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Choosing The Right Mortgage Program in Today’s Competitive Sacramento Real Estate Market

Mortgage Application

Buying a home in the Sacramento area means choosing the right mortgage program.

Home Buyers in Sacramento frequently ask me “What Type of Mortgage Should I Get?” Especially here in our Competitive Sacramento Real Estate Market, Choosing The Right Mortgage Program  is an important part of the home buying process.

Before you Decide on a Home Loan. There are a few things you should be clear on as a home buyer.

First, just be ready to enter a competition: As a home buyer in today’s Sacramento Home Market, you are one of many, many, well informed and well educated price hunters. And you are all judges in a very complex beauty pageant! Price and value are so important and so critical to today’s Sacramento home buyers, that homes that are priced well and conditioned correctly are attracting multiple offers.  And these Beauty Pageant and Price War winners are going for full or above full asking prices quickly. Buying a home in Sacramento has become very, very competitive  over the last few years.  Even with the recent increase in the number on homes for sale here, we are seeing many, many homes selling for asking or over asking price, within days of being placed on the market-

So, if you see a home and fall in love with the condition, location and price… in nearly every single case, many other buyers will find it and fall in love as well- and the sellers must pick through multiple offers to find the offer that meets their needs and also represents the strongest, most likely offer to be successful and close on time -The next step in for you home purchase is actually deciding who you want on your team. Having the right Lender, the right Agent and  has become critical in this competitive real estate market.

No matter Which Home Loan You Decide to use, it’s best to be clear about certain points-

How long will I live in this house?

What are my five or ten years goals

Do I want to make home improvements?

Do I need cash on hand for other expenses or  other investments?

Do I like to take financial risks?

Do I want to be debt-free?

Getting clear on these basic, fundamental goals. This always seems to make Choosing Your Home Loan much easier-

The next step in choosing a mortgage for you home purchase is actually deciding who you want on your team. Having the right Lender, the right Agent and choosing the right type of home loan has become critical in this competitive real estate market.

So as a home buyer in the , building a winning team of professionals, people who have a winning track record and a track record of success is the most critical thing you can do-

All of these scenarios and choices will need to be considered as you and your mortgage lender Discover Which Loan Program Works Best for you.

Once you choose a lender and provide the Documents Needed for a Home Loan, you will be asked to clarify your goals, your objectives in order to identify the different  types of home loans you qualify for and that meet your needs and goals:

The conventional 30-year fixed loan may not be for you. Consider and compare all the options. There are hundreds of mortgage products out there, so be sure to find the right one for your needs. Before you approach any lenders, figure out your financial strategy.
Now that you have a reasonable picture of your financial philosophy, shop around and evaluate your options. Don’t rush into the first loan offer you get.

If you can afford to take financial risks and have the assets and credit score to back it up, you can get the best deals. Go for mortgage products that allow you to pay the least amount of cash while still satisfying your loan obligation. Consider these:

You can choose a longer loan term, such as 30 years or more. The longer your amortization period, the lower your monthly payments would be, but the more interest you’d pay. If you borrow $100,000 at 8 percent interest over 30 years, you would pay $164,000 in interest along with the principal by the end of the term. Your mortgage payment would be $733 a month. A 15-year mortgage, in contrast, would require a $955 monthly payment.
Skip the down payment and go for an “80-20” loan. A standard loan funds the first 80 percent and a second loan with higher interest rates finances a 20 percent down payment. This option also gets rid of private mortgage insurance, or PMI, which is typically required for homes bought without 20 percent down payments. PMI protects the lender in the event that a borrower defaults on a loan.

Consider an adjustable rate mortgage (ARM) if you want to keep some cash or take advantage of a low interest rate. The rate is fixed for the first few years, then begins floating. But be aware of market conditions – if rates rise, so do your payments. This option makes sense for serial relocators, who don’t plan to be in a home for more than five years. A three or five-year ARM lets you make low payments and gets you through the typical mortgage cycle. If rates drop, you can refinance. If rates rise, you can sell.

Interest-only mortgages also let you keep more cash. They do not require principal payments during an initial period, typically three, five or 10 years. After the initial period, borrowers must begin repaying principal over the remaining life of the loan. By comparison, a traditional amortizing loan requires principal and interest payments from day one, with more of the monthly payment going to interest in the early years and to principal in the later years.

Homeowners can lower their monthly payment by 20 percent to 25 percent by skipping principal payments in the early years, but they must be prepared for a big jump in payments when the interest-only period ends. A lower initial monthly payment may also allow you to qualify for a bigger home loan. The downside? When housing prices fall, you could end up owing more on your home than it’s worth.
To qualify, you normally must have good credit or pay a slightly higher fee or interest rate. Balloon payment mortgages are short-term, fixed-rate loans that involve small payments for a certain time period and then one large payment (the balloon payment) for the remainder of the loan.

If you don’t like debt and risk, you may want to stick with conventional loans with fixed rates and shorter terms, making big down payments and extra principal payments whenever possible. If you go with a 30-year mortgage, you could refinance after 10 years. You could get a lower rate and dramatically reduce your principal balance in a shorter period.
Here are more tips for finding the right home loan:

Buying or selling a home in the Sacramento area is a huge project.  Get educated and take your time- interview several professionals in each area where you will need a consultant and advisor- Real Estate Agents and Mortgage Lenders are not all created equal!

Before you interview us, listen to Listen to what our past clients and what you have to look forward to! 

The Hoyt Group Testimonials

Click to hear recent

from happy clients


Then, give us a call, text, or email!


p.s. Do you know what your home is worth? Forth does! 

Forth Hoyt 
e-PRO, RDCPro, PFC,Certified HAFA Specialist, 
Master’s Club Life Member

The Hoyt Group Keller Williams Realty 
DRE 01319540

[email protected]

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El Dorado Hills and El Dorado County Approved Short Sales Continue To Surge

El Dorado Hills County Approved And Pended along With Closed Short Sales

El Dorado County Approved And Pended Along With Closed Short Sales

Looking For Short Sale Information in El Dorado County?

Need Short Sale Market Stats or Short Sale Market Information For El Dorado Hills? Sacramento Area Multi-Certified Short Sale Specialist Forth Hoyt Shares Short Sale Market Facts for El Dorado County and El Dorado Hills

The Short Sale is becoming a more viable foreclosure option in El Dorado Hills and El Dorado County.  Short Sales are going pending and approved in El Dorado County much much more successfully than in the past. See the graph above and the chart below that illustrate that short sales are going pending and approved much more that in the past.

1 month 1 year
May 10 June 10 % Change June 09 June 10 % Change
For Sale 187 203 8.6% 227 203 -10.6%
Sold 40 46 15% 21 46 119%
Pended 59 98 66.1% 48 98 104.2%

With the short sale being approved, going pending, and actually closing escrow in El Dorado County so much more frequently and consistently, I wondered how they were doing as a foreclosure option in El Dorado Hills? So lets take a look at El Dorado hills short sale information

But first:

The Chart Below shows that El Dorado Hills has an inventory of Active Short Sales that is barely more than 1/4 of the active short sales in El Dorado County, yet Pended and Approved Short Sales and Closed Short Sales that is nearly half of the entire El Dorado County Short Sale Inventory for these categories!

El Dorado Hills Short Sale Market Stats for 6/09 to 6/10

El Dorado Hills Short Sale Market Stats for 6/09 to 6/10

With so much talk about short sales as an option to foreclosure, and with many new Government short sale Programs it’s nice to see they are actually closing and getting short sale approval on more and more short sales.

When you look at the year over year numbers, you can really see that short sales in El Dorado Hills are definitely trending upward and being successfully used as an anti-foreclosure tool in El Dorado Hills

The Chart above and graph below show that, not surprisingly,nearly half of the pended short sales in El Dorado County were short sales that were approved and went pending in El Dorado Hills.

1 month 1 year
May 10 June 10 % Change June 09 June 10 % Change
For Sale 55 68 23.6% 79 68 -13.9%
Sold 12 20 66.7% 5 20 300%
Pended 19 46 142.1% 18 46 155.6%

With so much talk about  giving homeowners foreclosure options, stopping foreclosure and working homeowners to avoid losing their homes, (except for a principle reduction loan modification that makes sense!) you might think that the foreclosure filings such as notice of default and notice of trustee sales in El Dorado Hills And El Dorado County would both be down. NOT THE CASE!  Foreclosure filings for both El Dorado Hills and El Dorado County are both way up, yet the postponement of the El Dorado County Trustee Sale (at the courthouse steps) have just continued…

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Pending Home Sales Drop 7.6% Nationally, But Greatly Increase Sacramento Metro Market




Sacramento Real Estate Market Stats For January
All Sac Placer ED Counties All January Sales

All Sac Placer ED Counties All January Sales



 Sacramento Real Estate Pending Sales Are up 23%

It always happens this time year that pending sales start to increase, but what is so different about this year is the fact that available homes, or active listings have significantly reduced from last year.

The chart above goes a long way in explaining our market her in the Sacramento area and explaining the indset of the buyers we are working with.

Frustration that it is so hard to buy a home in a market that is so affordable.  The frustration actually comes becouse of all the inventory available, only about 20% of it is priced right and in a condition to be able to pass inspections and get a mortgage on it…

Who do you kow that is struggling with a mortgage right now?

Contact the Sacramento Short Sale Center for a Sacramento Short Sale Specialist at

National Pending home sales drop 7.6%

According to the National Association of Realtors (NAR), its Pending Home Sales Index, a forward-looking indicator based on contracts signed in January, dropped 7.6% to 90.4 from a reading of 97.8 in December, and is 12.3% higher than January 2009 when it was 80.5. NAR said the harsh winter hampered home sales. “January pending sales, though still higher than one year ago, remain much lower than expected given that a large number of potential buyers are eligible for the expanded home buyer tax credit,” said NAR chief economistLawrence Yun. “Moreover, the abnormally severe and prolonged winter weather, which affected large regions of the US, hampered shopping activity in February.” Analysts say extension of tax credit is doing little to boost pending home sales, and given that the Federal Reserve will end purchase of mortgage backed securities this month, the housing recovery is going to take time. “When you take away all the support from the housing market, the und
erlying demand for housing is a lot weaker than we thought,” said Mark Vitner, an economist at Wells Fargo Securities. “We clearly pushed some demand forward, and there wasn’t that much demand to pull forward anyway. The housing recovery is going to be very, very slow.” On a regional basis, the pending home sales index dropped 8.7% to 71.3 in the Northeast, dropped 13.2% to 102.9 in the West, dropped 8.9% to 81.2 in the Midwest, and dropped 2.1% to 98.1 in the South.


Courtesy Chris Mcglaughlin

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Sacramento County home prices turned upward in 2009



Courtesy of SacBee-



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Published: Friday, Jan. 22, 2010 – 12:00 am | Page 6B

New December statistics paint 2009 as the year when

Sacramento County home prices finally ended a dramatic four-year free fall.

Median sales prices for new and existing homes combined rose 0.6 percent in 2009, property researcher MDA DataQuick reported Thursday. The percentage represents a welcome change for thousands of anxious Sacramento County homeowners who saw their values drop 20 percent in 2007 and plunge another 37 percent in 2008.

The newest numbers reveal a 2009 real estate market prodded by government stimulus, more than five months of interest rates below 5 percent and plenty of cheap bank repos in its early months. The year also brought an $8,000 first-time homebuyer federaltax credit and several months of a similar $10,000 state tax credit for buyers of new houses.

Prices for Sacramento County resale homes alone closed at $178,000 for the year, up 2.4 percent from the start of 2009, DataQuick reported. It was a second straight month to beat the previous year – after 41 months of annual losses.

“That’s probably because of the slowdown in (bank repo) sales,” said Bob Bronswick, Roseville-based president and chief operating officer of Coldwell Banker Residential Brokerage. “And if you look at it, our primary market is entry level. There’s been such demand for it, and prices over the asking price. We’ve garnered a lot of multiple offers.”

DataQuick analyst Andrew LePage said Sacramento County sales under $100,000 fell from a year earlier while rising slightly in the $500,000 and $800,000 categories.

The reversal of a long downward trend in prices appeared inside a December report showing that capital-area homeowners closed 40,534 escrows in 2009. The tally was 496 escrows shy of 2008 in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties, DataQuick reported. While robust for a market pocked with foreclosures, job cuts and anxiety, the annual total was one of the lowest since 1998, DataQuick records show.

“Everything I have in escrow right now is a short sale,” said Roseville-based ReMax real estate agent Jaye Crews. Those are sales, increasingly common in distressed newer neighborhoods, in which banks accept offers below what they’re owed. For Crews, short sales and first-time buyers have largely taken the place of her earlier bread and butter – move-up buyers.

The Sacramento Association of Realtors says one in four December sales in Sacramento County and West Sacramento were short sales. DataQuick said Thursday that 50.6 percent of Sacramento County sales were bank repos. That’s down from 71 percent as 2009 opened.

This continued prevalence of short sales and repos shows that the market – while it’s more stable – is still not normal. Collectively, Sacramento, Yolo, Placer and El Dorado counties remain mired in 12.4 percent unemployment.

As 2010 begins, almost 12 percent of the four-county region’s mortgages are late, in the foreclosure process or tied to bank-owned homes, according to First American CoreLogic. That’s a sizable increase from 7 percent at the beginning of 2009, when unemployment was 8.7 percent.

DataQuick reported that 3,450 new and existing homes changed hands in December in the eight-county region, beating 3,183 sales in November. December sales normally rise from November.

While prices have largely stabilized in Sacramento County they’re still under pressure in Placer County, where homes are more expensive. Prices in Placer County finished 2009 down 13.6 percent.

“A lot of stuff is still highly discounted in Lincoln Hills,” said Crews. “We’re definitely seeing stability in markets and places where there aren’t a lot of houses for sale. But, boy, in those new-home tracts even six or seven years old. Ouch.”

With so many newer houses being resold, new homes accounted for just 9 percent of capital-area sales in 2009. That’s down from 25 percent market share in the boom that spanned 2002 to 2006.

Many in real estate circles believe 2010 will proceed with less artificial stimulus. The federal tax credit expires at the end of April. And Wednesday, the Federal Home Administration, which insures many first-time buyer loans, announced it will charge higher fees and require higher down payments from buyers with credit scores below 580. At least 40 percent of Sacramento-area loans in 2009 were FHA loans.

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Sacramento Short Sales Will Definately Improve in 2010


Sacramento Foreclosure Solution Expert Report

Short Sale Help Is On The Way! BofA Implements The REOTrans Equator Short Sale Process Module.

Sacramento Short Sales are here to stay… and with more and more defaults and homeowners in foreclosure, short sales will become even more and more rampant in Sacramento.


Bandk of Amerioca Short Sale System

Short Sale Help

The problems with most Sacramento short sale transactions are the extremely slow communication, processing, negotiating and approval of short sale files.Even though their are several banks that have been really good to work with; Wachovia has been good for a long time, Chase is becoming a breeze; Wells Fargo is getting things lined up, and now even Freddie Mac and Fannie Mae are pledging to help the Short Sale Process to become smoother.

Click here for Sacramento short sale help.

The “writing is on the wall” for 2010 to become the year that servicers, banks, institutions and secondary investors all get their act together to help make the short sale process more mainstream, less painful, confusing and stressful for buyers!

Over the last few years; often times, after Sacramento buyers have written offers on two, three, even four or more short sales without success, they just quit looking at short sales altogether and look for an REO or equity sale…

We will Surely look back at 2010 as the year the game changed… as more and more banks implement systems to make the Short Sale Processmore streamlined, easier to manage and even transparent; more like traditional real estate transactions! Sacramento’s real estate market will see a huge change as Bank of America gets its act together and starts closing short sales faster and more consistently

Click here for Sacramento short sale help.

The new Equator Short Sale Processing Module  (formerly known as REOtrans) has been launched as the industry’s first short sale processingonline portal. The amount of people I talk to here in the Sacramento area just amazes me; its like one of every three or four people I visit with about their mortgage have a BorA or Countrywide BofA

Although Equator has declined to name the lender, the new Internet based platform, as recently reported by the San Francisco Chronicle, will be used by Bank of America. A representative from BofA recently told the Chronicle that they were using the Equator platform to manage the short sale process. Great news, as Bank America is hands down the WORST bank to deal with on short sale files right now! 

The Short Sale platform will allow everyone involved in the transaction to work together, in real time with access to all documents, processing requests etc. and will be a huge asset in helping to shorten the time frames of short-sale approvals.

As reported in DSNews:

“This is the first time that short sales have been handled through an electronic platform,” said Equator CEOChris Saitta. “With our new system, everyone works together in real time, dramatically improving communication and approval timeliness for our client, its borrowers, vendors, and real estate agents.”

Just think– The short sale process becoming more like traditional real estate!

Click here for Sacramento short sale help.

If you are a buyer or a homeowner with questions about your options, Contact me today for Sacramento Short Sale Help!

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Sacramento Region Homeowners Fed Up with Loan Modification Blunders…

Beautiful Natomas Home

SACRAMENTO, Calif. – James Seeley, a machine shop supervisor at the University of California, Davis, just wants a modified mortgage that he and his wife, Sandi, can better afford.

It’s a common quest in this economy. Seeley’s wages are being cut. His house in Natomas, Calif., has lost almost half its value. And he owes more than it’s worth, even with a $125,000 down payment in 2006.

“We want to get payments down to 31 percent of our income,” Seeley said.

In Curtis Park, Calif., Hilary Egan is trying to do the same. Her contractor husband has seen a considerable drop in business. She wants a modification before their interest-only loan resets next year to higher payments.

The Seeleys and Egans, both current with their mortgages, have something else in common: Both their modification requests were denied.

Their rejections have aligned them with a broad and growing swath of public opinion: sore that a U.S. banking industry that has received billions of dollars in taxpayer support in the past year hasn’t reciprocated on their behalf.

“I don’t know a single person who has benefited from the money that was given to lenders,” Egan said.

Added Seeley, “The taxpayers are the largest investor in these companies, so I would think they would be taking care of us first.”

Banks and financial institutions aren’t usually adored even in best of times. But after absorbing much blame for exuberant lending that created the housing bubble, they are increasingly absorbing a backlash for their response to the subsequent foreclosure crisis.

It’s not hard to see why. While banks and loan servicers have promised for almost three years to better address rising stresses on their home loan borrowers, foreclosures and defaults still haven’t seriously slowed.

The eight-county Sacramento region has counted more than 42,000 foreclosures since the start of 2007. Many area neighborhoods are scarred by vacant repos and dead lawns that pull down property values of other homeowners. Statewide, the foreclosure tally has passed 410,000, and it’s believed thousands more are inevitable.

As a result, it’s not just borrowers griping about the inability of banks to contain the crisis. Elected officials, besieged by complaints from constituents, are increasingly applying pressure as well.

This month, the League of California Cities, convening in San Jose, will consider a resolution urging 480 cities to yank deposits from banks that “fail to cooperate with foreclosure prevention efforts.”

“If you count up the money cities have in banks, that’s an amazing amount of power,” said Los Angeles City Council member Richard Alarcon, a former state lawmaker. “We have never tried to seize it. I’m trying to seize it. If you’re not a good player on the foreclosure front, we’re not going to put our money in your bank.”

Last week, the Elk Grove City Council voted 4-0 to back the notion and lobby for it at this month’s convention. The city of 141,000, one of the fastest growing in California during the housing boom, in the bust became an epicenter of defaults and foreclosures.

“It’s time. It’s past due. We should have done this some time ago,” said Vice Mayor Sophia Scherman, who lives next to a foreclosed home. “It’s going to send a very strong message to these institutions.”

Others aren’t so sure. Tony Cherin, professor of finance at San Diego State University, said, “I can understand the frustration.”

But he said cities would have fewer choices for investing because of bank failures and mergers during the meltdown. He said cities’ options “may be limited even though they would like to divest themselves.”

Two weeks ago, U.S. Rep. Doris Matsui and more than a dozen other California House members applied their own pressure. They wrote Shaun Donovan, secretary of the U.S. Housing and Urban Development Department, urging him to turn up the heat on mortgage lenders to modify more loans. Matsui and others wrote that homeowners who use HUD-approved counselors to contact loan servicers are often “rebuffed or told they couldn’t be helped until they were behind on their payments.”

Said Matsui, “The economy will not come back the way it can until we take care of these foreclosures, and this is the way to do it. There are no excuses at this time, and that’s why the letter went out.”

Last month, the U.S. Treasury Department likewise issued a so-called “name and shame” list of lender performances. The report revealed that banking giants like Bank of America had modified only 4 percent of its loans that qualified for President Barack Obama’s Making Home Affordable Program. (That program provides financial incentives to lenders to lower interest rates or stretch out loan payment times to make payments more affordable to borrowers.) The government said Wells Fargo had modified just 6 percent of its eligible loans.

Banking officials are quick to acknowledge they can do better. But they also contend that they are dealing with a crisis that keeps growing beyond efforts to staff for it.

“Unfortunately, our member banks, as committed as they are to working with their customers, still haven’t found a big enough magic wand to wave over this thing,” said Rod Brown, president and chief executive officer of the California Bankers Association. Brown noted that Wells Fargo hired 4,000 staffers in the first half of 2009 to deal with mortgages. He also cited U.S. Senate testimony by Bank of America that it handles 1.8 million calls a month about residential foreclosure issues.

In a statement last month, Wells Fargo Home Mortgage Co-President Mike Heid acknowledged frustration. He said, “While the majority of our customers who request help are getting through to us and receiving the help they need, we know we’ve fallen short of our customer service goals in some cases.”

Banks, meanwhile, are also dogged by a widespread and often-mistaken perception that the purpose of so-called bailout funds – hundreds of billions of dollars in the past year – was specifically to help banks modify mortgages.

While the Obama administration budgeted $75 billion this year to help prod loan modifications, the much larger sums were designed to “better equip banks to make loans to help them get this economy out of the downturn,” said Brown. “It was also to help banks, strong banks, to give them more capital, and to work with the regulatory entities to acquire weaker or failing banks.” In other words, to prop up a banking sector reeling from losses as more Americans defaulted on residential mortgages, credit cards and commercial real estate.

“Those dollars had nothing to do with residential mortgages. They weren’t directed to banks for that purpose,” Brown said. He and others note that banks are paying back billions of dollars, with interest, to the government.

In the short run, that doesn’t spell relief for James and Sandi Seeley. Their Aug. 19 letter from Wells Fargo said the investor who owns their loan balked at modifying it. The big bank suggested the Seeleys consider a short sale – in which the bank would accept less than it’s owed to avoid foreclosing. The Egans received the same option from a Wells Fargo subsidiary.

Neither couple wants to leave their houses. Both said they’re reapplying for modifications. Said Egan, in a plea to banks, “I don’t want you to bail me out. I don’t want you to make my payment for me. Can you just play ball?”

(c) 2009, Sacramento Bee

Distributed by McClatchy-Tribune Information Services.

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Sacramento One Of Fifteen Cities With 99% Chance of Lower Prices

Home pic 33

Mortgage Insurer PMI Group said in its quarterly Economic and Real Estate Trends (ERET) report (see US Market Risk Index ) that the Sacramento—Arden-Arcade—Roseville CA real estate market has a 99.9% chance of lower home prices through March 31, 2011. 

The 15 Real Estate Markets with the highest probability of lower prices in 2011 each have a 99 percent chance, PMI said. They include Miami, Fort Lauderdale, West Palm Beach, Orlando, Tampa and Jacksonville in Florida; Riverside, Los Angeles, Santa Ana, Sacramento and San Diego in California; Las Vegas; Phoenix; Providence, Rhode Island; and Detroit.

“The housing market has been hit by a demand shock of high unemployment and a supply shock of distressed foreclosure sales,” LaVaughn Henry, senior economist at PMI, the fourth- largest U.S. mortgage insurer, said in an interview.

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Loan Modifications Way Up With A Dramatic Increase In Prime Borrowers Going Seriously Delinquent


Loan Modifications and workouts have More than doubled in the past year! But they are being driven by more prime borrowers going delinquent. It has always been clear to me that this would happen as soon as the ARM’s and Pick-A-Pay loans started resetting. These borrowers are high income, high credit score homeowners who are obviously more likely to contact their bank and try to stay in their home. So becouse of the Governments newest push to keep people in their homes and homeowners who want to stay, Modification numbers have more than doubled.  Instead of walking away and giving the banks no alternative to taking the property back, these Homeowners are working with servicers and are being more and more successful in finding alternatives to turning the property over to a new buyer.

Described by many homeowners as “the fight of their life”; a loan modification is no  easy task. Homeowners must work with loss mitigation personell who are new to the industry, mostly young and inexperienced who are working with brand new, unproven systems.

I did a search today on; pulling the numbers on homes in Sacramento County with an estimated value of over $450,000 that received Foreclosure Filings in the first three months of this year: 113

Same search for the second quarter of 2009:256  More than double!

It will be interesting to see if this trend continues and how many of these will actually sell as Shortsales or go back to the bank and how many are able to work out a modification.

According to an article today in the Washington Post;

The percentage of prime borrowers seriously delinquent on their mortgage rose 20.3 percent during the first quarter compared with the previous quarter. It was up 163.7 percent compared with the same quarter a year ago. In comparison, the percentage of subprime borrowers seriously delinquent rose only 1.5 percent during the first quarter. It was up 54.9 percent from the same period a year ago.

In a related article today in DSNews:

Loan modifications made by mortgage lenders and servicers spiked during the first quarter of the year, according to a report issued Tuesday by the Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision (OTS). The regulators said the trend toward more sustainable modifications with lower monthly payments continued, however delinquencies and foreclosures on first-lien mortgages also climbed.

The agencies’ report, based on data from loan servicing companies that manage 64 percent of all first-lien U.S. mortgages, shows that the number of loan modifications made by these institutions significantly increased during the first three months of the year. Servicers implemented 185,156 new loan modifications – up 55 percent from the previous quarter and 172 percent from the first quarter of 2008.

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Foreclosures Rising In California and Sacramento County

Despite lenders in California and specifically the Sacramento area, voluntarily postponing most foreclosure sales; (73%, to be exact), data shows a month over month increase in foreclosed homes for the last several months. issued its monthly California Foreclosure Report a few days ago and it shows that statewide, foreclosure sales jumped 31.9 percent in May, following a 35 percent increase the prior month. NOT’s, or Notices of trustee sales, which set the auction date and time, also rose a whopping 42 percent from last month, indicating that Trustee Sales are probably going to continue to rise in the foreseeable future.

So in California in May; reported 17,871 foreclosed homes taken to auction in California last month. In Sacramento County, in April; there were 742 and the County saw a sizeable increase to 1,041 for May.

Almost all foreclosures put up for sale continue to be taken back by the lender. According to ForeclosureRadar, California statewide saw 87.9 percent, or 15,599 sales, went back to the lender in May.

Of all foreclosures scheduled, ForeclosureRadar says 40% or so are being postponed or reschedules at the banks request, and another 33 percent are being postponed based on the mutual agreement of lender and borrower (Loan Modification or Forbearance Agreement).

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7 of 10 Sacramento Home Sales are Distressed Properties

Joel Singer, executive vice president of the California Association of Realtors, said that as painful as it is, all this housing distress has one advantage… Affordability,

Addressing the over 1500 Realtors that attended the annual CAR convention held this week in Sacramento, Singer said that today’s statewide median, skewed by high numbers of bank repos and other distressed listings, is now at $256,700. a huge, almost surreal drop from the nearly $600,000 in the recent boom.

“That affordability, in itself, will help cure this problem in the future if we can maintain it,” said Singer. “It also makes California, in my book, a more competitive place, something we all need in terms of long-term economic growth.”

Singer told agents from all over the state to expect more distress, even though he sees a “bottom forming”, especially in the low-end market. He thought the higher-end market was still declining.

News form other sources confirm this; research shows that inventory of homes priced under $500,000 has shrunk to a three-month supply at current rates of sale while the supply of million-dollar homes has expanded to 17 months.

With many local markets’ median prices still declining, California remains “uncharted territory,” he said. Singer said nearly nine in 10 homes sold in Solano County this March were bank repos, short sales or had some kind of financial distress. Sacramento County was only a little  better, with seven in 10 sales being distressed homes.

Distress sales have caused the squashed  prices, but have also killed commissions, even as sales have risen.

“If you look at the dollar volume of housing transactions, why does it still feel so bad when sales are twice what they were? It’s because the dollar volume of housing contracted by 53 percent. If you’re getting half of what you made in the peak year of 2005, you’re beating the average, and that’s why you feel so bad. That’s why I am so impressed that there are so many of you still here. Most industries don’t survive a 50 percent downturn.”



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