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How’s the New Short Sale Law Doing?

How’s the New Short Sale Law Doing?

As of July 15th, 2011, the new Short Sale Deficiency Law became effective. This applies to second mortgages involved in a short sale. http://www.aroundthecapitol.com/Bills/SB_458/20112012/ If the first lender agrees to a short sale then the agreed-to settlement is Payment in Full (since Jan 1, 2011). What about the second? This new law SB458 now says that any second or junior lender who agrees to a short sale is now prohibited from going after a deficiency judgment against the homeowner. Now there is also no recourse on second mortgages in CA. I am sure this law will help many. What immediately comes to mind is the fact that second lien holders that have substantial losses may now decide NOT to cooperate with short sales. Anthony B Sanders, Professor of Finance at George Mason, has posted just that concern. This law may backfire, Sanders says, by making second lien holders less likely to agree to short sales. In the past if a second lien holder refused to settle for the normal 3 to 5% then at least there was the option of settling with a reduced note. That will no longer be allowed. Considering that most second notes are small and the current values of the homes are far less than the first mortgages, this law will be welcomed by many borrowers. By the way, if your home is foreclosed upon (non-judicially), and the first and second mortgages are purchase money loans (a home-financing technique in which buyer borrows from the seller instead of, or in addition to, a bank), then the banks have no recourse against the California borrower. Always...

Laguna Niguel – It’s Getting Better and Better

Did anyone happen to check out the Grand Opening of the new Whole Foods Market in Laguna Niguel today? The parking lot was absolutely jammed. I couldn’t find a spot anywhere, even over by Ted’s! This is good news for our community, and by extension, good news for the price of your home. Things are looking up, and going up! Inventory on homes is low, and listings are often getting multiple offers at above asking price ON THE FIRST DAY. Adding to the good news is that all five of the area’s high schools were ranked in the top 5% of high schools in the nation. Now, we who have had kids who have attended one of these schools already know this – you don’t have to convince us – but this kind of news is great PR for our city. I went to The Druggist to mail a letter after unsuccessfully trying to find a parking spot near Whole Foods, and the postmistress told me that she’s going to wait “a couple of weeks” to check out the market. That says a lot about the crowds, doesn’t it? I don’t know if you agree with me, but full parking lots make me feel good, and I’m glad to see them! I hope you are,...

Supply and Demand

Free markets are about supply and demand. Jim Rohn the motivational speaker and coach use to say if you are not paid enough then improve your skills. If you acquire skills that are in demand you will be paid more. Learn a second or third language and double your income, Rohn says. Real estate in south Orange County is also about supply and demand too. When prices are falling and inventory is high, buyers are afraid to buy. The inventory grows and people who need to sell drop their prices. Some of these same buyers now are saying, “I refuse to get in a bidding war.” Again a product of supply and demand, buyers must realize that the majority of people believe we are at or past the bottom of the market. Even the national media is on board with this. Some new government and bank programs are keeping people in their homes and in some states the former owners are turned into renters with a deed in liew. In our area some banks are facilitating “preapproved” short sales. While getting a loan modification is difficult, some homeowners have been successful if they can show ability to pay. The result is fewer homes are coming on the market. Another factor is the low interest rate environment. Buyers realize these rates may never be seen again. Therefore more buyers are moving forward. Would you rather buy something that many people feel is valuable or wait till the prices fall again. South OC rarely has a “normal” market – whatever that is. Here is a little piece of wisdom for you....

The Pulse of Laguna Niguel, CA Real Estate

It is a good time to sell a home! Yes inventory is low in all price ranges. Currently there are only 22 active listings in Laguna Niguel between one and two million dollars. There are 13 active listing over two million. Lenders have eased up on larger loans now and there are cash buyers about as well. By the way, if you have an upper end home it pays to stage your home. Today there are 99 detached homes under one million. Only 18% are short sales. There are 243 homes of all types in back-up or pending status and of those 62% are short sales. Of course, there would be more short sales in backup status because it takes three or four months typically to get them approved and closed. Just to put all this in perspective, let me compare where we are today with January this year. In mid-January there were 257 active listings on the market in Laguna Niguel of all types and prices and today we have 205. In mid-January there were also 191 in pending positions compared to 243 today. This tells us two things. Buyers are buying to take advantage of the record low interest rates. Second, fewer sellers are listing. Our typical hot listing months are March through June so we Realtors® are holding our collective breaths. Buyers looking for a first-time detached home or an investor looking under $500K in Laguna Niguel have only thirteen to look at. One can see the entire inventory in one Saturday. Needless to say this is putting upward-price pressure on affordable homes. For a buyer...