From the category archives:
Calabasas Homes & Santa Monica Homes for Sale
Have you been searching for a home and getting frustrated? Are you tired, feeling helpless and almost over it entirely? One of the most important things you can do in a confusing and quick changing market like the one we are in today is to work with the best agents possible. Once you are ready to buy you are really truly better off with an experienced, knowledgeable, creative and tenacious Realtor working for you.
This is part of an article written by Michael C. Gray, CPA in April, 2010 discussing the tax consequences of a “short sale” vs. a foreclosure.
Our nation is now seeing the effects of tightening mortgage credit after a liberal period. With increases in interest rates for adjustable rate mortgages and the conversion to amortization of principal for interest-only (or negative amortization) loans, home values for homes favored by subprime borrowers (and even other homes) are collapsing, and the debtors are either trying to “walk away” from their homes and allowing them to be foreclosed or are making “short sales.”
A “short sale” is selling the home for less than the mortgage balance and trying to get the lender to forgive the unpaid balance. This is a new use of the term, and is not the definition for this item in the Internal Revenue Code. In the tax law, a “short sale” is a sale of a borrowed item to be replaced at a future date, usually a security. The only case that I know about using the term “short sale” for this type of transaction is a 2008 decision, Stevens v. Commissioner.1 With the explosion of real estate short sales, we will undoubtedly soon see more cases with them.
A reason for debtors to consider a “short sale” instead of a foreclosure is to try to protect their credit history.
The map above indicates short sales that are either active or looking for back-up (and for short sales that is not necessarily a bad thing) that are on the market right now in Calabasas. There are 10 active and 25 that are looking for back-up which in most cases means that a buyer has written an offer and it have been submitted to the bank. At that point they are waiting for the bank to approve the short sale. Frequently, the original buyer who submitted the offer get’s impatient and the next buyer in line ends up buying the property. Our buyers are getting deals on short sales all over the place. We are getting approvals and making them happen. Despite all of the nightmare stories that you may have heard, short sales do close and the process is actually improving as I write this. Contact us for short sale assistance whether you are a buyer or seller.
DSNEW.COM – By: Brittany Dunn: In an effort to support overall market stability and reinforce the importance of borrowers working with their servicers when they have difficulty repaying their
debt, Fannie Mae has updated several policies regarding borrowers’ future eligibility to obtain a new mortgage loan after experiencing a pre-foreclosure event, including a deed-in-lieu of foreclosure, pre-foreclosure sale, or short sale.
Under these new policies, Fannie Mae is changing the waiting period required for a borrower to be eligible for a mortgage loan after a pre-foreclosure event. The waiting period, which commences on the completion date of the pre-foreclosure event, may now vary on the loan-to-value (LTV) ratio for the transaction, occupancy of the property, and whether extenuating circumstances played a part in the borrower’s inability to pay his or her mortgage.
Current waiting-period requirements are four years for a deed-in-lieu of foreclosure, two years for a pre-foreclosure sale, and no policy currently exists specific to short sales. But under the new guidelines, waiting periods will be determined by LTV ratios, not the type of pre-foreclosure event.
Bloomberg’s Monica Bertran reports on the government’s new Home Affordable Foreclosure Alternatives program, which encourages lenders to allow more homeowners facing foreclosures to sell their property for less than they owe on their mortgage. (Source: Bloomberg)
The California housing market is showing more signs of stabilization—at least for now—as sales of bank-owned and bargain-basement homes in inland areas partially give way to sales of costlier homes toward the coast, according to a new report.
California’s median home price rose 11.2% in February from February 2009, although home sales in the state slipped for the second consecutive month compared with a year earlier, according to a report released Thursday by MDA DataQuick, a La Jolla, Calif., housing-data provider.
The median home price increased to $249,000 in February from $224,000 a year earlier, DataQuick said. The median price rose 0.8% from January 2010. Home sales in the state fell 3.8% in February from a year earlier to 28,111 sales, but were up 0.9% from January 2010, DataQuick said.
The San Francisco Bay Area’s median home price rose 20% from February 2009 to $354,000, while home sales fell from year-earlier levels for the second straight month. In Southern California, the median home price rose 10% to $275,000, led by a 13% rise in San Diego, while the number of home sales rose from year-earlier levels for the 20th consecutive month.
The increase in the statewide median price—the biggest year-over-year jump since March 2006—partially reflected a shift in the types of homes being sold in the state, as fewer foreclosures and stiff competition for bargains ate up inventory at the market’s lower end, said DataQuick analyst Andrew LePage. “There has been a shift in what’s selling and what’s not selling,” Mr. LePage said. “The high end has woken up, whereas it was comatose a year ago.”
But prices are “still way below any peak we saw two or three years back,” he added.
The change can be seen in the experience of Rich Barbaria of Campbell, Calif. After searching on and off for a year, including bidding unsuccessfully on several bank-owned homes, the 31-year-old mechanical engineer last month offered $455,000 for a three-bedroom, two-bathroom house in Morgan Hill, a city in southern Santa Clara County. The sale closed this week.
“I finally found something in a better area than I was expecting,” said Mr. Barbaria, who added that he bought the home from its owners and faced no competing bids. But he thinks he spent slightly more than he would have last year when home prices hit bottom. Indeed, Santa Clara County’s median home price rose to $460,000 in February, up 12.5% from a year earlier, DataQuick said.
Despite the stabilization in home prices, housing experts said, the hard-hit state isn’t out of the woods.
“The rebound in prices is artificial,” boosted by federal and state efforts to stimulate demand among buyers and stem foreclosures, said Sam Khater, a senior economist at First American CoreLogic, a Santa Ana, Calif., research firm.
While the percentage of existing homes sold last month that had been foreclosed on in the prior year fell to 44.3% from an all-time high of 58.8% in February 2009, it edged up from 43.8% in January 2010, DataQuick said.
Meanwhile, default notices, the first step in the foreclosure process, jumped 19.7% in February from January, though they were down 37.7% from February 2009, according to a report released earlier this month by research firm ForeclosureRadar.com.
“I think that the market is going to struggle for some time,” said Mr. Khater, who noted that California’s unemployment rate was 12.5% in January and the percentage of California mortgage holders who were at least 90 days late on payments increased to 11.6%.
“You’ve got quite a bit of road to go before you see the light.”
(source: Wall Street Journal)
Here are the current stats for Calabasas Homes For Sale.
There are currently 178 homes and condos active on the MLS for sale.
There are currently 87 homes and condos in escrow on the MLS.
There are 66 sold homes and condos in Calabasas since the beginning of 2010.
If you do the simple math with 178 homes available and 87 in escrow this month, it would appear that there are about 2 months worth of inventory. Those numbers are likely skewed by the fact that 46 of the homes that are in escrow are short sales. The reason this skews the statistics is because most of the time, the short sales hold a pending or back-up status for much longer than standard sales while waiting for the banks to approve the sales. The activity is still a good indicator as it shows that there are buyers interested in purchasing these homes.
The number of homes that have sold in the last 3 months gives a different picture showing an average of 22 homes per months being sold. Based on that one could infer that we are looking at about 8 months worth of home inventory. That is a more accurate indicator. We could go back even further and look at the number of homes sold in the last six months, which is 145, and we are still looking at 7.4 months worth of home inventory.
We have willing buyers and willing sellers. Banks are even approving the short sales. We now need the banks to step up and give loans. Especially jumbo loans, which have proven very difficult to get these days. C’mon banks. Let’s make it happen.
Amid increasing government pressure to stem foreclosures, Bank of America Corp. said Wednesday that it would offer to erase as much as $3 billion in principal owed by thousands of severely delinquent borrowers who owe more than their homes are worth.
The bank’s plan is by far the most ambitious and systematic effort by a major lender to help homeowners avoid foreclosures while continuing to make loan payments. Unlike previous initiatives, this one will be geared toward borrowers who are so far underwater that they are unlikely to be helped by a government housing relief plan.
If successful, the plan could become a model for other lenders, experts say, and could also help the still-fragile housing market from being walloped by a new wave of foreclosures.
“I think this is a strong signal to the industry about the importance of principal reduction in a loan modification program,” said Paul Leonard, California director of the Center for Responsible Lending, an advocacy group.
Bank of America’s offer would knock as much as 30% off the principal on about 45,000 adjustable-rate mortgages nationwide. BofA didn’t provide a state-by-state breakdown, but spokesman Rick Simon said the largest block would be in California.
For the rest of the article please follow this link: LA TIMES
So picture this. The owner of a condo unit who is attempting a short sale owes the home owner’s associated many months worth of dues, say around $8000. The owner’s lender has approved the short sale (where it will accept less than full payment to satisfy the mortgage). The bank has even offered to pay a portion of the delinquent HOA dues, say around $3000 to have the association release its claims.
I think there is a fundamental debate about whether or not an association has the right to compromise its claim for delinquent dues effectively excusing the unit owner from paying their share of common expenses while all other unit owners are not excused.
I would suggest though, that there is a more important judgment call to make that would permit the association to compromise its claim. It is more of a business decision. It seems fair to assume that if the association plays hard ball and refuses the banks offer and holds out, it may force the bank to go ahead with its foreclosure proceedings. This will ultimately result in additional months of unpaid assessments, which may well be less than the $3,000 that was initially offered. In contrast, the association would benefit from a quicker closing in a short sale situation so that a new unit owner can take title and be obligated for payment of all assessments going forward.
Occasionally associations successfully hold their ground and say they will only accept full payment for the delinquent dues. There are also cases where the parties to the short sale agreement may find it in their best interest to simply pay the entire past due amount, rather than let the deal fall through over a few thousand dollars. However, if they are not so inclined, and the lender does need to go through the foreclosure process, the association will likely end up on the short end of the proverbial stick.
The map above indicates short sales that are either active or looking for back-up (and for short sales that is not necessarily a bad thing) that are on the market right now in Santa Monica. Our buyers are getting deals on short sales all over the place. We are getting approvals and making them happen. Despite all of the nightmare stories that you may have heard, short sales do close and the process is actually improving as I write this. Contact us for short sale assistance whether you are a buyer or seller.
Calabasas and Westside real estate and homes for sale
