What does the government/big bank foreclosure settlement mean to you? Well, perhaps a write-down in principal

We've all seen the headlines about the government settlement with the big banks, but what does it really mean? Check out this article from the Washington Post:
http://www.washingtonpost.com/blogs/where-we-live/post/what-does-the-foreclosure-settlement-mean-for-you/2012/02/09/gIQAxE9U1Q_blog.html
This is so new that these are the only details that I have, but it looks like -- don't get excited yet -- these five banks have agreed to PRINCIPAL reduction if you're underwater!!! I'm sure the devil is in the details, but...

In the meantime, here in our land, expect inventory to get even shorter as a lot of short sales may be cancelled because of this.

A new short sale plan from BofA? Wha? Gah!

Apparently BofA, our all-time-favorite-lender-not, is rolling out a new short sale program.  It's called the coop program, and it calls for approval of a particular short sale before offers are received.  I learned about this from a listing agent when I called to inquire about the status of my buyer's short sale offer.

In the short term, this will delay the sales of these kinds of distressed properties.  In the long term, it will be good, however, as potential home buyers won't have to waste their time on properties that are not approved.

And not all short sales do get approved, or get approved at market price.  I just had a (different) short sale deal die because the bank would not approve the appraised price and wanted more money.  My buyers, and the seller too, have been waiting on the approval SINCE EARLY DECEMBER. The bank was Bank of Evil Empire Bank of America, naturally.  I hope to blog more about this particular transaction in the future.

All your real estate good news/bad news reading in one convenient post!

If you regularly read the L.A. Times or any other major news source, you know that there's conflicting news out there about the economy and real estate.  Here are the latest links from the last week:

First, from Fortune Magazine: It's time to buy a house again.

http://finance.fortune.cnn.com/2011/03/28/real-estate-its-time-to-buy-again/  

I'd love for this to be correct.  One thing though: we never had a lot of new homes here in the center metro area of L.A., unless you count condos.  And a lot of those new condos still haven't sold.

Next, from Rob Hahn via AOL, a rebuttal to the above article: Is it really time?

http://realestate.aol.com/blog/2011/03/29/its-a-great-time-to-buy-a-house-really/

Rob slices and dices the stats used in the Fortune Article and comes up with a different take.

Then, from yesterday's L.A. Times: Banks may be forced into agreeing to short sales.

http://www.latimes.com/business/realestate/la-fi-foreclosure-short-sales-20110330,0,732448.story

I read this with delight, until I got about half-way through the article.  Then, it said that banks can still refuse the short sale if they don't like the sales price.  So, what's the point?

And finally, from A. Lazo in today's L.A. Times: There really is a shadow inventory, and it's depressing prices.http://latimesblogs.latimes.com/money_co/2011/03/unlisted-shadow-supply-of-18-million-homes-looms-over-housing-market.html

I don't want to argue with the statistics experts -- Core Logic in this case -- but it bears repeating that no one set of statistics can be applied to hyper-local real estate markets.

What's your take on our market, dear reader?

OMG, cheapest condo EVER in Burbank

Pigs are flying.  I'm looking for a hat to eat.  And Burbank has its lowest-priced listing that I ever remember.  And it's not even a dump!  355 Maple, #114 in the Entourage development just listed at $99,000.  It's a 480 sf. studio and the building has lots of amenities.  It's close to the studios, too. Is it priced according to comparables or is it an auction price? I vote auction.  A similar unit there sold for twice this just last fall.  And in November, my buyers closed on a one-bedroom condo on Bethany which was the cheapest thing to list on the market in over a decade and it was $180,000.  And prices haven't dropped 50% in four months.  So yes, I do think it will go out much higher...still...stay tuned!

From Activerain: Irresistible forces are meeting immovable objects. Real estate in 2010

IRRESISTIBLE FORCES ARE MEETING IMMOVABLE OBJECTS. Real estate in 2010.

IRRESISTIBLE FORCES ARE MEETING IMMOVABLE OBJECTS!. . . .  WE ARE TRULY LIVING IN A PARALLEL UNIVERSE WITH SELLERS ON ONE SIDE OF THE CURVE AND BUYERS ON THE OTHER!  Can they come together and form "WHITE MATTER".  Or, will be all be drawn into that BLACK HOLE of negativity. 
Why, what do you mean, Lenn??? 
What "irresistible forces"?  What "immovable objects?"
NO. 1 IRRESTIBLE FORCE:   SELLERS' LENDERS WHICH, AFTER 3 YEARS OF SERIOUS and UBIQUITOUS SHORT SALE ACTIVITY, THERE ARE:

• No Short Sale Guidelines for the lending industry.
• No lenders with established published Short Sale processing procedures.
• No conformity of qualifications for Owner acceptance for Short Sale.

THE IMMOVABLE OBJECT?  THE LENDER and THE INTRACTABILITY OF SHORT SALE PROCESSING by sellers' lenders who follow no logical or timely attempts to get to the closing table.   Oh sure, we read "bragging rights" advertising and blogs (advertising) by listing agent describing "closed in 19 days" or "processed in 45 days".  Yet, the preponderance of short sales that the Buyers' Brokers in my network close have been taking an average of about 135 days.   That's not fiction.  That's fact established by tracking the "contract to close" period for 12 months - 73 short sale transactions by 11 experienced Realtors. 
NO. 2 IRRESISTIBLE FORCE:  PROSPECTIVE HOME BUYERS WHO BELIEVE THAT ALL SELLERS ARE DESPERATE TO SELL AND WILL ACCEPT OR NEGOTIATE ANY LOW OFFER INCLUDING:

• Bank owned properties that are discounted to about 90% of local market.
• Short Sale listings with 8 DOM that are discounted to about 90-95% of local market.
• Non-foreclosure or non-short sale listings that are priced to sell at the low end of local market.
• Fixer-upper listings that are discounted to 25% below market.  THE IMMOVABLE OBJECT?  THE INTRACTABILITY OF

BUYERS WHO BELIEVE THE NEWS REPORTS THAT ALL OWNERS ARE DESPERATE TO SELL AND ANY OFFER IS REASONABLE.  One of the results of the frequency of low offers is that sellers are pricing unrealistically high to counter the low offers that they expect from unrealistic buyers.  The belief that buyers can "pick up" real estate at prices well below the local market may be inspired by Realtor advertising touting their "negotiating skills" which often amount to little more than writing low offers.  Without good research into the individual property listings with consideration of recent closed sales, general condition, local attractions, shopping, schools, transportation alternatives, etc., simply writing low offers doesn't take an experienced real estate buyer's agent.  Such superficial representation can be performed by any licensee.
NO 3 IRRESISTIBLE FORCE:  HOME OWNER SELLERS WHO BELIEVE THAT THEY CAN DICTATE THE CONDITIONS FOR THE SALE OF THEIR HOME.

• Sellers who eschew agent prepared CMAs and price their property based on how much they want to clear.
• Price their home based on the price for which a home in the neighborhood sold 11 months ago.
• Owners who refuse to address deferred maintenance items prior to listing.
• Owners who ignore agent provided sold pricing trends and expect the market to always go up.
• Owners who believe that "as is" means that a buyer must accept the property "as is".

THE IMMOVABLE OBJECT?  THE PROPERTY.  A piece of land with or without an improvement that has no heart or brain.  A property that listens to no one.  A house that refuses to morph into what the seller wants to believe he is selling and refuses to be reduced to the image of what the buyer believes is it's value.
THE REAL ESTATE INDUSTRY IS ON THE PRECIPICE OF DRAMATIC CHANGE.  Much has already changed in the past 3-4 years.

• Home values have plummeted across the country.
• Foreclosures and Short Sales dominate many local real estate markets.
• Mortgage loan qualifications have become dramatically more difficult.
• Negative equity has stripped many home owners of their financial security.
• Loss of credit limits the ability of buyers and sellers to buy and sell real estate.
• Unemployment excludes many from the real estate market for some time.
• The high percentage of First Time Home Buyers with marginal credit and no cash reserves. 

IS THERE ANY GOOD NEWS??  Of course there is.  There always is:

• Home buyers have many new and late model homes on the market from which to select their dream home.
• Home prices should, in time, show positive equity for today's buyers.
• Mortgage payments are low when compared to past values.
• Interest rates are low which should benefit owners for many years to come.
• New homes have been reduced in priced to about 3/4 of the 2006 price range. 

IS THIS A GOOD TIME TO BUY A HOME?  Clearly, if a person is financially able and motivated towards home ownership, this is an a good time to buy a home.
IS THIS A GOOD TIME TO SELL A HOME?  If an owner is realistic about the local market values and has sufficient equity or assets to close.  Other than need, it's not a good time to sell.  However, the picture doesn't appear to be changing any time soon.
IS THIS A GOOD TIME TO JOIN THE REAL ESTATE INDUSTRY AS AN AGENT?  Only if a person has sufficient savings and/or income from other sources to be able to finance a real estate practice start-up and pay living expenses for probably a year or more.  It may take that long to build an income stream from real estate sales.  Many home buyers believe that they can do the job themselves with the help of the Internet.  Many agents don't understand Internet advertising.
DON'T FORGET TO REBLOG!  THANKS.
Courtesy, Lenn Harley, Broker, Homefinders.com,  800-711-7988.

Sunday reading from Gretchen Morgenson at the New York Times

Gretchen Morgenson, the NY Times business columnist, has written an article entitled "In this Play, One Role is Enough."  Link here in case the title above doesn't work.  It details a bill introduced in the U.S. Congress by Rep. Brad Miller (D-NC).  If passed, the bill will help unwind the second mortgage mess that's holding up so many short sales.  Go, Rep. Miller!

How my Toluca Lake condo short sale is going, Chapter 4

If you're a regular reader of this blog, you may recall posts about my short sale with Chase bank.  I rep both the buyer and the seller on this Toluca Lake condo, and we had a complete package (all seller financials, all buyer financials, offer, etc.) submitted at the end of February.

Anyway, we finally had a negotiator assigned in May, he asked for a few more pieces, and verbally told me at the end of May that we were approved for the short sale purchase.  Yay!  Time for dancing in the streets!

Note the word "verbal." Even the negotiator has to kick things upstairs for a final sign-off and that department issues an approval letter.  Nothing can happen until the letter is received by seller.  The negotiator has expected the letter any minute -- for the last five weeks. 

One thing did happen.  After three weeks of waiting, "upstairs" kicked the approval out unless I agreed to halve my commission.  What's a Realtor to do?  Unhappily, I agreed of course.  And we got reapproved.  Verbally. 

Then, no letters could be issued at the end of June or the beginning of July because it is the end of the fiscal year and all Chase employees had other responsibilities.

So we're still waiting for the letter.  Seller, buyer and escrow are ready to close.  Jay, my Chase negotiator, and I talk every day re status.  I have his number memorized.  I know the names of his kids. 

To be continued.

How my short sale is going, Chapter 3 (or is it 4? Whatever)

When I last posted about my short sale, the file had just been sent to the closing department at Chase.  This is good news because that's the last step.  And then...nothing.  Nobody assigned to it, bunches of phone calls, etc.  Finally, I managed to have it resent to the closing department.  And this week, I got a name of a closing manager!  AND HE CALLED ME BACK YESTERDAY!  WOO HOO! However, it was just to tell me that the file will be assigned to a closer some time this week.

How my short sale is going, Chapter 3

My short sale "file" has now been in the closing department of Chase since 3/29/10.  However, nobody has been assigned to the file yet.  I'm told that the closing department just got a lot of short sale files (you don't say!) and they will hopefully have a negotiator assigned this week.

No more foreclosures for awhile

California has put another three-month moritorium on foreclosures. That means that there won't be bunches of REOs on the market until mid- to late Fall. It also means that there probably will be more short sales (banks: get your act together on this) and inventory will be short this summer. I think.