In addition-the  lender wants some type of written proof that the
borrower will be receiving the benefits for at least another 3 years.

I would suggest that you contact a reputable lender to determine your qualifications.

Some experts estimate that we have between four and five million distressed properties flooding the market in the next couple of years. The incoming foreclosure and short sale inventory needs to be absorbed at a much quicker rate than we have seen in the past.

According to the National Association of Realtors approximately 5 million homes are sold annually in the United States. Those numbers include short sales, foreclosures and traditional sales. If 50% of those sales are distressed it would take an estimated 2-3 years to absorb those incoming properties.

Market stabilization could be expedited if the lenders would simply reduce a portion of the principal on upside down borrowers loans while marginally upside down borrowers should be able to refinance at today’s lower rates.

The borrowers that have lost their jobs and can not afford their homes must have the arms length transaction restriction lifted. Friends, relatives and business associates should be free to purchase the property through a short sale transaction.

One of my mentors once said “If you always do what you always done you’ll always get what you always got.”

If we continue to handle the mortgage crisis in the same way that we have been we will continue to see abandoned homes, blighted neighborhoods and declining values. There’s an estimated 10 million vacant homes in America today. Many of those homes will end up being bull dozed by lenders that don’t want the liability.

Home values will continue to decline. The equity in residential real estate in 2006 was estimated to be 12.8 trillion dollars. Today’s estimate is 6 trillion dollars. Zillow estimates a $700 billion loss of equity in 2012.

Loan modification schemes and other fraudulent practices will persist. The cost of policing and prosecuting these scammers will only increase.

We can’t afford to let this drag on. Until all of the short sales and foreclosures are absorbed the economic crisis will drag on and on.

A wise man once said, America always does what’s right, after it’s tried everything else.

The statistics that I
used for the Auburn area real estate quiz are from November 2010 and November 2011.

Here goes! Test your knowledge:
1. There were fewer properties on the market in 2011 than in 2010.
True or False
2. There were more pending sales in 2010 than in 2011.
True or False
3. 67% of the pending sales in of 2011 were distressed properties.
True or False
4. There were the same number of sales in  November of 2011 as of 2010.
True or False
5. The listing inventory in Placer County was down by 36% in 2011.
True or False
6. There were fewer sales in Placer County in 2011 compared to 2010.
True or False
7. Auburn Real Estate activity represents 10% of the entire Placer County real estate market.
True of False
8.  The new anti-deficiency legislation protects individuals from a deficiency judgement after completion of an approved short sale. On July 15, 2011, the legislation was expanded to include junior real estate mortgage liens. The protection was also expanded to include owner occupied as well as investment properties and mortgage liens that have been refinanced.
True or False
9. The anti-deficiency legislation expires at the end of 2012.
True or False
10. Many well-known economists predict that the real estate market will begin to stabilize in 2012.
True or False

ANSWERS

1. True, the listing inventory is down by 25%! The Auburn area has gone from 168 listings in  November 2010 to 126 listings in November 2011.
2. False, pending sales are up by 27%. It’s interesting to note that 32 of the 48 pending sales in November of 2011 were either short sales or reo’s.
3. True
4. True, for all intents and purposes the number of closed sales were the same. 2010 saw 32 closed sales compared to 30 closed sales in 2011.
5. True, there were 1683 listings in all of Placer County in 2010 compared to 1075 listings in 2011.
6. False, placer counties pending sales increased by 41%.
7. True
8. True
9. True, if one has been contemplating a short sale or foreclosure consult a real estate attorney. The protection may not be extended beyond 2012.
10. True, 2012 could be the beginning of a stabilized market.

Sure, the market has always had its ups and downs. It’s the nature of things. Remember the S&L crisis of the 1980″s when over 700 Savings and Loan companies failed?

Many say that today’s crash is different but aren’t they all? I wonder what the pundits will call this crisis.

As our family members, friends and neighbors and perhaps even ourselves are losing their homes to foreclosures and short sales in numbers not seen since “the great depression”, I am once again reminded of what is really important.

Unfortunately its during hard times that we are reminded that crisis is opportunity disguised as loss.

As much as our homes define who we are and how we live, we are NOT our homes. We are what brings life to a home. We animate it. You might say we are the spirit of our homes.

Imagine a hermit crab. What gives the empty shell life? Is it not the crab itself?

I was talking to a single mom who I will call Mary. She went through a terrible divorce that included a custody battle. Her income dropped significantly. After 5 years of struggle she lost her home in foreclosure. Her teen age daughters gave her a birthday present. It was a simple sponge that said ” Home is where your mom is.”

Happy Thanksgiving!

Review each of the presentations. Are two of the presentations closer in
value than the third one? Are the properties that were used in the market
analysis similar or the same and truly comparable to your property?

If there are two of the estimates of value that fall within 3-7% of each
other and the third one is way out there choose between the two.

When choosing between the two think about which agent you are going to be spending the next 60-90 days with. Choose the one that you are most comfortable with. In any event call the two agents that you didn’t list with and thank them for their time. Let them know that you would appreciate having them show and sell your home.

The mortgage debt relief Act applies only to forgiven or cancelled debt used to buy, build or substantially improve your principal residence, or to refinance debt incurred for those purposes. To qualify, the debt must be secured by the home.

This is known as qualified principal residence indebtedness. This provision applies to debt forgiven in calendar years 2007 through 2012. The maximum amount you can treat as qualified principal residence indebtedness is $2 million if filing jointly or $1 million if filing individually.

Any debt reduced through mortgage restructuring, a short sale as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.

There are other exclusions under the mortgage debt relief act including bankruptcy and insolvency. The act applies to most homeowners but to make sure you qualify you are advised to Seek the advice of a qualified tax Professional.

With so many real estate bargains available, it seems like a time for investors to step up their participation.  It doesn’t seem like interest rates can go much lower and prospects for the rental market seem great.