We just closed another short sale in Oceanside California!
Amazingly, our client asked that we tell her story and share it with other people in her situation.
About 18 months ago our client and her husband experienced a medical hardship, and after exhausting their savings , they found themselves unable to make their mortgage payments. Once they could no longer make the payments they decided to call the lender and ask for help. Time and time again, they felt ignored and unsure of the process. Without anyone to refer them they decided to google it. Our client did some research online and found a company that told them they could help them with a deed in lieu for $2,500.
This was serious money for them but they felt that it was there only choice to settle with the bank. Even though a deed in lieu is a voluntary foreclosure they were told that it was better for them to go this route. Many months passed and eventually they realized that the money was gone. Worse yet, almost 10 months had passed and still nothing had been resolved. She then heard about an attorney who claimed he had the power to help people in foreclosure. So, $4,000 later, all they had learned is that she could do a short sale or wait for the bank to foreclose.
Does this sound like your situation ?
During this time the home across the street was also in foreclosure, and they too had left the house vacant. This home was broken into by teenagers who burned it to the ground. Frustrated and worried, she looked online once more and searched for Carlsbad Short Sale Expert, this is how she found me, how I am not sure but she did.. She liked the information on my sitewww.shortsalemc.com and decided to let me help her.
When I looked at the file I felt that this file was doomed, the file had the following red flags:
The second had not been paid and the loan was sold to a credit company.
The HOA had not been paid and the lender (Bank of America) does not pay these fees.
18 months had passed with no payment.
The home was vacant.
The seller had no money to contribute towards a short sale settlement.
Every possible bad scenario played out here, so why did I take the file? We had a client that did want to avoid foreclosure and trusted me. The other reason was that we had a plan …after the financial review we designed a planned to get this done that involved another important piece …Buyer COOPERATION.
We set out to find a buyer that would follow the process and help settle the debt. In return we got them an awesome price ($30k under market value).
We were able to:
Negotiated the second lien payoff so they would not go after our client.
Paid off the HOA thru strong negotiations with buyers agents.
Had the clients move back in to take care of the property.
Got seller $2,500 from the lender to relocate.
Only worked with the strongest buyers, not just any offer.
I am glad to have been able to help them. I am also glad that she did not give up and tried one last time. She said the last time she prayed that God would help her find someone and said I was the answer to her prayers. Wow, I did’t know what to say to that! That was by far the best compliment I had ever been given!
Are you in a similar situation? Do you need help to avoid foreclosure?
San Clemente Real Estate | Helping you find a home in Talega
Search for Talega Real Estate with Michael-Edward Cruz
My name is Michael-Edward Cruz 01758933, and I work with a vast network of agents to help you find a home in the San Clemente neighborhood of Talega. From San Clemente to Del Mar, I specialize in beautiful Coastal and Master Planned Communities. Talega is one of those master planned communities.
I Work with Buyers looking for Talega Real Estate.
ABOUT TALEGA
(Source Wikipedia)
Talega is the name of a tract housing project in the city of San Clemente in Orange County, California. It began construction in 1999.
It is located near the Northrop Grumman Capistrano Test Site (formerly TRW), active today and where the Lunar Module Descent Engine (LMDE) engines were developed in the 1960s for the moon landing. It is about 8 miles (13 km) from the San Onofre nuclear power plant and east of the Marine Corps Base Camp Pendleton.
There is an 18 hole golf course, 2 elementary schools, and a middle school. It is served by the Capistrano Unified School District, and was recently annexed to San Clemente from the unincorporated territories it existed in upon the beginning of construction.
Talega is home to 9,000 residents and, when completed, will have a total of 3,500 residential units. Most are tract houses, with apartments, condos and a low-income project that share the same master pools and facilities. There are no full-custom homes. The community has a predominant Spanish/Tuscan architecture, which is carried out in almost every home, and all the public spaces and buildings within the community.
Talega is a master planned community in San Clemente. It consists of 19 neighborhoods which are mostly single family homes, some condominiums and a few apartments. The Talega Specific Plan area encompasses a total of 3,510 acres (14.2 km2) in the Northeastern portion of the City. The major streets within the Talega Specific Plan are Avenida Pico, Camino La Pedriza, Avenida Vista Hermosa and Avenida Talega.
Talega is located about 3 miles (4.8 km) from the coast and 2 miles (3.2 km) east of the 5 freeway, between the streets of Avenida Pico and Camino De Los Mares. Some of the homes offer views of the ocean, their local golf course, mountains and it’s parks. There is a swim and Athletic Club also.
Parks
City Maintained Parks:
Talega Park
Liberty Park
Tierra Grande Park
Talega HOA Maintained Parks:
Altea Park
Pacifica Summit Park
Portofino Park
Sansol/Mirador Park
Lucia Park
Communities
Alora (Single Family)
Alassio by Standard Pacific Homes (Townhomes)
Alta by Standard Pacific Homes (Single Family)
Amalfi by Standard Pacific Homes
Bella Vista by Manning Homes (Single Family)
Careyes by Brookfield Homes (Single Family-Gated)
Carillon by Standard Pacific Homes (Single Family)
Cantabria (Single Family)
Caprizi (Single Family)
Catania by Standard Pacific Homes (Single Family-Gated)
Cazadero by Shea Homes (Single Family)
Escala by Standard Pacific Homes (Single Family)
Farralon Ridge (Single Family)
Lucia by Laing Luxury Homes (Single Family)
Mirador by William Lyon Homes (Single Family)
Miraleste (Single Family)
Monterey by Standard Pacific Homes (Single Family)
Pacifica by Standard Pacific Homes (Single Family)
Portomarin (Single Family)
Ravenna (Single Family)
Sabella by Pulte Homes (Single Family)
San Lucar by Brookfield Homes (Single Family)
Sansol by Standard Pacific Homes (Single Family)
Santalana by Standard Pacific Homes (Townhomes)
Seaside by Shea Homes (Single Family)
Solana (Single Family)
Stella Mare by Standard Pacific Homes (Single Family)
Verano by Lennar Homes (Townhomes)
Vittoria by Standard Pacific Homes (Single Family-Gated)
Vizcaya (Single Family)
There is also an area called The Talega Gallery that is a 55+ Community consisting of the following communities:
Seagarden
Sandbridge
Waterleaf
Wavecrest
Even though Talega sits within the city limits of San Clemente, some long-time residents do not consider Talega to be a part of the San Clemente `Spanish Village by the Sea’ atmosphere. In December 2007 the Southern California Multiple Listing Service moved Talega out of San Clemente and made it its own city. This move by MLS provoked such an uproar among San Clemente real estate agents that the MLS eventually put Talega listings back into San Clemente.
Due to its location tucked into the hills, Talega faces several transportation issues. As of March 2009, there are only two main roads out of the community. There is a proposed extension of La Pata that would bridge the 1.5 mile gap between Talega and the point where the road currently ends in San Juan Capistrano. The current Orange County Master Plan places the location of this extension very close to homes in Talega which is a concern to adjacent homeowners. A suggestion to relocate the route to a path halfway between Talega and the adjacent Forester Ranch community would involve relocating power lines and would be the most expensive option. However, the county does not currently have the fund to complete this extension and it will be many years before work is completed there.
In December 2008, the US Commerce Department suggested relocating the controversial 241 Toll Road extension along a path that would route this major highway directly into Talega, eliminating 176 homes and dumping the freeway onto city streets. The transportation authority (TCA) had not previously considered this path and is not likely to pursue that option.
Short Sale Killers # 1 – Video and Text Versions see below
“No Cooperation”
PART 1 – SELLERS
PART 2 – BUYERS AND LENDERS
PART 3 – SUMMARY
This is the BIGGEST reason why short sales fail. Why do I know this? Because when I jumped into this game I was working on these deals ‘alone’. Yes I was working on short sales alone because no one was willing to do anything to close these deals but me. I was working with the lender, I was cutting my commission, I was calling and calling to get paperwork from sellers who would take weeks to send it, I was trying to keep the buyer on board. Man, it’s no wonder agents hate short sales. Some will not even touch them! That was the way it used to be, before I learned from one of the best short sale negotiators in my area, his name is Troy Huerta. He became instructor for the PSC certification and everything he taught I lived through with his team and it was all true. I met him when I introduced him to my short sale management software 2007 to help him manage multiple short sale transactions. He has been using it ever since to close almost 250 short sales and I was able to learn his secrets in return.
Let me break down the single greatest issue that if confronted up front will steer you away from nightmare deals. If you are going thru a short sale and you notice that these points have not been addressed don’t be surprised later on when they become an big issue.
Here we go!
SELLERS
Many times we will work with sellers that are not really committed to short selling the home, even though lenders have already proven that modifications are hardly ever successful, many sellers naturally wish that they were not having to sell. While this is understandable it makes sellers less likely to contribute to the close. Many, many times $1,000 bucks has been the difference between short sale and foreclosure. Why? Well because sometimes it is required that sellers make a cash contribution to settle their home loans. They may owe 500k, 600k even 100k and some sellers refuse to pay any settlement amount to avoid foreclosure. Sometimes lenders will even allow for non-interest promissory notes and payments of 150 bucks for 5 to 10 years. These arrangements help your credit score and help you avoid a foreclosure.
Unfortunately there are situations where some folks are completely financially devastated. Still 90% of the time they are not paying for housing so asking for a contribution of at least $1,000 or $2,500 IS reasonable to help settle a debt of hundreds of thousands of dollars. Sellers need to have a genuine effort want to settle these debts.
So # 1 Cooperative Sellers, next
BUYERS
In 2008 I had my lowest ratio for closed short sales, But I was doing everything I could. Picking my sellers carefully, reviewing the lien types. Getting offers and marketing my properties for sale. Then I would get my approval letter and with all the excitement in the world I would call the buyer’s agent and say CONGRATULATIONS! THE LENDER APPROVED YOUR OFFER! …… and then I would begin to hear. “Oh, thanks, but actually my buyer is actually in escrow for another house now and well sorry.” As all the air would escape my body I would walk to my file cabinet with my head down and pull up my software to find the next offer in line. As I would scramble to find another buyer, my approval letters were begin to expire and when I finally found that new buyer, the lender would require us to “start over”! Man short sales suck right, wrong! I just didn’t find the right buyer!
I need a cooperative and qualified buyer. I need a buyer who has skin in the game and will start working on his loan approval right away. Buyers need to know that a purchase contract whether a short sale or not needs funds in escrow in order to be a valid contract. And yes I know, short sale addendums allow for checks not to be cashed until approval but believe me, the last thing you want to do is play the extension game with short sale approvals. Once you get a short sale approval you should be ready to close in less than 20 days. Meaning that when you buy one of my short sales you have money in escrow and your loan is ready in 45 days later. Plenty of time to work out last minutes issues that do arise. We usually get short sale approvals within 45 to 90 days after being submitted so buyers should be ready to close by the time the approvals come in. Tell your short sale negotiator you can close in 10 days and they will love working with you. I have had sellers accept buyers that do not go into escrow and every time it has been a mistake that has cost everyone time and has put them in jeopardy of foreclosure.
Don’t do it! Don’t work with uncooperative buyers !!!!! No No No No No.
So number # 2, Cooperative Buyers, next
LENDERS
Thinking that Jr Lien holders (2nd or 3rd loans) have to cooperate with you because they will get wiped out in a foreclosure if they don’t is a mistake that will cost you a foreclosure. Sometimes after 180 days of not paying on your second loan, investors will sell these loans to companies like GC Credit Services and Old Republic Credit Services. If this happens you can pretty much cut the chances of a successful short sale in half. Their motto according to an employee I spoke to is “everybody has to lose in order for us to approve the short sale” WOW! Companies like these do not care if your home goes into foreclose. If they do not collect a certain % of money from all parties involved they will not help, they even have “allegedly” been known to try and have agents pay them a % of commissions which is NOT legal since they are not licensed brokers in the transaction. In recent news stories, companies like these have “allegedly” been known to ask agents to pay money out of escrow to “approve” the short sale. A request that constitutes mortgage fraud and should never done, but still they”allegedly” try.
So can you close the short sale if you are working with a jr lien like this? Maybe, but they will lower the % of probability and should be avoided if possible. Unless you have large reserve of cash or have a buyer who is willing to pay the settlement amount, you will probably not get these type of companies to release the lien causing your home to go into foreclosure. This goes back to buyer/seller cooperation. If the buyer and seller cooperate then the probability goes way up. But if both parties are unable to settle jr lien demands then the chances are slim.
Another common short sale killer is a second loan insured by mortgage insurance. Mortgage insurance protects second mortgages for up to 20% to 25% of the loan amount. If your home is severely “underwater” you are probably not going to be able to pay the second what the insurance could and therefore there is no incentive for the second to cooperate at all. Why would they accept $3,000 if the insurance will pay them $25,000? So have your Realtor check this out for you BEFORE getting involved.
So # 3, Cooperative Lenders, can you begin to see the light here??
Whether you are a buyer, seller, or agent for that matter, knowing this information will help you assess whether you should buy, sell or list a certain property.
So let’s give three examples here and with what you have learned tell me if you think you should be part of the deal.
EXAMPLE # 1 (pretend you are the agent representing the seller)
The home is worth $200,000, the seller owes $480,000 and the lender has both loans. The seller will contribute $1,000 and may sign a prom note for a max of $5,000. The buyer does not want to open escrow and work on loan approval until after the short sale is approved. The home is already in foreclosure and the foreclosure auction is in 60 days.
EXAMPLE # 2 (pretend you are the agent representing the seller)
The home is worth $200,000, the seller owes $480,000 and the lender has both loans. The seller will contribute $1,000 and may sign a prom note for no more than $5,000. The buyer opens escrow and will work on loan approval and do home inspections so they are ready for the approval letter. Once they get approval they will be able to close in 10 days. The home is already in foreclosure and the foreclosure auction is in 60 days.
EXAMPLE # 3 (pretend you are the agent representing the seller)
The home is worth $200,000, the seller owes $480,000 and the lender has both loans. The seller will contribute $1,000 only. The buyer opens escrow and will work on loan approval and do home inspections so they are ready for the approval. Once they get approval they will be able to close in 10 days. The second lien was charged off and sent to a collection attorney, they will want $20,000 to release the lien. This is 2 times more than they would get on a normal short sale and 100% more than they would get if the home foreclosed. The home is already in foreclosure and the foreclosure auction is in 60 days.
Which would you choose? I would chose #2 and only proceed with #3 if the buyer was willing to pitch in some $$$ to settle the second loan.
Knowing these details begin to open your eyes to what short sales are, yes they can be a pain when you are swimming against the current. This is a tough market for everyone just look at the these other transaction types and there issues.
BANK OWNED PROPERTIES: ISSUES GETTING OUTBID, DEALING WITH AGENTS WHO NEVER CALL BACK, PAYING HIGHER THAN LIST, LOOKING AND SENDING OFFERS FOR MONTHS, ISSUES WITH THE PROPERTY THAT ARE UNKNOWN ECT ECT!
NEW HOMES: APPRAISAL ISSUES, WAITING FOR YOU HOME TO BE BUILT (MONTHS), BUILDER GOING BANKRUPT, UPGRADE COSTS ECT ECT.
There isn’t a “better” option, there is only an educated approach to buying and selling homes.
If you are in this situation and need a FREE CONSULTATION CALL US and we will be happy to tell you the truth about your situation. No BS just what will help you achieve your goals and what challenges we can help you overcome and what needs to be done.
Stay tuned as we spend more time on JR LIENS tomorrow. We will try and have TROY HUERTA on our blog to share some of his insight to dealing with JR Liens. And how you can avoid most common issues with JR liens.
Are you in foreclosure? Do you want to know your options but don’t want swim with the sharks?
This website may have the information you need to help you save your home. FANNIE MAY WEBSITE
If keeping your home is not an option and you need to short sale, then call us. We are certified with two major short sale designations ( CDPE and PSC ) and have invested a lot of time and money in our education in order to help you get your short sale approved.
Call now to see if you qualify for a short sale. 800-374-9110 Ext 1
“A belief in a positive outcome related to events and circumstances in one’s life. Hope is a feeling that something desired may happen, when the outlook may or may not warrant it.”
When I traded stocks I was taught that four letter words hurt you as a trader more than they helped you. The main bad words were FEAR and HOPE.
FEAR kept you from fully maximizing on your trades and HOPE kept you in them long enough to pay the hefty price.
Now as a Real Estate Broker I meet people who are in danger of losing their home to foreclosure. Like stocks, the real estate market has its ups and downs. And like stocks the same emotions play out. Fear and Hope are prevalent. Of those I think HOPE is worse, its hurting people more than just having a foreclosure.
EXAMPLE
We will call this person Tom,
Tom was behind on his mortgage three months and $14,000 in back payments not including fines and looming legal fees. Based on public record I knew he was in need of my services and offered to do a short sale on his property. He told me that he was working on getting a loan modification. It made sense, he was working but went thru a divorce and this hurt his ability to stay current. He just had to prove to the lender that since the property had lost 50% of its value it would be in their best interest to work with him. So he had his buddy refer him to an attorney who was going to work on the loan mod. The attorney charged him $4,000 to work on his file and off they went.
Five months later the banks responded… DENIED! Tom thinking that his attorney didn’t know what he was doing fired his loan modification company and hired another one he heard on the radio, they charged him $4,500.
One month later after the loan mod company didn’t return any phone calls or emails he decides to visit the location only to find out that the business had gone bankrupt, Ouch! (people still think radio and tv add credibility!)
But he was still hopeful so he paid a third company $3,000 to help him. This company did work on it like the first had and three months later he got his answer. DENIED! What!! how could this happen, it doesn’t make sense. The government said that programs exist and that banks had to help people!! Arrrrgh!! How could this happen you say, it doesn’t make sense, banks took tarp money!!!!
Well what happened is the investor sold the note the moment that Tom’s loan went into default. Huh? what does that mean you say? That means that the servicer or bank as most people know them (Bank of America, Chase, Citi) don’t own the loans. Investors do,banks hold a small number of loans but not many. So the many investors who do own these loans sell them to other investors who buy bad debt. Sometimes the same attorney who helped your on the loan mod is buying bad debt to resell. (yes it happens, I have had bank reps tell me that attorneys are there best note buyers, especially on second loans.) Don’t act surprised, these are the waters you enter when in these situations.
Most investors don’t know the homeowner and yes they don’t care. All they know is that they lent money for the purpose of collecting a profit, short or long term the word is PROFIT. Like your 401k at work, you save to be able to retire and live off the interest. Some of these loans were actually purchased with other peoples retirement money but that is a whole other topic for another day.
So again, without the homeowner even knowing, the investor sold that $380,000 note for $90,000 (property worth 180,000) The new investor has purchased the note for ONE REASON, LIQUIDATION. The old investor probably did it for tax breaks , or maybe his buddy buys it to resell, who knows, the point is money is moving. and Toms house is the prize!
Not FAIR right, well there’s another four letter word for you. Maybe they have LUCK, and Tom needs real HELP, see a pattern here?
We spoke with an exec at Bank of America who admitted that only 10% of loan mods have been made permanent. Of those 10% they did, 80% re defaulted. So why are the banks pushing them if they really don’t help??? Well like we said earlier, gov programs! They have to try and help even though many people will be denied, its called Public Relations!
But back to Tom…
So after Tom paid $11,500 of hope money he was told SORRY. We are foreclosing next week! So again hopeful Tom sues the bank which delayed the foreclosure for a week. And then the day came, FORECLOSURE! No stopping the train, this was done and done. Right?
Well hope reared its ugly head again, this time he hoped that he could reverse the foreclosure and hope that the bank could not make him leave his home. After a couple of misfiled court documents and other delay tactics he was eventually evicted.
So hope won him
$11,500 in fees, foreclosure and finally eviction, all in his credit record for him to keep for 10 years. From here on he can HOPE to get cell phone or lease on apartment in the near future.
This is a real scenario by the way. I have been in situations where the banks have screwed up and this was the only tactic left. But this was not Tom’s case at all.
Tom should have short sold the home. He owed about $400,000 for a home that was worth $180,000. What if he was successful with the loan mod? What did he actually accomplish? He would really be renting his home without a landlord. It would be a temporary fix at best. He would be responsible for repairs, insurance, and taxes only to have issues with the loan in 2 to 5 years. He could have rented a MUCH, MUCH NICER HOME while his credit improved.
The WORST PART OF THIS STORY is he would be ready to buy right about NOW because this happened 2 years ago. He would have been eligible to buy again. And those 11k would have been perfect for a down payment.
I guess when it comes to business, hope and money don’t mix!
Michael-Edward Cruz
California Real Estate Broker 01758933
760-689-BANK (2265)
Michael-Edward Cruz and Troy Huerta agree that Short Sale transactions will see an uptrend in 2010. Michael specializes in working with short sales South Orange County as well as communities in South Riverside County like Redhawk in Temecula California. Troy works with clients in North San Diego communities such as Carlsbad, Vista, Oceanside and San Marcos.
They are working the short sale market and giving homeowners options to avoid foreclosure. They do not charge any ridiculous “fees” to get your process started. With a high success rate, they are looking for sales that can be completed. To find out if you qualify send a request on the home page by clicking the link www.shortsalemc.com
Here is an article from the California Association of Realtors with some news on Real Estate Financing for 2010. To subscribe see the links above under POST for the link.
Conforming loan limits extended through 2010
For release:
Friday, Oct. 30, 2009
Extension of conforming loan limits through 2010 earns praise from C.A.R.
LOS ANGELES (Oct. 30) –The U.S. Congress late yesterday passed a congressional resolution extending through 2010 the current conforming loan limits of $417,000 for most areas in the U.S. and $729,750 for high-cost areas, including many in California. President Obama is expected to sign the resolution today or tomorrow as part of a broader piece of budgetary legislation that will prevent a government shutdown.
The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) and the NATIONAL ASSOCIATION OF REALTORS® (NAR) have long advocated making permanent higher conforming loan limits. As a result of C.A.R.’s and NAR’s efforts, a provision of the Housing and Economic Recovery Act of 2008 included temporarily raising the conforming loan limits from $625,500 in high-cost areas to $729,750 and extending the limits through 2009. Yesterday’s actions effectively extend the higher conforming loan limits for Fannie, Freddie, and FHA loans through 2010.
“There is no doubt that higher loan limits and the federal tax credit for first-time home buyers have helped stabilize California’s housing market over the last year,” said C.A.R. President James Liptak. “C.A.R. applauds our congressional representatives for their actions to extend the higher loan limits through 2010. They now should focus on making higher loan limits permanent.”
The conforming loan limit determines the maximum size of a mortgage that Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac can buy or “guarantee.” Non-conforming or “jumbo loans” typically carry higher mortgage interest rates than conforming loans, increasing monthly payments and hampering the ability of families in California to purchase homes by making them less affordable.
Leading the way…® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with nearly 163,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles
