California Foreclosure Sales Drop by 39.1% in October 2008

ForeclosureRadar is reporting a 39.1 percent from the prior month, due to significant increases in cancellations and postponements. Under California law,scheduled foreclosure sales can be postponed for a period of up to one year, until they are either canceled or sold. Foreclosure cancellations in California increased by 78 percent in October, resulting in nearly 20 percent of foreclosure sales scheduled being called off.

Notice of Default (NOD) filings continue to be impacted by CA State Senate Bill 1137

• Notice of Default filings up 2.8% (16,810 filings in October)
• Notices of Trustee Sale increased by 32.9% (25,408 filings in October)
• Properties taken to sale at auction declined by 39.1% (14,042 sales)
• Lenders took back 94 percent of the properties taken to auction ($9.19 Billion loan value)
• Third party purchases declined 24% 

The increase in cancellations was led primarily by Countrywide which saw a 460% increase incancellations from the prior month, and a 48 percent decline in the number of properties they sold at auction.

The October declines in California foreclosures is not an indication that the foreclosure problem is over for the California housing market. Loan modifications being made by the banks do not address the overall issue of negative equity. Helping home owners reduce their monthly payments with a low interest loan is a stop-gap measure that is "banking" on the housing market to rebound enough in a couple of years for homeowners to refinance with a loan to value ratio that is in the plus column for the bank.

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Contact Paul for more information on how foreclosures are impacting East Bay home prices (925) 963-4246

Great Loans Still Available Through Countrywide

(from an email received this morning)

97% loans up to $729,750 *

• FHA loans with as little down as 3% from buyers
• Government mortgage insurance required at a cost of 1.75% of the loan amount
• Seller can credit up to 6% of the sales price to cover buyers closing costs including points
• Rates currently at 6.625% 2 point cost to buyer

* must fund by December 10th 2008 because stimulus package is expiring December 30th

 90% loans up to $417,000 with NO Private Mortgage Insurance

• Conventional loans with 10% down from buyers
• This mortgage is lender insured. Mortgage insurance cost is absorbed by the bank
• Seller can credit up to 6% of the sales price to cover buyers closing costs including points
• Rates currently at 6.875% 1 point cost to buyer

 85% loans up to $729,750 *

• Conventional agency loans with 15% down from buyers
• Mortgage insurance required for loans over 80%
• Seller can credit up to 6% of the sales price to cover buyers closing costs including points
• Rates currently at 6.375% 1 point cost to the buyer.

*This is a stimulus package loan and must fund by December 10th 2008

80% loans up to $1,000,000

• Conventional Jumbo loans for purchase transactions
• Seller can credit up to 6% for closing costs including points
• Rates currently at 7.5% at 1 point cost to buyer
• Rates drop to 7.25% at 1 point with 25% down payment
• Rates drop to 7.0% at 1 point with 30% down payment

70% loans up to $1,500.000

• Conventional Jumbo loans for purchase transactions
• Seller can credit up to 6% for closing costs including points
• Rates currently at 7% at 1 point

It’s no news that foreclosures are on the rise in California. Danville, San Ramon, Pleasanton, Dublin and Walnut Creek are feeling the efeects of the increased foreclosure activity.

Can’t Make Your Mortgage Payment?
You’re NOT Alone

We can help. The absolute best thing a homeowner in trouble can do is: first – recognize YOU are not alone. Many people are finding themselves in the foreclosure process. The downturn in the housing industry is affecting many peoples lives – many people have lost their jobs as a result of the housing slowdown.

The rise in foreclosures is happening in all price ranges. It is not just first-time buyers that are in trouble with their mortgage. Homes above $2 million are also in the foreclosure process.

If you’re having trouble with your mortgage payment – contact your lender or real estate professional NOW. The sooner you take action, the better.

The bank does not want your property. Lenders are facing difficult times with the number of properties entering into default. Every home the bank owns effects their liquidity – they do not want your house, it ties up their capital reserves and they cannot sell it for what you paid for it.

Many lenders, like Countrywide, are starting to get more aggressive in their attempts to help homeowners stay in their homes. Do not give up or lose hope – contact a professional.

Foreclosure Process Timeline

Approximate minimum timeline for the foreclosure process in California.

• Day 1 – Notice of Default recorded
• Day 14 – Notice of Default – must be mailed to borrower 10 days after recordation
• Day 91 – Notice of Trustee’s Sale – recorded, published and mailed (lenders usually file 31 days before the sale because of an IRS notice requirement)
• Day 115 – Deadline to Cure Default (5 business days before the trustee’s sale)
• Day 122 – Trustees Sale (deadline to pay off loan is any time before the trustee’s sale begins)

Can’t Make Your Mortgage Payment?
You Are NOT Alone
Contact Us – We Can Help

(925) 984–4910

REOs – bank owned properties – are on the rise nationwide and California is leading the way. According to reports, California has led the nation in foreclosure filings for 15 straight months.

Real Estate Owned properties are houses which do not sell at foreclosure auctions. When houses are returned to the bank, the mortgage is eliminated and the bank negotiates with creditors to remove or reduce liens.

The 680 corridor from Walnut Creek to Pleasanton is one of the most stable real estate markets in the country, but that doesn’t mean that communities like Alamo, Danville and San Ramon are immune to the foreclosure problems.

The big lenders like Bank of America, Countrywide, IndyMac and others are ramping up their foreclosure and REO efforts to help homeowners in trouble and expedite the process.

Three perspectives to the foreclosure/REO situation:

• Homeowners in trouble – need help with restructuring to save their homes or expedited processes that help them move quickly through the difficulties and challenges with as little damage to their financial future as possible.
• Investors – individuals looking to invest in REOs and foreclosures will benefit from expedited procedures.
• Communities – neighborhoods like Danville and San Ramon will benefit by reducing vacant homes in the area and the quicker the inventory is moved, the sooner property values can be freed from the negative impact of REOs in the area.

Countrywide Mortgages Foreclosure Blog  indicates that they currently have over 14,000 properties available representing almost $3 billion of property – $1.3 Billion in California.

Financing REO properties in Danville and San Ramon is the same as any other investment property. Plan to contribute at least 10% or more toward the down payment. Do your due diligence to properly cash flow your investment; with this you will be able to weather any market volatility in the future.

The whole team is at Countrywide in Danville, CA listening to Lito Gonzales and Gene Mackey.

Gene and Lito are sharing their insight on what is happening with REO (bank owned) properties and explaining Countrywide’s involvement in the FHA loan market.

All of us are in agreement that the industry is going to see a lot more of these type of transactions over the next two years.