At The Approval Experts we continue to make a conceited effort to inform real estate buyers and sellers in San Diego of the current market conditions. We will discuss our opinion in this article of where we believe the market is headed into the summer of 2011. We are monitoring a number of aspects that effect market conditions and therefore we feel it is imperative to share this information with our clients.

The last two years has been a very interesting ride for many. Millions of sellers lost their homes to foreclosure or had to sell their home through a short sale process across the U.S. The government set up a number of programs to assist those in financial distress avoid further complications. Many banks went through their portfolio and managed to sell a number of their toxic assets through the foreclosure process, which also helped with the inventory shortages we experienced. The short sale and foreclosure market had very little competition in early 2009, but as spring of 2009 rolled around we saw the buying pools grow as many investors and home buyers found that interest rates and incentives made buying very appealing once again. This demand continued into 2010 and as such the market began seeing a number of changes in regards to supply and demand.

The unfortunate aspect of the real estate industry is that the banks still control a number of the current sales within San Diego County. Although March 2011 did see an increase in traditional sales, we can attribute some of these sales to price increases over the last 2 years. We have seen an influx of sellers due to profit taking. Buyers who purchased at the end of 2008 and the first half of 2009 in San Diego County likely have equity. These buyers in late 2008 and early 2009 are slowly becoming sellers and in doing so they are also avoiding the 2 year capital gains rules with the IRS.

Investors have been slowly backing away from the market as banks are doing their best to avoid disclosing further toxic assets to their investors. We are now seeing more banks looking to sell foreclosures for premiums, which in turn pushes up the value of additional inventory. Unfortunately, the only real benefit here is for the banks as most buyers aren’t looking to flip their homes in the short term and the percentage of traditional sellers is still quite low in comparison. Lack of information for traditional sellers can be extremely detrimental when listing a home as many sellers don’t understand how the banks operate, ultimately causing large price adjustments then necessary to keep up with market values.  The programs the government has instituted to help sellers with the short sale process, including HAFA and HAMP have done very little and in some cases actually created bigger problems.

Looking ahead we expect to see the banks continue their control of inventory. The shadow inventory will remain, which will likely control supply and demand for some time to come. The buyers are once again leaving the market, even with these astronomically low interest rates. It’s evident that in order for the housing market to pick up we need to focus on improving the overall health of the economic markets and employment numbers both locally and nationally. The strength of the real estate market is heavily dependent on economic data, which at this point is very indecisive.

There is a notable increase in rents over the last 12 months throughout various areas of San Diego County, which will certainly affect a number of buyers who are currently on the fence. Rents have increased for an obvious lack of supply in the markets. We will be monitoring the status of rents as it pertain the buying pool over the next few months. Another factor that has the potential to effect the status of both rental prices and home values is inflation. Although many economists believe we are not in an inflationary period, it’s hard to argue that the dollar’s value has been decreasing at extremely rapid rate over the last 18 months. Look for this to play a significant role over the months and years to come. This could be an entry point for some investors as rents and values have the potential of rising in an inflationary period, although we have to take into consideration that rates would have to increase to curb inflation, which could have a negative impact. It’s obviously tough to make a firm prediction in terms of inflation, but it’s safe to say that we have printing ourselves out of the current values and inflation becoming more evident daily.

Look for our updates in the weeks to come as local and national news impact our markets here in San Diego County.

Unfortunately HAFA, the federally subsidized program that helps individuals avoid foreclosure, didn’t include federal loans to the equation. HAFA along with Fannie Mae and Freddie Mac have finally found a mutual understanding and it looks as though HAFA will now assist those with Fannie and Freddie loans starting August 1, 2010.

This will allow just about every homeowner to be eligible for the HAFA program through HAMP. Although HAFA eligibility for Fannie Mae and Freddie Mac won’t start until August sellers can already start the process through HAMP as it will lead directly into the program in August.

Many questions can be answered on the government website in regards to HAFA eligibility and HAMP eligibility. We suggest you take some time to look over these sites to find out whether or not you fall under the HAMP or HAFA eligibility category.

Freddie Mac’s current program will allow the liens to be subordinated.  The junior liens, which will be categorized by priority, will receive no more than 6% of their unpaid principal balance with a cap of $6,000.  This will allow for a release of these subordinate liens and satisfaction of the debt. As an example if a home has two mortgages with the 2^nd HELOC having a balance of $125,000, and a $1,500 HOA lien, the 2^nd HELOC will get $6,000 and the HOA will receive nothing.

Freddie Mac will accept the minimum acceptable for the short sales net proceeds to satisfy the total amount owned of the note and the release of the lien.

No promissory note will be required by Freddie Mac, nor will any cash contributions be required from the borrow. In order for escrow to close under the program all subordinate lienholders will be required to release all liens without promissory notes or cash contributions.

Fannie Mae has offered higher incentives for servicers. They are currently offering $1,500 to $2,200, which is the max under the Treasury program.

If you are curious to know whether or not your loan is serviced by either Fannie Mae or Freddie Mac please click on the link below:

FREDDIE MAC LOAN LOOK UP

FANNIE MAE LOAN LOOK UP

If you have more questions or about HAMP or HAFA eligibility please be sure to check the links to get updated information along with the qualification guidelines. These programs have been put in place to help homeowners avoid the foreclosure process and here that The Approval Experts were here to help. Call our offices at 858-345-3825 and ask for Jeran Fraser.

If you’ve just received an email from your bank stating your automatic payment for your mortgage has been deducted from your account then you are probably like a lot of others Americans. The idea of having the bank automatically deduct that money is seamless, yet in this market so complex.

We are now in 2010 and reality has set in with the real estate markets. We’ve all heard the terms short sale and foreclosure and that’s not going to change anytime soon. We have another wave of adjustable rate mortgage resets happening this year along with some additional issues in the jumbo mortgage market, which is on the horizon that will surely affect the markets moving forward.  This, along with an inevitable boost in interest rates, puts the real estate markets in a very unique position.

A new buzzword around real estate is the term strategic default. A strategic default is simply defined as walking away from a mortgage payment that you can afford, but would prefer to deal with the short term ramifications of a short sale or foreclosure rather than holding on to a negative asset for a long period of time. This idea of strategic default brings up some moral and ethical questions, but looking at a home as investment rather than a money pit tends to answer a lot of these questions.

Many of those contemplating a strategic default tend to think that they may not necessarily qualify for a short sale. In many instances the banks may make it a bit more difficult for the seller, but the banks know full well that the benefits are much greater for bank when conducting a short rather than allowing the home to foreclosure. The government has a program set out to incentivize banks to perform a short sale, so in the case of a strategic default there are still a number of reasons why a short sale is a viable solution.

The term strategic default became somewhat of a national buzzword when Morgan Stanley decided to walk away from 5 commercial buildings they purchased in San Francisco back in 2007 at height of the real estate boom. While having the ability to pay for these assets Morgan Stanley decided to move ahead with a strategic default on these properties rather than dealing with the long-term ramifications. There is still the inevitable meltdown for the commercial markets, which has yet to occur, but Morgan Stanley is well aware that walking away can and most likely will avoid a potential catastrophe with these assets in the future.

If you are thinking about a strategic default or have any questions in regards to a short sale feel free to call the The Approval Experts at 858-345-3825. We would be happy to help answer any questions. We always recommend that those considering a short sale consult both a real estate attorney and tax attorney as each individual short sale is unique. We are located in the San Diego area, but have the ability to assist sellers throughout California.

What is HAFA:

HAFA is newly instated government-subsidized plan to give homeowners additional alternatives. HAFA, which stands for Home Affordable Foreclosure Alternatives, is a program designed for distressed homeowners who would like to sell their homes and avoid a foreclosure. This is program is for homeowners who owe more on their mortgage than the actual value of the home. What HAFA does is allow a participating lender to pre-approve the terms of the short sale and give the borrower at least 4 months to market and sell the property under a licensed real estate professional.

HAFA Eligibility:

- The property must be the borrower’s principle residence and not a investor property
- The loan must have been originated before 2009 and be a first trust deed
- Loan must be either delinquent or the delinquency must be reasonably foreseeable
- The current principal balance of the loan must be less than $729,751 for a single family home. The amount is higher for properties that are 2-4 units
- The borrower must qualify and be eligible, but unable to complete, a loan modification under the HAMP program (Home Affordable Modification Program)


HAFA Financial Incentives:

- This program gives $3,000 to the borrower for relocation expenses
- HAFA gives $1,500 to the servicer for each successful short sale
- $1 is given to the investor for every $2 paid to extinguish junior liens with a maximum incentive of $2,000 and not to exceed 6% of the unpaid balance


HAFA EFFECTIVE DATES:

The program started on April 5, 2010 and ends on Dec 31, 2012


HAFA Standard Procedure:

1. The lender will evaluate the loan modification under the Home Affordable Modification Program (HAMP)
2. The lender will evaluate the modification process and why the borrow was unable to complete through HAMP
3. The lender will issue a Short Sale Agreement (HAFA SSA)
4. The borrower will list the property for sale with a licensed real estate agent
5. Both the borrower and agent will market and sell the property
6. The borrower will submit the offer to the lender for a Request for Approval of Short Sale (RASS)
7. The Lender will approve the RASS within a period of 10 business days
8. The Sale will close escrow


HAFA Lender Evaluation:

Each participating lender in the program will have its own specific policy on the approval or rejection of the HAFA short sale based on a number of factors including but not limited to the severity of the loss, the borrower’s motivation and cooperation, market conditions, property valuation and a review of the title.


HAFA Short Sale Agreement (HAFA SSA) will including the following :

- A number that is acceptable to the lender either through a list price or the net proceeds.
- A full liability release for the borrower in regards to the deficiency amount of the loan
- Agreement that states the lender will not complete a foreclosure if the borrower cooperates with the terms of the Short Sale Agreement (SSA)
- An acceptable closing cost amount with up to 6% for allotted for real estate commission
- A notice that the sale must be an arm’s length transaction
- A notice that the buyer must agree not to resell the property within 90 days of closing


Tax and Credit Consequences:

As with any transaction of this nature we recommend you contact an attorney to further evaluate the type of financial, tax, legal or other consequences that may occur when performing this type of transaction.

If you are looking into the HAFA program or have any questions in regards to a short sale feel free to call the The Approval Experts at 858-345-3825. We would be happy to help answer any questions. We always recommend that those considering a short sale consult both a real estate attorney and tax attorney as each individual short sale is unique. We are located in the San Diego area, but have the ability to assist sellers throughout California.

California is taking some big steps this year to continue driving up homes sales in California while enticing home builders. In May California will roll out a $200 million dollar tax credit available to home buyers in the form a $10K tax credit. This program is sure to be hit with those in the market looking to buy a home. This tax credit is aimed to getting home builders to ramp up on the construction forefront.

With a $20 billion dollar deficit Arnold Schwarzenegger is taking some big risks to help spur the market once again. With inventories extremely low in many areas of the state this could possibly be a great move, that is if the banks aren’t forced to release additional bank owned inventory. There are a number of different aspects that could make or break this California stimulus package, but our state officials are tuned in and have an understanding that bank inventory will remain off the market while the State pushes for home builders to get back into the game.

Most analysts suspect the new home incentives will be exhausted within the first 5 months of the program, but with so many buyers currently looking to lock themselves in with a great rate, it looks like prices may move upward in some areas in order for buyers to lock in that tax credit. This is great news for buyers looking at short sale properties as well as sellers looking to sell their home. It may become a sellers market to the extent that homes will continue to move in an environment where incentives are given. If you have any questions in regards to this tax credit, have interest in selling your home or you are looking at purchasing at property, let The Approval Experts help you in selling or purchasing your next home.

If you are thinking about a strategic default or have any questions in regards to a short sale feel free to call the The Approval Experts at 866-96-SHORT. We would be happy to help answer any questions. We always recommend that those considering a short sale consult both a real estate attorney and tax attorney as each individual short sale is unique. We are located in the San Diego area, but have the ability to assist sellers throughout California.

The government recently launched a new program called HAFA to help push the loan modification process as many homeowners still carry very dangerous loans such as option arms and interest only loans. Currently these loans are manageable for many owners regardless of their equity position, but if rates changes (and they will) this could spell trouble for those that need to modify their existing loans.

This leads us back to the root of the problem, which is whether a loan modification in San Diego is an effective solution for you. We suggest you speak with an attorney to help guide you through the process. Here at The Approval Experts we can also help you understand other options such as a short sale in San Diego, which can help steer you away from the foreclosure process. A loan modification in San Diego is always an option and we believe it’s the first step in avoiding a possible foreclosure, but we know how the banks feel about these and that’s why we believe a short sale can be excellent alternative.

The Approval Experts is located at 2121 Newcastle Ave. Suite F in Cardiff, CA. The majority of our clients are located in North County San Diego, but we currently have transactions throughout San Diego County. When exploring your options and looking for a group of Realtors experienced in handling short sale transactions be sure to call The Approval Experts at 858-345-3825. Jeran Fraser and his team can help give you a better understanding of a loan modification in San Diego, foreclosures and short sales. We are the distressed property experts.

At The Approval Experts our entire staff has been trained on giving professional advice to help owners. We believe that the only way to avoid foreclosure is having the knowledge to understand your unique situation. You may not know this but many people today still have problems understanding how a short sale works and how it can really help you avoid foreclosure.

Our offices has been involved in over 400 short sale transactions and we believe we can help almost any homeowner avoid foreclosure. It’s up to you to take the first step in understanding your particular situation. We have professionals standing by ready to help you. If you are looking to reduce your liability and avoid foreclosure we recommend taking the time to sit down with one of us at The Approval Experts.

We always recommend speaking to an attorney to give you legal guidance. If you are looking for a local

You may not know this but choosing the correct real estate team to negotiate the sale of your home is crucial if you plan is to avoid foreclosure. Many Realtors and agents are unaware of how the process works and many can actually have a detrimental effect. In many cases uneducated agents that fail to understand the process will do their client a disservice by taking on the listing, as time is a valuable part of the short sale process.

We are conveniently located in Cardiff, CA, just south of Encinitas and north of Solana Beach. We specialize in North County San Diego with an emphasis in communities such as Rancho Santa Fe and San Elijo Hills, although we have worked on short sales throughout San Diego County and beyond. We are the distressed property professionals and we are here to help!

If your goal is to avoid foreclosure allow some of the most talented distressed property agents in San Diego help you. Feel free to call our office at 858-345-3825 or stop by and ask for Jeran Fraser or someone from his team to help you. Our address is 2121 Newcastle Ave. Suite F, Cardiff, CA 92007. You can’t miss our Trinity Homes and Investments sign above the door.

Buying a short sale will test any buyer’s patience, as the process doesn’t happen overnight. Thankfully many banks are starting to integrate programs that speed up the process. Recently Bank of America launched their Equator program, which seems to have helped Bank of America push short sales through much faster. Each short sale is still a case by case situation, but for the most part banks are aware that short sales will continue at a growing rate for the next 2-3 years.

The first step to buying a short sale is finding out whether or not the other agent has an offer on his/her listing. This can be done by simply having your agent contact the listing agent and asking a few questions to qualify whether or not the home currently has an offer and whether the Realtor understands the short sale process. This is the key here. Working on a short sale with an uneducated agent or Realtor can be a disaster waiting to happen. At The Approval Experts we understand the entire process and our office has been involved in the closing of over 400 short sales throughout San Diego.

Once you or your agent have contacted the listing agent and qualified them on the potential purchase of the property it becomes a waiting game. If your offer is submitted to the bank for approval be aware that it’s rarely a simple approval. Most times the bank will counter offer the buyer, but most banks are well aware that a short sale will net them more money than a foreclosure, which is why we encourage our buyers to look very hard at buying a short sale. At the end of the day a short sale is excellent option and the potential of landing a great deal is definitely a possibility. Do your research and always ask questions. If you feel your agent or Realtor is qualified to handle the purchase or listing of a short sale it may be time to look elsewhere.

At The Approval Experts we not only serve San Diego County but also surrounding areas. Our focus is helping the client, so allow us to help you. If you have any questions please feel free to contact us. Our office is conveniently located in North County San Diego in the city of Cardiff. Our address is 2121 Newcastle Ave. Suite F, Cardiff, CA 92007. Our office number is 858-345-3825.

A Carlsbad short sale is not a bad option if you are considering walking away or foreclosing. Keep in mind that a foreclosure on your record can be extremely detrimental compared to a short sale. Many ask the question why a short sale would benefit them and we can show a number of reasons why, including the credit rating effect, negotiating a potential deficiency judgment along with other reasons.

If you are in the search for a professional Realtor or real estate agent that can handle your Carlsbad short sale feel free to call North County San Diego’s premier short sale specialists. We don’t use automated machines and we will come and talk to you in person to better help you assess your unique situation.  We truly believe that a Carlsbad short sale can be closed in an efficient manner, which could very well minimize the exposure to potential issues if a foreclosure were to happen.

There are risks when walking away, so be sure to talk to someone at The Approval Experts who can explain the differences in a foreclosure or a Carlsbad short sale. We are conveniently located at 2121 Newcastle Ave. Suite F in Cardiff, CA. We can be reached at 858-345-3825.