Foreclosure Information

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Foreclosure Timeline: Foreclosure Scams:

More Foreclosures?

Notice of defaults still remain high with 7 out of 10 home owners are still in default (nationally). Loan modification & short sale are being pushed, and banks have began to speed up their process. However, not every short sale will be pushed through, or loan modification will meet the needs of the every homeowner. With HAMP modifications coming to an end, and the New HAFA short sale progrmas picking up where HAMP left off... we should start to see the effects of those not HAMP qualified, as either short sale or REO. The success of HAFA, will be more known after Jan. 2011

If you are seeking more information on short sale... buyng or selling, please see my short sale page.

So, who's got the REO listing?

Many times you will see a vacant property, or have first hand knowledge that it has become an REO (bank owned). There are a few steps that must happen before you'll see that property hit the mareket.

First the bank or asset management company will choose a broker (like Weichert, Elite) to list the asset (property) with. Once the asset is accepted by the broker, the broker will then check the occupancy. If the property is vacant, it's reported back to the bank and a BPO (broker's price opinion) is conducted and submitted back to the bank. If the property is occupied, a 18 days posting will be placed on the property. The occupant can choose to reply to the notice in hopes to negotiate "Cash for Keys". CFK (cash for keys) is a sum presented to the occupant, in exchange for a surrender of the property in it's present condition. If a successful negotiation is reached by all parties, eviction date on average it's about 21 days. (Most bank are NOT conducting evictions during the holidays, but are expected to resume shortly after).

If occupant chooses to ignore the 18 day posting, a non-responsive response is reported to bank or asset management company, and evictions process is started.

When will you see the REO on the market?

Once the property is deemed vacant, rekeyed, and BPO conducted. You can expect to see the property on the market in approx 2 weeks... depending on each bank and if any rehab is ordered by that bank. If rehab of a property is ordered, most bank will halt from placing it on the market until rehab is complete.

On average from time of asset's (property) acceptance by the broker, to market placement... is aprox 30 days. Again, these numbers will vary with each property's scenario.

written by, Brenda Miranda

“Foreclosures”

In today’s current real estate market, many buyers are turning their interest to foreclosures (REOs), an for good reasons. Foreclosure are usually sold at a discounted price, most are financial, and have the ability to close quickly!

There are many myths about foreclosures, some true, some false (depends on each state). Here are some common myths and facts about foreclosures to help you better understand foreclosures and what there about.

Fact: Foreclosures are Sold As Is? True. “As is" means once you've conducted your inspections, you are now buying that property in its current condition. With most banks will you still have the right to do your inspections (typically 5-10 days), and we strongly recommend you do! Generally the bank will not fix/repair any items found during that inspection period. However there are some exceptions. Such as lender required repairs. Which are found in FHA or VA financing. Now we’re not talking anything major repairs, but possibly replacing a missing stove, water heater,and some minor health and safety issue.
Therefore, it is always in your best interest to fully conduct a thorough inspection. Once your inspection is complete, in the allotted time... it is your decision to move forward or cancel the transaction, if the bank rejects your repairs request.
The requirements for owner disclosures are also relaxed, and for the most part except. The law assumes since the bank has never occupied the property, the bank has no knowledge about the property first hand. Therefore no knowledge to report.
Myth: After you Buy a Foreclosure, the Foreclosed Former Owner Can Cure the Debt and Get the House Back this is true to some extent in some states Outside of California. Most of these homes are sold in a judicial foreclosure. The previous owner may often be subject to the buyer's "right of redemption". A period lasting up to 1 yr, in which the buyer can get cure the debt and get the house back. However in California, the majority of homes are sold using a “deed of trust”. There is no right of redemption after the trustee's sale.
Myth: Banks are Desperate to sell, and Will Accept Almost Any Offer
Not true. We all know San Diego has experienced a high volume of REO sale. And yes, the banks do want to unload such properties. However, the majority of these properties have already been discount up front. In other words, the discount has already been built into the list price. Because foreclosures often represent good bargains, you may find yourself in a multiple offer situation. Sometimes driving the price of the offers up. Where the highest bidder wins...factoring in terms, and most importantly the banks net.
Remember, this is not because the banks weren't willing to offer a bargain. This is simply because they listed the home as a bargain up front.
Myth: When You Buying a Foreclosed property, you pay the Amount Owed on the Loan generally, false. When you buy a foreclosure you pay an amount agreed and negotiated by you and the bank that owns it. Any previous mortgage leins have been cured by the bank. It is still buyers responsibilty to investigate any and all liens.
Fact: Great buys found in foreclosures. As mentioned above, foreclosures are often listed under the current market value. And although a foreclosure may not be in perfect condition, or may need some repairs. A savings, as much as 20% is still a pretty good way to go!

There are still many foreclosure ahead on the horizon, we are not out of the woods quite yet.

So prepare now, by getting pre-approved! For an opportunity to own/invest in a foreclosure, may be an opportunity you don't want to miss.

If you are looking to buy a foreclosure, contact me for further guidance and help with any and all of your Real Estate needs.

Brenda Miranda
619-846-9088
brenda@sellmesandiego.com