Sacramento Real Estate Views

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Your Questions Answered!

“Are lenders making loans on lower priced homes?”

I got this question from Debbie in Cameron Park this week and I thought it was a great question.  My initial reaction is that I didn’t see why lenders wouldn’t make loans on these lower amounts.

I called my friend Tim Clark at Capitol Mortgage and my friend at Masters Team Mortgage, Stephen Hart.  They both have closed loans in the lower price ranges within the last two weeks.  Tim closed a $49,000 note and Stephen a $79,000 note.

So yes, it was confirmed through my favorite lenders, loans are being made on lower loan amounts.

“Are lenders modifying loans?”

Because I’ve done articles on loan modification success stories, I get calls every so often regarding whether or not I coordinate loan modifications between borrowers and lenders.  I do not help with the loan modification process but  because I get questions, I called Hope for Homeowners.org to find some answers.  Here is what I’ve been told:

1) If you’re not currently behind on your mortgage, your lender, generally, will not consider you for a loan modification. I know this doesn’t seem to make sense but this is what I’ve been told.

2) Lenders are not modifying principal loan amounts.  They are adjusting interest rates and restructuring loans but, from what I’ve been told, getting a principal loan amount reduction is rare.

My view is that this is the only valid modification tool.

3) If you don’t have the income to sustain your restructured payment, they lender won’t grant the modification.

4) The goal of the lender is to get your payment to 31% of your gross income.

5) “Strategic defaults” are beginning to increase nationwide. A strategic default means the homeowner is so far underwater that they don’t see their value coming back and just walk away from their homes regardless of their ability to make their payment. I’ve been hearing stories of this happening throughout the Sacramento region from many different sources.

6) 50% or more of restructured loans are re-defaulting within the first year of the modification.

7) Don’t call a third party to help with a loan modification until you talk to Hope for Homeowners.org. Although most of the shady loan modification scams have been shut down, they are still some out there.  Help for Homeowners.org is free and is working directly with the lenders to modify loans.

Loan modifications are happening throughout the nation and it is possible to get one. However, with perhaps as high as 45% of homeowners underwater in California (and getting worse), without a principal loan amount reduction most loan modification efforts will not be long term solutions.

Of the 500,000 homeowners that have been given trial loan modifications under the “Home Affordable Modification Program” only 5, yes just 5, have been given principal loan amount reductions.

Please call me if you have any questions you’d like answered.

Thanks for visiting!

Tags: home loans sacramento

“Do I Need A Realtor To Buy A New Home?”

Your Questions Answered!

When I check my statistics, “do I need a Realtor to buy a new home?” is one of the most prominent search terms that people find me for.  I wrote an article in September about this very topic but I thought I’d cover it again as it is an important question.

The answer boils down to one of trust.  Who can you trust to ensure you get the best representation and the best deal possible on your new home?

This question is easy to answer and I will explain why it’s important.  Right now, it’s easier to get a good deal in new homes than in resale homes.

Who Represents Who

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Tags: new homes rocklin roseville

“REO? Foreclosure? They’re The Same, Right?”

Well, No They Aren’t!

As I’ve said before, I get many real estate related questions every week from people who are trying to sort out this market.  Admittedly, it’s a very complex thing.  Some markets are harder than others especially when you’re dealing with financial institutions.

Just a few short years ago, no one was worried about foreclosure, short sales, declining values or losing their incomes.  The market was good, property was appreciating and everything looked very rosy.  As Paul Harvey used to say,  “now you (we) know the REST of the story”.

Things will get better, they always do.  It’s the natural ebb and flow of life.  I hope it happens sooner than later.

What’s a Foreclosure?

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Tags: bank owned, foreclosure, homes, Rocklin, sacramento, Sun City Roseville

Your Questions Answered!

I get questions from clients and potential clients all the time.  That is one of the great things about having a blog; it’s a very interactive platform.  Much more helpful than the newsletters I used to do and a lot more fun!

I’ve created a new category called “Your Questions Answered”  where I’ll be giving my opinion based on my experience in the real estate industry.  I hope you find it helpful.

The question in this post is concerning short sales.  As the REO/foreclosure inventory begins to decline, the short sale inventory will begin to increase or seem to at least due to the absence of foreclosed homes to purchase.  (Don’t infer that the foreclosures are going away. Let’s just call it a “stay of execution”! )

“What’s the length of time a bank will respond on a short sale?”

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Tags: Rocklin, short sales sacramento, Sun City Roseville