MORTGAGE DEFAULTS MAY BE NEARING A PLATEAU

California Mortgage Defaults up 125%

DataQuick: Activity may be ‘nearing a plateau’

By Inman News

 

Lenders started foreclosure proceedings on a record number of California homeowners in the second quarter, the result of declining home values and the rampant spoilage of a batch of especially risky home loans made in late 2005 and 2006, a real estate information service reported.

Mortgage servicers recorded 121,341 “notices of default” during the April-through-June period. That was up 6.6 percent from a revised 113,809 for this year’s first quarter, and up 124.9 percent from 53,943 in second-quarter 2007, according to DataQuick Information Systems.

Last quarter’s number of defaults was the highest in DataQuick’s statistics, which go back to 1992. Notices of Default are recorded at county recorders offices and mark the first step of the formal foreclosure process.

“It’s still very clear that most of the problems are in certain areas and in certain categories. Basically, areas that absorbed spillover activity during the end of the boom cycle in 2006 seem to be the hardest hit. Prices went too high, fueled by the availability of easy-to-get, dicey home loans. An added element was speculative buying,” said John Walsh, DataQuick president.

“The small increase in defaults from the first to the second quarter may indicate that we’re nearing a plateau. We won’t know until the end of the year, but it may be that some lenders are starting to prioritize workouts with homeowners instead of grinding things through the foreclosure process. Of course, they may just be swamped and can’t handle processing any more paperwork,” he said.

Most of the loans that went into default last quarter were originated between September 2005 and November 2006. The median age was 26 months, up from 16 months a year earlier.

On primary mortgages, California homeowners were a median five months behind on their payments when the lender filed the notice of default. The borrowers owed a median $11,583 on a median $346,400 mortgage.

On home equity loans and lines of credit, homeowners were a median eight months behind on their payments. Borrowers owed a median $3,492 on a median $60,000 credit line. However the amount of the credit line that was actually in use cannot be determined from public records.

Although 121,341 default notices were filed last quarter, they involved 118,020 homes because some borrowers were in default on multiple loans (e.g. a primary mortgage and a line of credit).

Last quarter’s default numbers were a record in almost all of the state’s 58 counties. That included Los Angeles County, where last quarter’s 21,632 residential defaults surpassed the prior record of 21,444 recorded during first-quarter 1996.

On a loan-by-loan basis, mortgages were least likely to go into default in San Francisco, Marin, and San Mateo counties — an historical norm. The likelihood was highest in Merced, San Joaquin and Stanislaus counties.

Of the homeowners in default, an estimated 22 percent emerge from the foreclosure process by bringing their payments current, refinancing, or selling the home and paying off what they owe. A year ago it was about 52 percent. The increased portion of homes lost to foreclosure reflects the slow real estate market, as well as the number of homes bought during the height of the market with multiple-loan financing, which makes ‘work-outs’ difficult.

Multiple-loan financing peaked in Q4 of 2006 at 60.9 percent of all financed home purchases. Last quarter it was 11.5 percent.

Trustees Deeds recorded, or the actual loss of a home to foreclosure, totaled 63,061 during the second quarter. That’s the highest since DataQuick began tracking Trustees Deeds in 1988. Last quarter’s total rose 33.5 percent from 47,221 in the previous quarter, and jumped 261 percent from 17,458 in second-quarter 2007. In the last real estate cycle, Trustees Deeds peaked at 15,418 in third-quarter 1996. The all-time low was 637 in the second quarter of 2005.

There are 8.4 million houses and condos in the state, DataQuick reported.

Foreclosure resales have emerged as a significant market factor, accounting for 40 percent of all California resale activity last quarter. A year ago it was 5.4 percent. Foreclosure resales vary significantly by area, from 3 percent in San Francisco County to 75.1 percent in Merced County.

CHECK OUT BANK OWNED HOMES AT www.CentralValleyHomes.com

 

Thanks,
CAROL PERDEW
(209) 239-7979
Carol@PerdewHomes.com

 

HOUSE PASSED NEW FORECLOSURE RELIEF BILL

The House passed a new state program designed to help first-time buyers purchase foreclosed home in Stanislaus, San Joaquin and Merced counties.  First-time home buyers would get a $7,500 refundable tax credit under the bill.  Those who support this program say this could help more people buy the valley’s foreclosed homes.

 

Foreclosure Relief Bill Might Bring Help to San Joaquin Valley

$4B program expected to win Senate approval

By MICHAEL DOYLE
BEE WASHINGTON BUREAU

Related Stories

WASHINGTON — The House on Wednesday approved a controversial housing bill that supporters say could offer some relief for the San Joaquin Valley’s foreclosure crisis.

California and valley agencies, for instance, could purchase some of the region’s myriad foreclosed and abandoned homes with the help of a new $4 billion grant program.

“This is just a stopgap,” said Rep. Dennis Cardoza, D-Merced, “but it’s the best we can do today.”

Cardoza joined other lawmakers in contributing provisions to the forbiddingly technical, 694-page bill that has bounced around Capitol Hill for about a year. President Bush this week dropped his earlier veto threats, giving a green light for final approval.

The bill was approved 272-152. The Senate is expected to pass the bill Friday or Saturday.

The new federal program follows an announcement Monday by Gov. Schwarzenegger that a state program has been established to boost the valley’s economy by helping first-time buyers purchase foreclosed houses in Stanislaus, San Joaquin and Merced counties at discount prices and with reduced-rate loans.

That state initiative, called the Community Stabilization Home Loan Program, is expected to help 800 to 1,000 families purchase vacant bank-owned properties. Nearly 100 homes in the Northern San Joaquin Valley are eligible, and more are expected to be added each week.

Schwarzenegger said the $200 million program will “pump up” the region’s economy by boosting real estate sales and reducing the number of foreclosures on the market, which has been reeling from escalating foreclosures and declining values.

A big part of the federal bill props up Fannie Mae and Freddie Mac, the giant government-sponsored mortgage finance companies that together own or guarantee half of the nation’s mortgage debt.

The $4 billion grant program would enable state and local housing agencies to “purchase and redevelop” abandoned and foreclosed homes within 18 months. The government agencies could buy the properties at a discount and then choose to sell, rent or demolish the homes.

Lawmakers declare that the grants should target “areas hit hardest by foreclosures.” This will be determined by a formula that includes the number of foreclosures, the extent of subprime lending and other factors set by the Department of Housing and Urban Development.

The word “California” does not appear anywhere in the Housing and Economic Recovery Act of 2008. Nonetheless, the state in general and the San Joaquin Valley in particular could get a fair-sized chunk of the money.

More than 17,000 Northern San Joaquin Valley homes have been lost to foreclosure during the past year, according to data released Tuesday.

The number of homes repossessed by lenders continues to skyrocket in Stanislaus, San Joaquin and Merced counties, according to DataQuick Information Systems.

This April, May and June, for instance, 2,207 homes were foreclosed on in Stanislaus, pushing the county’s one-year total to 5,554. California lost 63,031 homes to foreclosure this spring and 166,087 during the past year.

San Joaquin and Merced counties have the highest foreclosure rates in the United States. In San Joaquin, 3,185 homeowners lost their property to foreclosure this spring, pushing its one-year total to 8,366. In Merced, 1,223 homes were foreclosed this spring, pushing its one-year total to 3,174.

The foreclosure problems in the valley aren’t likely to end soon, because a record number of “notices of default” were filed in almost all of California counties this spring, including Stanislaus, San Joaquin and Merced. Notices of default are the first step in the foreclosure process.

“We want to keep as many people in their houses as we can,” said Democratic Rep. Jerry McNerney of Pleasanton, whose district includes part of San Joaquin County. “This is a bill that really does help people.”

McNerney wrote a provision that boosts loan limits for veterans.

Cardoza, McNerney and Rep. Dan Lungren, R-Gold River, voted for the bill. Rep. George Radanovich, R-Mariposa, voted no.

First-time buyers would get a $7,500 refundable tax credit under the bill. Proponents say this could help more people buy the valley’s foreclosed houses.

The bill provides $180 million for financial counseling and legal assistance to help current homeowners. The bill targets some of this money for the 100 U.S. metropolitan areas with the “highest home foreclosure rates,” which will guarantee funding for the valley.

To search for Central Valley homes go to www.CentralValleyHome.com

Foreclosure Signs

FREDDIE MAC’S GUIDE

What are the Warning Signs of Foreclosure?

Unexpected life changes are often a contributing factor to foreclosure – especially those that impact your finances, such as:

• Loss of employment or reduction of hours
• Major illness or injury
• Divorce or separation
• Death of a spouse

What makes it so difficult to think about foreclosure during times of crisis is that you are so focused on the problem at hand and not likely to have the time or energy to think about how it could impact other aspects of your life. That is why a plan that was developed before any problem starts is the best protection.

If you have a “Plan B” in place, you won’t have to organize your finances while you are stressed about finding a job or dealing with a major illness. The plan will already be done – you will need to just follow it.

Financial Warning Signs

There may not be a major life change to signal potential trouble – you simply may be having a difficult time properly managing your finances. Don’t be fooled into thinking your credit card problems won’t affect your mortgage. It is important to realize that financial difficulties in one area can, and often do, spill over to other areas. These difficulties are all warning signs of financial problems that can lead to foreclosure on your home if you do not act quickly. They include:

• Maxing out credit cards
• Using credit to pay for day-to-day expenses, such as groceries, utilities, etc.
• Being unable to pay your bills on time
• Paying only the minimum amount on credit cards
• Applying for new credit cards after maxing out on existing ones
• Having to choose which bills to pay

Talk to a housing counselor immediately if you see these signs (see sidebar for help finding a legitimate counselor). You may be able to get your finances back on track before foreclosure becomes a reality.

View Homes for Homes for Sales at   www.PerdewHomes.com

New Bill Creates a Tax Credit for 1st Time Home Buyers

Senate Sends Sweeping Housing Bill to House

Legislation addresses FHA expansion; Fannie, Freddie oversight

By Matt Carter
Inman News 

 

Senate lawmakers Friday signed off on a bill that would modernize the Federal Housing Administration and expand FHA loan guarantee programs by $300 billion, create a new regulator for Fannie Mae and Freddie Mac, and create an $8,000 tax credit for first-time home buyers.

HR 3221, the Foreclosure Prevention Act of 2008, would also appropriate $4 billion for states to purchase and renovate abandoned and foreclosed properties, a proposal the Bush administration has threatened to veto.

The bill also envisions a national licensing system for residential loan originators and would establish minimum qualifications for all loan originators and require federal regulators to create a registry for banks and thrift employees who originate loans.

The bill is headed back to the House of Representatives, with a plea from Sen. Chris Dodd, D-Conn., not to change the bill without consulting with him and Senate Banking Committee co-chair Richard Shelby, R-Ala.

Before a 63-5 vote to reject two amendments to the bill and send it to the House, Dodd conceded that “it will not solve every problem,” but said it addresses criticism that Congress has failed to act quickly to address the housing downturn.

The Bush administration has long sought an independent regulator for Fannie Mae and Freddie Mac, and legislation to modernize practices at FHA. But differences between Republicans and Democrats have scuttled multiple bills on both issues.

By tying several major housing issues into a single bill, Dodd and Shelby hoped to build bipartisan support for the legislation. But differences between the Senate bill and legislation previously adopted in the House must still be ironed out.

While the House wants to continue the temporary limit of $729,750 for loans purchased or guaranteed by Fannie Mae and Freddie Mac, the Senate bill would set a cap of $625,000 for Fannie, Freddie and FHA loan guarantee programs.

The Senate bill envisions covering the nearly $1 billion in expected costs associated with a $300 billion expansion of FHA loan guarantee programs by assessing new fees on loans guaranteed by Fannie and Freddie, a proposal some House lawmakers have been critical of.

But with financial markets roiled by speculation that the government may be forced to bail the giant mortgage companies out, there’s a renewed sense of urgency surrounding the bill’s passage.

“I hope the House and Senate can work quickly with each other to get a bill to the president before Congress adjourns for its August recess,” Mortgage Bankers Association Chairman Kieran Quinn said in a statement. “It is unfortunate that it took a crisis of this magnitude to bring us to the point where we can reach broad agreement on these issues, but have no doubt, a more nimble and modern FHA along with stronger … oversight (of Fannie Mae and Freddie Mac) are crucial to addressing the issues that are currently affecting the mortgage and housing markets.”

Search for Homes at www.CentralValleyHomes.com

RESIDENTS PLAN TO ADDRESS FORECLOSURES

Not one neighborhood has escaped the problems of foreclosure homes. Foreclosures and bank owned homes are marring our local neighborhoods. See how some Manteca residents plan to address this problem in the upcoming Manteca election.

Foreclosures Hurt Neighborhoods
Residents vow to make it No. 1 issue in Manteca election

Dennis Wyatt
Managing Editor
Manteca Bulletin

Frank and Denise Pacheco just need to look next door to see what they believe the defining issue is going to be in the November Manteca City Council election.

The issue? What they perceive as the city’s myopic, lackluster and “it’s not our problem” approach to the impact foreclosed homes are having on neighborhoods throughout the city.

Not one neighborhood has escaped the problems of foreclosures. Even upscale Terracina – a gated community in East Manteca off Northgate Drive that has nothing but larger custom homes – has foreclosures.

Frank – a retired dairyman who works hard at keeping his home and yard up on Lovell Way behind Doctors Hospital of Manteca – has gotten to the point his daily constitutional through Manga Terra which was once Manteca’s premiere neighborhood is fraught with frustration.

“You can see places where nobody cares,” Frank said. “There are places with swimming pools that have green water.”

They’re breeding grounds for mosquitoes and potential death traps for kids since many foreclosed homes have broken sections of fence that may become all too attractive for a curious child to wander through.

Denise, who teaches at West High in Tracy, had thought when they moved into their new home on Feb. 14, 1975 to start a family that it would also be the place they’d live in during their retirement.

Says city has allowed creation of slums

Not any more. Between the foreclosures marring their neighborhood and what she called “the slum the city allowed to be created” in and around nearby McNary Circle off North Street, she said she is now getting to the point where she is starting to look forward to the day the market bounces back and they can sell and move from her beloved Manteca.

She doesn’t want to get to that point but she believes that they – as well as other families – will have no choice if elected leaders don’t step up to the plate.

“Nobody builds a slum,” Denise said of the McNary problem where the streets are littered with shopping carts, people sit in the morning sun drinking beer on front steps, park cars on lawns, and crime is almost a daily occurrence. “(Slums are) allowed to be created.”

She draws a parallel between the multi-family housing in the McNary area and what is happening with foreclosures.

Denise believes city leaders have lacked the gumption to hold landlords accountable for their property and how tenants use and abuse it. She sees the same thing happening with investors who are snapping up foreclosures.

And from the couple’s perspective, the city has already demonstrated just how impotent they are in dealing with banks and foreclosed properties.

“They (the staff) tell us there is nothing they can do to require that lawns be kept watered and not be allowed to die and turn into weeds because it predates a 1991 city law,” she said.

But she is quick to note that at the point of sale the courts have allowed existing property to be encumbered with new requirements for health and safety including smoke detectors and strapped in water heaters.

Wants council candidates to say exactly what they would do if elected

The condition of property – that the city’s own Manteca Redevelopment Agency guidelines say can lead to blight and create significant community health and safety issues – should be an issue. Denise wants to hear council candidates explain how they intend to hold landlords responsible for upkeep of their property.

As for the 1992 threshold, she noted that when they bought in 1975 there was no restriction on when property owners could water and now there is.

“Now they can tell us when we can and can’t water and we (comply),” she said.

Countrywide Mortgage has foreclosed on the home next door. Their communications with the company and the Realtor representative have been anything but responsive.

They were told the bank pays to have a gardener come out every three weeks. But with the water shut off, all the gardener does is mow weeds.

An e-mail to Assistant City Manager Karen McLaughlin brought the fire and police departments out. But McLaughlin noted the city ordinance requires abatement proceedings if the weeds are above six inches, which they are not. As far as the code enforcement officer, the response was it didn’t meet the council defined threshold of the city’s much touted “vacant structures” ordinance that threatened up to $1,000 day in fines for non-maintained abandoned property.

It is why neither husband nor wife fault city staff for what they believe is an inexcusable situation that is tearing apart the fabric of neighborhoods throughout Manteca. She puts the blame squarely on the five council members for not being tough enough or having the vision to see what the next step is in the foreclosure process.

Tired of platitudes from leaders, they want action

The Pachecos and several neighbors noted an out-of-town landlord took over one home and has let renters get away without maintaining the property, specifically watering and cutting the grass. They have had to continually pressure the landlord even telling them of an ordinance that can get them fined if the property isn’t maintained.

But then they found out the city law only protects those in newer homes and not them.

“We’ve paid out taxes and we’ve been good residents,” she said.

Denise recalled the downtown effort four years ago where city agencies combined together to hold landlords responsible for drug use, crime, public defecation, and assorted other issued including building code violations. She doesn’t understand why similar checks aren’t made in other crime areas such as McNary Circle.

The Pachecos want answers from incumbents Jack Snyder and Steve DeBrum as to why nothing is being done to give staff the tools to help save neighborhoods. She won’t buy the argument that neighbors have to pitch in and do their part because they already are. One neighbor is watering an adjoining lawn and is having it cut as well.

They are doing their part and they want to know what the city isn’t doing theirs.

It’s a question she also wants announced challengers Ben Cantu, Debbie Moorehead and Samuel Anderson to answer as well. They just don’t want platitudes. They want specific action programs outlined.

“Our City Council lacks vision in dealing with problems impacting neighborhoods,” she said.

And it’s not just a concern she sees facing older neighborhoods. She noted those in and around Woodward Park as well as southwest Manteca are going through the same problems.

“It is devaluing our property,” Frank said.

Denise is quick to add their quality of life as well.

A few doors away, they’ve been told another home is going into foreclosure. It doesn’t take too much imagination for them to see that the problems will start spreading.

There are currently 1,500 properties – almost all single-family homes – in various stages of foreclosure throughout Manteca.

The problems they create are significant.

It wasn’t too many months ago when a home across the street from them was in foreclosure. It had been left vacant.

Those inspecting the home for possible purchase found the bathroom had been destroyed. Also, the garage has been broken into and appears to have been used as an illegal hangout for juvenile delinquents. Weeds were much higher than the city’s six-inch threshold.

That is exactly what the Pachecos don’t want to see.

And given the Nov. 4 election will probably hit about the same time record foreclosures will flood the Manteca market, they think the No. 1 issue needs to be how this council – and the next council – deals with property maintenance through the enforcement of existing laws and putting new ones on the books that are also enforced to make sure landlords or new owners don’t spread blight.

 

Search for Homes at  www.CentralValleyHomes.com

Foreclosure Filings Are Down – Bank Repossessions Are Up!

Good News!  Foreclosures Filings have dropped 3.4% in June.  Despite improvement, bank repossessions are up from a year ago along with an increase in auction notices. Seven of the 10 metropolitan areas with the highest rates of foreclosure-related filings were in California, including tockton, Merced and Modesto.

Foreclosure – related Filings Dip 3.4% in June  

Report: Despite Improvement, Activity Up 53% from a Year Ago

By Inman News

The number of homes subjected to foreclosure-related filings fell 3.4 percent nationwide from May to June, data aggregator RealtyTrac reported today, thanks in part to improvements in the two states with the highest rate of foreclosure filings — Nevada and California.  

The 253,363 properties subjected to filings in June represented a 53.3 percent increase from a year ago, RealtyTrac said, with bank repossessions increasing at a much faster clip than default notices or auction notices. Bank repossessions were up 171 percent from a year ago, to 71,563, compared with a 38 percent gain in default notices and a 22 percent increase in auction notices from a year ago.

One reason for the sharp year-over-year increase in bank repossessions is that it can take months for properties to work their way through the foreclosure process. Not all foreclosure-related filings result in foreclosure, because borrowers may be able to refinance their loans, and lenders will sometimes work out loan modifications or approve short sales. Many properties that became real estate owned in 2007 would have entered the foreclosure process in 2006, before the housing downturn worsened.

But the year-over-year increase in properties subjected to foreclosure-related filings in June, 2008 “indicates we have not yet reached the top of this foreclosure cycle,” said James Saccacio, chief executive officer of RealtyTrac, in a press release. Nevertheless, the number of properties subjected to filings in the two states with the highest filing rates fell from May to June.

Nevada, which RealtyTrac says has the highest rate of foreclosure-related filings in the nation — one for every 122 households — saw properties subjected to filings fall 3.3 percent from May to June, to 8,713. The state with the second-highest rate of filings, California, saw the number of properties subjected to filings fall 4.5 percent, to 68,666.

The number of properties hit with foreclosure-related filings in third place was Arizona whose rate remained essentially unchanged from May to June, at 12,950, or one in 201 households.

Other states with foreclosure rates ranking among the top 10 were Florida, Michigan, Ohio, Colorado, Georgia, Indiana and Utah.

In terms of raw numbers, California, Florida and Ohio had the largest number of foreclosure related filings. Other states in the top 10 for total filings were Arizona, Michigan, Texas, Georgia, Nevada, Illinois and New York.

Seven of the 10 metropolitan areas with the highest rates of foreclosure-related filings were in California, including Stockton, Merced and Modesto. Two metro areas in Florida made the top 10 list: Cape-Coral-Fort Myers and Fort Lauderdale. Las Vegas was the only area outside of California and Florida to make the list of top 10 metro foreclosure rates.

The report includes documents filed in all three phases of foreclosure: Default — Notice of Default (NOD) and Lis Pendens (LIS); Auction — Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS); and Real Estate Owned, or REO properties (that have been foreclosed on and repurchased by a bank). If more than one foreclosure document is filed against a property during the month only the most recent filing is counted in the report. If the same type of document was filed against a property in a previous month, and if that previous filing occurred within the estimated foreclosure timeframe for the state the property is in, the report does not count the property in the current month.

View Bank Owned Homes at www.CentralValleyHomes.com. 

FORECLOSURE HELP AT LOCAL FORUM

Banks are Starting to work with struggling homeowners to avoid foreclosure. The non-profit “No Homeowner Left Behind “group has been working in various cities and lenders to help homeowners hopefully save their homes. This Manteca forum is being held at the Manteca Senior Center on Wednesday, July 16, from 6:30 – 8:30 p.m.  For a complimentary real estate consultation please contact Carol Perdew at (209) 239- 7979 or go to www.CentralValleyHomes.com.     Foreclosure Prevention Forum Manteca, Private Sector Stepping up to Help Dennis Wyatt Managing Editor Manteca  Bulletin  7/7/08 There are nearly 1,500 homes in Manteca in various phases of the foreclosure process. The banks that are preparing to sell them already own some. Others are at least at the first step of being a month delinquent in payments. That’s the bad news. The good news is that some banks are starting to work more aggressively with struggling homeowners to avoid foreclosure. Also, there is a coalition of private and public sector resources banding together in a bid to arm homeowners caught up in the foreclosure mess with essential information to help them take control of their future. “To be honest, a lot of people may not be able to save their house but they will have the information they need to proceed with dignity,” said Edward Parcaut, a mortgage planner out of Modesto who has been working with the non-profit No Homeowner Left Behind effort. But as Parcaut noted, the fact the group exists and has been working with various cities and lenders has helped improve the odds of homeowners to possibly save their homes or at least be able to move on with less fear and more certainty. The first Manteca forum is Wednesday, July 16, from 6:30 to 8:30 p.m. at the Manteca Senior Center, 295 Cherry Lane. It is a forum not only to have experts answer questions but to prepare distressed homeowners to talk to lenders at an upcoming larger gathering designed to see if there is a way that they can keep their homes. At such gatherings in the past, some homeowners have been successful with negotiating with bank representatives on the spot to secure 30-year fixed rate loans that have kept them in their homes, Parcaut cautioned that not all banks are working to that degree. He also warned that some people might simply not be in a position based on the determination of the bank to get a streamlined loan at a reduced rate. But, as he noted, the climate today has vastly improved compared to six months ago when banks were struggling to figure out what to do. “We can’t guarantee that your house will be saved,” added Anna Rocha of the Manteca Redevelopment Agency. She noted what the forum July 16 and the upcoming face-to-face with lenders that will take place after a second forum is completed in the upcoming weeks in Tracy can accomplish is helping people deal with the unknown of maneuvering through the foreclosure process. Rocha, along with Parcaut and Central Valley Association of Realtors President Bev Marlow, indicated the worst thing people can do is simply do nothing or ignore the foreclosure process. Similar efforts in Fresno have been credited with drastically reducing vandalism done to homes by frustrated homeowners who were losing them to foreclosure. “You’re seeing a lot less damage everywhere because people are being shown how they can deal with it with dignity,” Parcaut said. Rocha added that there is no longer a stigma attached to foreclosure since the odds are there is another neighbor who is going through the same problem. With 1,500 homes in various stages of foreclosure in Manteca that represents about 1 out of every 14 single-family homes in the city’s housing stock. “It isn’t to anyone’s advantage to see a home going into foreclosure,” noted Deputy City Manager John Nowak who cited the potential for blight, crime and deteriorating neighborhoods not to mention economic and property tax impacts. Staff is executing the City Council’s directive to take steps to do what can be done to ease the impact on the community and affected families. “Obviously, the redevelopment agency doesn’t have the resources to intervene on a (large) scale,” Nowak said. He added that the coalition to educate homeowners is the most effective way that the RDA money can be spent as it is showing results. Marlow noted that even though home sales have picked up to double of last year’s pace with nine out of every 10 of the 410 existing homes that have sold in Manteca since Jan. 1 being foreclosures, there is a serious concern about how many more people will be able to take advantage of the housing market to become homeowners. For now, more foreclosed homes are being sold than those that are being taken back by the banks. The biggest wave of foreclosures, though, has yet to hit. Parcaut said some lenders understand that concern which is why they are now willing to deal aggressively. But those who don’t get involved with the process may find themselves losing a home they could have saved. “The worst thing is to do nothing,” Marlow said. Past forums have helped people to understand that if they trash their home, it will become more difficult – if not impossible – to rent. While the foreclosure goes on credit reports, it doesn’t necessarily preclude families from renting. But what might are landlords who will drive to the home where a family who is in foreclosure stress had been buying to see what condition it is in. The forum could also benefit those who rent homes being foreclosed to make them aware of their rights and what they can do. The forum will feature Housing and Urban Development certified housing counselors and a panel of housing industry professionals from the No Homeowner Left Behind Central Valley collaborative to answer questions. All are volunteers. No solicitation for business will take place. Although this is not the gathering where you would need to have your loan documents and other information to meet face-to-face with bankers, it can be helpful to bring mortgage papers if you have questions that need to be explained regarding the specific document. For more information contact the Manteca Redevelopment Agency at 239-8427.

Foreclosures Are Ahead of Workouts

 Growth in Foreclosure Sales Outpaces Workouts
 
Real Estate Roundup
By Inman News, July 2^nd

HOPE NOW’s Latest Data on Loan Mods, ARM resets
Lenders are speeding the pace at which they conduct workouts with troubled borrowers, but foreclosure sales are rising faster, according to the latest numbers from the HOPE NOW coalition of loan servicers. Based on the 163,649 foreclosure sales reported by HOPE NOW in April and May, foreclosure sales were on a pace to hit 245,473 for the second quarter, up 24 percent from 198,172 foreclosure sales in the first quarter. Based on the number of workouts in April and May, servicers were on track to complete 519,291 workouts in the second quarter, up 7.5 percent from the first quarter.  

In engaging in workouts with troubled borrowers, HOPE NOW loan servicers are relying less on repayment plans, which some critics have said are a short-term fix, and increasing the number of loan modifications. Based on the numbers for April and May, HOPE NOW loan servicers were on track to put in place 202,003 loan modifications during the second quarter, up 18 percent from the previous quarter, and 302,287 repayment plans, down 3 percent from the first quarter.

HOPE NOW also announced the results of a separate survey of subprime adjustable-rate mortgages with rates resetting in 2008. The results, representing approximately 60 percent of subprime loans, showed 45 percent of the 718,000 loans scheduled to reset between January and May were paid in full because the homeowner refinanced the loan or sold their property. Another 5.3 percent were modified by lenders, and 0.5 percent of loans that were current at the date of reset entered the foreclosure process.

Paulson: Gov’t shouldn’t always come to rescue
Treasury Secretary Henry Paulson said today the Bush administration will continue
a policy of seeking to avoid preventable foreclosures without impeding “necessary correction” in housing prices. As the housing market works through “past excesses,” Paulson said, “U.S. foreclosures will remain elevated and we should not be surprised at continued reports of falling home prices. Our policy continues to be to work to avoid preventable foreclosures while not impeding the necessary correction because the sooner housing prices stabilize and more buyers return to the market the sooner housing
will begin to contribute to economic growth.”

Speaking in London, Paulson also said the financial regulatory system should be restructured to allow the government to intervene when events pose a risk to the entire system, without creating the expectation that the Fed will step in to prevent the failure of individual institutions. Paulson called the Fed’s decision to loan money to investment banks — after providing a $30 billion loan to facilitate the sale of Bear Stearns — an “extraordinary step” necessary to preserve the stability and of the financial system.

While it is clear that “Americans have come to expect the Federal Reserve to step in to avert events that pose unacceptable systemic risk,” Paulson said, “it is imperative that market participants not have the expectation that lending from the Fed, or any other government support, is readily available” because they will take too many risks. While there is widespread belief that some institutions are “too big too fail,” Paulson said “the real issue is not that an institution is too big or too interconnected to fail, but that it is too big or interconnected to liquidate quickly.”

Although Paulson did not mention Fannie Mae and Freddie Mac by name, legislation now pending in the Senate would create a new, independent regulator of the government-chartered mortgage financers, which would have the power to place the companies in receivership if they became insolvent.

To receive the article, “Buying Bank Owned Homes”, go to www.CentralValleyHomes.com

 

ANSWERS TO COMMON MORTGAGE QUESTIONS

Here are some answers for some common real estate questions.  It is useful
to be informed about the home buying process. Hope this is helpful!  

Some Answers to Frequently Asked Mortgage Questions
by Jack M. Guttentag
  

Below are answers to some of the most common questions I am asked by readers.

Does mortgage insurance protect me if I’m disabled or lose my job?

No, mortgage insurance protects the lender against loss in the event that you default. You pay the premium, but the lender receives the protection.

The sole benefit to you is that, with mortgage insurance, lenders are willing to make loans with down payments smaller than 20 percent of the purchase price or appraised value. I should add that a few mortgage insurers have experimented with programs that provide the kind of protection to borrowers that you are asking about, but they have never caught on.

What is the best type of loan to take if I know I will be paying it off within two years?

When your time horizon is very short, you want to minimize your upfront cost. The best way to do this is with a no-cost three-year or five-year adjustable-rate mortgage (ARM).

A no-cost loan is one with an interest rate high enough to command a rebate from the lender (negative points) that will cover your settlement costs. Avoid interest-only or option ARMs because these minimize your payments rather than your upfront cost.

How can I know whether a mortgage broker or loan officer is a predator?

You can’t; there is no directory of predatory loan providers. Checking the Better Business Bureau or the state licensing agency is usually a waste of time, because very few misdeeds are reported and predators change their names and locations.

But this question is only posed by borrowers who have allowed themselves to be solicited, which is a big mistake. Select your loan provider, don’t be selected. If you were a wild-mushroom fancier who lived in the woods, which are full of mushrooms, and a mushroom knocked on your door and said “eat me”, you wouldn’t, because it might be poisonous. What the mushroom fancier does is choose from among those he knows are safe, ignoring the rest. You should select a loan provider that way.

If I refinance two years after purchase, why do I need a new title insurance policy?

You don’t, but the lender will probably require a policy that protects him against the risk that some liens might have been placed on your property during the two years since the policy was written. Title insurance policies are backward looking; they cover incidents prior to the date of the policy. Anything that happens after that date is not covered.

If only a few years have elapsed since the previous policy, however, you are entitled to a discount, because the insurer doesn’t have to do a lot of work to bring the policy up to date. Be sure you ask for the discount; if you don’t, you may not get it.

Am I in trouble because I borrowed as an occupant, then changed my mind and rented the property?

 

Lying on your application is a fraud, but everyone is entitled to change their mind. If you occupy the house for a while and then rent it, you are probably in the clear. If you never occupy it, appearances are against you, but if you make all your payments on time, nobody is going to care, and the chances are that nothing will happen. If you never occupy the property and become a chronic delinquent, a flag goes up opposite your name, an investigation could reveal your transgression, and an action might be taken against you.

What is the major risk in buying a home under a lease-purchase contract?

The option to purchase a house under a lease-purchase contract is contingent on the buyer paying the agreed-upon rent every month. If the buyer doesn’t pay, the seller doesn’t have to sell. But the devil is in the details.

A contract that allows the seller to back out if the buyer is late only once, by a single day, is clearly unfair. The buyer should read the contract carefully to make sure that this provision is not unreasonably onerous.

What should I do if the lender mistakenly raises my tax escrow payment?

Pay it, and then make your own calculation of what the escrow should be and submit a “Qualified Written Request” under the Real Estate Settlement Procedures Act to get your money back. 

The worst thing you can do is refuse to pay, because the lender will place your insufficient payment in a suspense account, which means you are delinquent and on your way to having your credit ruined.

For Real Estate Information go to www.CentralValleyHomes.com  

 

 

 

First Central Valley Development To Start Forclosure

The biggest news in Manteca and Lathrop is the foreclosure notice for Beck properties three subdivisions along with individual residential prosperities in mortgage foreclosure.  This is the first  major development in the Central Valley to start the foreclosure process.

 

Mother of all foreclosures
Hundreds of lots at Oakwood Shores, Mossdale Landing up for grabs

Rosoe Albano-sRis
Manteca Bulletin
City Editor

It is without the doubt the largest housing-related foreclosure yet in the Manteca-Lathrop market.

Hundreds of lots in Beck Properties’ highly-touted Oakwood Lake Shores and two sister developments in Mossdale Landing are now in the foreclosure process.

It marks the first, major development to start the foreclosure process and is a clear sign that a significant up tick in home sales since March may not be enough to rescue large segments of the collapsing real estate economy.

A legal foreclosure notice for Beck properties’ three subdivisions appeared in the Manteca Bulletin’s Thursday edition, along with individual residential properties in mortgage distress.

The development company in the trustee’s sale notice is the Stockton-based Beck Properties. The company is the developer of the widely advertised luxury homes in a gated community at Oakwood Shores located at West Woodward Avenue in Manteca, and the Newport Cove and Bar Harbor communities at Mossdale Landing in Lathrop.

The legal notice notwithstanding, it was business as usual Thursday at the company’s sales offices in Manteca and Lathrop, as well as the company’s main office in Stockton.

An employee at the exclusive gated community of Oakwood Shores by Beck Properties on Woodward Avenue said the office was closed Thursday and Friday for the Fourth of July observance and will reopen for business after that. However, she declined to answer any further questions about the sale of the luxury homes in this lakefront community whose name harkens to the widely popular recreation Mecca that it replaced, the Manteca Waterslides at Oakwood Lake owned by the Brown family.

The residential developments at Oakwood Shores and Mossdale Landing in Lathrop were among the properties listed in the legal trustee’s sale or foreclosure notice in the July 3 edition of the Bulletin, which may be sold at a public auction to the highest bidder unless the owner/s “take action to protect your property.” The property owner or trustor identified in the legal notice is Linda C. Beck Holding Company, LLC, a Delaware limited liability company, with Bank of America N.A. as the beneficiary.

A message left for Dave Wenig, whom staff at the main Beck Properties office in Stockton as the person to talk to about the legal notice, was not immediately returned on Thursday afternoon.

Phone calls to the other sales offices of Beck Properties in Manteca and Lathrop were answered by recorded messages. At the Tra Vigna homes at Oakwood Shores, the message said that the office is open everyday from 10 a.m. to 5 p.m. and that if no one answered the phone, they may be on the other line or showing the model homes to visitors.

After the closure of the world-famous Manteca Waterslides at Oakwood Lake in 2004, Beck Properties started building what it touted as luxury homes built around man-made lakes filled with natural groundwater. The 360-acre site encompasses the areas where the mile-long waterslides and other summer attractions at Oakwood Lake and the Brown family’s sand mining business were located. The recorded message from Bella Lago at Oakwood Shores describes the homes on sale at this community as lakefront homes ranging in sizes from 2,600 to 4,600 square feet. Prices for the Tuscan-style homes at Tra Vigna originally ranged from $644,990 to $764,990 with additional $100,000 to $200,000 for those with lakefront locations. The employee contacted on the phone Thursday hung up before this reporter could ask the current prices for these homes.

The Oakwood Shores is located in unincorporated San Joaquin County. Water and sewer services for the 480 homes in the entire development is being provided by the Oakwood Lakes Water District which is an independent agency that was set up by the San Joaquin Local Agency Formation Commission.

 

Thanks

CAROLPERDEW

(209) 239-7979

www.CentralValleyHomes.com