The number of foreclosures in Los Angeles County is seeing a slight uptick compared to a year ago. Foreclosures occur when a homeowner is no longer able to keep pace with the mortgage payments. When this happens, the home is repossessed and then sold among other bank foreclosures so that the lender can regain the money lost on the bad loan.

There are several advantages to foreclosures. First off, motivated sellers who want to move on without a strike on their credit record can accept a lower offer on the property, depending on how much they still owe on the mortgage. Second, there is more time to inspect the property than is the case with auctions. Also, utilities will still be on so a complete inspection will not be impeded. Foreclosures can mean big savings and benefits for the buyers. As the properties are sold at below market value, buyers are allowed to enjoy instant equity and less spending on housing, which can actually mean more financial security. For first-time home buyers on a budget, bank foreclosures create huge opportunities.

Finding out about the right property at the right time is very crucial as well, as the foreclosure market is highly competitive.  Many professional investors find that buying low-cost foreclosure properties is much safer than investing in other types of real estate.

President Obama has just released ‘The White Paper,’ offering three
separate plans to solve our current mortgage crisis.  Obama’s
provisions include plans to deal with loan servicers whose interests
don’t coincide with the those of investors, thoughts on shoring up
consumer protections, and dealing with secondary home loans.

Currently, the government is one of the only organizations dealing in
mortgages, which could mean us taxpayers having to pay for any bad
loans made right now.  Of course, eventually, it makes sense for the
other players to check in to the game.  The mortgage companies will
need some help though, from the private sector that is, and this is
why Obama’s proposal to shore up consumer protections sounds pretty
good to me.  It just makes sense, that should mortgage companies whiff
again, our government will have our back.

Joshua Anderson, Lexington Realty Chief Correspondent, Los Angeles, Ca

Friday, February 18, 2011

Los Angeles- We have all heard the horror stories, desperate homeowners paying thousands of dollars to so called modification specialist, in hopes to save their homes, only to find out they were victims of fraud. Julio Salazar of Falls Church, Va, knows this all too well. When the economic crisis caused his hair-cutting business to plummet last March, he became desperate and was willing to do anything to save his home. That’s when Miami based “Friendly Financial Services” solicited Salazar for a permanent loan modification. He was immediately coaxed into paying a $2,300 attorney fee in exchange for the modification. He was told that CitiMortgage and One West Bank would be contacted by the firm’s attorney, this never came to fruition.

According to the state laws in Florida, homeowners are never supposed to pay upfront fees for modification and as a result of thousands of complaints, a federal ban on collecting upfront fees went into effect on January 31^st. Frank Dorman, who is a spokesperson for the Federal Trade Commission, said that “loan modification scams have increased with the recession to take advantage of increased foreclosures.”

When a homeowner has exhausted all of their options there is little to do to salvage the situation. One increasingly popular solution is to short sale. www.housingassist.com provides in depth solutions to short sales and has a proven track record of success, and best of all there are no fees involved whatsoever. It is the responsibility of the homeowner to do their due diligence on any company before they hire them. In the case of Salazar, he was lucky to have his foreclosure stopped, but not without yet another financial loss.

A deficiency judgment is an unsecured money judgment against a borrower whose foreclosure sale did not produce sufficient funds to pay the underlying promissory note or loan, in full.  Generally speaking the homeowner is ordered to pay this judgment back.

By Joshua C Anderson, Lexington Realty Correspondent

Thursday January 06 2011

Los Angeles- Government stimulus programs and federal tax credits would have seemed to be great news for the real estate market, however the market has showed slow signs on recovery. While the foreclosure and unemployment rates show no signs of stabilizing, 2011 is almost exactly where it was a year ago with the exception of a few changes.

According to expert analyst the real estate market has yet to bottom out and while prices remain low there simply are not enough qualified buyers to make up the difference. While foreclosures are still very common home values will continue to plummet, further weakening the economy. The only entities benefiting from this situation are real estate investors who are buying properties and holding on them for the long term. One of the major contributors to the crisis is delinquent homeowners who won’t budge. The government has stepped in to offer its help via the HAFA program. It’s essentially a short sale that offers sellers up to $3,500 in relocation assistance if they qualify. The majority of short sellers are in fact insolvent and the relocation assistance would be a great benefit for them. On the other hand there investors who own rental properties and they will not likely benefit from HAFA. The problem however is not easily solved; getting the delinquent homeowners to agree to the short sale requires a lot of negotiating. Like most people in the United States home ownership is the American dream and like anything else there is a deep emotional attachment.

California based firm Housing Assist of America www.housingassist.com is one of the leading short sale companies in the country and have done hundreds of short sales with nearly every lender. A spokesman from the company stated that, “2011 is going to be one our busiest years yet, banks are stepping up their efforts to get these short sales approved with efficiency and satisfactory results”. The end result of these short sales is a positive direction in the real estate market.

Monday November 29, 2010 at 12:00 pm PST by Joshua Anderson, Lexington Realty Correspondent

Los Angeles—We have all heard the stories, a once vibrant neighborhood goes to the dumps because every other house on the block is either bank owned or currently in foreclosure. Everyone looks around and points fingers and asks who’s to blame?  Well from the top we of course by default blame Wall Street, the banks and the government. But by taking a more in depth look at the whole scenario, we realize there were a chain of events that eventually lead us to where we are today, and the unfortunate outcome, are those who suffered because of someone else’s mistakes.

Take 60 year old Sherrilynn Palladino, a ten year homeowner in the California community of Grover beach.  A responsible borrower who never missed a payment, Palladino could only stand by and watch as the price of her home plummeted until it was too underwater to do anything about it. This scenario had been played out over a million times in thousands of communities across the nation. It’s almost like a domino effect, one block falls, and sets off a chain reaction. Palladino had dreams of selling her home and cashing out. A home with good equity would have made for a secure retirement, but instead, the values declined. Between all of the underwater mortgages and rising rates, foreclosures were inevitable. In the case of Palladino though, she never missed a payment, even after being laid off from her job as an administrative assistant. Unlike her situation, most families could not afford to salvage the basic necessities just to keep up with the mortgage payment. This is where the real trouble began. Almost everyone who had an adjustable rate mortgage was bound to default at some point or another, and just as it was predicted, they did. On top of the defaulted loan, many homeowners lost there jobs, thus creating an even deeper financial burden.

Now that we are somewhat nearing the tail end of this foreclosure mess, we need to have a better understanding of what got us here in the first place. Prices will still drop for the next couple of years and lenders are stepping up there foreclosure efforts. So before the smoke dissipates there will be even more collateral damage. Sherrilynn Palladino was just one case, but there are thousands more just like her. One of the best things you can do in a situation like this short sale. The process allows you to alleviate the negative debt and does minimal damage to your credit, pending your not severely in default. Upon completing the short sale you may be entitled to up to $3,500 from the Obama driven HAFA program. The benefits are endless; however the most significant is avoiding foreclosure. After just 18 months the homeowner can be eligible to take out a new home loan and take advantage while prices and interest rates are still historically low.

Being a victim of this housing crisis doesn’t mean you need to be a casualty, in many cases it takes risk and a small amount damage to rectify the situation, but in the end it may be worth it.

A mortgage loan is a loan that is secured by real property though a mortgage note.  A mortgage note proves existence of the loan and the encumbrance of that realty through the granting of a mortgage which secures the loan.

Borrowers pay at a rate lower initially than the nominal interest rate on their mortgages. The difference between the two builds up every month and has to be repaid with one huge payment at a specified date.