Sell My Short Sales

Los Angeles, California

The numbers don’t lie, and if you think that California real estate is better check out the information below, and you determine for your self.
Every one knows of the hardest hit states in the country through the foreclosure crisis has been California.
California Pre Foreclosures have been consistently high in Los Angeles County, which has 3.08 percent of its households in foreclosure; Orange County has 3.42 percent of families in foreclosure, followed by San Diego at 4.26, San Bernardino with 7.31, and Riverside is still first with 9.27 percent of families in foreclosure.

With Los Angeles Pre Foreclosure down, the outlook for the region is positive you would suspect, as the area has seen foreclosure rates decline on average 25 percent from the November 2008 to November 2009;however we have not seen the eye of the storm as of yet.
The cities with the highest numbers of Notice of Default and Notice of Trustee Sales are Los Angeles (1120), San Diego (1067), Riverside (717), and Corona (505).
Jeff Coga, a short sale investor in Southern California pulled local data, and it clearly showed over 20,000 notice of defaults, and over 31,000 trust deed sales set between January- March. This is a frightening number as it could even be higher as the holiday Moratorium is now officially over today 1/04/2010.
Bernie Germani, another short sale investor in Southern California said ” that 2010 will be no different than 2009 as far as the real estate market in California. We are still declining, and I don’t care what the media tells you, We Aren’t On A Recovery Road Yet. The option arms that are going to adjust this year, and next year we will see many many new foreclosures, and these are good credit borrowers. Don’t let the media trick you into believing we have the bottom of the market.”

Written By:
Susan Park

Popularity: 45% [?]

Los Angeles, California:

Bernie Germani, a short sale investor in Southern California said “He personally knows of siutations where the homeowner was notified the foreclosure was postponed until further notice, and Bernie said some of these familes cried with joy that they could stay through the holidays.”

Written By Susan Park

Popularity: 54% [?]

Four years after the collapse of the U.S. housing bubble, flipping homes is back in fashion.

Jeff Coga, a Los Angeles, California real-estate investor, learned late in the morning of Oct. 28 that a never-occupied custom house on the northern fringes of Los Angeles County a beautiful property was going up for auction around noon the same day. The six-bedroom home, built on a 15,000 square foot lot. The kitchen with two dishwashers, four ovens, “antibacterial” copper sinks, and a master “spa” bathroom with space for a flat-screen TV visible from the tub. Jeff, knew the area and knew the exact house that was being auctioned off that day.
Jeff, decided to go to that particular L.A. County auction to see if we might be able to purchase this luxury home.

The minimum bid, as set by a unit of Citigroup Inc., which had a $1.7 million mortgage on the home, was $389,900. After several minutes of bidding among investors and their representatives, some wearing shorts and flip-flops, Mr. Coga won the home for $549,900. A week later, he agreed to sell it for $698,000 to a woman who moved in this month.

During the housing boom, millions of Americans tried to make money by buying and then quickly reselling new houses and condominiums. That kind of flipping stopped several years ago as home sales stalled amid a surge in foreclosures and curtailed lending.

Now, a different breed of flipper is proliferating: one who seeks bargains at foreclosure auctions. Unlike the boom-time flippers, the latest generation needs cold cash, lots of local-market knowledge and strong nerves.

Investors compete mostly with other full-time professionals who monitor foreclosure auctions at county courthouses across the country. The bidders often haven’t had a chance to inspect the property or determine whether it’s occupied by tenants, who may be hard to evict.

Sometimes ‘you have half an hour to make a half-million-dollar decision,” says Jesus Yinh, another real estate investor at “That’s something most people can’t or aren’t willing to do.”

In the states where home prices have fallen the most, many local real-estate markets are dominated by foreclosed property, dragging down the value of neighboring homes. Barclays Capital estimates that banks and mortgage investors have 639,000 foreclosed homes for sale across the U.S., largely concentrated in Florida, California, Arizona and Nevada. That’s equivalent to more than 10% of expected U.S. home sales this year.

“Flippers swoop in at public auctions of foreclosed homes, known as trustee (California) or sheriff sales. In many states, the lender sets the minimum bid, and takes possession of the property only if no one bids more. In the past, the minimum generally was about equal to the mortgage balance due”. Susan Park, real estate investor in Southern California said” in today’s market, in which many home values have dropped far below the loan balance, lenders wouldn’t attract investors if they set the minimum at that level.

So lenders, or the loan-servicing firms that represent banks and investors, are increasingly likely to set the minimum much lower. Their goal is to tempt others to buy the house and spare banks the headaches and costs that come with taking possession”.

November about 21% of homes sold in trustee sales in California went to investors rather than to a foreclosing lender, up from 6% a year earlier. The trend is similar in some other areas with high foreclosure rates, including Phoenix and Miami.

The real advantage of such an outcome for the bank is that it gets money for the property right immediately, even if it isn’t enough to cover the loan balance due. The bank doesn’t need to make repairs to the home, cover the taxes and insurance, or pay real-estate-agent commissions. Is this a smart business decision for the banks?

The risk for banks is that if they set the minimum bid too low, the home might end up selling for much less than they could reap if they took ownership of it and sold it themselves; however with some 7.5 million U.S. households behind on their mortgage payments or in foreclosure, many lenders are overwhelmed, and over worked. They’re negotiating with distressed borrowers and figuring out how to sell the growing supply of foreclosed homes, and don’t see an end to this challenge for many years to come.

To help them set the minimum bid, banks often consult with local real-estate agents and use software that estimates housing values. American Home Mortgage Servicing Inc., which collects payments and handles foreclosures on behalf of banks and loan investors, uses a formula designed to “achieve a fair value for the property and induce third-party bidders,” says Christine Sullivan, a spokeswoman for the Coppell, Texas-based firm.

American Home starts with a broker’s estimate and subtracts the expected costs of taking ownership of the house and selling it. The minimum bid is above the net proceeds American Homes believes it could get by acquiring and selling the property itself, she says.

Outside the Los Angeles County court building in Norwalk, California trustees, companies that are hired to handle foreclosure auctions, offer as many as 800 – 1000 houses every weekday. A typical auction lasts only a few minutes. On a recent afternoon, a few dozen bidders and onlookers were clustered around a trustee employee seated on a lawn chair conducting auctions. He kept track of the bids on a laptop computer perched on one knee.

Many of the bidders are regulars at the sale, bidding for themselves or on behalf of investor clients. “We’re all kind of like a little dysfunctional family,” said Jeff.

Buying at these auctions is perilous. There are no public viewings, so bidders often can’t know how much damage may have been done inside a house by occupants facing foreclosure. We’ve seen people pour concrete down the toilets. Unless they’ve done their homework, bidders also don’t always know whether they’re buying a home subject to a lien from another lender, which can happen in cases where the borrower took out more than one home loan.

If you have the time, and our dilligent, you can really pick up some amazing deals at the court house steps, and turn around and sell those for some great profits.
We help struggling investors find their niche in today’s market place. Please feel free to email us at info@getsswb.com or call us directly at 310-776-5032.

Written By:
Bernie Germani

Popularity: 100% [?]

Remember it was first the sub-prime market and now mortgage experts agree, adjustable rate mortgages combined with rising unemployment and falling property values could create another economic storm capable of ravaging the weak economic recovery. Here’s a quick breakdown of the ARM Storm-Tracker for those savvy short sale investors to beginning their planning:

Resetting Rates: Current interest rates are at or near historic lows with 30 year fixed mortgages below 5 percent while ARM’s are likely to readjust and drive the cost of monthly mortgage payments to double their former payments. Unfortunately, many current ARM holders do not qualify for refinancing due to changes in employment status, high loan to value ratios and increased debt to income percentages.

Evaporating Equity: Not only did millions of Americans take out Adjustable rate mortgages but they built additions and over-improved their homes based upon loans. As home values fell, so did the equity reserves required to refinance their ARM mortgages. Whether it was a first mortgage with minimal down payment or a second (and even third) mortgage, lower property values have all but erased excess equity from a large number of buyers.

Cheaper to Walk: Many homeowners are finding it less expensive to simply walk away from rapidly rising mortgage, rent for awhile then repurchase. According to industry experts, a significant number of homeowners are capable of making the mortgage payment but simply don’t desire to do so given the cost of purchasing the same home after foreclosure. Jesus Yinh of Exit Real Estate Group, said ” he has seen a trend of this happening in the mid Wilshire area of Los Angeles.” Current homeowners are eligible for FHA loans in as few as three years after default – creating an inverse incentive to continuing paying on a property worth tens (or even hundreds) of thousands dollars less than the existing mortgage.

Renting an Increased Option: Throughout the nation lenders are getting creative in order to reduce the inflow of defaulting properties on their portfolio; one of the more popular options among existing homeowners is the ability to rent your current property for a specified period of time.

ReFi with an ARM? It’s true, the FHA has a 3.87 five year adjustable rate mortgage option designed to help keep payments affordable. Unfortunately, it may simply delay the pain until interest rates continue to rise later. However, with a 2 percent cap on each adjustment/rate increase, it could conceivably buy time for those in unusual short term situations such as temporary illness, job loss of other large expenses. It also has the benefit of “buying time” for the banks and lenders who are in no hurry to acquire even more properties given the current backlog of non-performing properties in their portfolio.

What is a California short sale investor to do? Get ready for the coming wave of ARM properties to hit the market. Be sure your mindset is in place and position yourself to solve problems for both homeowners and lenders in need of a new start. Well first off, please come back shortly to http://www.shortsalewealthbuilders.com/
We can show you how to take advantage of California’s short sale market, and in 2010-2011 it will become California’s second Gold Rush… So saddle up, and get ready for the ride of your life.

Popularity: 40% [?]

Late Monday afternoon The Obama administration came to a conclusion on the final guidelines that may make it easier for some financially troubled borrowers to have the ability to shortsale their homes.

The guidelines are to help encourage the use of short sale transactions in which the borrower with lenders approval sells the home for less than what is owed on the loan.
The program taunts that it will now become easier for borrowers to voluntarily relinquish ownership of properties through a “deed in lieu of foreclosure.” (In the past banks said this program would be rolled out, but it has never quite taken off.) A homeowner just gives the property back voluntary to the bank while being in default, and it was not to have as much damage as a foreclosure to the credit score, but banks balked at this program.

Short sales generally results in higher profits for the bank than a foreclosure, and will have less economic effects to the local neighborhood, because homes aren’t left vacant, they are not exposed to squatters, and vandalism.

The new proposal would allow borrowers to receive $1,500 from the government if they sell their home as a short sale. Mortgage-servicing companies(the companies who manage the mortgage for the investor.) will receive $1,000 for each completed short sale. Is this a big enough incentive for them to get the job done?

The program is open to borrowers who have 1st pursued a government loan modification but did not qualify, or are delinquent on their modification.

This program was first introduced in May, but did not include short sales. This is the Obama administration’s $75 million foreclosure-prevention plan, which include incentives fore mortgage companies and investors to rework these troubled loans.

Under the new guidelines, second- mortgage holders can receive up to $3,000 of the sales proceeds in exchange for releasing their liens.

Another great idea(hopefully it works) is that borrowers who complete a short sale under the new program must be “fully released” from the future liability for the debt.  Susan Park, an Exit Real Estate Group Realtor said ” this will be a huge opportunity for homeowners to help insure no further repercussions of worrying if they will be sued from their lender over the remainder of the mortgage balance.”

Bernie Germani, a short sale investor in California said “he has been waiting for this day to come, but has some reservation that it will not be able to help more people out who truly need this program.”

Jeff Coga, said ” If this program works out the way it is designed to, this will have a very positive impact on the real estate community across the country.”

Popularity: 46% [?]

The Moody’s/REAL Commercial Property Price Index (CPPI) published last week showed a decline of 3.9 percent in real estate values from August to September. Prices in September were 37 percent lower than they were a year ago, and 43 percent below the index’s peak in October 2007.

Commercial property prices have clearly taken a nosedive, but Moody’s says the pace of decline appears to be moderating. From February to May of this year, the Moody’s/REAL CPPI averaged a drop of 4.6 percent, falling more than 7 percent during the months of April and May. But looking at the June to September four-month period, the average decline has retreated to just 3.2 percent.

Still, the agency’s analysts expect commercial property values to fall in the coming months by as much as 12 percent more from the October 2007 peak before experiencing a modest rebound to be followed by a long, gradual recovery.

In a report accompanying the agency’s price index, Nick Levidy, Moody’s managing director, explained that cash flows for properties with short-term lease structures, such as hotels and multifamily, are likely to hit bottom in 2010 or early 2011. The bottom for office, retail, and industrial properties, he says, will take longer to form.

“We believe that valuations will rebound off the bottom and settle in for the longer term at levels 30 percent to 40 percent below the market top as liquidity and investors return to the sector and property cash flows begin to recover,” Levidy said.

According to Levidy, in general, commercial real estate lags the overall economy and is dependent on both business and consumers for demand, but he says specific property types are strongly affected by certain macroeconomic metrics. “Employment growth is fundamental, for example, to the office property market,” Levidy said. “The health of the residential housing market is a key for the multifamily sector and retail properties are greatly dependent on rising consumer confidence.”

Cash flows from properties that back commercial mortgage backed securities (CMBS) will recover slowly over a period of several years, Moody’s said in its report. In addition, refinancing risk on CMBS will grow as maturities near on bonds issued during the 2007 peak of the market.

Popularity: 27% [?]

To All California Realtors/ Investors/ Wholesalers/ whomever:
California Revitalization Group is in need of your short sale listings:

My name is Bernie Germani, I work with a group of CASH BUYERS and were interested in working with you and your team, we would like to purchase at least 5-10 Short Sales each and every month, we can have a CASH offer within 24-48hrs on all properties that fit within our buying criteria.

Have you been trying to do Short Sales, but can’t get them completed?

Do they take too much time?

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No more long phone calls and frustrations dealing with loss mitigation
Access the progress of your short sales online, 24/7!

In other words….

YOU list and sell the property
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It’s THAT SIMPLE!

That leaves you time to do what YOU do best:

• Finding Sellers
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• Cash Big Fat Commission Checks!

Popularity: 36% [?]

There is news that I just saw that was astounding to me, and could make for a great run for investors in the short sale market.

A record-high 23,117 trustee sales are scheduled for sale Monday, November 30^th coverage area (CA, AZ, NV, WA, OR).

Since state laws do not allow trustee sales on state holidays, we are now hit with an overabandunce of sales today. The total number of trustee sales per day for the region is typically five to six thousand.

To cover Thursday, Friday and Monday, the number of sales should reflect three days (15,000 – 18,000). In addition, trustee sales typically slow during the holidays and see a bump in January.

So it’s a little surprising to see four-day’s worth of sales from a three-day period right after Thanksgiving. That being said, it doesn’t mean 23,117 families will lose their homes on Monday. Lately, ninety percent of trustee sales are just postponed to another day.

Susan Park, a short sale investor in Southern California mentioned “that she could not believe all the trust deed sales scheduled for today just in Los Angeles County.”

Jeff Coga, said “more than likely half of those foreclosures will get postponed.”

Bernie Germani, another short sale investor said in his market place Lakewood, Long Beach California that he is starting to see the affects of the mortgage meltdown starting to affect the higher end luxury homes, and a lot more people from the higher economic financial status is now starting to call me more in need of help.”

Jesus Yinh, and Exit Real Estate Group Realtor, said that he got a large number of calls over this Thansgiving weekend to help new clients from foreclosure.”

Popularity: 52% [?]

Do you remember when the mortgage meltdown crisis started and all we could hear was how the mortgage companies allowed this by giving mortgages to those who could not afford one in the first place?

Do you remember how we were told that it was the “stated incomes” that anyone could just claim an amount they earned that would qualify them for a mortgage.  Then as the bubble was deflating in the real estate market we were seeing foreclosures on the rise, and continuing to this day.

Well today there is a new story that is unfolding to the old foreclosure story.  We are now seeing people with good credit who did not use stated incomes in order to get their mortgage, now going in default.  We are seeing fixed rate home loans that were made to good credit applicants now in foreclosure, a big difference from a year ago.  It was the sub-prime and adjustable rate mortgages that was driving the housing crisis then, and that is not the case today.

A report from the Mortgage Bankers Association found that an alarming large percentage of mortgages were either in foreclosure or behind, 14 percent as of the end of September.  This was a record high for the ninth quarter in a row, which is a very scary situation, because this could mean we have not seen the bottom of the real estate market despite what other reports on TV, and the news are telling you.  This report went on to say that it was unemployment that was the main cause of foreclosures.  We have seen prices fall on real estate and that gave us a little “bump” in the market during the summer.  There is a new wave of foreclosures that will hit the market within the next year and that will drive the price of real estate down further.

We here in California along with Nevada, Florida and Arizona make up 47 percent of all new foreclosures. 

How much lower can we expect real estate prices to fall?  A chief economist at Moody’s Economy. com, Mark Sandi is predicting that on a national basis, home prices will fall another 10 percent between now and next fall.  Will this be the bottom?  Susan Park, an Exit Real Estate Group Realtor said “In her opinion it is all going to depend upon the private sector and jobs.  If unemployment continues to rise then we will see more and more foreclosures and the price of real estate falling further than 10%. In my market I’m now seeing more high end homes going into foreclosure.”

Today we are seeing fixed rate, prime loans to borrowers who had good credit accounting for almost 33 percent of new foreclosures and that number is up over twelve percent from a year ago. These figures are based on the last quarter.  FHA loans are beginning to see problems in their loans; over 18 percent are either behind or in foreclosure as of last quarter.

The current real estate situation is like a cancer that is quickly spreading across all sectors of the financial landscape and is affecting all sectors of employment.  As we continue to see layoffs, downsizing and underemployment, we will continue to see more and more foreclosures and consequently the value of real estate falling more and more.  The job market will drive the number of foreclosures not Wall Street.  Until we get a handle on just how and where we, as a nation, are going to increase jobs, we will continue to see this spiral go deeper and get tighter and tighter.

Jeff Coga, a short sale real estate investor in California said “that he hears so many sad stories as he is in the trenches every day helping people from fore closure that he wishes he could help more people, but many times the banks are not interested in peoples situation and foreclose anyways.

Bernie Germani, another short sale investor said “People are in such need of hope, and there is a lot of desperation in California, and he has noticed many homeowners just giving up hope, because their loan mod failed,  that was their last shot at staying in the home, and now they just thrash the house before giving the house back to the bank.”

Popularity: 28% [?]

According to a securitization research note by Barclays Capital, short sales have been boosted by mandatory and voluntary foreclosure prevention efforts that prevent mortgages from entering real estate owned (REO) status.  As federally-funded modifications made through the Home Affordable Modification Program (HAMP) grow in frequency and lenders are expected to hold off on foreclosure proceedings, the REO pipeline shrunk, according to BarCap researchers. The foreclosure prevention efforts have had the effect of “artificially” boosting short sales.  “The artificial constraints to foreclosure auctions have resulted in a reduction in REO stock,” BarCap said. “As a result, the net volume of REO liquidations has also dropped.

As short sales are not affected by moratorium, their rate held up and their overall share in distressed sales increased.  It has now risen more than 10 points from the lows to about 35% of overall liquidations. It remains to be seen if this increase will sustain itself once the large number of loans sitting in foreclosure are finally released into REO.”  BarCap researchers pointed to the difference in severity seen in foreclosure and short sale scenarios as one of the drivers behind servicers choosing short sales.

Servicers that pursue foreclosure on non-performing loans held within securitization have to make principal and interest advances until the loan’s liquidation, BarCap said. If the asset declines in value during the liquidation timeline and it neighbors other REOs, the final selling price will likely come in far below the current broker price opinion (BPO), which leads to high severity.  Short sales, on the other hand, pose a shorter timeline during which fewer principal and interest advances are needed. The asset has less time to depreciate, and borrowers have a strong incentive to maintain the property in order to sell it. After all, a better-maintained house attracts stronger bids, reducing overall severity in comparison with the REO liquidation scenario.  A short sale also tends to cost the lender less than foreclosure and it spares the borrower the negative credit score implications.

Jeff Coga, a California short sale investor said “We don’t need to do transactions outside of California because we have our hands full with all the short sales that Realtors are bringing to us to write a No contingency offer on and help their clients from a foreclosure. Realtors are now flocking to us, because they know we can get these transactions closed.”

Susan Park, an Exit Real Estate Group Realtor, said in the Los Angeles area west of down town  short sales make up about 1-3 transactions in that market space.”

Popularity: 26% [?]