sacramento-based homebuilder Allen Warren, president and chief executive officer of New Faze Development, agreed that this is an “unprecedented” time for such a business model, and it won’t last too long once prices start to rise.

“As long as you can do that, the market will be there all day long,” he said. “But that will be short-lived.”

Douglas agrees that time is short. So before the bargain-basement sale ends, he savors one repo makeover in particular. It’s an Oak Park rebuild, once the worst house on a nice block.

He put $65,000 into the house and made it like new inside. Then he sold it to people from Carmichael.

“It’s a jewel on the corner. It was a nasty house on the corner,” he said. “I don’t care what neighborhood you live in. Nobody wants that in their neighborhood.”

U.S. Plan Will Help Homeowners Avoid Foreclosure

Homeowners across the United States who are undergoing financial hardship could avoid foreclosure under a plan announced on Nov. 30 by the U.S. Treasury Department. Under the plan, millions of at-risk homeowners could be free of mortgage debt without going through foreclosure, and given $1,500 for relocation.

The Treasury plan, which potentially applies to 75 percent of the mortgages in the U.S., including those backed by Freddie Mac or Fannie Mae (those two organizations are currently devising guidelines), provides incentives for lenders and homeowners for completing Short Sales – transactions in which the lender agrees to a sale price that’s less than the borrower owes on the mortgage. Short Sales are preferred to foreclosure because homeowners take less of a hit on their credit and lenders realize a smaller loss.

However, Short Sales often get bogged down because of the complicated nature of the transaction. Deals can fall through because they take too long.

The official effective date of the plan is April 5, 2010, but participating mortgage servicers can begin operating under the terms of the program before then if they are ready to meet all reporting requirements.

Under the plan, which speeds up and simplifies the Short Sale process, mortgage servicers have 10 days to approve or reject a request for a Short Sale. And when the sale is done, the borrower must be fully released from the debt.

OneWest Bank accused of pushing home loan borrowers into foreclosure

Nineteen months after the catastrophic failure of one of Sacramento’s top lenders, Pasadena-based IndyMac Bank, a flurry of local lawsuits alleges that the bank’s successor – OneWest Bank – is systematically working to push home loan borrowers into foreclosure.

The allegations filed in the Eastern District of U.S. Bankruptcy Court claim that OneWest can make more money by foreclosing than by keeping borrowers in their homes. That’s due to its so-called “shared-loss” agreement with the Federal Deposit Insurance Corp., at least 10 local lawsuits allege.

A video made in Fairfield and circulating widely on the Internet also alleges that OneWest stands to earn millions from taxpayers by foreclosing on borrowers as a result of its shared-loss agreement with the FDIC.

The FDIC declined to comment on the Sacramento lawsuits, but it recently denounced the video’s “blatantly false claims.” The agency told The Bee that its agreement with OneWest contains provisions to make sure the lender is taking adequate steps to modify loans.

OneWest declined to comment on either the lawsuits or the video.

The FDIC, which seized IndyMac in July 2008, sold the failed institution to Pasadena-based OneWest in March 2009.

As part of the deal, the FDIC agreed to absorb some losses from the troubled loan portfolio. That’s after OneWest absorbs the first $2.5 billion in losses, the FDIC said.

But Sacramento bankruptcy lawyer Peter Macaluso claims the shared-loss agreement will reward OneWest for foreclosing on homes. Here’s how, he said: The company bought IndyMac’s troubled portfolio at a 30 percent discount. It can count on the FDIC eventually reimbursing 80 percent or more of its losses – and also can keep proceeds from the foreclosure sales.

“They’re deliberately blowing people out in a systematic pattern,” said Macaluso.

He has filed eight lawsuits in U.S. Bankruptcy Court on behalf of area IndyMac borrowers who have filed for Chapter 13 bankruptcy protection.

Macaluso alleges that OneWest improperly boosted his clients’ monthly loan payments – sometimes by more than $1,000 – by doing a new escrow analysis after they had filed for bankruptcy protection. He said his clients can’t afford the increases and are in danger of losing their homes.

On Friday, he said OneWest has since rescinded the extra payments in three cases.

Elk Grove bankruptcy attorney Mark Wolff makes similar allegations in two lawsuits in U.S. Bankruptcy Court.

“We made the allegations that it’s a systematic approach they’ve employed, and it’s a violation of bankruptcy code,” said Wolff. He said he previously filed similar actions against Bank of America and JPMorgan Chase. His clients also are still in their homes.

A third attorney, Sean Gjerde of Elk Grove, recently filed a civil suit against OneWest in Sacramento Superior Court. It alleges violations of the Truth In Lending Act, claiming that OneWest is unresponsive to attempts to modify an Elk Grove client’s IndyMac mortgage.

“As soon as OneWest took over, the communication stopped,” Gjerde said. “My client has been in default for a long time and it’s been like heck to even get them to talk to me.”

The local lawsuits represent another messy aftermath of IndyMac’s implosion in July 2008, a development that added to fears of an imminent U.S. financial collapse.

IndyMac was a leading Sacramento lender, ranking 10th in loan volume during the riskiest part of the housing market: mid-2005 to mid-2007. Statistics from researcher MDA DataQuick show IndyMac made 5,312 home loans worth $1.4 billion during this period in Sacramento, Placer, El Dorado, Yolo, Sutter and Yuba counties.

A Treasury Department performance report last week showed that OneWest has temporarily or permanently modified 25 percent of its loans that are 60 days or more late. Twelve lenders reported higher modification rates and nine reported worse rates. The report said OneWest had permanently modified 3,087 of its 112,000 delinquent loans by the end of January.

Home Front: Foreclosures’ collateral damage widespread

If you’re among the thousands of Sacramento-area homeowners who played it conservative during the housing boom, who didn’t refinance or flip to a bigger house, everyone else’s foreclosures reached out and smacked you anyway.

Sales prices are lower. There’s less home equity to tap into. Local services have been shredded by falling property tax revenue.

Such repo collateral damage is why so many owners who pay their mortgages on time are so grouchy.

Rob Wassmer hasn’t been affected so much. Fourteen years ago he bought an east Sacramento house – in the Fab 40s – cheaply at the very bottom of the last housing bust. His older neighborhood has largely escaped the brunt of 52,000 foreclosures across the Sacramento region since 2007.

But Wassmer knows the financial whipping people have taken in Lincoln, Elk Grove, North Highlands and Yuba City. Being an academic, he knew there had to be a number for the carnage.

“I knew this kind of research had been done. I wanted to do a study of Sacramento,” said Wassmer, chairman of California State University, Sacramento’s department of public policy and administration.

Wassmer analyzed $9 billion in sales prices from 36,822 home sales in Sacramento, Yolo, Yuba, Sutter, Placer and El Dorado counties between January 2008 and June 2009. Almost half were homes sold by banks. The other half were sold by regular folks.

He concluded that the foreclosed homes cost this one region of America $2.7 billion in price cuts and lost equity over just 18 months.

• The repos sold for $659 million less simply because they were bank-owned and differed from normal sales. They took $1 billion more in price cuts because they were near other repos.

• Both reductions then stripped $1 billion from sale prices of nearby homes never in foreclosure danger.

Collectively, these foreclosures cost local governments $27.1 million in property taxes. Reassessments will likely take more.

Said Wassmer, “This is a call for regulation.” He suggests a federal law to make lenders and borrowers meet in “structured mediation” at least once before foreclosure.

Few ideas have proved so far to be the solution. See the research directly at: >www.csus.edu/indiv/w/wassmerr/ResForeclosure.pdf

State tax credit confusion

Tax preparation season is already disappointing some 2009 California home buyers who aren’t getting a full three-year, $10,000 tax credit for buying a new home.

A Lincoln buyer called Home Front saying his 2009 credit will be about $300 – well short of the $3,333 he’d expected to get for each of the next three years.

Spokeswoman Brenda Voet of the California Franchise Tax Board told Home Front that the size of the credit depends on the buyer’s specific tax situation. “It’s a dollar for dollar credit for taxes owed,” she said.

That means if you owe $300 in state taxes you get a credit for the $300 and don’t owe it. If you owe $4,000 in state taxes you get a credit for $3,333 and pay $667.

No one gets money from the state above what they owe, Voet said.

Housing has hope amidst the hurt

Foreclosures inched up slightly across the capital region in the last three months of 2009, but loan defaults fell for a third straight quarter as lenders focused more on finding alternatives to taking the keys, La Jolla-based MDA DataQuick reported Wednesday.

The newest statistics revealed a still-painfully fragile housing market beset by widespread distress but also beginning to emerge from the subprime meltdown.

“We’re moving from a lender-created mess to an economy-created mess,” said Stuart Feldstein, president of lending industry tracker SMR Research in New Jersey. “The nature of the beast has changed. That doesn’t mean it’s better, but it’s more curable.”

• DataQuick counted 5,081 fourth quarter 2009 foreclosures in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties. The third-quarter count was 5,004 foreclosures.

• Fourth-quarter capital-area defaults numbered 7,522. That was down from 9,751 in the third quarter. Regionally, foreclosures peaked at 7,769 in the third quarter of 2008. Area defaults crested at 11,049 the first quarter of 2009.

The trend was repeated on a larger scale statewide. The sustained decline in defaults led DataQuick to suggest the worst may be over in hard-hit entry-level markets that dominate inland areas of California. Feldstein concurred, saying, “The good news, often overlooked, is (that) the truly horrible risks of people who shouldn’t have gotten loans in the first place are running off at a fairly rapid rate.”

But DataQuick analysts also noted that the recession is spreading the mortgage crisis to more expensive neighborhoods. Owners there, many with prime fixed-rate loans, are struggling with wage cuts, state employee furloughs and a 12.4 percent unemployment rate that may keep rising.

Wednesday, DataQuick reported that most of the loans experiencing trouble at the end of 2009 were originated in early 2007. Many also date back to mid-2006, “the worst of the ‘loans gone wild’ period,” the company said.

Lenders with the highest numbers of problem loans statewide included Countrywide (now an affiliate of Bank of America), Wells Fargo and Washington Mutual (now an affiliate of JPMorgan Chase). Along with Bank of America and World Savings, all were the most active lenders in the second half of 2006, DataQuick said.

Today, many of those lenders have become slower to proceed with foreclosures.

“Our take is that lenders are increasingly willing to work with borrowers before a notice of default is filed,” DataQuick Analyst Andrew LePage said.

Other options include loan modifications or the short sales that are becoming more common, according to the Sacramento Association of Realtors. Short sales – in which lenders accept sale prices below what they’re owed – accounted for one in four December sales in Sacramento County and West Sacramento, said SAR.

Elk Grove-based Century 21 real estate agent Derek Kirk said more than half the for-sale signs in the suburban city are tied to short-sale listings.

“I believe lenders are getting pressure to make it easier,” he said. “They are doing more of them, and I think some of the banks are now trying to streamline and implement better procedures so they can make quicker decisions.

“Waiting 90 to 120 days is not realistic for buyers.”

The Foreclosure Story

It is everyone’s dream in Sacramento to own a home. As home loans are made easily affordable, almost every family has a home of their own. Home loans with low mortgage rates are provided by the government for low income and people with bad credit. These loans have interest rates as less as three percent. Consolidation of loans by the government has made repayment much easier. In spite of all these, foreclosures are on the rise.
The major factors that contribute to foreclosures are fall in real estate prices, abundance of unsold homes, inert home sales and mortgage loans going into default. People could not afford homes because of their heavy prices and were seen buying homes at fancy prices. This was possible because of the government grants and loans with adjustable rates. A major fall back with government grants was that, they were issued to people with low income and bad credit. With loans having adjustable rates, people were finally left hands full with a mortgage loan they could not repay. When owners do not repay, the foreclosure process sets in. Homes are foreclosed when owners are lagging in their repayment for a period of 5 months.
But this can be stopped. Owners can stop their homes from being foreclosed. Since foreclosure is a time consuming process, owners will have to act immediately. First understand the foreclosure process. In a hurry, your first visit is to a foreclosure rescue firm. But wait, stay far away from them. Most of these firms are scams and they charge thousands of dollars from you to only have a look at your file. They do not offer any help. They only make you believe that you cannot stop the foreclosure. But they are wrong.
Foreclosures can be stopped by none other than the home owner. That is you! You can escape a foreclosure by getting your payments to the current. Selling your home and paying off for what was yours or refinancing are other options. While selling a home, you must repay all the loans. But in foreclosures, second mortgages and credit lines are usually written off.
Another option to stop foreclosure is to file bankruptcy. Filing of bankruptcy can help stop foreclosure. But this is only a temporary option. Also this is a very complicated and expensive procedure. There are huge risks of the bankruptcy judge dismissing your case. If that happens, the foreclosure procedure will continue as before and you are left with no option.
In order to avoid all this and save yourself the foreclosure, do not delay repayment of your loan. Make use of all the facilities and programs the government has to offer in paying back your loans.
Choose a loan and repayment scheme that best suits your finances and avoid foreclosures.
For additional resources and information please visit the following sites.

Resource Links:

http://www.gmacrealestate.com

Bill Fields All Star Coaching Program: http://www.AllStarCoaching.net
GreatWest GMAC Search all MLS Listings: http://www.LocalHomeLink.com
GreatWest GMAC Consumer Buyer/Seller Blog: http://www.GreatWestBlog.com
T. Sami Siddiqui (Broker/ Owner) Buzz About Sacramento Blog: http://www.samisiddiquiblog.com
Brodie Stephens (Executive Vice President) One Stop Blog: http://www.brodiestephensblog.com
GreatWest Podcasts- Weekly Updates on new REO, Short Sale, Bank Owned Foreclosure Listings: http://www.HouseTalkOnline.com
GreatWest Videos: http://www.youtube.com/brodiestephens
Facebook Brodie Stephens Profile Page: http://www.facebook.com/brodiestephens
Facebook GreatWest Profile Page: http://www.facebook.com/searchmlshomesforsale
MySpace Brodie Stephens Blog: http://www.myspace.com/brodiestephens
MySpace GreatWest Blog: http://www.myspace.com/greatwest
Picasa Web Album: http://picasaweb.google.com/brodiestephens
GreatWest Real Estate Careers- GMAC is looking for Professional Realtors to Join Us: http://www.CareersWithUs.com
Global Employee Relocation: http://www.employeerelocation.blogspot.com
Apply for a Loan: http://www.choice1funding.com
ActiveRain Blog Brodie http://activerain.com/blogs/brodiestephens
ActiveRain Blog Company http://activerain.com/blogs/greatwestgmac
Sacbee http://www.sacbee.com
Company WordPress Site http://www.thehomeholders.com
Real Living http://www.realliving.com

Foreclosure flood fails to materialize in Sacramento area

People who watch housing prices have predicted for months that another deluge of foreclosed homes would soon hit the market – once again crushing Sacramento-area property values.

But the flood of bank repos hasn’t materialized. And now, a leading California foreclosure analyst says it probably won’t.

“From the things I’m seeing, there’s not going to be a wave any time soon,” said Sean O’Toole, president of ForeclosureRadar, a Contra Costa County firm that tracks mortgage defaults and foreclosures.

Despite a growing number of loan defaults and delinquencies, O’Toole said banks are now selling more homes than they’re repossessing – and political pressure on them to work with homeowners is slowing foreclosure rates. Other market watchers also see banks slowly dribbling out their supply of repossessed homes.

“From all appearances, it does look like they’re managing it better,” said Charlene Singley, president of the Sacramento Association of Realtors.

If the supply of homes for sale remains in balance with demand, the danger of another sharp downturn in prices is lessened, at least in the short run, O’Toole and others said Thursday.

The prospect of another wave of new foreclosures has long threatened to destabilize a capital-area market precariously balanced by massive repo sell-offs, curtailment of new-home production and buyers enticed by lower prices, low interest rates and tax credits.

Even as disaster scenarios remain easy to imagine, the number of area for-sale signs is now at an encouraging 52-month low.

Still, the downside to this relative steadiness in the near term, O’Toole acknowledged, may be that it will take longer to work through the mortgage crisis and recover.

On Thursday, La Jolla researcher MDA DataQuick offered fresh evidence of the market’s tenuous balance.

Regional home sales in September ticked up slightly from August, with 3,454 new and existing homes changing hands in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties. Yet September marked a fourth straight month in which sales fell below the same time last year.

That’s because recent sales have been unable to match last year’s sharp rise as banks unloaded thousands of repos, a phenomenon that also put downward pressure on area home values. O’Toole said banks have cut their statewide repo inventory by 41 percent in the past year.

Now that the repo sales pace has slowed in Sacramento County – from 70 percent of sales in February to 53 percent in September – median sales prices have quickly stabilized.

DataQuick reported a September median price of $176,000 in Sacramento County. Median is that point where half the homes cost more and half less. That was down from a 2009 high of $180,000 in August, but still well above February’s housing bust low of $160,000.

Fewer repo listings this year brought another phenomenon not seen since the boom: bidding wars. The phenomenon so frustrated state employee Lauri Lathrop that she finally bought a new house in Elk Grove in September.

“I was putting in offers $15,000 above the asking price, and I was getting outbid,” she said Thursday. “I saw this new house and nobody could outbid me. It was like it was mine,” she said.

Lathrop obtained a favorable interest rate and an $8,000 federal tax credit for first-time buyers – though she missed the window for a $10,000 state tax credit for buyers of new homes.

Such perks combined with affordability to prod more buyers off the fence this year. Sales of new and existing homes combined from January through September this year total 30,231, beating 29,751 during the same period in 2008 and 26,777 from January through September 2007.

As a result, the number of for-sale signs in El Dorado, Placer, Sacramento and Yolo counties has fallen to May 2005 lows, according to Sacramento researcher TrendGraphix.

The affiliate of Lyon Real Estate counted 6,129 listings in the four counties at the end of September. The numbers have fallen for 25 straight months since peaking at 16,262 in August 2007.

TrendGraphix said 13.4 percent of current listings are bank repos and 27 percent are short sales, in which owners hope lenders will accept a sales price below what they owe. That means 40 percent are so-called “distress sales.”

That’s scary, but real estate agents like Singley and Carey Covey of Cook Real Estate maintain there is an ample supply of buyers. And sales statistics from the Sacramento Association of Realtors show that banks are faster to approve short sales now than months ago.

As the repo share of the sales mix has continued to decline, short sales rose to almost 20 percent of sales in September in Sacramento County and the city of West Sacramento, SAR reported.

Covey, who specializes in selling bank-owned homes, said he believes the supply of repos will remain steady. But he expects no trouble selling them at such a pace.

“As of right now, we’re still short on supply, and there’s still a lot of demand,” he said.