Pacita's Quick Bytes of Real Estate: July 2008

Having Brad address our group today more than lit a thousand light bulbs. Folks who are timid about blogging are encouraged to start.

Here he is at Gallagher & Lindsey, Alameda CA where he gave us a quick tutorial on blogging.

Great session, and I encourage you, if you haven't yet, get him to show you the basics of blogging oon Active Rain. Loved his ActiveRain starter kit.

Also loved his key points when it comes to blogging: Title, Images, Links. 

Haven't mastered any of these yet, but will definitely start. Also convinced that Flip Video is the way to go especially when uploading tours of listings. If you haven't watched it yet, check out How to Use the Flip Video with Your Computer

Thanks to First American Title Company, specifically Stewart Anderson, for bringing him here. We are going to town on this new way to reach our target audiences!

Go and prosper!

Venting...

After weeks of waiting for word from Downey Savings for approval for a short sale, I got my answer yesterday.

Private investor

Downey Savings won't approve any short sales. The only way they would approve a short sale is if they received the full payoff --- which, in that case, won't be a short sale.

I made it crystal clear that my sellers are in no position to pay off the full amount owed or sell at price they owed and still pay commissions out of their pocket. And that if they can't sell, then the only remaining avenue is a foreclosure and/or bankruptcy.

Foreclosure is the Downey Savings' only solution

The asset manager from Downey Savings confirmed that regardless of how hard I try to sell the property, unless the Downey is paid the whole amount, they would rather foreclose in November.

So this might as well be an REO in waiting. 

Is Downey Savings the next IndyMac? Some bloggers seem to think so.  Mr Mortgage says, "Downey Savings is widely rumored to be the next ‘IndyMac' due to their heavy Pay Option ARM exposure." See his blog here headlined "Downey Savings Paid Borkers up to $50K Commission on Each Loan!"

Time and effort wasted

Time and again, lenders refuse to speak to the authorized representative unless the package is complete --- i.e., letter of authorization, pre-HUD statement, copy of the offer, hardship letter, financial statement of assets/liabilities, copies of 2 most recent pay stubs/income tax returns/bank statements, report on marketing activity, copy of listing agreement.

So I spent a lot of time preparing the house, marketing it for sale, getting a buyer, preparing a complete package to send off for the lender's review.

But now, they're telling me Downey Savings won't approve the short sale? Couldn't they have told me that from the very begining when I made contact to tell them I am authorized to talk with them about the loan before I started marketing the property?

AAARRRGGGGH!

We know the foreclosure activity picked up. We also know that we have brisk activity when writing offers, many times, at a multiple-offer situation.

So it wasn't a shock to see this headline that talked about repossessions in the Bay area soaring. Read the story

• In the Bay Area, mortgage companies recorded 18,516 notices of default, up more than 140 percent from a year ago. Foreclosures rose nearly 315 percent to 9,206.
• Notices of default, the first step in foreclosure proceedings, rose nearly 125 percent from a year ago during the second quarter, and trustee deeds recorded, which reflect the actual homes repossessed, soared more than 260 percent, according to research firm DataQuick Information Systems.
• There were 63,061 foreclosures statewide during the second three months of the year compared to 17,458 during the same period a year ago.
• Foreclosures will continue to climb until at least the third quarter of 2009 due to: rising unemployment rates that will apply pressure even to homeowners who secured prime loans, and the expectation that many borrowers soon will face higher payments on option adjustable-rate mortgages.
• Lenders are overwhelmed with paperwork and taking longer to issue default notices. Or lenders could be more willing to allow short sales - unloading distressed properties for less than the amount owed on the loan - instead of initiating the foreclosure process.
• Among homeowners who fall into default, an estimated 22 percent now escape foreclosure by catching up on their payments, refinancing or selling, DataQuick said. That's down from 52 percent a year ago

They included a link to see what's happening by zip code

The short sale packages are pretty much the same today....I think the lenders are making their requirements almost standard. In the case of a short sale property with more than one loan, this is most certainly useful and helpful so that we don't recreate the package.

From what I've encountered, lenders rarely touch a file until after there is an offer (accepted by the Seller) on the property. If the offer is substantially less than list price, or if it is substantially less than what is owed, the asset manager or loan negotiator submits the file to their committees for review and for a decision.

Here's the latest list of requirements that I received from the 2nd loan lender. Always include pre-HUD statement and a report on activity of showing, etc. 

In order for the bank to address your request in a timely manner, please adhere to the below listed required documentation. Please note, if the information is not provided or does not have all pertinent information and signatures, it will not be reviewed for consideration. 

1. Please send ALL required documents in ONE PACKET AT THE SAME TIME or it will not be reviewed.
2. Bank will not contact you if a required document is omitted.
3. Turnaround time is subject to the Real Estate Department's current volume, completion of due diligence and subsequent review and approval.
4. Upon receipt of a completed short sale packet, turnaround time will be at least 10  (realistically --- it's 45 days or longer if the package is incomplete) business days.

**Calls prior to that date for status will not be returned.**

REQUIRED DOCUMENTS:

• Copy of the Contingency Sales Contract or Purchase Offer Contract

-This form will demonstrate that a prospective buyer has made a purchase offer.  It is not necessary to provide credit information about the proposed buyer, please do not include buyer's financials.

• Pro forma or pre- HUD Statement reflecting that there is $0 funds going to seller, must include payment and commission amount(s) to all parties. NCB must be receiving funds for the offer to be reviewed. -This form shows the breakdown of funds from the sales price.  The bank requires an actual federal HUD-1 form, not a title agent's Estimated Closing Expense Form.
• Copy of the Realtor's Listing Agreement. Agreement must be signed.

-This is the contract between the Bank's Customer and the Realtor giving the realty company permission to place the property on the market.

• A COPY OF THE LISTING ACTIVITY !

-This would be a listing of all sales activity regarding the subject property including showings, open houses, and advertising efforts.   This is the Realtor's opportunity to provide relevant information regarding marketplace challenges, including obstacles to sale as well as demonstrative scaled reductions in offering price and marketing fees.

• Authorization to release information to the Realtor. Form must be signed.   

-This letter will be written by and signed by the Bank's Customer allowing the Bank to discuss and/or release any info to the Realtor pertaining to the subject property.

• Letter of written authorization to perform and interior/exterior bpo. Must be signed.

-In order to perform an interior/exterior appraisal the Bank will need a written ok with a signature by the Bank's Customer to perform the inspection.  There must be a telephone number provided with a contact name so that an appointment to access the property can be scheduled.  The letter must specifically state that the Bank's Customer gives his/her permission to complete an interior/exterior appraisal of the subject property.

• Hardship letter from our customer

-This will be a letter drafted and signed by the Bank's Customer stating the reasons and/or hardships that led to the need for a Short Sale or Settlement.

• Financial Statements/Asset Information

 This includes, but is not limited to, six months of bank statements, W-2 forms or 1099 (or any tax forms), last two pay stubs, 401K statements, and  IRA statements for all signers.  If self-employed please highlight on bank statements when deposits have been made.

Venting...

I love my Blackberry Curve 8310 and its features. But recently, I had a problem with it and spent hours trying to get it resolved between ATT who referred me to Blackberry who said I should get the phone replaced since it's still under warranty.

Called AT&T who said that according to their records, I bought a refurbished phone and it's out of warranty. Went to the AT&T store where I bought it, and armed with my receipt, asked them to correct their records.

Tried to get the phone exchanged at the store, they told me to call the warranty department. The warranty people asked if I dropped my phone --- who hasn't? So I said yes. And there's the rub: they said that because I dropped my phone it voids the warranty! It doesn't matter if I was sitting in my chair and dropped the phone on carpet --- it's akin to dropping it from a 3-story building. The warranty is voided!

After arguing with the rep, I asked for the supervisor who wouldn't budge. They said to send the phone to Blackberry and have Blackberry fix it (which means I will be without a phone during that time). She also said that if they replace my phone, they will give me a refurbished phone and that if they find some damage to the phone I send back, that they will charge me $300 which is about the price of a new phone. So why give me a refurbished phone?

I had a TREO 650 before, and hated that phone. Switched to Blackberry --- should have switched carriers then instead of signing up for another two years. Not worth the headache of not being able to switch carriers.

Here's a link to a review of Cell Phone providers. http://cell-phone-providers-review.toptenreviews.com/. Although AT&T is ranked higher than some, I still think their customer service is the pits.

There's an Alameda CA blogger who goes by L.Opine whose website is www.knifecatchers.com. The blogger says

"Knife Catchers will document noteworthy tidbits about the US housing bubble implosion of mid-2007.

Why "knife catchers"?

Real estate bubble bloggers and commentators often refer to getting involved in risky real estate transactions in post-bubble times as "catching a falling knife." This blog will illustrate the art of knife catching through the eyes of bearish real estate market watchers in California.

The blogger's comment about a particular property and its owner in distress was so unkind when he/she said:"Let them fall, I say."

If the blogger reads ActiveRain, hopefully this message will reach him/her. The owner is an elderly widow who may have cause to complain about elder abuse and fraud involving the reasons for, and the times she has re-financed her home.

I tried to register so that I can comment to give this blogger a bit of information that perhaps would make him/her a bit more understanding and sympathetic to this widow who is in serious financial trouble. But when I identified myself as an Alameda Realtor, my subscription request wasn't processed.

The blogger writes well, seems very much in tune with the properties that are for sale, and is quite resourceful. However, in an attempt to be funny and smart, the comments are sometimes unkind, unsympathetic in a "Told you so" manner. Even the blogger says he/she "scoffs, scoffs, scoffs."

WRONG LINK provided! And in an attempt to be anonymous, the link provided by the blogger points to a local realtor's website. This realtor now has a statement on her home page that she is not the blogger, she doesn't know why the blog is linked to her site, she doesn't agree with the blogger, etc.

To the blogger: Why the secrecy?

For all of you looking for a home in Alameda...this is more than a starter home. Seller's loss, buyer's gain.

Photo Gallery Open plan Arch defines living areas Fireplace and built-in china cabinet Upgraded kitchen with granite counters Kitchen with eat- in area Cozy breakfast nook Bedroom 2 parquet floor Bedroom 3 parquet floors Bathroom Pedestal sink Inside laundry area Front view Front bedroom Formal areas Arch frames dining room Fine dining Stained glass front door accent Corner lot Front porch Row of bungalows Description Delightful 3 bedroom Craftsman Bungalow is a short stroll to Alameda's new library, the newly restored Alameda Theater, Park Street shops and restaurants. Easy access to public transportation and main highways. This classic homes retains its architectural details and enjoys modern upgrades and amenities. Sweet front porch where one can enjoy the fabulous Alameda weather. Elegant front door with leaded glass accent and a security door. Open plan with an arch that defines the formal areas. Dining room features wood burning fireplace, a built-in china cabinet and a chandelier for the enhanced dining experience. Pergo was laid over the wood floors in the formal areas. All three bedrooms have parquet floors in different designs. Light and bright kitchen has granite counter tops and a cozy eat-in area. Adjoining laundry room leads to the back patio and detached garage/storage. All kitchen and laundry appliances stay! Upgraded bath has pedestal sink. Energy-saving double pane windows throughout are framed by plantation shutters. Roof was replaced in 1998. Sewer lateral was replaced in 1996. There is a bonus room in the finished basement that has doubled as storage, and occasional overflow sleeping area. Detached garage is used primarily for storage. SHORT SALE subject to lender approval. Features Bedrooms: 3 Bathrooms: 1 Year Built: 1908 Lot Size: 3060 sq ft School District: Alameda Square Footage: 1138 Agent Name: Pacita C Dimacali Broker: Gallagher & Lindsey, Inc. MLS #: 40355271 Bonus rooms: Bonus room in basement Location 2170 Pacific Alameda CA 94501 Powered by vFlyer.com vFlyerId: 1758712

Okay, I have to vent.

Since the number of REO listings are increasing, they are an integral part of my buyers' house hunting expedition. But Jiminy Cricket! It certainly hasn't been easy. Although we don't expect the properties to be squeaky clean, we should at least be able to see it!

Here's my beef. These are REO listings, and the instructions were simply to go and show.

BROKEN LOCKS     I tried --- four times! --- to show an REO home. The first time, the lock was broken. I reported it to the listing agent who said she will have a locksmith take care of it. The second time, the lock was still broken. Reported it to the agent who said the locksmith didn't want to go in the house because people are squatting in it. The third time, the lock was still broken. The agent said to try the back door. Well, heck, the back door is boarded up! The fourth time, the lock was still broken, the back door was boarded up. And get, this: the agent's assistant told me to bring my own handyman to remove the board to let us in, and then board it back up!

SQUATTERS    On another REO, I noticed people going in and out of a property. I called the listing agent who said it's supposed to be vacant. Well, DUH! I know! But there are squatters there. The second time we went, they had cleared out the house of all possessions that the squatters put there, and threw them out on the yard. My clients and I managed to get in --- albeit with extreme caution --- but again, there was evidence that someone else is squatting in the property. So I called the agent again to tell him of a new problem. He said they will call the police. Goodness! This was definitely a scary situation.

•  
  • I have a co-worker and his client who once walked into an REO and was accosted by someone menacing who screamed at them and asked "Who are you, and what are your doing in MY house?"

COMBINATION CODES    Why not put the codes for the combination locks in the confidential remarks, instead of instructing agents to email or call the listing agent for the code? I have called agents whose voice mail boxes are full. I emailed agents who didn't respond.

I am not an early adaptor to technology, but neither am I techno-phobic.

As such, it is now decision-making time: to buy a Flip Video or Vado?

Without scouring thousands of posts, can those of you who have shot videos for posting on youtube, using either of these video cameras, provide me with the links of your videos? And any feedback you can give me regarding why one is better than the other, will be most appreciated.

Thanks!

Although not all REOs/bank-owned listings are trashed, that isn't the only challenge we face when showing this type of property.

REO      Last week, I was going to show an REO to my clients. I got there early to scout the area, and saw that the front door of the subject property was open. And from the open windows, I noticed the backs of sofas and TVs. So I called the listing agent to verify that the property was vacant as it was noted on the MLS. He said that it was --- but as I was talking with him, I noticed one man go in the lower unit, and another man leave the upper unit. Both men acted like they owned the property. I told the agent what I saw....and after waiting for a while, he said that the property was broken into, and that there are squatters on the premises. He said to come back after 48 hours, or to write an offer subject to inspection.

For God's sake -- neither the break in nor the 48 hours waiting time was mentioned in the listing. What if an unsuspecting agent entered the premises not knowing that there are squatters in the house?

My clients still wanted to visit the property --- so we went back three days later. There was a mountain of trash on the front lawn where everything inside the house was thrown --- sofas, lamps, TVs, clothes, etc. So it appeared the squatters were evicted and their possessions thrown out.

Cautiously, we knocked before entering the premises. It was cleared out, all right....but apparently, someone else had broken in through a window that was left open. There was evidence of someone sleeping in the front room, while the rest of the house was empty. I told the agent about this new break-in.

VACANT LISTING    And there's my listing that another agent had listed for months before I got it. This is no ordinary home --- it's brand new, beautiful, and in a very nice neighborhood. Yet, it's been broken into several times, and people have camped in it. Thank goodness they didn't vandalize it. But there is still clear evidence that people made themselves quite at home.

BE CAREFUL OUT THERE!