Zombie Foreclosures: They're Not From the Movies!

Have you unfortunately already lost your home to foreclosure? Did you go via Deed in Lieu? Perhaps you had 2 or more loans when the hammer fell. Well, for some of you out there, we are seeing a disturbing detail of the foreclosure situation rising as we speak. This is the so-called Zombie Foreclosure. It has nothing to do with that scary movie or TV series that you may have recently seen. Rather, it involves finding an unexpected letter in your mail or receiving a threatening phone call from a collection agency chasing you for money that you didn't know you owed, and which, for the most part, you don't owe! Here's the way it works. You lost your home either by deed in lieu, or, if by a regular public foreclosure auction, to a foreclosing lender of your first mortgage, but you also had a second mortgage as well. In the former case, in far too many cases, the foreclosing bank either forgets to complete, or incorrectly completes, the documentation relating to transfer of title from you to them. The tax collector as a result never is notified that you no longer own the property, so he believes, incorrectly, that you are still on title. You, not owning the property any longer, have no reason to continue paying property taxes on it and do not,in fact, pay any such taxes. The tax collector, acting on erroneous information, passes your account to a collection agency and they start chasing you for taxes that you do not owe! Getting rid of them then becomes all too often like something out of Michael Douglas's efforts in the movie, Fatal Attraction, to rid himself of an extramarital girl friend. Try and prove you don't own the house--to the agency's satisfaction. That can be a real adventure! Alternatively, your lost your home to a foreclosing lender that held the first mortgage on the property. Unfortunately, even though the foreclosure wiped out any second and successive lower mortgages, THEY (the lenders) aren't giving up! They pass on the amount you owed at the time of foreclosure top a collection agency, with instructions to go after you for the amount they believe is still due. Again, getting the agency off your back can be a monumental task. In either case, you very well may have to engage legal counsel, and, if you couldn't pay your mortgage, how do you do that? You may want to talk with Legal Aid, or find a lawyer that does pro bono work, or locate counsel that will take on the bank AND the collection agency in a lawsuit to: get them to stop hounding you; and pay you compensation for the continued aggravation, as well as any damage to your financial standing and/or reputation. Fortunately, these zombie foreclosures are the exception to the rule, but they are on the rise. Hopefully, you're not one of them, and if you are, you can get help to end the chase. As always, good luck.

Has the Economy Helped You Out of Trouble?

Well, as most of you are painfully aware, the past 5 plus years have been a real weight dragging many down to foreclosure or the slightly better negative of a short sale. In some cases, the issue has been, or had contributing to it, the dramatic drop in value of one's home as the housing market crashed along with the economy. Well, as things have slowly started to turn around, the reverse is becoming more true by the day. When prices for homes dropped through the floor as the Great Recession took hold, they basically gutted whatever equity owners had in their residences. As things have turned the corner and values have again begun to rise, some homes now have, or are approaching, a positive equity again. If your equity is in positive territory again, it may allow you a better opportunity to refinance or sell in a regular, not short, sale transaction. So how do you know what your home's value is? You could get it appraised, but that will cost you several hundred dollars that you may not have or feel comfortable parting with at this time. An easier way is to call a Realtor. If you still have contact with the Realtor who helped you purchase the home, call him or her. If not, pick up the phone and contact a local real estate brokerage nearby, or, better yet, ask one of your friends or co-workers if they know a good Realtor. Most agents will be only too happy to give you a valuation on your home. Once you have that figure in hand, you can make a better decision about where you go (or stay) from here. With this in mind, if you're in Marin County in California, call me for a free valuation and a discussion of the market. In any event, good luck.

Foreclosure Settlement Payments to Date

Well, as you know from our prior posts, last year the attorneys general from 49 states reached a major agreement with the five largest mortgage lenders over the issues of improper foreclosures and related issues. In many cases the lenders were to pay affected homeowners various sums of money related to improper foreclosures or denied loan mods or short sales. This process is still going on, but, thanks to the Office of Mortgage Settlement Oversight, we have an accounting of how much has been paid so far--a scoreboard of sorts, if you will. According to the OMSO, total payments, adjustments and settlements under the agreement to date total $45.83 Billion made to a total of 550,000 homeowners. This is a pretty impressive sum, but it is not the final total as other settlements are still being worked out. Of the total so far, $24.7 Billion went to pay for 'relief to support home ownership'. An additional $19.5 Billion went to short sales. Complaints and claims are still coming into the OMSO, now at a rate of about 830 per month since November 2012, up from an average of about 550 per month in the first six months of the program. If you think you have a legitimate complaint and haven't yet filed it and your lender was one of the following,Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, and Ally Financial, don't hesitate--get on the horn to OMSO and get your claim filed! As always, Good Luck.

Eminent Domain Foreclosure Scheme Rejected in So. Cal.

Last year some local investor groups (Mortgage Resolution Partners) in southern California, specifically, San Bernardino County, pitched the idea OF using EMINENT DOMAIN as a way to foreclose on underwater homeowners and get values going at more market realistic levels again. The idea was to foreclose on the mortgages that were underwater, then revalue at existing market values and refinance them. Only trouble is that a number of homeowners who were, for the most part, still hanging in there and making payments would have found themselves out of their homes. Last month the Joint Powers Authority (JPA), formed by the county and two of its cities, Fontana and Ontario, to consider the idea rejected it. They noted that to permit such a use of eminent domain would not only harm more homeowners, it likely would also weaken further the already reeling local housing market.

Jobs--They DO Affect the Housing Market!: One thing that is always in play regarding availability and, more importantly, the costs of homes is the relevant local job market. It isn't surprising that this is the case. If people aren't working, they're not likely to be considering the purchase of a home--first home, move-up or anything else. No income, no buy--very simple and logical. So, when the local job market improves, that means more folks are probably going to be out there looking to purchase a home. This, in turn, will likely drive prices up, relative to the market. Recent statistics show that San Francisco is now the third best job market in the country, right behind Austin, Texas and Washington, DC. Such a good rating only bodes well for sellers. Given the continued relatively low interest rates, it can also benefit buyers if sellers start to jump on the bandwagon too. The site, NerdWallet noted that San Francisco’s high median household income (No. 2 at $72,947) offsets the city’s high cost of living. “With Silicon Valley nearby, San Francisco has become a tech hub in recent years, and its population growth indicates the city is home to many transplants,” NerdWallet said. “Tech and tourism dominate the job market in San Francisco, and tech giants such as Facebook, Google, Twitter, Yelp, and Dropbox are located in or just outside the city.” The job-seeker rankings were based on income, cost of living, the unemployment rate, and population growth. NerdWallet also recently ranked San Francisco the 10th best city for recent college graduates, citing its “walkable layout and great social scene,” and the fourth most expensive city. The site produced the rankings with its new City Life Tool, available online, which provides extensive demographic profiles of 26 of the nation’s largest cities based on data from the U.S. Census Bureau, the Council for Community and Economic Research, and other sources. Although NerdWallet is talking about the San Francisco job market, with Marin being one of the leading up-scale housing areas serving the City, means that this SF job market directly affects the Marin housing market. If you've been uncertain about your own situation up to now, perhaps these stats will cause you to rethink things. Questions? Call us: Peter: (415) 279-6466; Jane: (415) 531-4091.

Possible Good News in Florida: There is a bill in the Florida legislature, authored by Representative Kathleen Passidomo of Naples, HB 87, which, while making some foreclosures easier, will also have safeguards against some wrongful foreclosures. In the protection section of the bill is a proposal that would institute much tougher guidelines that banks and other lenders would have to abide by in the area of actually being in possession of required paperwork before foreclosing. In other words, they'd have to prove that they actually had the necessary legally required documents to foreclose instead of just claiming they had them without needing to show physical proof of that fact. This, ostensibly, would reduce wrongful foreclosures in many cases where the lending bank or its servicer didn't actually possess the documents proving the existence of the loan. Without these docs, supposedly a foreclosure can't legally be supported, and thus, cannot proceed. Separately, the proposed law would also limit time frames for lenders to pursue deficiency judgments. Current law allows a lender to file such a legal action any time within five years of the foreclosure. The new proposal would cut that to just one year. For those of you unfamiliar with deficiency judgments, they occur when the lender forecloses on a home and the home's value or the amount received at the foreclosure auction fails to equal the amount owed on the mortgage. If the amount realized from the foreclosure is less than the loan amount, the lender then files a suit requesting the difference from the former homeowner that the foreclosure was deficient. It's bad enough you've lost your home. Now the bank wants to get whatever amount the foreclosure failed to produce directly from you. Perfectly legal, but a hell of an extra dagger in the ribs to one who's lost their home. Questions? Check with your local state legislator. He's working for you, so make him provide you with the correct info. It may save you your home, or, failing that, a sizable chunk of cash, post foreclosure.

Prices Continue to Climb; Rates Remain Low!: Well, the following relates to the latest numbers available for the State and also pretty accurately reflect on the status of things in Marin County. Given the conditions that helped generate these numbers, it is very reasonable to expect a continuation as we move deeper into 2013. Rates remain in the mid-3%'s for 30 year fixed loans and inventory is still well below normal levels at all price points. What does that mean? As with any item that is in demand, it will continue to drive prices up and we have seen more multi offers in 2012 and are continually seeing some in the early days of 2013. So, without a further word, on to the stats and info. Home prices rose dramatically across the Bay Area in December, led by Contra Costa County, where the median sale price of single-family homes jumped 22.9 percent from a year earlier. San Francisco finished a close second, with the median price up 22.3 percent, according to a report released this week by the California Association of Realtors. The median price rose 21.8 percent in Sonoma County, 17.8 percent in Alameda County, 14.8 percent in Marin County, and 4.5 percent in Napa County. Across California, the median sale price rose 27 percent, which the C.A.R. attributed to a significant increase in sales of higher-priced homes last month and a shortage of lower-priced homes on the market. For all of 2012, the median sale price rose 11.6 percent in California. The median sale price indicates that half the prices paid were higher than this number, and half were lower. Medians are more “typical” than average prices, which a relatively small share of transactions at either the lower- or the upper-end can skew. California home sales edged up 0.9 percent in December from a year earlier and declined in all but one Bay Area county. Sales rose 29.7 percent in Marin County but fell 17 percent in Napa County, 7.9 percent in Sonoma County, 6.9 percent in Contra Costa County, 5.3 percent in San Francisco, and 1.5 percent in Alameda County. For the year, home sales statewide rose 5.4 percent from a year earlier. Not only is this info of value in making a decision on selling or buying your own home, but it also is helpful in your decision as to whether or not to buy an investment property this year. Remember, not only can investment real estate be a great way to increase the value of your personal estate, it can also provide unmatched income tax writeoffs for you. These can include depreciation and the costs of maintenance of the investment property that are not available for deductions on your personal residence. Check with your CPA for more details as to how it could exactly affect you. If you need assistance on these or any other real estate needs, don't hesitate to call us: Peter: (415) 279-6466 or Jane: (415) 531-4091. Enjoy the Super Bowl on Sunday!

LATEST SETTLEMENT NEWS!: Lender Processing Serviuces (LPS) and its subsidiaries have reached a settlement with the attorneys general of 46 states and the District of Columbia in a large series of roboprocessing claims against LPS et al. The agreed settlement amount is $127 Million, and also precludes further use of the techniques/tactics LPS et al previously used in completing foreclosures. No info was announced from the settlement details as to whether any of the robosigned foreclosures will or can be reversed or compensated, so, if you feel you were robosigned out of your home, you may want to check with your state AG. As always, good luck.