Things to remember:  This is not absolute and many factors can change in your particular circumstances.  When you are facing foreclosure the best thing to do is for you to call your lender and find out what type of help, if any, they can provide.  Waiting until your home has a sale date may be too long to wait and it may be too late in order to save your home from foreclosure.

It truly is time to be your own landlord and own a piece of the American Dream – that dream may never be this affordable again.  Most professionals in the real estate industry agree that if things had not gone wacky, we would still be in an escalating-price market for real estate, rather than an extreme correction-priced market.  Take a look at the chart below from trulia for interest rates and the sample activity chart for real estate in Tracy, California to see how low interest rates have become and what kind of activity there is in the local real estate market.  Click here for more information about availability of houses for sale in the Central Valley.

42 price reductions in Tracy, CA

171 new listings in Tracy, CA in the past 7 days

1,030 foreclosures in Tracy, CA

216 sold properties in Tracy, CA in the past 60 days

Average listing price in Tracy, CA went up 0.12% to $300,393 from prior week

Average price per sq ft in Tracy, CA went up 3.36% to $123/sqft

For property owners that have suffered a severe decline in market value may be eligible for property tax relief.   In 1978, California voters passed Proposition 8, a constitutional amendment that allows a temporary reduction in taxable (assessed) value when real property suffers a decline in current market value.  When the market value of a  property on the January 1 lien date falls below the assessed value, the assessor is obligated to review the property and enroll the lesser of the two values.  If it is determined that the market value of your home is less than its assessed value, your property’s assessed value will be adjusted to the level of its current market value, and consequently, your property taxes will be reduced. 

To apply, each county assessor office has implemented its own procedures for Proposition 8 applications.  Some county assessors require  the filing of a formal application with the inclusion of two comparables sales.  Others require the filing of a simple informal form or a written notification.   Some only require a phone call.

Be Aware of Scam Artists!  There is no fee for this and you should not pay anyone a fee for this service. 

Every year the assessor will review your lien date value.  The assessed value of a property with a Proposition 8 value in place may increase each lien date by more than the standard two percent maximum allowed for properties assessed under Prop. 13.  However, unless there is a change in ownership or new construction, a property’s assessed value can never increase above its factored Prop. 13 base year value after adjusting for the annual increase. 

In order to effect a change in value be prepared to provide evidence of the change in value of your property to support your opinion of that market value.  The best supporting documents are at least two comparable sales in your neighborhood as close to January 1st of the subject year.   The properties you include should have comparable size, amenities, and features to your own.  If you do not know where to get this information contact your local Realtor , or visit your Realtor’s website .

If you don’t agree with the outcome you do have some options.  You may file a formal appeal with the County Assessment Appeals Board or the County Board of Equalization.  These Boards are independent entities established these differences.   Appeals must be filed within July 2 and either September 15 or November 30 of the same year.   Go to www.boe.ca.gov/proptaxes/pdf/filingperiods.pdf. 

HUD-Approved Housing Counselors

 The U.S. Department of Housing and Urban Development (HUD) sponsors housing counselors who can talk to you about your situation and help you decide what to do.  HUD approved housing counselors are prohibited from charging you a fee for foreclosure prevention counseling services (you should be aware of this because there are people out there claiming to be a part of HUD and charging you for help – this is illegal).  Call 800 569-4287 or go to www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm. 

HOPE NOW

Hope Now Alliance is a cooperative effort by mortgage counselors, lenders, and others to help homeowners avoid foreclosure.  Hope Now has a Homeowner’s Hope Hotline that provides foreclosure prevention counseling free of charge at 888 995-4673 or go to www.hoepnow.com.  

Neighbor Works America

This is a nonprofit organization that administers housing counseling agencies funded through the National Foreclosure Mitigation Counseling Program.  For its list of foreclosure counseling agencies, call 202 220-2300 or go to www.nw.org.  

Making Home Affordable

The Making Home Affordable Program provides government subsidized refinances and loan modifications for homeowners in distress.  Under the Home Affordable Refinance, eligible borrowers of loans backed by Fannie Mae or Freddie Mac, which are GFE’s (Government Sponsored Enterprises), can take advantage of historically low interest rates by refinancing up to 125 percent of current market value.  Under the Home Affordable Modification, eligible borrowers can obtain more affordable mortgage payments by modifying their existing loans.  For more information, go to www.makinghomeaffordable.gov. 

Office of the Comptroller of the Currency (OCC)

This is the federal governmental agency that regulates all national banks.  The Office of the Comptroller of the Currency has a number of resources for consumers, community groups, and bankers to help them preserve their home ownership, avoid foreclosure, and protect themselves against foreclosure and debt elimination scams.  Contact 800 613-6743 or www.freddiemac.com/avoidforeclosure/workshops.html.  

Other Resources

There are many resources on foreclosure prevention.  You may want to go to HUD’s website at www.hud.gov/foreclosure, or Fannie Mae’s website at www.fanniemae.com.  For tax information, go to www.irs.gov or www.ftb.ca.gov.   For credit information, go to www.fico.com.    For information about the HAFA program and short selling your home go to www.GoTracy.com  .

The first option to look at is a loan workout plan with your lender.  If you are experience difficulty paying your mortgage, you should immediately contact your lender or a housing counselor to try to work something out.  If you just need a little time to get back on your feet, your lender may agree to a loan workout plan to temporarily reduce or suspend your payments, allow you to repay what is past due in monthly installments, or provide some other type of relief.

Another option to look at is loan modification.  Even if your financial situation is severe and long term, you should contact your lender or a housing counselor to try to work out a solution.  Your lender may agree to a loan modification to permanently change one or more of your loan terms.  A loan modification may involve a reduction of your loan term, loan balance, or other changes to your benefit and make your payments more affordable.  Your lender may participate in the government subsidized Home Affordable Modification program, which gives monetary incentives to both lender and borrower for modifying certain distressed loans.  For more information about this alternative click here.

In addition to the above a short sale may be right for your particular financial situation if you feel you will not ever be able to catch up.  Selling, however, may be challenging if you are upside down, where your loan balance is actually higher than the property value currently.  As with foreclosures, short selling will affect your credit report, and possibly affect your tax liability and personal liability, along with other consequences.  However, you may avoid the stigma of an actual foreclosure and allow you to take a pro-active approach in dealing with your distressed loan.   Contact a housing counselor.   You may even qualify for the HAFA program.  Contact a certified HAFA agent. 

Also, you may qualify for a refinance, deed in lieu of foreclosure, or bankruptcy.  Contact your lender for questions about their requirements for a refinance or deed in lieu.  Contact a housing counselor.  Remember, doing nothing will only add to your problem and time may eventually not be on your side.

It is important to remember, outwardly scam artists tend to be clean cut, well spoken, and often seem to know a lot more about  your situation than you do.   They often attempt to lure people by belonging to, or pretending to belong to the same racial, religious, social, or other group as their victims.  They will often say or do whatever you want to hear or have them say in a very convincing manner, often agreeing with your plight and seem to empathize with you. 

With certain exceptions, someone who charges you a fee to negotiate with your lender on your behalf must be licensed with the California Department of REal Estate.  You can do a quick check, or “License Status Check” by going to www.dre.ca.gov.  You should also conduct further investigations before doing business with someone offering to help you by checking public records, the Better Business bureau. and the Internet, asking for and verifying references and going to the physical address to verify one actually exists. 

Another clue is when someone tries to push you into making a decision right now, or making false deadlines.  If they give you a deadline ask to see it in writing from a source you trust.  Taking time to ask friends, family, or just discuss the decision with someone else is always a good idea.   If and when you do finally sign a document, know what you are signing after you have had a chance to read it, and don’t allow the person to leave without giving you copies of what you signed.  Never believe anyone who tells you, “it doesn’t matter what it says in the contract, here is the truth”.   A written contract almost always trumps a verbal promise. 

Don’t be afraid to ask questions and don’t ever allow someone to talk you into doing something illegal, or let them convince you it’s OK because everyone is doing it.  Do not comprmise your position by getting involved in anything underhanded.  Once you agree, you will be less likely to blow the whistle on the scam artist if you too are involved in the scheme.   The bottom line is the more you know about foreclosures, the less likely you will be duped.

Although the median home price in California rose in June on a year-to-year basis, in month-to-month comparisons the median price declined 3.8%, according to another C.A,R. report.  However, California’s housing market continues to recover at a faster pace than the national housing market in general.  Nationwide, home sales have declined 5% in June alone and the median price has risen only 1%, according to a N. A. R. report.  (National Association of Realtors)

The Central Valley of California is expected to a little lower in the second half of the year due to the absence of the federal home buyers tax credit, but sales should remain above the long-run average and be significantly higher than the trough in 2007.   It is important to remember prices are substantially below their peaks from just a few years ago and interest rates are historically low, making this a very affordable time for many first-time home buyers to purchase a home of their own. 

Having said all that, the Tracy/Central Valley market continues to be very strong, as many first time home buyers feel they may never have another chance again like this where both prices and interest rates are both down at the same time.  Who knows, by next year we may be saying, “Do you remember when…..” 

If Senante Bill 1178 becomes law that may change and prevent the lender of your refinancing  from collecting on any deficiency in the foreclosure.  Existing law provides that no deficiency judgment exists if essentially,  the money you borrowed was used to purchase.  This bill would provide that a loan used to pay all or part of the purchase price of real property or an estate for years includes subsequent loans, mortgages, or deeds of trust that refinance or modify the original loan, but only to the extent that the subsequent loan was used to pay debt incurred to purchase the real property. The bill would become operative on June 1, 2011, and would apply only to actions filed after its operative date. 

This new bill, if passed into law would improve the lives of so many people fallen victum to predatory lending and unscrupulous lenders who led borrowers down that rose path of refinancing, “because it made sense and would save them thousands of dollars in the long run”.

The new rules for the HAFA Short Sale is very specific and every homeowner wanting to participate must first complete the application process and agree to such things as making minimal payments to their mortgagor, paying taxes, HOA’s and insurance, as well as a list of other commitments that must be kept by the homeowner during the short sale process. 

For more information about agents who have met the requirements of the HAFA training and earned a certificate click here Certified HAFA  Real Estate Agents to find an agent who can work with you on the sale of your home.   Finding someone who can guide you through the gauntlet of a short sale can prove to be one of the most valuable relationships you can have during this most challenging time in real estate. 

For more information contact me at 800 788-2973.  All of the participating agents at Realty World are HAFA certified and you can pick an agent with confidence by visiting www.GoTracy.com .

Fannie Mae has recognized that walking away from homes is bad for the community.  Neighborhoods that have homes boarded up, or even worse, homes in disrepair and shelters for homeless and drug havens are bad for the neighborhood.  The actions by Fannie Mae are designed to deter this disturbing trend toward strategic defaulting.   The flip side of this deterrent, borrowers who make a good faith effort to resolve their situation with their servicer will preserve the option to be considered for a future Fannie Mae loan in a shorter period of time. 

An added deterrent is Fannie Mae’s ability to take legal action to recoup the outstanding mortgage debt from borrowers who strategically default on their loans in jurisdictions that allow for deficiency judgments.  On the other hand, troubled borrowers who work with their servicers, and provide information to help the servicer assess their situation, can be considered for foreclosure alternatives, HAFA (Home Affordable Foreclosure Alternatives) program offers such help as loan modification, short sale, or deed-in-lieu of foreclosure.  It may be possible for one of these borrowers to be eligible for a new Fannie Mae loan in as little as two to three years, depending on the circumstances.   For more information click here for the complete Fannie Mae Selling Guide, as updated in April 2010.