Buying A Foreclosure Home
New report shows that, while 2013 foreclosures were down overall, foreclosure sales were up.
We’ve talked a lot recently about the number of foreclosures dropping significantly in 2013, but interestingly enough, a report released recently by RealtyTrac shows that foreclosure and distressed home sales were up 2 percent in 2013, and that a good chunk of buyers paid all cash for these homes.
The report showed that 29.1 percent of all foreclosure and distressed home sales in 2013 were purchased by all cash buyers. While you might think that these were all purchased by investors such as private equity groups, you might be surprised to find out that they made up for just over 7 percent of the all cash sales. The markets that garnered the most foreclosure sales were:
- Jacksonville, FL (38.1%)
- Knoxville, TN (31.9%)
- Atlanta, GA (25.2%)
- Cape Coral, FL (24.9%)
- Cincinnati, OH (19.3%)
- Las Vegas (18.2%) Continue reading
Homeowner Protections Signed Into Law
This law has been praised by consumer advocates, but criticized by the lending industry. Its protections are necessary in light of recent national economic events that have often put homeowners at the mercy of their home mortgage lending servicer without much recourse. The law insures accountability on behalf of lenders and closes some loopholes in other areas regarding the buying, selling and renting of real estate as well.
Here is a summary of the California Homeowner Bill of Rights
Restriction on Dual Tracking Foreclosure
Prior to January 1, 2013, a homeowner could still face foreclosure by the lender holding the mortgage deed even during loan modification negotiations. Many times a homeowner would receive a loan mod, only to then also receive a Notice of Default against his property. This restriction on dual tracking insures that the foreclosure will be postponed while the loan modification is under review.
Guaranteed Single Point of Contact
The California Homeowner Bill of Rights guarantees that, in the event of a loan modification proceeding, the homeowner will have only one point of contact. This relieves frustration on the part of the homeowner who, in the past, may have ended up with a different point of contact every time he called his lender regarding his loan modification. This provision will be insured that one person or a team at the bank will know the facts of their case, has their paperwork, and can get them a decision about their application for a loan modification.
Verification of Documents
Also known as “robo-signing,” the California Homeowner Bill of Rights provides a civil penalty of up to $7,500 per loan for any violation wherein a lender files and records unverified loan documents.
Borrowers can now seek “redress of ‘material’ violations” of the foreclosure process; meaning they can now sue their loan servicer for any violations they may have made during the foreclosure process.
Buyers of foreclosed properties are now required by the California Homeowner Bill of Rights to give tenants living in the property at least 90 days before beginning eviction proceedings. If the tenant was under a fixed-term lease at the time of the foreclosure, the new buyer must honor the terms of that lease.
Tools to Prosecute Mortgage Fraud
Prior to January 1, 2013, the statute of limitations to prosecute mortgage fraud and mortgage-related crimes was one year. The California Homeowner Bill of Rights extends that statute to three years, and provides the Attorney General’s office the ability to use a statewide grand jury in the prosecution of anyone accused of financial crimes in multiple California counties.
Tools to Curb Blight
The California Homeowner Bill of Rights provides additional recourse against blight caused by vacant homes in a neighborhood. This includes providing homeowners more time to remedy code violations, and also provides penalties for homeowners of foreclosed properties to pay for maintenance and upkeep.
What questions do you have about the California Homeowner Bill of Rights? Feel free to contact us using the form below.Email Contact Form
Many home buyers in today’s market begin their home search by looking for deals on short sales and foreclosure properties, but are they really a better deal?
At the beginning of the real estate and financial crisis a few years ago, as short sales began to increase, many banks and lenders had no streamlined process to handle the nearly record quantities of short sales and foreclosures happening across the country. In many cases, the lenders took the real estate agent’s word as far as the sale price of the home. This led to many homes being sold too far below market value which led to more problems with the undervaluation of surrounding homes without taking into effect realistic fair market value.
Banks have since streamlined the process and have taken a more proactive approach to the valuation and pricing of short sale properties as well as foreclosures and Real Estate Owned (REO) properties. In most cases, a home that is listed as a short sale must still fall within reasonable fair market value based on the recent sales of similar properties. Any “deals” or homes for sale that fall far below market value are usually priced that way for a reason which may include severely deferred maintenance or physical damage to the home.
This does not mean that short sales or foreclosures still aren’t a great deal. If you have questions about short sale or foreclosure/REO properties for sale, feel free to begin your home search at http://bringingyouhomescv.com, or call us direct at 661-290-3802.
Are short sale or bank-owned/real estate owned (REO) properties good purchases?
In this economic climate, there may be deals to be had when it comes to purchasing a home where foreclosure is imminent, or the home has already been foreclosed upon.
When a foreclosure may be imminent, a seller may attempt to sell his home through a short sale. A short sale means that the bank will accept a sale price that is less than the amount owed on the property. There are several requirements the seller must meet before this can happen, and this is usually the last step a seller will take to avoid foreclosure on his property.
A bank owned (or Real Estate Owned) property is where the home has already been foreclosed upon by the bank, but it ends up in the bank’s inventory as they have yet to sell it.
Both of these situations can make for a potential deal when it comes to buying a home, but there are some things you must consider before making this choice:
- Most short sale properties are priced aggressively low which may cause a bidding war with multiple buyer offers coming in at one time. It is important to have a clear game plan when considering a short sale purchase. Our team of realtors are skilled and experienced in helping buyers put together a strategy that will give them the best chance of finding a deal on a home. Contact us for details.
- Remember that in most cases (including short sales AND REO’s), properties are sold “as-is”; meaning you will not have the opportunity to request repairs to be made to the home you’re purchasing prior to closing escrow. Occasionally in an REO property, the bank MAY consider including repairs on major items such as air conditioning, heating, or items that may cause safety or health issues, but these are done on a case-by-case basis, and all banks have different criteria when considering these repairs.
- Lastly, unless you’re making your purchase as an investment or rental property, make sure you buy a home that you love and want to live in. Remember that home prices have not begun to see a rise in value, so it’s best to make a wise purchase that you plan to keep for a while until property values return to their normal rate of yearly increase (typically 3-5% per year).