San Jose Real Estate * REALTOR ® * Richard Gonzalez » 2009 » August

What About the Homeowner Who Did Everything Right?

Richard Gonzalez — Sun, 30 Aug 2009 16:46:38 +0000

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.

Lose your home and face a possible state tax hit

Richard Gonzalez — Sat, 29 Aug 2009 04:08:38 +0000

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.

Californians who lose their homes in a foreclosure, short-sale or deed in lieu of foreclosure this year could be hit with a state income tax on canceled or forgiven debt.

A state law that temporarily exempted many homeowners from this tax at the state level expired at the end of last year. Attempts to revive it have not been successful.

The state law was similar to a federal one that exempts many homeowners from federal tax on canceled mortgage debt. The federal law remains in effect through 2012.

The state-tax hit could be substantial and the rules are complex. People in mortgage trouble should consult a qualified tax professional.
Read more:

Silicon Valley Median Prices Rise by 11 Percent in July

Richard Gonzalez — Fri, 28 Aug 2009 21:00:38 +0000

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

What to do if Your mortgage is sold to another lender

Richard Gonzalez — Fri, 28 Aug 2009 03:35:05 +0000

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

Santa Clara County Affordability Index at 58

Richard Gonzalez — Tue, 25 Aug 2009 17:36:21 +0000

“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:

San Jose, Top 10 Place to Grow Up

Richard Gonzalez — Fri, 21 Aug 2009 22:55:03 +0000

A US News article covers the 10 best places to live in San Jose. I remember growing up in South San Jose (Santa Teresa Area) when IBM was the big company in the area and on the weekends it was off to Oakridge Mall to see a movie. Funny thing is that some areas have not changed much. San Jose is still a great city to raise a family.

“With 9 square miles of green spaces, 300 days of sunshine a year, and four different professional sports franchises to follow, San Jose, Calif., has everything you need for a happy childhood. At just over 1 million residents, San Jose considers itself the capital of Silicon Valley, but it doesn’t take a computer scientist to understand the city’s appeal to kids. San Jose is the country’s safest big city, and although it’s certainly expensive—the median home price is $449,000—the city offers all sorts of great activities for children. Rather than chasing its skateboarders away, San Jose has embraced them by opening six public skateboarding parks, including Lake Cunningham Regional Skate Park, the largest one in the state. And at the Children’s Discovery Museum of San Jose, children can experience everything from theater to gardening.”

Read entire Article Here

July Inventory Supply Down by 78% in San Jose Real Estate

Richard Gonzalez — Thu, 20 Aug 2009 08:00:41 +0000