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“After three months, nearly 36 percent of the borrowers had re-defaulted by being more than 30 days past due. After six months, the rate was nearly 53 percent, and after eight months, 58 percent,” said U.S. Comptroller of the Currency John C. Dugan. A report scheduled to be published later this month will show continued increasing delinquencies and foreclosures in process for all first-lien mortgages held by the largest national banks and federally-regulated thrifts, Dugan said.

You can read the report released 12/08/2088 HERE

Key findings of this report include:

* New loan modifications increased by more than 80 percent from January to June and increased by 56 percent from the first to second quarter. By comparison, new payment plans grew only 8 percent from January to June 2008, and increased just more than 2.7 percent from the first to second quarter. As a result, the mix of loss mitigation shifted toward loan modifications from the first to second quarter with the share of loan modifications increasing from 34.5 percent to 44.5 percent.

                                              First Quarter Total                  Second Quarter Total
Loan modifications          71,883                                          112,353
Payment plans                  136,367                                        140,155
Loss mitigation actions  208,250                                       252,508

* More than nine out of 10 mortgages remain current. However, credit quality declined during the second quarter across all risk categories. The overall percentage of current and performing mortgages in the combined portfolio declined from 93.35 percent at the end of the first quarter to 92.61 percent at the end of the second quarter.

* There were increases in early stage delinquencies (30-59 days past due) and seriously delinquent mortgages, defined as mortgages that are 60 or more days past due plus loans to bankrupt borrowers who are 30 or more days past due. Foreclosures also increased in the second quarter.

% of all Mortgage Loans in the Portfolio     End First Quarter 2008     End Second Quarter 2008
30-59 days delinquent                                                     2.57%                                  2.85%
Seriously delinquent                                                        2.67%                                  2.95%
Foreclosures in process                                                   1.40%                                  1.60%

* New loss mitigation actions increased more quickly than new foreclosures during the second quarter. Overall, new loss mitigation actions relative to new foreclosures averaged more than 87 percent during the second quarter, about 12 percentage points higher than the first quarter.

                                                                                                                  First Quarter 2008     Second Quarter 2008
Total number of new loss mitigation actions                                208,250                          252,508
Total number of new foreclosure actions                                       278,857                          288,740
New loss mitigation actions relative to new foreclosures          75.68%                           87.45%

My Comments:

ASK ME WHY I’M NOT SURPRISED. From what I have seen so many buyers are so far underwater on their homes with respect to equity and paying so much more than they can afford that any loan modification is little more than a stop-gap measure that simply delays the inevitable: FORECLOSURE.

		Direct: Fax:		559.301.1647 559.438.7475
1319 W Bullard #4 — Fresno CA — 93711
© Randy “Lazarus” McAtee

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Fresno California Real Estate Market Update (edit/delete)

Interesting article in the Fresno Bee yesterday discussing the uptick real estate sales.  According to the article the same investors who sold property 2003 - 2005 and went to the sidelines are now coming back in.

• Fresno Association of Realtors reports preliminary figures of  612 units sold in October
• Over half of  October sales (56%)  were foreclosures.
• The median price of a home is now $175,000 ( down 31% from a year ago)

Go here for a chart of sales in Fresno  Clovis area

		Direct: Fax:		559.301.1647 559.438.7475
1319 W Bullard #4 — Fresno CA — 93711
© Randy “Lazarus” McAtee

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So, I just mentioned in my last blog an offer made 5 or 6 weeks ago on a Short Sale and said I had still not heard back from the agent, well this afternoon I did. The home is/was (havent looked to see current status) listed as an ” APPROVED SHORT SALE” at $119,000 According to the agent this mean that she had an “approval” from the lender that if she brought an offer at the listed ask price it would be approved by the lender. Well, that sounds promising. Unfortunately, my buyer’s offer was under the ask of 119k but apparently it would not have mattered.

Here is what I was told this afternoon. The agent received multiple offers on the property. Some of the offers were over the ask and went as high as $135k so now the bank is countering back to all the bidders at $160k (or give us your highest and your best). This is complete bullshit and should not be allowed to take place by NAR. The listing agents on these properties don’t really give a rats ass; they will lay down and take it in the rear from the lenders all day long. The buyer’s agents shouldn’t tolerate it either. If, in fact, the lender had indicated that they would sell at the price listed by the selling agent then they should sell at the listed price, or the highest and best offer above the listed price..

The broker who listed it is from ANOTHER county. I just reported the matter to FAR and advised them to boot the broker and her business off the Fresno MLS.

[update - FAR tells me the broker didnt pay her MLS dues so she got the boot - good!]

If you’re a buyer, I would strongly urge you to forget about bidding on a Short Sale. Find a competitively priced REO and go for it.

Oh - by the way - remember this REO I mentioned. The agent has recently lowered the price $10,000 but his Marketing Remarks still say: ” 3 bed/2 bath in established neighborhood. Great starter home or investment” ——— SIGH!

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…and their agents.

In a previous blog I gave an example of an offer that I made on behalf of an investor on a Short Sale. It was an ALL CASH OFFER that was rejected by the lender. A few months later after the home went through foreclosure the home was listed at LESS THAN THE CASH OFFER and probably went into escrow for substantially less than the list price. About 5 weeks ago I made another offer on a Short Sale and to date have not received an answer back from the agent. Other agents I have spoken with have the same stories.

Once again, as a reminder, out of the HUNDREDS of Short Sale listings in the Fresno MLS last year there were only 46 closings.

I say all of this as a preface to a news article I just read titled:

according to the article lenders are saying they will let strapped sellers know whether or not they are approved for help within 45 days. Well I’ll believe it when I see it.

Personally, I would discourage ANYONE from even bothering to with a short sale. Simply too much hassle and scant prospects of producing fruitful results.

And if you happen to be reading this blog because you’re considering a Short Sale and your plan is to sell your home to a relative at a huge discount to what you paid so you can buy it back cheaper: FORGET ABOUT IT! It doesnt work. But hey, dont listen to me - besides because I’m certain you wont have a problem finding a Realtor® who is willing to try and get such a deal done.

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Not long ago I gave the bleak statistics on closing of SHORT SALES on our Fresno MLS.  Yesterday I spoke with an agent at another brokerage and he told me that he submitted an offer on a Short Sale in February and was recently told by the lender that they still haven’t assigned an asset manager to review the file.  He just made another offer on a Short Sale property and spoke with that lender and was told it would likely be about 3 months before the file would be reviewed and more months after that to finalize paperwork if it was accepted.

The majority of offers on Short  Sales are simply a waste of time.   If you’re an investor looking for a bargain don’t even waste your time on a short sale; spend it looking at REOs or properties in which the owners have a significant equity position.

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Lately I have had the unpleasant opportunity of speaking with people who are in the process of losing their homes, some of these people are Realtors®.  In most cases their credit has been completely destroyed and they will have to rebuild/repair it.

This evening I read a blog by Aaron Gordon, a Home Loan Consultant in Las Vegas Nevada that addresses this issue and I asked his permission to republish his content on my blog.  Here is what Aaron had to say:

People ask me weekly, “If I let my home go into foreclosure or sell it in a short sale, how long until I can buy again?”  

The answer is…. a long time.   Plan on a minimum of three years and as many as seven or more.

Fannie Mae, the largest backer of mortgages in the world, recently sent a harsh message to borrowers for walkaways and other foreclosure situations.    

Plan on waiting five years and then having good credit and a nice sized down payment.

The walkaway trend is popular here in Clark County (Las Vegas) and other areas where many homeowners find themselves upside down on their loans.  These people owe tens of thousands more than the current market value of their houses.  

In some cases, they are upside down by hundreds of thousands.

Some homeowners, who put little to no money down, think they may be throwing good money after bad. So, even if they can still afford the payments, they are simply choosing to walk away.

Fannie Mae will now prohibit foreclosed borrowers from getting another mortgage through them for five years, unless there are “documented extenuating circumstances.”  In those rare cases, you can buy again after three years.

No word on if this is the same on “settled” accounts like short sales, but most experts say to expect the same guideline.

Extenuating circumstances are life events that are “out of your control” that create a financial crisis, like death of the primary wage earner, medical-related illness to the primary wage earner or, sometimes job loss of the primary wage earner.

Extenuating circumstances are judged on a case-by-case basis and are challenging to prove.  You will have to document this tragedy through death certificates, medical records, letters from the former employer, and you will have to prove that this event, and this event alone, this led to your financial demise.   

It’s not a common exception and underwriters are usually pretty skeptical when faced with it.   Be prepared to provide an extensive paper trail of documentation.

Getting in a bad adjustable rate mortgage or the market turning downward is not an extenuating circumstance.

Even after five years, Fannie Mae will require borrowers with foreclosures to make at least a 10 percent down payment.  They will need a minimum FICO credit score of 680 for a new loan.

Freddie Mac counts foreclosures for seven years.   FHA is currently at three years but it is expected they will increase this soon as well.

The bottom line, once again, as I keep preaching, is to avoid foreclosure and short selling when possible.  There is nothing positive accomplished from either strategy.   Note modification is the way to go.

If there is no way to avoid the foreclosure or short sale, plan on renting, leasing or leasing-to-own for the next three to seven years

____________

If you are considering a Short Sale on your home and would like some help CALL ME - I’m not an expert (I don’t know any agents that are) but I will do my best to help you.

Lazarus @ 559-301-1647

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INFORMATION ON THE FRESNO CALIFORNIA REAL ESTATE MARKET FROM FRESNO’S BLOGGING BROKER

C.A.R. stands for the California Association of Realtors and they constantly send Realtors®. Often more info than we have time to digest. Here are some recent highlights:

NEW HOME SALES DOWN 57 PERCENT IN FEBRUARY (Statewide)

that’s 57% from last Februaty

Median price of SoCal homes plunged 24 pct to 4-year low

March 2008 median price was $385,000 compared to March 2007 median price of $505,000>
The median price in 2004 was $380,000

Fifty-six percent of homes sold in Riverside County in March were foreclosures

Foreclosures Creating Ghost Towns
read the story HERE

After C.A.R. gives us the bad news they actually conclude by saying:

Here’s what to tell consumers — and then they proceed to tell us what we should be telling YOU, the consumer. Personally I think they need to word that differently. N.A.R. and C.A.R. dont have the best reputation - and neither do Realtors®. When I was at the S.W.A.T. meeting last week they said that consumers rated Realtors® as and 11 on a one to twelve trust scale - with ONE being the highest rating. It think we rated lower than auto mechanics.

Folks, the glass is half-full:  interest rates remain at historic lows, the affordability index is rising, and sales volume is picking up, and if you’re BUYER you are in the driver’s seat (oh what a difference a few years make!)

All Lazarus lacks is YOUR business.  Call me TODAY and let me hep you buy or sell your home: 559.301.1647

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Back in January I said to be prepared to see your lender reduce or freeze your HELOC (home equity line of credit) altogether. This morning I’m reading an article that says that Wachovia and other lenders are doing just that. They estimate that there’s about a trillion dollars of this “rainy day money” that hasnt been tapped and that if homeowners do tap into it could mean more problems.

I also read that foreclosures filings jumped in March and that the worst is not over with respect to the resets on adjustable rate mortgages.

For those reading my blog - perhaps for the first time - I want you to know I am only relaying the news and the market conditions - I AM IN NO WAY GLOATING OVER THE MISERY AND SUFFERING OF OTHERS. I find no joy in reading bad news about our economy.

Looking to buy in Fresno or Clovis - Call Lazarus @ 559.301.1647

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Just want to make mention of an article in the Fresno Bee last Saturday about Foreclosures in the Fresno Ca real estate market. It mentions one buyer who made several offers on foreclosed properties only to end up finally purchasing a property from an original owner. The article put the inventory on foreclosed properties at almost 1100.

Please read the article.

Also - hear this. Last year I placed an ALL CASH, quick close offer on a property for an investor on what was at that time a SHORT SALE. I believe our terms were very generous, including the clauses I inserted which took into consideration the time the owner would need to move out. After waiting SOMETHING LIKE 5 WEEKS we finally got an answer back from the bank. THEY REJECTED OUR OFFER.   Since then the property has been foreclosed upon and is now and REO.  The home is now listed with another broker and guess what - it is listed for LESS than our all cash offer made last year. Now I’m glad my client didnt get it!

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Today I attended a California Association of Realtors S.W.A.T class. SWAT stands for:

Special Weapons and Tactics - to survive a down market.

The morning session was mostly a review of the stats that have been compiled by C.A.R presented by someone with a marketing/economics degree. It was the opinion of the speaker that the stats show that the market has hit a bottom in California. Based upon what I heard and saw I cant argue with the figures - whether or not this is A bottom or THE BOTTOM only time will tell. The reason I say this is that while the speaker was going over the numbers I was reading today’s news and this article Citigroup, Wells Fargo May Loan Less After Downgrades raises some concern that there could be further tightening of the credit market esp if there are more losses reported in the banking sector tied to home lending.

If the banks tighten up — we could see things get worse.  If the credit markets stabilize, I think the real estate market will improve and we could come out of the woods.  I am hoping for the latter.

Two things I gleaned from the morning session:

1. So many Foreclosures, Short Sales, and REOs have come onto the market that the lenders have had to create “loss mitigation teams” to handle them.  These loss mitigators have never really done this before because nothing like this has ever happened in our generation so these guys that the Sellers and  Realtors are dealing don’t necessarily have all the answers.  They have been slow to move but as the market has deteriorated they have begun to come around.
2. The cheese is moving.  Meaning the money to be made today isnt where it was yesterday.  We need to “follow the cheese”.

One of the speakers said that if we wanted to service the short sales and foreclosures we need to put “SHORT SALE EXPERT” on our cards and websites.   Well, what do you expect, this is one of the few industries where people study on line for 6 weeks, take a test, then call themselves PROFESSIONALS.  (ok — remember Lazarus - this is not the way to win friends and influence people in this industry)

After lunch we given a good review of the foreclosure and short sale process.  I found this part more interesting and I we really only scratched the surface.

If you are interested in purchasing a foreclosure, pre-foreclosure, short sale, or REO property in Fresno  Call me today:  559-301-1647

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