Snippets of news cautiously point to positive economic signs indicating the bottom of the real estate market is here. However, an article in Smart Money takes these generalizations a bit further suggesting there are six signs a home you are considering buying is about to rise in value. Here they are:

1. Unemployment Rate-Common sense, higher unemployment, less potential buyers in a given market place. Shasta County’s  double-digit unemployment rate will keep prices down until this number drops to the historic average
2. Rising Incomes-Numerous websites will give you income data for cities and even individual neighborhoods. The Bureau of Economic Analysis is one such site.
3. Fewer foreclosure filings and sales-The local paper has laid out these numbers monthly or can be obtained through Realty Trac. This indicator has not been favorable this year for Shasta County.
4. Declining inventory- Today, just over 1400 homes are listed for sale. The highest inventory level locally during this bubble burst was about 2500 in 2007. Overall the inventory has been very stable with minor seasonal variation.
5. Shrinking list-to-sales price ratios- I haven’t been tracking this but would guess it’s not shrinking yet in our local market.
6. Decreasing sale prices-That has certainly been the case for 2009 here in Shasta County. I would peg that number close to 20% for this year alone, more than 40% for 2006-present.  The low-end of the price spectrum seems to have bottomed but I expect the upper-end not to bottom until 2010-2011.

Our local market stats show some signs of recovery but that could stall or tank if some of these numbers don’t improve in the coming months. Reduction in unemployment and foreclosure filings are what I feel is absolutely necessary locally before we can say this ugly chapter of the housing meltdown is behind us.

bradgreps@yahoo.com

530-224-6767 or 530-941-7492

BRAD GARBUTT

REALTOR/BROKER ASSOCIATE

REAL ESTATE PROFESSIONALS REAL LIVING

CORNER OF COURT AND PLACER IN REDDING

QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE

Last week, Fannie Mae announced a new program targeting borrowers that can no longer afford their home. In exchange for expediting the foreclosure process the borrower is offered the right to lease back the home for up to a year. This allows the lender to avoid the more costly and time consuming traditional foreclosure process while the borrower gets to stay put and pay fair market rent while creating opportunity for the borrower to regroup financially.  

Dubbed the “Deed for Lease” program, after going through a qualifying process and being approved, the borrower would transfer title to Fannie Mae using a deed-in-lieu of foreclosure. The advantage to the borrower is this process results in a smaller credit ding than a straight foreclosure, which can damage credit so severely securing a rental is difficult. This option could also be helpful if the borrower works at a job nearby or has children attending area schools.

 Some particulars include:

• Must be at least one payment (but not more than 12) behind
• Must have applied for and been denied a loan modification
• Must prove your ability to pay fair market rent (rent can’t exceed 31% of monthly gross income)

Don’t bother applying if you can afford your current mortgage payment but would rather walk away because your property is upside down.  Don’t do this because you want to buy the house back when Fannie Mae offers it for sale- your credit is unlikely to be strong enough a year after the deed-in-lieu.

If interested, click below for Fannie  Mae’s loan look-up feature to see if your loan is held or insured by them. FHA, VA and other government backed loans are ineligible. 

 Click here to see if Fannie holds your loan:http://loanlookup.fanniemae.com/loanlookup/

The program will not work if:

1. Fannie Mae is only a second lienholder 
2. Borrower can’t get a second loan released 
3. Borrower has filed for bankruptcy
4. Borrower is involved with litigation concerning the property
5. Zoning or Homeowner Association rules prohibit renting

Some would argue this program will only prolong the agony of finding the bottom of this current housing market meltdown. I doubt many qualify for this program so the impact, in my opinion, will be negligible. If lenders were to aggressively foreclose and dump distressed properties on the market simultaneously, it could lead to a death spiral of home value erosion creating wave after wave of foreclosures. This program, along with other efforts underway may eventually bring price stability to a battered, but vital, segment of our economy.

bradgreps@yahoo.com

530-224-6767 or 530-941-7492

BRAD GARBUTT

REALTOR/BROKER ASSOCIATE

REAL ESTATE PROFESSIONALS REAL LIVING

CORNER OF COURT AND PLACER IN REDDING

QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE

An enrolled agent from Southern California once again spoke with local Realtors about the extension and expansion of the federal tax credit for homebuyers. Earl M. Salter, said this tax free credit not only applies to first-time buyers but homeowners who have owned and lived in their personal residence for 5 consecutive years during the last 8 years (Long-time Residents). First-time buyers and long-time homeowners  must have a home under contract by June 1, 2010 and close escrow before August.

Additionally, the new law raises the income limits (Adjusted Gross Income or AGI) from $125,000 to $145,000 and for married couples filing jointly from $225,000 to $245,000.  To qualify for the tax credit, long-time residents can buy the replacement property now and sell their current principal residence or keep it as a rental property. The credit is up to $8,000 for first-time buyers and $6,500  for married  long-time residents or $3,250 for married filing separately.

Other important details include having to repay the credit if you sell within 3 years. The tax credit can be used immediately for closing costs if the loan is a government-backed loan such as FHA. Otherwise, the buyer can wait until filing their 2009 tax return for the credit. Ammending the 2008 return is another option but due to processing time, Earl said it’s better to wait and file for the credit with the 2009 return.

The bill, H.R. 3548, is called the Workers Homeownership and Business Assistance Act of 2009. More details of the bill will be released once the technical details are worked out and published by the federal government.

bradgreps@yahoo.com

530-224-6767 or 530-941-7492

BRAD GARBUTT

REALTOR/BROKER ASSOCIATE

REAL ESTATE PROFESSIONALS REAL LIVING

CORNER OF COURT AND PLACER IN REDDING

QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE 

Enrolled Agent, Earl M. Salter, addressed members of the Shasta Association of Realtors regarding what sellers of over-encumbered homes should expect  from the IRS. Homeowners in this predicament should consult with an accountant or enrolled agent prior to pursuing a short sale. It is a viable option for those that took out a purchase money loan to buy the home originally. However, if the property was refinanced or is not the primary residence of the homeowner, selling short could create unwanted income tax liability.

Earl said 95% of the time a property owner has no tax liability if the property was their personal residence and the loan was taken out to purchase the property. These loans are referred to as “non-recourse loans”. A homeowner should make sure their lender will issue a 1099C after the transaction closes. If the lender will not provide this debt forgiveness form, the lender could pursue the loss for up to 10 years. Some lenders are selling these debts to collection agencies which will pursue the homeowner for the amount forgiven. Earl said a good indicator a 1099C will not be issued is when the loan has been sold to investors.

In the event a homeowner is not provided a 1099C, bankruptcy may be the only option to get out from under the debt. To add insult to injury, the IRS may consider any debt forgivness income and tax the “gift” accordingly.  The same will happen if a borrower successfully negotiates a loan modification with a principal reduction.

Anyone considering a short sale should consult with a tax professional before determining a course of action. Failure to do so could result in unexpected tax consequences. Contact me if I can be of help.

bradgreps@yahoo.com

530-224-6767 or 530-941-7492

BRAD GARBUTT

REALTOR/BROKER ASSOCIATE

REAL ESTATE PROFESSIONALS REAL LIVING

CORNER OF COURT AND PLACER IN REDDING

QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE

The GMAC brand is no more as Brookfield, the parent company of GMAC Real Estate, re-branded the entire franchise to Real Living. Real Living, according to a corporate profile summary, “emerged in 2002 as the largest, independently- owned company in the Midwest and the seventh largest real estate brokerage”. The Ohio-based brokerage established themselves as a “lively consumer-focused brand” utilizing Internet technologies to assist consumers in the decision-making process.

Here are accolades from industry watchers:

• Inman News-2005 most innovative Franchise Broker of the Year
• REALTOR Magazine-2006 Most Productive Agents in the Nation
• Entrepreneur Magazine-2006 Top New Franchises
• Web Marketing Association-2007 Standard of Excellence Award
• Swanepoel Trends Report-2008 Most Promising New National Brand 

Real Living is built on family, innovation and results according to the news release. Prior to being acquired by Brookfield, a Canadian firm, Real Living had 2,500 agents operating from 120 offices in 20 states. Real Living also offers:

• home financing
• title services
• relocation services
• auctions
• home warranties

Real Living was one of the first companies to invest heavily in the Internet to “provide more functionality and features for home buyers and sellers, and more streamlined marketing and online tools for agents and brokers”.

I am excited about the opportunity to join an innovative company among the most productive in the business. Look for our new real estate signs around Redding/Shasta County in the weeks and months ahead!

bradgreps@yahoo.com

530-224-6767 or 530-941-7492

BRAD GARBUTT

REALTOR/BROKER ASSOCIATE

REAL ESTATE PROFESSIONALS REAL LIVING

CORNER OF COURT AND PLACER IN REDDING

QUARTER CENTURY OF LOCAL REAL ESTATE EXPERIENCE 

Many homeowners across the nation, particularly those that owe more than their home is worth in today’s market, are asking themselves this question before making their monthly mortgage payment. Here is a time line of what to expect:

1. Expect your lender to report your missed payment to credit bureaus by the first day of the following month.
2. The late payment knocks down your credit score by up to 200 points assuming this is the first missed payment.
3. Your other creditors will take note of your nosediving credit score and either raise your interest rates or cancel your credit account or at least lower your credit limit.
4. If your credit limits are lowered, this triggers and increase in something known as the utilization rate, which lowers your credit score even more. This will impact your score for up to 7 years with the greatest impact occurring the first two years.
5. Your lender will contact you to see what is going on. If no payments are made within 90 days, your lender may refuse any future payments unless you have contacted them beforehand and a course of action is agreed upon.
6. The foreclosure process generally begins once four payments have been missed. The process takes 4-5 months start to finish if the lender pursues the foreclosure vigorously under a deed of trust.
7. You will be thrown out of your home. Some will offer cash for keys, others will hire an attorney to do an eviction. With the backlog of foreclosures these time frames may be extended by several months.

If you want to keep your home, call your lender and  discuss loan modification options before you miss any payments. You may also be able to deed the property to the lender and rent it back under a new program for loans held by Fannie Mae and Freddie Mac. Seeking the advice of a real estate attorney may be in order before you decide a course of action. Contact me if you have any questions.

bradgreps@yahoo.com

530-224-6767 or 530-941-7492

BRAD GARBUTT

REALTOR/BROKER ASSOCIATE

REAL ESTATE PROFESSIONALS GMAC

CORNER OF COURT AND PLACER IN REDDING

QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE

 

Beverly Hills Properties was just hit with a $2.725 million dollar fine from the U.S. Department of Justice for housing discrimination. According to an article from the California Association of Realtors, a lawsuit brought in August of 2006 claimed Donald T. Sterling and others engaged in discrimantory practices including refusing to rent to African-Americans, Hispanics, and families with children.

In Koreatown buildings,  apartment owners refused to rent to non-Koreans. The real estate firm manages about 119 apartment buildings with over 5,000 units in the Los Angeles area. They allegedly misrepresented the availability of units and kept internal reports of tenants’ racial profiles.

The settlement is the largest ever obtained for rental housing discrimination.  In addition to the fine, the defendants must take action to ensure non-discrimantory actions in the future including fair housing training for employees and monitoring their compliance with fair housing laws for the next three years.

The bulk of the settlement monies will be placed in a fund to pay tenants harmed by the defendants’ discriminatory practices. A great outcome considering how difficult it is to uncover these acts and prosecute violaters.

bradgreps@yahoo.com

530-224-6767 or 530-941-7492

BRAD GARBUTT

REALTOR/BROKER ASSOCIATE

REAL ESTATE PROFESSIONALS GMAC

CORNER OF COURT AND PLACER IN REDING

QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE

Lenders are always searching for ways to help buyers leverage their good credit to buy homes. Wayne Barni, local loan broker with ChoiceOne, reviewed a loan program dubbed CHF Access. This program uses an FHA first mortgage which requires a 3.5% downpayment and a 3% second mortgage that can be used toward the downpayment or closing costs. Essentially, the borrower can get in for 0.5% downpayment. Here are some details:

• Downpayment can be a gift from a family member
• 2nd mortgage has a 15 year term at 8.25%
• Seller may contribute up to 6% of purchase price for closing costs
• Both first and second are fixed-rate loans
• No prepayment penalty on either loan
• Maximum loan amount is $417,000
• Maximum income for Shasta County residents is $66,840
• Loan for primary residence only
• Loan can be used for FHA approved condos, manufactured housing and single family homes
• Not limited to first-time buyers
• Buyers OK 2 years after bankruptcy or 3 years after foreclosure
• Buyers must take online homebuyer education course

Credit scores play a role so not everyone will qualify. Buyers should have credit scores at or above 620. Some lenders will raise the bar further to 640. Borrowers may be able to make some adjustments to their credit score by following the advice of a good loan officer.

For more details, give me a call or drop me an email. Wayne can be reached at 530-224-6707.

bradgreps@yahoo.com

530-224-6767 or 530-941-7492

BRAD GARBUTT

REALTOR/BROKER ASSOCIATE

REAL ESTATE PROFESSIONALS GMAC

CORNER OF COURT AND PLACER IN REDDING

QUARTER CENTURY LOCAL SALES EXPERIENCE

For most of this year, Redding home prices have hovered around $135 per square foot but dipped to $129 in October. These averages are for Redding only and do not represent Anderson, Shasta Lake or Shasta County. The average home price dropped accordingly to $212,988, about $30,000 less than the 2nd quarter average of $244,718.

On a more positive note, the number of homes sold is up from last year. The majority of sales are for homes priced under $250,000. Of the 195 homes sold in September, 145 were priced under a quarter million.

This week, there are 1424 active home listings, 497 homes in escrow, 126 bank owned homes for sale, 241 sellers trying sell short and 1659 closed escrows year-to-date. The number of Shasta MLS member agents  has declined from nearly 1200 at the peak in 2006 to 865 today.

Interest rates remain at about 5% for a 30-year fixed-rate loan. FHA remains one of the most popular loans for first-time buyers. Investors are also buying distressed properties to be fixed up and rented or rehabbed and resold. A few buyers are buying up and down or relocating due to job opportunities elsewhere.

The federal tax credit has been cited with helping sales this year and efforts are underway to extend the program into Spring of 2010.

Contact me if you have any questions regarding buying or selling in today’s market.

bradgreps@yahoo.com

530-224-6767 or 530-941-7492

BRAD GARBUTT

REALTOR/BROKER ASSOCIATE

REAL ESTATE PROFESSIONALS GMAC

CORNER OF COURT AND PLACER IN REDDING

QUARTER CENTURY LOCAL SALES EXPERIENCE

Quite the value, relatively speaking! For starters, this Street of Dreams home sits on a ridge overlooking Redding, the valley and the beautiful western range. Featured last year on the cover of FROM HOUSE TO HOME  magazine, this sprawling estate is situated in the gated community of Standford Hills on the northwest boundary of Redding.

The main residence, nearly 4400 square feet of elegant living space in all, includes a home theatre, 4 bedrooms, 3 baths, office and 2 half baths. Travertine flooring, marbled columns framing the arched entryway, multi-dimensional architectural ceiling designs combine to create interesting  focal points. Slab granite counters with tumbled travertine back splashes grace the island kitchen with professional grade stainless steel Thermador appliances. 

The master suite includes a huge walk-in closet, sauna, whirlpool tub, honey-glazed cabinetry topped with honed granite counters and shower with glass block wall divider. There is also a generous laundry room with walk-in pantry and a 3-car attached garage with 2 additional storage rooms. Step out onto the large covered patio overlooking tropical palm trees, rock lounges and infinity pool.  Vacation in the luxurious backyard that resembles a tropical paradise! The rolling hills above the Sacramento River serve as a backdrop for this exquisite abode.

Follow the pathway past the babbling brook to the detached 830 square foot guest house. Used as an artist studio by the previous owner, no expense was spared in the construction of this cottage on par with the main residence. Find a fully contained living space with slate flooring,huge picture windows, wired for sound, a bedroom with separate walk-in closet, full bathroom and a kitchen that would make gourmet cooks feel at ease. Attached is an over-sized 2-car garage and separate storage room with access from the securely gated parking area. Exit the slider to the private multi-tiered trellis-covered patio with hand-crafted river rock fireplace. Wander past the trampoline area to the fire pit overlooking Redding  and river canyon to the south and the South Cascade Range including Mount Lassen to the east.

Purchased new in 2005 for $1.5 million, the previous owner added the guest home, garage and additional landscaping. Nearly $2 million invested, agressively priced at $995,000 or $191/square foot! Contact me for a private showing.

For additional pictures of this unique, private estate offering, click here:

 

 bradgreps@yhttp://www.visualtour.com/shownp.asp?sk=16&t=2031039&prt=11001ahoo.com

530-224-6767 or 530-941-7492

BRAD GARBUTT

REALTOR/BROKER ASSOCIATE

REAL ESTATE PROFESSIONALS GMAC

CORNER OF COURT AND PLACER IN REDDING

QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE

Fannie Mae is once again setting the ground rules for mortgages they will purchase from lenders and starting in a few weeks, borrowers better have a credit score at or above 620. This will apply to conventional loans as well as FHA and VA loans insured by the government. Additionally, if you want the best rate and terms, you’ll need a credit score around 720 or higher. This applies to purchases and refinances.

Gregory Karp, reporter for the Chicago Tribune, offered a few tips for borrowers:

• Avoid mortgage brokers unless you need “hand holding”. New appraisal rules make shopping a loan difficult for brokers plus there are additional fees to be paid for the broker’s services. The rule limiting mortgage brokers revolves around the appraisal-lenders can not accept an appraisal from commissioned brokers. Thus, a loan broker would have to order a new appraisal for every lender the loan is presented to. Costly and inefficient-according to the author.
• Shape up your credit. Getting a loan approved today is the most difficult its been in decades. Pay bills on time and pay off as much debt as possible. The formula for calculating credit scores is secret, but these two items account for the largest part of your credit score. He also recommends you not close old credit card accounts and keep your credit usage as small as possible. Check your credit report for errors at: www.annualcreditreport.com
• Apply for a fixed-rate mortgage-One of the main reasons for the real estate crash is the increased usage of adjustable rate loans. They were easier to get, but many borrowers ended up choking once the payments started adjusting leading to foreclosures. Fixed rate loans will not have payment variations due to interest rate changes.

bradgreps@yahoo.com

530-224-6767 or 530-941-7492

BRAD GARBUTT

REALTOR/BROKER ASSOCIATE

REAL ESTATE PROFESSIONALS GMAC

CORNER OF COURT AND PLACER IN REDDING

QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE

Robert Angulo is the investigator recently assigned by the DA’s office to handle real estate related crimes. Robert spoke to a group at the Shasta Association of Realtors weekly meeting Wednesday. The real estate fraud unit has been up and running for just a few months and is already handling 31 cases. Here is a summary of cases being investigated or prosecuted:

• Property management company being operated by individual that does not have a real estate license or a trust account to handle tenant deposits and rent. This case goes to trial in November.
• Another property manager that committed grand theft, embezzlement and grand theft from an elderly person. Amount lost was reported at $40,000.
• Person creating false deeds. This person first created a deed to get the property out of his name and into the name of his girlfriend because he was incarcerated and didn’t want his neighbor, with whom he had disputes, to take his property. He later created another deed to put his name back on the property. He used false identification to get the documents notarized. This is a felony.
• Florida loan modification firm took $2,700 from a county property owner for loan modification services but did nothing. Robert found out the Florida Attorney General was already involved in prosecuting this firm so no action will be taken locally.
• Craigslist-Nigerian scam artists are using properties advertised for sale on Craigslist to create rental ads. Potential tenants are baited with really nice homes for cheap rent  if they would just wire the funds to the scammer. Of course the home is not for rent and the money will be lost once sent. If it’s too good to be true, it’s probably a scam.

Robert also did a cross-check of all the property management companies in the phone book and found 8 that were being operated without a real estate licensee. In fact, most of the real estate fraud investigated thus far involved unlicensed individuals.

He also encouraged those in attendance to contact his office if anyone hears of someone being victimized by fraudsters or sees an ad for loan modification services that require an upfront fee or if our clients have strangers knocking on their door asking about the home for rent or asking them to leave because the bank has foreclosed. These are all scams that are happening here and elsewhere across the state and country.

Robert can be reached at 530-245-6350 or rangulo@co.shasta.ca.us.

bradgreps@yahoo.com

530-224-6767 or 530-941-7492

BRAD GARBUTT

REALTOR/BROKER ASSOCIATE

REAL ESTATE PROFESSIONALS GMAC

CORNER OF COURT AND PLACER IN REDDING

QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE

The first half of the 2-year legislative session is in the books and here is a summary of new laws that impact those involved with real estate transactions:

• Buyers of REO’s (foreclosures) can choose the escrow or title company. Prior to October 11, 2009 REO lenders routinely dictated where the escrow would be handled. Breaking this new law can result in a fine equal to triple the charges the buyer incurred and if the real estate agent insisted on a particular company he or she shall be subject to disciplinary action against their real estate license. This law expires January 1, 2015.
• Agents or attorneys can no longer charge any upfront fees for loan modification services. The Department of Real Estate and State Bar Association have received numerous complaints from borrowers that have paid for assistance and received little if any help. This law is an attempt to put scam artists out of business. This law sunsets January 1, 2013.
• Real estate agents that originate mortgage loans must obtain a license endorsement beginning December 2010. To obtain an endorsement, agents must complete education, testing and reporting requirements.
• Mortgage Broker Activities redefined-Starting January 1, 2010, mortgage brokers will be deemed a fiduciary meaning they must put the interest of their client’s economic interest above their own. Real estate agents have had this fiduciary requirement for decades, now mortgage brokers will have the same duty.
• Appraisal Industry Oversight-The Home Valuation Code of Conduct (HVCC) prompted the requirement that someone oversee the appraisal management companies that have sprung up this year in response to this new code. The Office of Real Estate Appraisers will have regulatory oversight including registration, fingerprinting, and background checks. This law also better defines what conduct constitutes improper influence of the appraiser including threats to withhold compensation or deny future business or promise future referrals if the appraiser does what is asked.
• Mortgage fraud is now a state crime under California law. Violators are subject to 1-year prison term. Federal law adds a $1 million fine. Fraud is defined as making a material misrepresentation or omission during the loan process.
• Increase in Homestead Exemptions- Beginning in 2010, judgement creditors will be faced with additional protection of home owner’s equity to the tune of $75,000 for individuals and $100,000 for married couples and $175,000 for persons over 75 years of age.  Homeowners must formerly file a Homestead Declaration to protect their equity from creditors.
• Landlords must give 60-day notice to terminate a month-to-month tenancy with a term greater than one year. 30-day notice will suffice for tenants that have rented for less than one year. The law was scheduled to sunset January 1,2010 but has been extended indefinitely.

Other new laws impact tenants of properties where the landlord has past due utility accounts, who can sell a mobile home in a park, swimming pool anti-entrapment devices, Mechanic’s Lien laws, low water-using plants, reverse mortgages, disposal of abandoned records that include personal information and plumbing fixture retrofits. Call me if you have any questions on these new laws.

bradgreps@yahoo.com

530-224-6767 or 530-941-7492

BRAD GARBUTT

REALTOR/BROKER ASSOCIATE

REAL ESTATE PROFESSIONALS GMAC

CORNER OF COURT AND PLACER IN REDDING

QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE

Governor Schwarzenegger signed SB 94 into law a couple days ago which, among other things, prohibits anyone from taking an advance fee for promised loan modification services. Prior to this bill’s enactment, attorneys and some real estate agents could charge borrowers an upfront fee typically ranging from several hundred dollars to several thousand dollars for promised loan modification services.

The problem that unfolded when these individuals or companies offering assistance to distressed borrowers would collect a fee and do little or nothing leaving the client in a deeper financial hole than before. Rather than hire someone to negotiate a loan modification, borrowers should work directly with their lender to seek a rewrite of their loan terms. The modification typically involves converting an adjustable rate loan to a fixed rate, reducing the interest rate and/or extending the term which lowers the monthly payment. Borrowers should seek a reduction in principal if the property is worth less than what is owed. More lenders are willing to consider a reduction in principal in light of the fact many loan modifications are failing because  borrowers still can not afford the revised payment.

In the event borrowers need assistance with a loan modification, they should seek out non-profit credit counselors or governement organizations set up to assist homeowners. HOPE NOW is one such organization.  The bank bail out package includes incentives for lenders assisting borrowers seeking loan modifications. Now that banks have shored up their balance sheets, they should be more cooperative with borrowers seeking loan modifications involving loan balance reductions.

Call law enforcement if anyone asks for a fee upfront to assist you in a loan modification. The Department of Real estate is currently investigating more than 1300 complaints regarding loan modification fraud. Don’t pay anyone anything, it’s the law!

bradgreps@yahoo.com

530-224-6767 or 530-941-7492

BRAD GARBUTT

REALTOR/BROKER ASSOCIATE

REAL ESTATE PROFESSIONALS GMAC

CORNER OF COURT AND PLACER IN REDDING

QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE

Borrowers seeking loan modifications are more likely to get a bank to agree to reducing the outstanding loan balance today than earlier this year. The rate of reducing the principal as part of a loan modification has more than tripled from 3.1% to 10% from the first to second quarters of 2009.

According to a new report from two government agencies responsible for overseeing financial institutions, banks found reducing interest rates or extending loan terms only temporarily helped borrowers in trouble. In fact, more than a quarter of borrowers that were granted a loan modification redefaulted within three months because they still could not afford the revised monthly payment.

According to the news release from the California Association of Realtors, one reason banks have started reducing the amount owed on mortgages is due to prodding from the Obama administration. The president has included financial incentives in his housing plan to encourage lenders to work with borrowers underwater on their home loans. Another fact cited is banks are shoring up their finances which gives them more latitude to help borrowers wishing to keep their homes.

In my opinion, 10% is still too low to really stem the tide of foreclosures. More than 20% of the mortgages in these United States are upside down so this is a step in the right direction but we still have a long, rough road ahead.

bradgreps@yahoo.com

530-224-6767 or 530-941-7492

BRAD GARBUTT

REALTOR/BROKER ASSOCIATE

REAL ESTATE PROFESSIONALS GMAC

CORNER OF COURT AND PLACER IN REDDING

QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE

We are a team of successful, professional, and knowledgeable real estate agents….

We finish strong for each client.

Call 530-224-6700 for details

Click here to view the embedded video.

Senate Bill 306 will not require lenders to review or respond to short sale requests from sellers and their agents. This bill was allegedly mischaracterized by practitioners as much needed legislation requiring a 21-day turnaround for short sales approvals. This bill actually requires lenders to respond within 21 days with a payoff demand when requested.

What this law really does is require lenders to provide the loan payoff within 21 days on an approved short sale. My experience has been lenders ususally provide the demand within a day or two of short sale approval. Apparently there was no law specifying when a payoff must be provided. Non-short sale lenders are required to provide a payoff to an escrow company within 21 days of a request. This law extends that to short sales.

Practitioners such as myself would love a law requiring mortgage holders respond within a 3-week time period. Currently, 3 weeks is the quickest one can expect a bank to respond but 3 months is the more likely time frame. I’ve been told that asset management companies that handle negotiations on short sales for the bank are paid by the hour, so it is in their best interest to prolong the process to enhance their profits. Others speculate that banks may benefit more by foreclosing and writing off the loss than working in good faith with homeowners underwater on their mortgage.

Another provision of this bill allows escrow companies to close escrow even if the bank has not approved the final closing statement (Hud-1) as long as it is “not clearly contrary to the terms of a short sale agreement.” Typically, banks provide a payoff demand that signifies the short sale approval and a specified amount of time to close the transaction. The escrow holder is required to submit a closing statement a few days before closing for bank approval. Some banks apparently are slow to return the approved HUD-1  delaying the closing even if the net proceeds to the bank are in agreement with the original estimated closing statement.  The new law takes effect January 1, 2010.

bradgreps@yahoo.com

530-224-6767 or 530-941-7492

 

Of course if you’ve never owned a home the answer is obvious …yes you are…

Haven’t owned a home in 3 years? ….yes you are

Renting with a good income? …yes you should …

In reality there is less than a week to be able to grab onto the Federal Credit….has to close escrow by Nov 30th to qualify …not be in escrow

Don’t wait too long ….

Lead economist for the California Association of Realtors (CAR) addressed agents from across California at the annual convention in San Jose. Leslie Appleton-Young predicted home prices in California to increse 3.3%  in 2010 to a median price of $280,000. However, the number of housing units sold is expected to decline 2.3%  to 527,500 units compared to 540,000 units projected for 2009.

CAR President Jim Liptak added “California’s housing market continued its strong sales rebound this year, resulting from the continued pace of distressed properties coming on the market. This follows two years of double-digit sales declines in 2006 and 2007. Looking ahead, we expect sales to moderate to a more sustainable pace.” He went on to say “2010 will mark the beginning of a ‘new normal’ for California’s housing market”.  He expects demand for low-end priced distress properties to drive a “steady stream of sales”.

Leslie expects distress sales to represent 1/3 of sales activity and supply to be lean in the winter and increase in the peak buying season. Leslie also likes to list wild cards that can derail her forecasts. These include “foreclosures, loan resets, the labor market, the California budget crisis and actions by the federal government.”

She may be referring to the fact banks are sitting on many foreclosed properties which could impact supply and demand depending on when and how many are placed for sale in 2010. The loan resets she is referring to are for Alt-Aloans that are the next tier up from subprime loans. Most of the subprime loans, made to buyers with low credit scores, have either been refinanced or foreclosed upon.

Now we are dealing with the next group, Alt-A loans, which fall between the prime and subprime loan categories.  Unemployment could cause even the most credit worthy buyers to lose their homes due to income loss or reduction. California’s budget woes could spur more taxation pushing more people and businesses from California. Federal programs assisting homeowners underwater with loan modifications or tax credits for home buyers can impact next years sales activity.

bradgreps@yahoo.com

530-224-6767 or 530-941-7492 

BRAD GARBUTT

REALTOR/BROKER ASSOCIATE

REAL ESTATE PROFESSIONALS GMAC

CORNER OF COURT AND PLACER IN REDDING

QUARTER CENTURY LOCAL SALES EXPERIENCE

Home values in Redding continue to bounce up and down indicating the market is still searching for a bottom. Home prices averaged $233,500 in the first quarter, then up to $244,700 in the second quarter but down to $232,900 for the quarter that ended in September. The average square footage for a home in Redding was 1734 and the average cost per square foot was $134 for the 3rd quarter.

The number of home sales continues to increase and the average sales price and cost per square foot remains relatively steady for the year. The vast majority of home sales are in the lower price ranges. In August, 92% of sales activity occurred in the under $350,000 price range.

The high end of the Redding real estate market has seen a dramatic drop in sales and prices. For example, a home in Old Shasta listed originally at $2.3 million closed escrow recently at $870,000. Another home south of Redding with a river view was listed at $2.5 million, foreclosed upon and sold by the bank for $675,000. Another high end luxury home originally listed for sale at $1.895 million was foreclosed upon in Sunst Hills near Cottonwood and is now listed at $824,000.

Overall, 2009 is shaping up to be a better year for the number of units sold, but home prices have dropped by double digit numbers. First-time buyers that haven’t bought yet are well-advised to jump in and buy now before the $8,000 federal tax credit expires at the end of November. These buyers should be in contract by mid-month to have the best chance of beating the deadline.

bradgreps@yahoo.com

530-224-6767 or 530-941-7492

BRAD GARBUTT

REALTOR/BROKER ASSOCIATE

REAL ESTATE PROFESSIONALS GMAC

CORNER OF COURT AND PLACER IN REDDING

QUARTER CENTURY LOCAL SALES EXPERIENCE