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Editor's Notes

• #5: Regular Properties For Sale: Most sellers today are frustrated and finding themselves competing with REO and short sale properties. So if they need to sell their home, what can they do to sell their homes at the highest price possible?  Knowing what the buyers are facing in today market, knowing the current market condition, months-of-inventory would definitely help! ·         A regular sale transaction is always more desirable to buyers. Since buyers always receive full disclosures from the sellers, it allows them the opportunity to know the condition, the history of the home better.  For some buyers, this is always very important part in their decision making process. ·         Lender’s guideline requirements often limit average buyers from completing the purchase of REO and short sale properties due to their poor/non-habitable condition. With fewer choices, buyers will look for a regular sale. ·         Most average buyers do not have excess cash in addition to the minimum required 20% down payment and closing cost, to fix or major repair projects. Therefore, it is more advantage for them to purchase a “ready-to-move-in” property. ·         A lot of buyers are in fact just as frustrated in dealing with short sale and REO properties, since there are too many unknowns, uncertainties involved.   Sellers – If you are planning to sell your home, it’s important to know your local market trends, the neighborhood activities and the conditions of the homes for sale, pending and sold. Preparation is still the key in getting your home sold quickly at the highest possible price.  Active buyers and your Realtor will most like know more about the homes for sale nearby better than you. Consult with your Realtor to provide you with current market trend can help you better prepare your home for the market.   Remember you are looking for the buyers who appreciate your home and everything that they know about your home. 
• #6: Short Sale Properties: What is a short sale?   A short sale is a sale transaction in which the seller’s mortgage lender agrees to accept a payoff of less than the balance due on the loan.   It is of course easier said than done.   Most short sales involve a lengthy process of negotiation and a lot of patience.  Why would a lender agree to a short sale? Lenders are in the business of selling mortgage loans, not taking property back through foreclosure and reselling them. Lender wants to avoid: ·         Adding a bad loan and REO to their portfolio ·         Paying property taxes, insurance, maintenance, repairs for REO properties ·         Risking theft and vandalism to the property, either by the borrower prior to vacating the premise and others. ·         Wasting time & money evicting borrowers and reselling their properties   Why do sellers want to short sale? In general, sellers who are unable to make loan payment as the result of increases in their adjustable interest rate, or other economic reasons, want to sell their homes to avoid foreclosure, or personal bankruptcy.   The impact to their credit score is usually less going through a short sale than a foreclosure action. They can potentially purchase a home again in a few years, without a bankruptcy on their Credit Report. Short Sale Sellers – As you are going through the process of short selling your home, it is import to understand the impact that a short sale to your financial status.   A Realtor with track records in negotiating with the lender is critical to the success of the transaction. A qualified Realtor can definitely reduce the stress involved in short sale process. There are tax consequences that you should be aware of. Consult your tax advisor for more info. You are required to provide disclosures to your best knowledge, as if it is a regular sale process. Buying Short Sale Properties – It has been known that short sale transactions usually take a long time to complete due to lender’s approval process. This timeline has improved significantly in recent months. Once a seller has accepted an offer, the negotiation process with the lender begins. The approval process is now averaging between 30-60 days compared to 90-180 days previously. Buyers often run out of patience and miss out on great purchases. Every transaction is different, and each lender will have its own guideline and timeline.   So when you work with a team of Realtors/negotiators with solid understanding of the process, you chance of success is greater. 
• #7: Bank Owned (REO) Properties: An REO (Real Estate Owned) properties are properties own by the mortgage company after an unsuccessful foreclosure, trustee sale, etc. What’s involved in purchasing REO properties? Again, understanding the process could help buyers acquire properties at a relatively lower price. It usually cost more for lenders to sell their REO properties. During the process of title transfer from the previous home owner to the lenders, there could be cost associated with evictions, liens on the property, insurance, property taxes that the lender normally would have to care of, before title transfer is completed. In general, since the banks (sellers) have not lived in these properties, They are exempt from providing many disclosures, that are normally mandatory in a regular sale.   Buyers should expect the following when purchasing REO Properties: ·         Negotiation - Since it costs the bank more to sell their REO properties, there is very little negotiating room. Banks will try to get the best and highest offers. It is to their interest not to “dump” properties to the market. Most REO properties are sell with multiple offers. ·         REO properties are normally sold in its "As-Is" condition. There are only few mandatory disclosures that the banks (sellers) are required to provide. Buyers should be prepared to do their own inspections to their satisfactory.   ·         Buyers must be pre-approved prior to making offers.  Some properties may not qualify for a new loan if their conditions are poor and non-livable.  (This is especially important for FHA/VA approved buyers).  A qualified Realtor should be able to clearly explain the REO purchasing process.   Cost of renovation should be taken into consideration ·         There are little disclosures available; buyer should consult with a qualified Realtor to review all available information including title and title insurance, etc.
• #9: Start of foreclosure process. Initial notice recorded after borrower fails to meet the terms of their loan. CC 2924c.(a)(1) Sets auction date. Can be recorded 3 months after Notice of Default CC 2924 c. (b)(1) Initial auction date can be just 20 days after Notice of Trustees Sale is recorded. CC 2924 f. (b)(1) Auctions can postpone for up to one year. CC 2924 g. (c)(1) More information on Postponement Reasons Transfers property to winning bidder. By default this will be the lender if no bid higher than the lender's opening bid is received. CC 2924 h. (c)
• #10: Foreclosure Filings—Notice of Default filings are the first step in the foreclosure process. Notice of Trustee Sale filings set the date and time of an auction, and serve as the homeowner's final notice before sale.
• #11: Foreclosure Inventories—Preforeclosure inventory is an estimate of the number of properties that have had a Notice of Default filed against the property, but have not yet been Scheduled for Sale. The Scheduled for Sale inventory indicates those properties that have had a Notice of Trustee Sale filed, but have not yet been sold or had the sale cancelled. The Bank Owned (REO) inventory indicates the number of properties that have been sold Back to the Bank at the trustee sale, and which the bank has not yet resold to another party.
• #12: Time to Foreclose— Green: The average number of days between the filing of the Notice of Default and the final sale at auction for foreclosure sales that occurred during the specified month. Red: Time to Resell—The average number of days between the final sale at auction and when the property was resold by the bank. Orange: The average number of days between the final sale at auction and when the property was resold by 3rd party.
• #13: Foreclosure Outcomes—After the filing of a Notice of Trustee Sale, there are only three possible outcomes. 1. First, the sale can be Cancelled for reasons that include a successful loan modification or short sale, a filing error, or a legal requirement to re-file the notice after extended postponements. 2. Alternatively, if the property is taken to sale, the bank will place the opening bid. If a 3rd party, typically an investor, bids more than the bank's opening bid, the property will be Sold to 3rd Party; 3. if not, it will go Back to the Bank and become part of that bank's REO inventory.
• #14: Filings By Est. Market Value—The number of foreclosures that have received either a Notice of Default or Notice of Sale, shown in columns arranged by the estimated market value of the property in foreclosure.
• #15: Filings By Loan Origination Date—The number of foreclosures that have received either a Notice of Default or Notice of Sale, shown in columns arranged by the quarter and year in which the loan was originally made.