David Ormonde's Homes for Sale

 As we all now know, one of the many factors that sent housing prices through the roof in the early part of this century was mortgage fraud.  Of course wherever there is fraud there must be the lure of big profits, such was provided by universal greed – Greed on the part of sellers who wanted more for their house; no matter where the money came from – Greed on the part of the real estate and mortgage brokering industry, obviously driven by commissions and fees – Greed on the part of the banks and lending institutions who didn’t really care who had bought their product or how they got it – Greed on the part of corporate America who bought the mortgage backed bonds who obviously didn’t care about how the bonds were rated or what was securitizing them. 

 So, one would think that is all gone and that the government in all its wisdom and far reaching resources and capabilities certainly would have brought all that to a stop.  After all, we have all seen a series of new laws and rules starting at the financial markets all the way down the chain through the lending institutions, mortgage bankers, loan officers, the real estate industry and the appraisal business, and right down to the bottom reaching the way in which borrowers apply for and receive their loans. 

 Well, according to an article in the Associated Press, mortgage fraud is still prevalent and hard to catch.  Mortgage fraud remains widespread in the depressed housing market, with perpetrators motivated by high profits and little risk of getting caught, according to the FBI.   It is believed that less than 10% of all mortgage fraud is ever prosecuted and an even smaller number of convictions occur.  

The FBI’s annual report on mortgage fraud said such schemes are particularly resilient and hard to discover, and their total cost is unknown. Real estate firm CoreLogic says more than $10 billion in loans were made with fraudulent application data in 2010, the report noted.

Fraud last year stayed at levels seen in 2009 as the housing market remained in distress, providing ample opportunity for schemes, the report said. It predicted that perpetrators would “continue to seek new methods to circumvent loopholes and gaps in the mortgage lending market.” 

“These methods will likely remain effective in the near term, as the housing market is anticipated to remain stagnant through 2011,” the FBI said. The bureau’s pending investigations into mortgage fraud increased 12 percent last year over 2009, officials said.

The most prevalent schemes involve falsifying financial information to qualify buyers who otherwise would be ineligible for a loan. Other crimes involve inflated appraisals, including schemes that use dishonest appraisals to sell homes at elevated prices. Some get-rich-quick schemes persuade investors to buy rental property or land believing the price will appreciate quickly.

The FBI says the crimes are committed by licensed and unlicensed brokers, loan officers, real estate agents, appraisers and other industry insiders who use their expertise to exploit vulnerabilities in the system. Organized crime groups are also behind some of the fraud, the report said.

“Mortgage fraud enables perpetrators to earn high profits through illicit activity that poses a relative low risk for discovery,” the report said.

The top states for mortgage fraud last year were California, Florida, New York, Illinois, Nevada, Arizona, Michigan, Texas, Georgia, Maryland and New Jersey, the FBI reported.

The agency says it is dedicating resources to combat the threat, including an initiative launched in June 2010 called Operation Stolen Dreams that targeted mortgage fraud throughout the country.

For information about how some of the changes have affected your loan process contact David Ormonde at 800 788-2973   david@GoTracy.com   www.DavidOrmonde.com

What we know is there may be a lot of hoopla about nothing, but here are the facts:

 In late September and early October some lenders and servicers began voluntarily halting foreclosures in select states while they reviewed their foreclosure processes.
 

• So far, only Bank of America has extended its foreclosure moratorium to California, where the vast majority of foreclosures are conducted without a court order.  Foreclosures in the other 23 states are processed through the court system.
   
• Non-judicial foreclosures in California, however, do have legal requirements that lenders must follow.  For example, California law requires that lenders for certain mortgage loans made between Jan. 1, 2003, and Dec. 31, 2007, attempt to make contact with borrowers to discuss options for avoiding foreclosure at least 30 days before filing a notice of default.  Lenders also must sign a declaration in the notice of default stating that they tried to contact the borrower, made contact with the borrower, or fall within an exception (such as a bankruptcy filing).
   
• The lenders and servicers that have placed their foreclosure moratorium on properties in the 23 states where courts are involved in the foreclosure process include:  Goldman Sachs Group Inc’s Litton Loan Servicing, Ally Financial Inc.’s GMAC Mortgage unit, JPMorgan Chase, and PNC Financial.
   
• These lenders/servicers have only temporarily halted their foreclosures while they review their foreclosure process.  This is in response to findings that questioned whether some lenders/servicers were following the correct procedures to foreclose on a property.
   
• This halting of foreclosures is a voluntary action taken on the part of these lenders/servicers and has not been mandated by either the states or the federal government.
   
• Some members have begun to report the immediate impact of this moratorium on transactions that involve foreclosed properties.  Delays in escrow and the removal of listed foreclosures are temporary results of this moratorium.
   
• The immediate impact on the market will be the slowing of home sales, which could put upward pressure on home prices in the short term.  The long-term effect on the market is uncertain at this point as it depends how long the moratorium remains in place.
   
• Assuming the moratorium is lifted in the next month, the flow of REOs to the market should resume, but the uncertainty created by the moratorium may cause hesitation on the part of buyers.
   
• Federal agencies, including the Office of the Comptroller of the Currency, the Federal Housing Administration, and the conservator of Fannie Mae and Freddie Mac, have asked lenders and servicers to review their foreclosure processes.  This review would apply to all states including those like California where the vast majority of foreclosures are non-judicial.
   
• The participating lenders and servicers believe their internal review processes should take anywhere from a few weeks to 30 days to complete.

 
A number of major banks recently have suspended foreclosures in 23 states due to problems with the signing of declarations in connection with judicial foreclosures — foreclosures that proceed through the court system.  Bank of America has further expanded its suspension of foreclosures to all 50 states.  In California, the vast majority of foreclosures are conducted through non-judicial foreclosure or trustee sales which do not involve a court process. 

While California foreclosures are not conducted through the court system, lenders in California must still comply with other legally required procedures for non-judicial foreclosures. The media, politicians, consumer advocates, ambitious state attorneys general, and hungry lawyers everywhere have seized on “RoboForeclo,” (the “robo-signing“/rubber-stamping foreclosure docs scandal) the nation’s newest self-destructive mania.  The question is, is there any substance to all the hoopla?

It may be the worst of times, but then again it may be the best of times depending on whether you are buying or selling.  Recent economic forecasts suggest that the housing recovery could take years. As a seller who has a strong motivation to sell, do you try to sell now or hold on for a better market?  First consider where you want to be in 10 years. How do you envision your lifestyle? Is your current home too big, too small, or in the wrong location?

Homeowner’s who intend to move from one house to another can take advantage of low interest rates, if they are able to sell their current home. It is true you will probably sell for less than you would have several years ago, but then again you may get a deal on the home you buy.  Of course this all depends on where in the country you sell and where you buy.  However, if you don’t plan on living in your next home for the next eight to 10 years, this might not be a good time to make a move.

For sellers who purchased in recent years, selling requires a huge readjustment in their expectations. Many will probably sell for less than they paid; in some cases, a lot less. If they highly leveraged the purchase, or refinanced and pulled out equity, they may need to contribute cash to close the deal.  Sellers who have no cash reserves and need to sell for less than the amount of the loans secured against the property will need lender approval to complete a sale. This is called a short sale. In this case, or with a foreclosure, sellers don’t have the option of buying another home until their credit is restored, which takes about two to three years for a short sale and five years for a foreclosure.

It may not be the best time to sell, but it might not be the worst either. Recent economic forecasts suggest that the housing recovery could take years. As a seller who has a strong motivation to sell, do you try to sell now or hold on for a better market?   Again, this depends on how long you plan to live in your new home, keeping in mind that many people find that because of unforeseen circumstances they need to sell sooner than they had originally planned.  Will you be financially able to handle the unknown?  If you don’t plan on living in your next home for the next eight to 10 years, this might not be a good time to make a move.

Some listings in prime, high-demand markets come on the market and sell quickly, leaving other sellers in the area perplexed. Why isn’t their home selling? Why aren’t they receiving bids from multiple buyers?  Listings that sell quickly are priced right for the market. They are homes that will work long term for the buyers, which means 10 or more years. They don’t need updating; they’re in move-in condition. And, they are usually located in high-demand, low-inventory neighborhoods. Buyers are waiting for these prime listings and will move quickly when they come along.

It’s very frustrating for sellers whose listings don’t receive an overwhelmingly positive response, especially if they put time and money into fixing them up for sale, and they thought they priced right for the market. Motivated sellers will need to accept the probability of a longer marketing period and a lower price.  Expect low offers if your home has been on the market for awhile. It’s natural for buyers to try to buy a home as inexpensively as possible to cover for the possibility of a further downturn in the market. Don’t take it personally; counter any offer from financially qualified buyers who make a clean offer that’s not encumbered with complicated contingencies.

It may take several offers and failed attempts to find the right buyer. It isn’t easy for most sellers to reach a successful closing in this market. But those who stick it out can reach their goal.  Waiting to sell could net you more for your home. But it’s impossible to know when that better time will arrive. The market will be volatile for the foreseeable future and good economic news will trigger a pickup in the market just as bad news will cause buyers to pull back.  To take advantage of a pickup in the market, your home needs to be on the market or ready to go on a moment’s notice.  For more information about market conditions contact David Ormonde at 209 832-0679 or email david@GoTracy.com.

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. 

The best way to avoid foreclosure related scams is to get tough.  Scam artists intentionally seek out the weak and hope to take advantage of you when you are in a distressed situation, such as foreclosure or losing your home and worried you are not going to be able to handle the stress.  When you are down and out you will tend to believe anything, even if it sounds too good to be true.  This can make you a specific target for the unscrupulous scam artist. 

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.

David Ormonde’s Real Estate and Dinner Blog for the Central Valley and Tracy

Contrary to popular beleif, the average price per square foot for Tracy CA dropped - Currently at $119, a decrease of 1.7% compared to the same period last year. The median sales price for homes in Tracy CA for Dec 09 to Feb 10 was $234,000 based on 630 home sales. Compared to the same period one year ago, the median home sales price increased 0.4%, or $1,000, and the number of home sales decreased 27.5%.

There are approximately 286 resale and new homes in Tracy, including 1,095 homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. The average listing price for homes for sale in Tracy CA was $302,839 for the week ending Mar 10, which represents a decrease of 0.9%, or $2,738, compared to the prior week.

Here is what that looks like graphically according to Trulia:

Market View for Tracy

Market Trends for Tracy

Average Listing Price

$302,839 -0.9%

Median Sales Price

$234,000 +0.4%

Average price/sqft

$119 -1.7%

Number of Sales

630 -27.5% y-o-y

More Tracy Market Trends

Home Prices for San Joaquin County

Info

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Most popular zip codes Avg. listing price Week ending Mar 10

 

95391

$343,826

-1.7%

95376

$222,713

+0.9%

95206

$137,182

+0.5%

95377

$297,510

-1.6%

95219

$342,370

-1.3%

 

95205

$218,163

+21.6%

95212

$302,719

+20.4%

95202

$266,240

-19.5%

95215

$207,923

-15.4%

95204

$190,183

+8.5%

Selling a luxury home in today’s challenging market is even more difficult than ever because the cost of marketing the luxury home needs to be in check with the shrinking number of actual sales.  Locally, in the Central Valley of California the number of luxury homes compared to all others is very small and very few agents specialize in marketing luxury homes because it is a very specialized market. 

The steps in selling a luxury home include many of the same steps needed to sell any other home, except that your audience may be very different and the level of expectations may vary greatly.  In addition to the usual preparation, the following recommendations can bring a better price and a faster sale:

Pretend your home is a model home.  How does it compare? 

Does the entry to your driveway and entrance look impeccable?

Do you have color brochures (preferably books) available in a "Marketing Center" of the home for buyers to see and take with them?

Do you have a virtual tour and/or a video of the home and grounds for buyers to preview?

Is your home readily available for viewing at all web portals?

Do you have a website for your property (i.e. www.123Paradise.com)

To view marketing ideas for your luxury home go to www.SellThisLuxuryHome.com  or visit www.DavidOrmonde.com

 Also, see related information below:

http://books.google.com/books?hl=en&id=MfdCzE2KhQIC&dq=luxury+homes&printsec=frontcover&source=bll&ots=p6M8cCiy5K&sig=Ip6FF_3WwPnlHyUG1Kf0O184zK0&sa=X&oi=book_result&resnum=11&ct=result#PPP1,M1

http://books.google.com/books?hl=en&id=4zmr6Hl14AQC&dq=luxury+homes&printsec=frontcover&source=bll&ots=qPm4-Iv0L1&sig=r3kvC9T2t6mzBzXOm-tNj6XXvog&sa=X&oi=book_result&resnum=12&ct=result

http://www.luxuryhomemagazine.com/index.cfm