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Do you live in Rocklin CA? How about Granite Bay CA? Or Lincoln CA maybe? Folsom CA? Well, even if you live in El Dorado Hills CA or Roseville CA this message may help you if your home mortgage is underwater or you have considered a Short Sale.

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BLOG SERIES – “What Does a Notice of Default Mean? CALIFORNIA SHORT SALES FAQ's RETURNS!!! for Rocklin, Roseville, Granite Bay, Folsom, El Dorado Hills, Lincoln and Sacramento CA

As a Rocklin CA Short Sale Listing Agent serving places like Rocklin CA, Granite Bay CA, Folsom CA, Roseville CA, El Dorado Hills CA, Citrus Heights CA, Sacramento CA and Lincoln CA... And others in the area, I get many questions regarding the process, lenders, what course of action should be taken... There are an endless number of questions that come up. So, I decided to start a BLOG series in 2011 regarding those Short Sale questions that I get asked. Here s a link to 10 Short Sale Questions and Answers and my answers BLOGGED previously.

That said here is the next question I hear from Sellers & General Public a lot:

"What does a Notice of Default mean?" ANSWER – In California, your first missed payment is technical default.  However, most loan servicers (i.e. – Bank of America and Wells Fargo are Loan Servicers) do not begin the formal process until the third payment is missed.  A Notice of Default is a document filed with the county recorder officially beginning a non-judicial foreclosure timeline. Once you receive a Notice of Default, foreclosure has begun.  You have approximately 111 days before the property will be SOLD AT AUCTION or taken by the bank if nothing is done to prevent foreclosure.  After a Notice of Default, the next document received will be a Notice of Trustee Sale.  We will summarize the Notice of Trustee Sale in a later post.  If you are not making your mortgage payment, it is highly recommended that you seek advice from a qualified Realtor or Real Estate Attorney immediately.

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I have read several news and Blog pieces about 2012 being the bottom of the market and how the best time to purchase a home is now. In good conscious I cannot sit idly by without voicing my opinion.

The news and columnists have based their analysis on the low number of inventory currently on the market for sale and the fact that it is 22% less than this time last year. They further site a 30% increase in property searches on Realtor.com which is one of the top search websites where consumers make purchase decisions. The reporters further substantiate their point by stating that interest rates are the lowest they have been since the great depression. Well folks, I am here to let you in on a few things. I am a distressed property real estate broker and live in the numbers and happenings on the ground. Last year alone I personally closed $17 Million in real estate. More than three quarters of my sales were short sales and bank owned property sales. My job revolves around tracking properties that have defaulted on their mortgage payments and listing the property for sale before it ends up in foreclosure. When properties do end up going to foreclosure the banks also contacts me to sell the properties back into the marketplace as a bank owned property. This is also known as a REO (Real Estate Owned) property.

In dealing with the lenders on a daily basis I have the ability to see how many mortgages are current or behind in any part of California. The numbers are staggering! One in three properties in San Diego County is currently underwater (owe more than what the property is worth).
Many of you may have heard of the “Mortgage Debt Relief Act of 2007” which is set to expire at the end of 2012. This means that anyone wanting to do a short sale has until the end of this year to get it done to avoid the enormous tax and deficiency implications. As homeowners scramble to do short sales, the banks are absolutely inundated with files. Banks have increased their loss mitigation departments to handle the amount of short sale requests as the deadline draws near.

So to shed further light on the subject of a “recovery,” I would have to say that the reason there is a 22% decrease in inventory on the market for sale is due to the “Robo-signing” debacle which simply held up the foreclosure process for a few months. Furthermore, the lenders have started issuing three month extensions to foreclosure sale dates rather than the standard 30 day extensions. The numbers are artificially adjusted to modify the supply and demand ratio. Also, the news columnists have stated that the average nationwide sales price has started increasing and the market is recovering. This is not quite correct because the number of higher end distressed sales has dramatically increased. In other words, if 100 homes sell at $200K and 900 homes sell at $500K, the average home price may have increased.  However, what they are not saying is that the home that is currently selling at $500K was purchased in 2005 for $900K.  See how they are messing with the numbers. Just because the average nationwide sales price has increased, does not mean we are recovering.

So I would maybe agree that the lower end has reached the bottom whereas the middle and higher end have room to fall.  Far be it from me to state that 2012 is the “Big Housing Recovery.” New young families or recent college graduates will also add to the lower end recovery as they will need to purchase in this range.

The number of Baby Boomers now wanting to downsize will further hamper the prices of the middle and higher end as they add to the supply. There are currently 30 million Americans in this segment of the market.

The FED made an error in judgment a month ago when they stated interest rates would remain low through the end of 2014, which took away the immediate driving force to purchase now. If interest rates would remain low for an extended period of time, why would anyone be in a hurry to purchase when they know how much shadow inventory the lenders are sitting on?

As the world has become a global economy, few have shed light on the fact that China has begun their housing crisis with more than half the cities reporting huge decreases in home prices. This may have an influence on our economy further down the road as this may affect the cost of consumer goods locally.

Gas prices are at an all-time high and could further contribute to inflation and gyrations in the consumer price index.

Unemployment is still stubbornly above 8% and steam rises from the printing presses at the Fed.

I don’t know folks. Recovery 2012?  I am not so sure. And over the years I have learned that in the long run it pays to be honest rather than bending a situation for personal gain. There is a reason I am renting right now. Though the rents are higher, cash will soon be back on the thrown to be crowned King. Don’t be in any hurry to purchase unless you find a great deal.

This is my honest humble opinion.

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