HUD homes can go fast though.  Many are open to owner occupants and non-profits first, then after 30 days will open to investors and others.  Want to search HUD homes in Contra Costa or HUD homes in Alameda, check out the links below:

HUD Homes for sale Contra Costa

HUD Homes for sale Alameda County

HUD Homes in Concord CA

The process for an offer on a HUD home is completely different than the typical California real estate transaction.  Call for a free consultation.

If you already have an agent, have them call me, this is not an attempt to move you away from a current business relationship.

Here is an example of a HUD home one of my wonderful buyer clients is purchasing now.

Located on Silverleaf Lane in Concord it is a 2008 built 4 bedroom home, listed for 325k. What a treasure!

Last week, DS News reported that an Obama plan proposes to extend this tax waiver legislation.

The Act ensures that homeowners who received principal reductions or other forms of debt forgiveness on their primary residences do not have to pay taxes on the amount forgiven.

We’ve written about short sale taxes in the past, and while you must always talk to a tax professional we offer you information on what to do with that 1099 when you receive it. Check out our article from earlier this year: Taxes on Contra Costa short sales

We’ll keep our ears open to see if it sounds like the State of California will follow suit, we hope so.  We don’t think short sales and foreclosures will end by this year, so it seems prudent to extend these protections for homeowners in distress.

Want more specialized reports? Just ask Catherine Myers

After the jump to the next pages, you’ll find trends and statistics for the following local real estate markets:

• Contra Costa Homes for Sale
• Walnut Creek Homes for Sale
• Concord CA Homes for Sale
• Pleasant Hill Homes for Sale
• Martinez Homes for Sale
• Clayton Homes for Sale
  

We all know there have been many mistakes in foreclosures and some have lost their homes despite doing everything asked of them in a modification agreement, or through a series of errors and or misrepresentations.

The timeline in which to request a review has been extended to July 31, 2011.

If you endured a foreclosure with one of the following banks, you may be eligible:

• America’s Servicing Co.
• Aurora Loan Services
• BAC Home Loans Servicing
• Bank of America
• Beneficial
• Chase
• Citibank
• CitiFinancial
• CitiMortgage
• Countrywide
• EMC
• EverBank/EverHome Mortgage Company
• Financial Freedom
• GMAC Mortgage
• HFC
• HSBC
• IndyMac Mortgage Services
• MetLife Bank
• National City Mortgage
• PNC Mortgage
• Sovereign Bank
• SunTrust Mortgage
• U.S. Bank
• Wachovia Mortgage
• Washington Mutual (WaMu)
• Wells Fargo Bank, N.A.
• Wilshire Credit Corporation

Check out the Independent Foreclosure Review FAQ.  The Federal Reserve Bank has also set up an informational page. This is a legit program. But be careful, this is free, no one should be approaching you and wanting to charge you money for this review. It is free.

It is NO surprise that a recent study in San Francisco showed that 80% of the foreclosures that occurred had blatant errors.  This is staggering.  Take a look at the article NYT: SF audit finds foreclosures riddled with errors. 

Image: ddpavumba / FreeDigitalPhotos.net

Beautiful area just off Myrtle Drive in beautiful Concord.  3 bedroom, 2 bath w/ swimming pool!   1748 square feet of enjoyable living space.  Close to shopping, Safeway, Starbucks and the Pavilion.  Right on the Clayton border and near the popular rural feeling Myrtle Drive.  Cul-de-sac. Wonderful curb appeal.

Check out the property website with virtual tour.

Concord Homes for Sale

This one is zoned to the new and exciting Clayton Valley Charter High School! Best of all worlds here!

Offered for an amazing $350,000.  (short sale)

What is known is that there may be some relief for those who hold “underwater mortgages,” or you may be eligible for a one time $2,000 payment if you were foreclosed upon by one of the big banks involved in the settlement.

Here’s some of what we know right now:

Participating banks: JPMorgan Chase, Bank of America, Citigroup, Wells Fargo and Ally Financial (formerly known as GMAC Mortgage).

Foreclosure relief: For some who suffered a foreclosure between January 1st 2008 and December 31, 2011 (and who meet other requirements) you may be eligible to receive up to $2,000.

Principal Reduction: Some of this settlement will go toward up to 1 million homeowners who are both underwater on their mortgages AND behind in their mortgage payments. This part of the agreement may mean principal reductions, however there are some factors that may prevent many from seeing relief in this part (of course).

Refinancing: Up to 3/4 of a million homeowners who are underwater and current on their payments may be able to apply for relief through a refinance to our record low interest rates.  These homeowners could realize some good savings on their monthly payments.

Here are some resources that may help:

CNN Mortgage settlement could bring billions in relief

Wall Street Journal discusses the foreclosure settlement:

Local Bay Area CBS Channel 5 discusses the mortgage settlement on Sunday, 2/12/12:

Many feel a bank “should” help them when they decide a short sale is the decision they’ve made for themselves.  And, for the most part, many banks do cooperate.  Especially in California when after a foreclosure there is no recourse.  Banks know that very often they will net more money doing a short sale now vs. a foreclosure months down the road.  However, sometimes we deal with investors and mortgage insurers that don’t have that same kind of care. They have their own guidelines and they aren’t always aligned with our reality. 

It is rare that short sales fail, yes really.  Most do go through (assuming you have a bonafide hardship and can submit a complete package).  But, it’s those few that can eat at you, drive you crazy and make you question the sense of it all.  One thing I’ve learned, is that the decisions don’t always make sense TO US, but make perfect sense to the reps sitting at their desks making these decisions day in and day out. For mortgage insurers especially, I believe they are PAID to find reasons to deny your file. They are an insurance carrier, they don’t want to pay claims – is that a surprise?

I had a file a while back that was being denied at the mortgage insurer level.  They just don’t feel the seller has a hardship, period. That’s it.  Even though the financials show a clear upside position in monthly income vs. debt, it’s not enough.  Even though the home is worth less than 50% of the loan balance, it’s not a hardship. On the surface it seems clear right?

Here are some things THEY say:

• Why should they be the only debtor being asked to take a bath on this debt?
• Nothing has materially changed; there’s been no termination of job, no involuntary transfer, no death in family.
• The mortgage payment going up 3x in the last 6 months is not a hardship, as he knew what kind of loan he had from the beginning.
• Maybe he should default on his other debts first.
• Maybe he could get another job.
• Perhaps the HOA could help and reduce the HOA fees for him (yah right!)
• Maybe he could rent it out (oh sure for a 1,000 a month loss?)
• Maybe he shouldn’t have gotten married if it would result in increased household expenses (nice!)
• Being underwater by 200k is not a hardship.

So you see, they have their “reasons” but they don’t always make sense to us.  And not only do they not make sense to us, they can feel hurtful and vindictive. I’m willing to bet too, that of the files they deny, there is a certain percentage of those that DO end of staying current, and again, that is something we don’t know -but could prove a big incentive for them to deny files.

The big thing that sellers in a short sale position have to understand is that there are never any guarantees of success in a short sale.  Decisions are made at the corporate level that DO NOT have your best interests at heart.  We have competing interests in fact.  Over 95% of my short sales close, but that is because I don’t take them all. I assess them early and not all situations are cut out for a successful short sale.  Of the ones which do fail, and get denied, it is VERY often (and almost exclusively) secondary denials i.e. mortgage insurers, second lien holders that want large lump sum contributions, etc.  There are reasons, they just aren’t reasons favorable to you.

No one wants more foreclosures in the market.  No one wants to feel they did everything right and submitted a perfectly good market offer, and still be denied. No one wants to feel a foreclosure is their only option – yet it happens. It is also especially hard to take when one didn’t even know they had mortgage insurance and it is a lender placed policy – you had an obligation to your bank, your bank is willing to do the short sale, but THEIR insurer says no?  It can be maddening (to say the least).

So, I guess there is no moral to the story here except to realize that sometimes a decision  made is not in your best interests, but theirs. Sometimes it doesn’t make sense. Sometimes it is against everything that seems clear to you. Sometimes you do have to make other decisions not in your favor (i.e. whether to continue to pay, or to foreclose) and those are decisions only you can make.  I wrote about Strategic Defaults in Contra Costa and one of the reasons I cited is a denial by a banking or insurance entity.  Some are left feeling they have no choice.

A few of other blog posts I wrote that may be helpful:

Taxes on Contra Costa short sales

Anatomy of a short sale decline

From Contra Costa short sales:

SB931 no deficiency following a short sale

SB458 no deficiency following a short sale – 2nd liens

Contact me:

Catherine Myers, BROKER Assoc
DRE 01337828
Windermere Bay Area Properties

Serving:
Walnut Creek, CA
Concord, CA
Clayton, CA
Pleasant Hill, CA
Martinez, CA

925-683-2125

More and more, I hear about folks contemplating a strategic default.  Here are some Q & A’s about what a strategic default is, and what it can mean to your future credit score, ability to buy a home again, and your psyche!  With the ease of many short sales, bankruptcy options and the tax and recourse protections now, I’m not sure most would need to turn to a strategic default, but as you’ll find out below, there are pros and cons – and alternatives.

What is a strategic default?

In simple terms, it is a calculated decision by a homeowner to stop their payments, and to “walk away” from their mortgage.  Often these people have never missed a payment on their mortgage.  Just as often these are folks with high credit scores and a good payment history.

Why a strategic default?

For people that make a decision to strategically default on their mortgages, it is often a part of a larger strategy to get out from under an underwater home (or asset as we get more impersonal about this debt).  As with many homes in our Contra Costa area, we’ve witnessed some of the steepest declines in our home values in history. If you’ve bought in the last 10 years, even with 20% down, in some areas it is a sure bet you owe more than your property is worth.  For properties with negative equity, for many Bay Area homes, there really is no immediate end in site. Many homeowners anticipate they’ll be underwater for years to come.

What happens in a strategic default?

Well, when someone stops their payments, the bank will initiate foreclosure proceedings.  I can only speak for California, but that process can take as few as 4-5 months to as long as a year or more.  It is not uncommon to see banks take 18 months or more to eventually foreclose, but many banks are starting to speed the process in 2012. Your credit will take a significant hit with your first missed payment, and will decline as some estimate up to 150-200 +/- points by the time all is said and done with 6-18 months of missed mortgage payments hitting your credit report.  Of course, you’ll get numerous, if not daily calls from your bank to urge you to make payments. I’ve heard some banks are starting these calls the day after your due date.  Believe me when I say, they really don’t want your house. They really don’t.

What happens while you wait for foreclosure?

Well, that depends.  Some people have already moved on and stopped paying after they’ve moved and are settled in a new home. There is a term that some can identify with called “buy and burn.”  This is when , with your good credit and income, buy a new home, then simply walk away from your old one.  Some though stay in their homes with a goal to live for “free” and save money each month while they await the bank foreclosure process.

What are the alternatives?

With record low rates, in some cases below 4%, maybe refinancing with your lender will help your situation and allow you to more comfortably continue with your payments and in your home.  If your lender doesn’t have a program you like, check with www.makinghomeaffordable.gov to see what government programs may be available to you. There are programs that may help with principal reduction and/or interest rate reduction.  You may owe it to yourself to check it out first.

A short sale may be an option.  In California the same recourse and tax protections that are offered in a foreclosure, are offered in a short sale. The advantage of a short sale is that it can shorten the cycle considerably.  A short sale you can be done and closed escrow in 3-4 months vs. up to 18 months of missed payments on your credit awaiting a foreclosure.  But many banks are very diligent about you being able to prove hardship.  If a hardship can not be proven, they may not agree to a short sale. However, hardship can mean many things, and it isn’t always financial.  Has your job moved, has your family changed, have you sustained a financial set back, gotten divorced, experienced an illness?

What did we say about psyche?

Yes, I did say “psyche” and want to acknowledge that walking away from your mortgage can do a number on folks and their mental health.  I’ve seen it.  The desire to fulfill your financial obligations and uphold your contractual obligations is strong for many and the decision to “walk away” is difficult and full of fear and constantly second guessing.  However, for others it is looked at as a “business decision” much like the articles they read of major banking institutions strategically defaulting on their own non-performing assets. It is an interesting dichotomy and a decision that is very personal for each person.

What to consider?

There are many different moving parts here, and the consequences of any default, foreclosure or short sales can be longstanding and severe.  It is best to discuss your options with your CPA and attorney to help you find the best “exit strategy” for you.  Each situation is different, so be careful of the stories of others who have “done it.” If this was/is an investment property or second home for you, there may be significant tax consequences for you.  If your financial situation is overwhelming and the house is just one of your issues, perhaps speaking with a good local bankruptcy attorney would serve you best.  There may be a strategy for you and your personal situation that only an attorney could advise.

As mentioned above, the credit consequences can be severe.  From a recent Reuter’s article “What Happens When You Walk Away From Your Home”:

The penalties largely revolve around your credit record, which admittedly gets blown up in the near-term. For a few years you can likely forget about qualifying for a mortgage or a car loan. When lenders are ready to take a chance on you again, you’ll have to pay for the privilege, with stiff interest rates due to your default history.

So to recap, strategic defaults are happening.  Many banks realize that without help or an approval of a short sale, many are walking away anyway and some are being more cooperative.  Some banks are very stringent on their definition of hardship and will straight out tell you they will not help and that the decision to foreclose is up to you.  Talk to an attorney.  Talk to a CPA.  The consequences on your credit and possible tax liability need to be explored.  Keep in mind, each state is different and in some states your bank can still pursue you for the deficiency after a foreclosure.

Alternatives to Foreclosure (strategic or not):

• Short Sale
• HARP refinance
• HAMP modification
• HAFA short sale
• Bankruptcy

This article is meant to offer commentary, not legal or tax advice.  Seek the advice of your attorney and CPA for the best information in planning what is best for you.

You can always see me about a short sale, and I can let you know my experiences with your lender.

Catherine Myers
Contra Costa Short Sales
Windermere Bay Area Properties
925-683-2125
DRE 01337828

Serving the needs of home buyers, home sellers and investors in:
Walnut Creek, CA
Concord, CA
Clayton, CA
Pleasant Hill, CA

and surrounding areas…

• HOA dues are NOT wiped out (for you) in a foreclosure.
• HOA dues are very often NOT paid by a short sale lender.
• HOAs CAN foreclose on your property.
• HOAs CAN file a lien and require all back dues to be paid before a short sale will close.

One important piece of advice I give to ALL my short sale sellers located within an HOA is to keep those payments current.  That is because in California, HOA dues are a personal debt, and WILL follow you as a collection after foreclosure.  Many times sellers have to ask buyers and even the agents to contribute to the pay-off of HOA dues in a short sale. It is just best to keep them current. Always check with a real estate attorney for any specific legal advice related to unpaid HOA dues or collections.

Some banks will allow a month or two to be paid, some don’t allow ANY.  Why is this you ask? This is because your bank’s primary lien is SUPERIOR to the HOA liens, and they can wipe it out in foreclosure, so why pay thousands in a short sale?  They’d rather (in many cases) just foreclose and wipe out those HOA liens altogether. Now just because the senior lien can wipe them out, doesn’t mean they disappear.  They are now your own personal debt and you will be pursued. Most HOAs are very aggressive in their collection actions.

I have had success with closing deals without the dues being paid , but buyer has to agree, and seller has to understand the dues are STILL due. But in California they do not follow the property, so talk with your escrow officer, as you can sometimes close “subject to” the dues not being paid.

If your HOA forecloses on you, there is a redemption period (90 days) in which you can still short sell the property or reverse the forelcosure in exchange for full payment. But best not to let it get that far.  Best not to let it get to a lien at all, as with a lien you will also owe mailing fees, late fees, legal fees, collection fees and a myriad of other junk fees HOA companies and their collection divisions charge.

Call me today for Walnut Creek short sale, Contra Costa short sale, or Pleasant Hill short sale information!

From Foreclosure Radar today:

Can a Homeowners Association (HOA) foreclose and if so can they kick me out?

 An HOA can foreclose for past due amounts. If the property goes back to the HOA at trustee sale they would have the legal right to evict the occupants and sell or rent the property. HOA liens are typically junior to any Deeds of Trust so the HOA would be responsible for the payoff of any senior liens or loans or they could risk losing their ownership when if the senior Deed of Trust later foreclosed. Note that in California the homeowner does have a 90 day period during which they can redeem their ownership by paying the outstanding dues.

Photo courtesy: GoogleMaps