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The Sacramento Beepublished an article September 26, 2011 with the following statistics compiled by RealtyTrac and Foreclosure-Response.org.  They placed our region’s shadow inventory at 53,256 homes in the four surrounding areas of Sacramento, Yolo, Placerand El Dorado counties.

They included in this number three categories of distressed properties:

• 12,285 houses already owned by banks but not sold
• 19,367 units whose owners have received an initial foreclosure notice, or notice of default, but have not been foreclosed on
• 21,604 homeowners who are 90 days or more delinquent on their payments but have not received a notice of default

Lenderare starting to pick up the pace on repossessions once again.  The figures provided by RealtyTrac show foreclosures in the area soared 76% from July to August, the highest number in 11 months.

Based on this “shadow inventory” it would take a year and a half to sell these distressed homes.

To read the complete article by Rick Daysog of the Sacramento Bee click here

This is a bipartisan bill (H.R. 6133) – Prompt Decision for Qualification of Short Sale Act of 2010 which is sponsored by Reps. Robert Andrews (D-New Jersey) and Tom Rooney (R-Florida).

The length of time it has been taking lenders to process the short sales has caused buyer’s to walk away.  Many lenders are taking from 90 days to several months without a decision made on the short sale.    The following states have the highest number of short sales:  California – 28%, Nevada 32%, Arizona 24%, and Florida 27%. 

Realtors across the country strongly support this bill and are urging Congress to pass the legislation quickly.  The National Association “NAR” of Realtor President Vicki Cox believes that quicker attention to the short sales process is vital to help homeowners who are underwater and their communities, as well as the nation’s economy.

During the same period last year there were 11,700 transactions up from 3,000 the year before.

 Federal Housing Finance Agency (FHFA) also reported that loan modification and refinancing by FNMA and FMCC were up in the second quarter.  The Home Affordable Modification Program (HAMP) increased 65% while refinancing under the Home Affordable Refinance Program (HARP) increased by 30%.  Loan servicers completed 171,200 permanent loan modifications on these types of loans thru HAMP and nearly 88,600 borrowers in HAMP trials transitioned to permanent modifications bringing the two companies HAMP numbers to nearly 225,000.  FHFA’s report also stated that approximately 202,000 of the borrowers were in a HAMP trial period at the end of the 2^nd quarter, compared to nearly 448,100 at the end of the first quarter.  That means minus the 88,600 permanent modifications 157,500 homeowners’ HAMP trials were cancelled as a result of missed payments or inadequate documentation. 

FHFA also noted that more than ½ of the modifications completed in the 2^nd quarter lowered borrowers’ monthly payments by more then 30%.  During this same period the two companies initiated 275,100 new foreclosures, an increase of 12%.  Completed foreclosure sales and 3^rd party sales totaled 112,400, up 15% from the previous quarter.

The Treasury pulled the numbers and re-evaluated the statistics after retaining a third-party consultant to provide independent validation.  A few weeks later, they corrected the re-default assessments as follows:  10% of six month old permanent modifications are 60+ days delinquent and 6% are 90+ days delinquent. 

Analysts say that’s still too low and the rates will surely go higher the longer the program is in place.  Up until six months ago, permanent modifications had been offered to only about 434,716 borrowers.  The Treasury has cancelled the temporary modifications of 616,839 borrowers. 

The analysts at Barclays are predicting a 60% re-default rate and Fitch Ratings projects 55-75%. 

http://www.dsnews.com/articles/print-view/treasury-corrects-its-math-for-hamp-redefaults-2010-08-12

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With the Sacramento Real Estate market full of Short Sale Properties for Sale it is taking longer to close on the purchase of your new home.  Due to the vast number of short sale properties available, the banks are starting to back up again on the approval of short sale properties.

If you are unwilling to wait a minimum of 60-90 days for an approval of your offer then a short sale is NOT for you.   With the decrease of inventory available for sale in the Sacramento area, we are seeing an increase of multiple offers on our listings for sale.   We are also seeing quite a few buyers who are unwilling to wait for short sale approval.   This is the main reason we take BACKUP offers on our listings and ask that our buyers be held in backup position.  We have seen countless buyers who are in 1^st, 2^nd and even 3^rd backup position get their home.  Patience is the name of the game in the short sale process.  

If you are making an offer on a Short Sale Property, be prepared for a lengthy process.   Updates are sometimes hard to come by, but working with a diligent agent who is well versed in Short Sales will help make the process quite a bit smoother and sometimes quite a bit faster.

In the past 32 years working in the real estate industry, I have not experienced a 4-1/2 % interest rate on a 30-year fixed rate loan.   It is time to give a lot of thought to purchasing a  home in this market. 

Are you concerned that  home values may decline?   

Sure, it is possible but will you ever see 4-1/2% again?   That equates to $450 for every $100,000 in the purchase price of your home.  Can you rent for that monthly payment?  I doubt it.  Lets also not forget the tax benefits of owning your own home and the freedom of making your house a home for you and family.

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