San Jose Real Estate * REALTOR ® * Richard Gonzalez

The question was posed to me by Mark and Susan who I had the pleasure of meeting while previewing a home out in the central valley. An area so hard hit by the housing downturn that in most communities you will find home after home with neglected lawns and notices posted on the doors and windows of a recent foreclosure.

Mark and Susan are among the growing number of homeowners who go to sleep at night knowing that their home is under water. In the case of Mark and Susan they bought their home for $350,000 in 2006 and are now watching homes twice the size of theirs selling in the neighborhood for $150,000.

Frustration and reality for California homeowners

The frustration for Mark is knowing that the government is providing assistance to first time home buyers and people who have decided to stop making payments on their mortgage. “We did everything right and could just let our house go into foreclosure like most homeowners in our position but I can’t see myself doing that”.

Mark is referring to the growing number of homeowners opting to either walk away or in some cases buy another home at a lower price then simply stop making payments on the first home letting it go into foreclosure. Most of Mark and Susan’s neighbors have  done exactly that and yet they continue to fight the temptation of following suit.

Mark also asked me how many homeowners were on the verge of default.

My response to Mark’s question was to share a statistic I recently read from the California Association of REALTORS showing the long run delinquency average of 4 percent increased to just under 9.2 percent. Foreclosure long run average was still relatively low at 5.2 percent.

9o percent of California mortgages were  still being paid on time in the first quarter of 2009.

Mark was surprised when he heard this statistic but it was no real comfort to him knowing that his situation seemed hopeless.

Is there anyone out there who can help?

“Why doesn’t the government help homeowners like us who have done everything right?” asked mark. “Give us a tax credit or provide a little incentive or relief by allowing us to modify our rate, anything to reward us for doing the right thing”.

I shared statistics, talked about legislation regarding tax relief laws for foreclosed homeowners, and just listened.

At the end of our conversation I realized that I didn’t have the answer for  Mark and Susan. All these nice people want is for someone to acknowledge their frustration and to let our legislators know they exist.

Mark and Susan are among the homeowners in this country who want to do the right thing.

Homeowners considering walking away from a home or a short sale should do their homework,  and above all please seek the advice of a tax preparer who knows the ins and outs of the debt forgiveness laws.

With so many bills and laws that have passed it almost seems like a full time job keeping up with all the changes. I read a recent article in the SF Gate web site I thought would help to make sense of it all. Here is an except.

Sue McAllister from the San Jose Mercury writes about the July data indicating a surge in median home prices.

Yet another media outlet continuing to share the good news that the San Jose Silicon Valley market is doing reasonably well.

New home sales increased from June to July nationwide, but that gain didn’t extend to California and the Bay Area where the expiration of a state tax credit for new home purchases is being attributed for a drop in sales.

A Commerce Department report released Wednesday showed that sales nationwide surged 9.6 percent in July, rising for the fourth-straight month and beating expectations as the housing market marches steadily back from its historic downturn.

Read Article Here

This is a common question that many home owners have especially in this mortgage market and I wanted to share the perspective of this LA Times article.

Some borrowers receive the missive a few days after they close on their loans. Sometimes it arrives years later. But over the life of the mortgage, practically every homeowner is sure to receive one. The loan may be sold two, three or even four times to other lenders.

In mortgage-industry parlance, it’s called a “transfer of servicing.” But although some borrowers may take the notice as a personal affront, it’s really nothing to fret about.

“People shouldn’t take it personally,” said Alan Jones, senior vice president for servicing at Wells Fargo Home Mortgage in Des Moines. “It doesn’t have anything to do with anything they have done. It’s a standard business practice.”

Read article here

“Quick Facts:
· C.A.R. First-time Buyer Housing Affordability Index stood at 67 percent in the second quarter of 2009 compared with 49 percent (revised) in the second quarter of 2008
· The median price of an entry-level home in California was $224,180 in the second quarter of 2009
· The estimated monthly payment including taxes and insurance was $1,330 in the second quarter of 2009
· The minimum household income needed to purchase an entry-level home in California in the second quarter of 2009 was $39,930″

California Association of REALTORS  most recent data shows affordability is at at an all time high. It’s no wonder buyers are opting to own for the cost of renting.

Read Article here: