Related articles

• Silicon Valley Foreclosure Inventories Record Low; How Does This Impact Your Home Search? (Siliconvalleybrokerblog.com)
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06085 – Foreclosure Inventories

Bank Owned

Bank owned activity has certainly made it easier for investors to benefit from the foreclosure activity while first time home buyers have had little luck in competing with investors to pick up these opportunities. The map below shows the bank owned inventory as of today for the City of San Jose alone. There are more than 7,000 properties that are 90 days or more in the foreclosure process for Santa Clara County.

Impact on your home search

For this reason I continue to think that short sales are the best opportunity for patient home buyers who want a good deal and are willing to work within the constraints of short sale timelines.

Relates article:The Foreclosure Report – February 2012

#1 Data

$600 k and below is on fire. The California Association of REALTORS most recent data concludes that $466,000 is the entry level price for Santa Clara County.  Affordable housing can be a leading indicator of  the market.

#2 Investors

Investors are out and cash is not a problem. With the new year a surge of investor activity has flooded the market. Most are looking for rental properties because they know that rental activity has increased in the area. The increase is a combination of foreclosed home owners and regular renters. There just isn’t enough housing to meet the demand.

#3 Low Rates

History has always showed is that rates and prices of housing have always been on opposite sides. If the rates are high, home prices have been low and vice versa. This is the first time that both rates and home prices are on the same side, low rates and low prices.

#4 DAP

Some Down payment Assistance Programs(DAP) are going to expire at the beginning of 2013. The City of San Jose has received a 23 million dollar grant from the federal government(NSP2) to use for revitalization of communities and some of the monies are also targeted towards helping first time home buyers(see related articles below). The city is doing everything they can to get the word out but there is a good chance that we may run out of time before this monies are used. This is creating a sense of urgency in homebuyers who have been sitting on the fence.

#5 Short Sale Tax Breaks

Federal and State tax shelters for deficiency are going to expire at the end of 2012. This is really a positive for homebuyers looking for a home in a market where the inventory is low. Sellers who have exhausted all options of modifying their loan terms and are going to be forced to list before foreclosure.

#6 Facebook IPO

I continue hearing the same message from buyers and other agents. Facebook has created a sense of urgency as though Facebook millionaires are going to buy up every home in the Silicon Valley.  The point is that Facebook has also increased the demand for real estate and home buyers are feeling the pressure(see Related articles).

#7 Word On the Street

Real estate practitioners love to share opinions and this market has created a fire storm of stress induced agents that are frustrated with multiple offer after multiple offer situations. REALTORS® are doing everything they can to have an advantage when making an offer.

How can a homebuyer compete?

There are strategies for buying a home and in my next post I will outline some of those strategies that a homebuyer can consider to better prepare themselves for a market that is absolutely ON FIRE!

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Related articles

• The Facebook IPO Could Set Silicon Valley’s Real Estate Market On Fire (businessinsider.com)
• Why the City of San Jose has Money Burning in Their Pocket For Homebuyers (Siliconvalleybrokerblog.com)

The Numbers for Santa Clara County

• 64 percent of Santa Clara County homeowners are able to afford a home
• $466,650 is the entry level price
• $2,300 Monthly payment
• $68,880 minimum income to qualify

See full articles here:

C.A.R. Affordability index Q4 2011

Related articles

• Bay Area home sales mostly up although prices fall. (mercurynews.com)

San Jose,CA – Foreclosure Outcomes

Bank of America May Lead The Way!

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A San Francisco Times article published late last year pointed to data by foreclosureradar.com showing significant foreclosure activity by Bank of America.

Read Article here: Bank of America said to fuel big increase in California foreclosures

Related articles

• Mortgage deal means more foreclosures (money.cnn.com)

The City of San Jose Housing Department And  Housing Trust of Santa Clara County are in the final stretch to use up all of the 23 Million award given through the National Stabilization Program part two. The second round of these dollar have been earmarked for revitalization of communities affected by foreclosures and to assist homebuyers purchase a home.

Who is Involved?

The Housing Trust of Santa Clara County is responsible for the distribution and education of these funds along with the Housing department for the City of San Jose. Although the City of San Jose is driving this opportunity to targeted areas the Santa Clara County Housing Trust is charged with educating the community. Other organizations involved in this effort are Neighborhood Housing Services, www.recovery.gov and NHORA(The National Hispanic Organization of Real Estate Associates).

Whats in it For the Public?

Opportunity to not only become a homeowner but also to begin the recovery of the housing market in Santa Clara County. Economists do tend to agree that the recover of the housing market will start in the Silicon Valley primarily because of Facebook and Google’s continued growth. In fact most of Santa Clara County is dealing with a housing shortage and multiple offers for home buyers.

Who Can Qualify?

There are income  limitations to qualifying for these programs among them is the Purchase Assistance Loan(PAL).

How To Get More Information?

Contact the Housing Trust Of Santa Clara County for more information http://www.housingtrustscc.org/

Class registration contact: jeanette@housingtrustscc.org

Most San Jose neighborhood values will continue to perform well in 2011 and into 2012 even with the recent negative news about Bank of America unleashing a slew of new foreclosures into California in the coming months.

Foreclosure levels will remain the same in 2012

That’s a pretty bold statement on my behalf but having just retuned from a national foreclosure convention I stand in pretty good company including the likes of Freddy Mac economists and various other national asset diposition companies who are all waiting for the foreclosure activity to increase.

The challenge over the last year has been the slow and methodical process of making sure banks are staying within the legal boundaries of the foreclosure process all brought on by the ROBO signing lawsuits. As a result the anticipated levels of foreclosiure activites are expected to stay at current levels through 2012.

What does this mean for San Jose Neighborhoods?

Neighborhoods like Willow Glen, Rose Garden, Almaden Valley, and Santana Row to name a few should continue to maintained their values while Downtown, Central San Jose, South San Jose, and the east valley will feel the affects of foreclosure activity.

Should I wait for the market to turn?

Experts at the foreclosure convention are now saying that we will continue to see the current real estate market through 2016. You have plenty of time to buy before the market sees a significant change and until then buyers will continue to find opportunities in those neighborhoods affected by foreclosures.

Related articles

• California foreclosures set to surge (Housingwire.com)

July 1st 2011 was the the day we finally closed a 605 day short sale for a client who tried to modify and could not qualify. As a result the sellers decided to proceed with a short sale but for a multitude of reasons we ended up going through through six different buyers and a dozen price reductions.

August 2009 was a turbulent time with most banks as they began shifting their short sale servicing systems from fax based processing to uploading documents into a task based system. Bank of America began shifting to web based short sale submissions because they just could not keep up with lost paperwork, missing documents, and lack of support staff. Soon most banks began making their own shift to prevent the endless duplication of effort.

What I Learned and What You Should Know

Through all of this I decided it was important to share the five most important changes that prevented us from closing in less than six months instead of almost two years.

1. The buyer and their agent must be totally committed to the process by putting earnest money in escrow.

2. Always have a backup offer in case the buyer backs out.

3. Investors need to know that your agent knows the value of your neighborhood. Make sure your agent knows how to prepare a broker price opinion to support the value of the purchase contract.

4. Banks and investors are always changing guidelines and requirements for submission of short sale packets. I have a network of short sale specialists that check in with each other to stay on top of recent changes.

5. Sellers must be willing to be patient with the short sale process. The sellers of the property mentioned in this post experienced a roller coaster of emotions all the way to the very end.

The Moral of The Story

Change will always be part of the short sale process, it really has improved and the success rate continues to climb from 20% to 70%. There are too many details to document in one blog post. In short, the process has improved and it can and will continue to get better.

06085 – Foreclosure Inventories

Foreclosure inventories stayed steady with little change to the amount of people who defaulted on their loans(green) and even less sale activity(blue). This is the first month that showed 0% activity in REO inventory levels(red).

06085 – Foreclosure Filings

Notice of sales increased(blue) while people who received a notice of default fell slightly(green).

06085 – Foreclosure Outcomes

Cancellations fell last month reducing the amount of foreclosure postponements for people currently in default(grey). Postponements(cancellations) are a good indicator of modification and short sale activity. The number of properties going back to the banks as a result of a sale increased slightly(red).

06085 – Time to Foreclose

The average time a homeowner had before losing their home to foreclosure has continued its steady climb and is close to one year(green). Bank are taking an average of 200 days to sell properties(red).

Project Homeowner

I’m sure by now you must have heard some news about a foreclosure prevention event going on in downtown San Jose this week but do these guys really help where most people have run into decline after decline to a modification request. I can’t really say that NACA will save your home from foreclosure but what I can tell you is what I have seen in my own experience with Project Homeowner.

Project Homeowner

A few years ago the Department of Real Estate and CHASE got together to create a traveling foreclosure prevention roadshow very similar to what you now see on a regular basis at events like the NACA one in San Jose.

• What has changed from few years ago is the investors willingness to participate in such events by allowing the borrower to modify.
• What hasn’t changed are the general guidelines of most investors and that is “Does this modification help the homeowner?”.

Project homeowner was revolutionary because it was able to bring the big lenders to the table (CHASE, Wells Fargo, Bank of America, etc…) and a few years ago lenders did not have staff on the ground to accommodate this need.

What NACA brings to the table

One of the reasons NACA has had much success nation wide is because of the media attention and I would imagine the lenders looking for an opportunity to create positive public relations impact with it’s homeowners.

Some things never change

The bottom line is this;

• If the lender owns the note(your loan) then your chances of a modification increase greatly. If an outside investor owns the note the bank must ask for investor for approval in order to modify your loan.
• Either way this scenario has not changed from past years and can dramatically increase your chances of a successful modification.

It doesn’t hurt to try

I received a call from a client over the weekend asking me if they should try to modify though NACA and may answer was “absolutely yes”. The great thing about this event is that most of the big lenders have staff to help escalate your situation to a level where the decision makers can help you get to your goal.

NACA Foreclosure Prevention infomration:

https://www.naca.com/index_main.jsp