Crescent City Real Estate News

With the number of California notices of default filings hitting 31,004 in February, it is no wonder California signed into legislation relief for homeowners who lost their home home due to foreclosure or short sale.

California had been lagging behind the federal government in cancelling taxes owed on the "short amount" or the difference between the mortgage amount and what the house actually sold for at short sale or in the case of foreclosure, trustee sale.

I had a client call me in a panic last week letting me know that although he would not be taxed by the federal government, his CPA told him he would have to pay California State taxes on the $100,000 difference between what he owed the bank and the sale price of his home at trustee sale.  He was flabbergasted and scared.  I told him with California leading the nation in foreclosures, there would no doubt be a movement by people like him to get California on the same page as the feds regarding taxing forgiven mortgage debt. 

Low and behold as of April 9th, 2010, thousands of Californians whose homes were foreclosed on or sold at a loss would get tax relief under a measure approved Thursday by the state Legislature.

The bill would waive state taxes on mortgage debt that has been forgiven in a foreclosure or short sale. It is expected to affect about 34,000 taxpayers.

       

Thank you for stopping by. Your comments on this post are welcomed and appreciated.
No one sold more homes in Del Norte County in 2009--*both in number and volume--than Fran Gatti. Put Fran to work for you!

Brought to you by Fran Gatti at  No one works harder for you!  Bus: 707-464-5400, Cell: 707-218-8162 Email: frangatti@remax.net Website: FranGatti.com My Blog: Fran's Blog RDCPro®

*PER CCMLS

Here are a few suggestions for buyers and their agents looking to purchase a Del Norte County foreclosure.

I have been working with many different banks and asset managers over the last few years and there seems to be a few common threads in this process:

1. Don't low ball your offer if the listing is less than one month old.
   
   I have not personally seen a bank accept an offer more than 98% of list price within the first two weeks.
   
   What does that mean for you, the buyer and your agent?  Do not submit a low offer if you really want the property.
   
   The theory behind this, the bank has paid 3 real estate agents for price opinions and more than likely an appraiser as well.  The asset manager knows their property is priced well (in most instances).  
   
   Also, in most instances, the asset manager is bound by the directives of the bank/investor who owns the home and they will not allow the asset manager to go below a certain percentage on price.
   
      
2. Banks require that all buyers have a letter of pre-approval or proof of funds so submit it will the offer. 
   
   This is just good business sense.  Your agent should have made sure you have this in hand before they show you ANY properties, not just foreclosures.  Why waste time looking at properties, if you do not have the means to purchase.  That is the surest road to buyer frustration I can think of. 
   
   
3. Banks, in most instances, will not do repairs?
   
   The bottom line for a bank is their net and will this escrow close?  Inspections can affect both the bottom line and the buyer taking a hike.  Don't get me wrong; buyer's need to know what they are purchasing, however, if you truly want to write a clean offer that has a better chance of acceptance, why not pay for your inspections yourself?
   
   
4. If you are asking the bank to pay for your closing costs, and the property is recently listed, you should mitigate the seller concession by raising your asking price.
   
   So, the home is recently listed at below market value, you know their are multiple offers and you are asking below list price with a seller's concession?  Why would you think this would work?  I haven't seen it work yet.  If a reader has seen this scenario work would you please leave a comment?  Thanks. 
   
   
5. Banks/Investors reserve the right of approval of all offers AND you are not in contract until the fat lady sends back the contract and bank addendum SIGNED BY THE POWERS THAT BE at the bank.
   
   THE LISTING AGENT WILL CONTINUE TO SUBMIT OFFERS AND THE BANK WILL LOOK AT THEM UNTIL THERE IS A FULLY EXECUTED CONTRACT.  I know this is frustrating, but there it is.  Ask your agent to quickly convey all counter offers and quickly sign and respond to them.  This should keep the process from dragging out. 

A few other suggestions:

• Use a full time agent- I can not stress this enough.  Don't you want someone who is working at this full time?  You need someone working on your behalf that is accessible and can quickly respond to your needs.  Many an offer is lost because the agent was unavailable.
  
  
• It isn't personal - The bank isn't picking on you if they countered and you accept, but in the mean time a better offer is submitted and they choose to go with that one.  Remember, it isn't over until the fat lady sends back the fully executed contract.  Your agent needs to understand that so they will stay on top of things.
  
  
• The bank isn't necessarily the bad guy - Out of my last 7 REO listings, 5 have been investors who continued to take their tenants rent knowing they were going to lose their property (many investors own more than one home), but didn't bother to say anything to the poor tenant. Guess who is left to deal with that.  Yep, me.  All that to say that the bank, in many instances is already losing quite a bit of money in dealing with tenants, personal property left in the home and disgruntled owners who "stick it to the man" by trashing the home on their way out the door.

So there you have it.  If you are coming to the sand box, you better be ready to play. Have your proof of funds letter or pre-approval letter in hand, expect to pay for some inspections and pay above list price if you are asking for a seller's concession.  If the home is extremely desirable, be ready for multiple offers.  Best of luck to you in your purchase.

       

Thank you for stopping by. Your comments on this post are welcomed and appreciated.
No one sold more homes in Del Norte County in 2009--*both in number and volume--than Fran Gatti. Put Fran to work for you!

Brought to you by Fran Gatti at  No one works harder for you!  Bus: 707-464-5400, Cell: 707-218-8162 Email: frangatti@remax.net Website: FranGatti.com My Blog: Fran's Blog RDCPro®

*PER CCMLS

Interactive Map of U.S. Foreclosure Rates by County -

Here is a very cool map that shows foreclosure actions by county in comparison to the number of properties in a county.

There are two other maps as well. One that shows Unemployment Rates and another that shows Median household Income.

I would like to thank my Facebook pal, Karen Corchoran of RE/MAX for finding this map on the NPR website.

It's hard to see how anyone can paint an optimistic picture of our economy with foreclosure rates increasing every month, but some economists are doing just that.

I keep an updated list of Del Norte County foreclosures that are listed on our MLS and also have a Foreclosure Alert Servicewhere you can receive new foreclosure listings and price reductions in your email inbox the second they come on the MLS.  Click here to sign up for this free service. 

NEW LISTING TODAY: Walk to ocean/beach, 3 bedroom, 1 bathroom home for $95,900. Call me today for more information.

If you have any questions about buying or selling real estate in Del Norte County, give me a call.  I will give you an honest answer and base what I have to say on sound market research of all pertinent data.

I am here to assist you with all your Crescent City and Del Norte County real estate needs.  Thank you for stopping by and please leave a comment.

       

Thank you for stopping by. Your comments on this post are welcomed and appreciated.
No one sold more homes in Del Norte County in 2009--*both in number and volume--than Fran Gatti. Put Fran to work for you!

Brought to you by Fran Gatti at  No one works harder for you!  Bus: 707-464-5400, Cell: 707-218-8162 Email: frangatti@remax.net Website: FranGatti.com My Blog: Fran's Blog RDCPro®

*PER CCMLS

Several clients have called this week to ask about the California foreclosure moratorium that went into effect June 15, 2009, and how it will affect them. 

The bill is similar to legislation passed by the federal government in March.

Some of the highlights:

• Banks can get an exemption from the moratorium by showing that they have a loan modification plan in place.  Several companies have already applied for the exemption; California Department of Corporations has 30 days to grant or refuse the request.
  
  
• Loan modification programs in place must have some combination of the following features:
  • Interest rate reduction for at least 5 years.
  • Extension of the amortization period for up to 40 years from the date the loan was issued.
  • Deferral of some portion of the principal amount.
  • Reduction of principal.
  • Compliance with a federally mandated loan modification program.
  • Other factors that the commissioner feels appropriate.

• The law affects owner-occupied homes where the first mortgage was recorded between January 1, 2003 and January 1, 2008
  
  
• The target rate set by the bill is for the borrower to have their mortgage payment be 38% of income.
  
  
• Lenders methods of choice for lowering the payments are lowering interest rate and/or extending the loan to a 40 year term.
  
  
• This bill has no effect on second (or higher) mortgages or on non owner-occupied homes, and is in effect through January 1, 2011.
  
  
• Loan modifications require that the homeowner can pay the modified mortgage, so not all homeowners will qualify for a loan modification. Some homeowners would be better off pursuing a short sale.

Now for the Loophole - banks only need to have a loan modification program in place - there is no requirement for them to actually be issuing loan modifications.  Some critics of the bill say if banks are able to get exemptions, the "teeth" are taken out of the bill, however, many banks seem to be realizing it is to their advantage to grant a loan modification or short sale rather than take the home through the expensive foreclosure process. Hopefully, as more and more homeowner's stay in their homes with loan modifications in place, the process will gain in momentum and popularity with lending institutions.

I talked with a client today who says her lender, Citi Mortgage, granted her a loan modification, lowering her interest rate to 3.5% for five years and graduating it back up to the original 6.5% in 7-8 years.  My client said this lowered her payment by $400 a month giving her a little bit of breathing room and the ability to keep her home. 

• Read the full text of the bill, sponsored by Assemblyman Ted Lieu (D-Torrance), HERE.

       

Thank you for stopping by. Your comments on this post are welcomed and appreciated.
No one sold more homes in Del Norte County in 2009--*both in number and volume--than Fran Gatti. Put Fran to work for you!

Brought to you by Fran Gatti at  No one works harder for you!  Bus: 707-464-5400, Cell: 707-218-8162 Email: frangatti@remax.net Website: FranGatti.com My Blog: Fran's Blog RDCPro®

*PER CCMLS