Banks & Lenders Are Taking Less Than What's Owed At Trustee Sales After Foreclosure

It's interesting that in Orange County, California, during April, 2008, buyers took foreclosure homes off the bank and lender hands at trustee sales for 21.5% less than the amount owed.

One year ago during April, 2007, the banks and lenders weren't so interested in discounting at trustee sales.

Perhaps the banks are getting smart.

It was reported that 84 percent of properties sold at the OC, California, at trustee’s sales during April, 2008, were offered at a discount.

Posted by Harrison K. Long, Explore Properties Group, May 14, 2008
Source: Orange County Register, May 14, 2008

What To Do If You Are Upside Down and Unable to Make Payment on Notes Secured by First and Second Deeds of Trust on Your Home

You Are Upside Down and Unable to Make Paymentd on Notes Secured by First and Second Deeds of Trust on Your Home. What do you do?

You might owe more money on your notes secured by a first deed of trust and on the note secured by the second on your home than what the property is worth.

What do you do?

Here in California we have the ONE ACTION RULE, the law preventing lenders from both foreclosing and suing you on the note. If the lender chooses the non-judicial foreclosure process, he is then prevented from suing you on the note itself. However, if the lender fails or declines to foreclose on the note, he retains the right to file and prosecute a civil lawsuit and get monetary judgment against you.

This could happen to you. It is more common these days.

If you are here in California and upside down on both the note secured by the first and that secured by the second on your home, always make all payments on the first if possible. Do whatever it takes to prevent the first from foreclosing. If you are unable to make payments on the second note, always force that note holder to foreclose. Once the holder of the second starts non-judicial foreclosure, he chooses that route and is prevented from filing a separate lawsuit for monetary judgment.

What is happening here in California is that some folks with note obligations secured by a first and a second on their home decline to make payments on either note. Their thought is to allow the holders to foreclose and to let the property go.

WAIT A MINUTE.

In that situation, the holder of the first can foreclosure and wipe out the deed of trust that was the security for the holder of the first. However, since that second holder did not exercise his right to foreclose, he could then file and prosecute a lawsuit against you for damages, the monetary amount of the note.

Think about this carefully. It is complicated. Seek and retain the advice of qualified counsel in your state and jurisdiction.

Posted by Harrison K. Long, Realtor and Broker, Explore Properties Group, www.ExploreRealEstate.net.
Also a lawyer licensed by the State Bar of California since 1976.

Proposed FHA Expansion of Loan Guarantee Program Got Help Today

Proposed Expansion of FHA Loan Guarantee Program Got Help Today
It's good that proposed expansion of FHA loan guarantee programs got help when U.S. Senate Republicans agreed to include the idea in a compromise bill. Some Democrats agreed on April2, 2008, to drop their controversial proposal to allow bankruptcy courts to "cram down" the mortgage debt of troubled borrowers. We could now have congressional debate over the planned FHA expansion. The Bush administration has made FHA loan guarantee programs part of its foreclosure prevention concept. Democrats apparently are dropping their idea about changing of the U.S. bankruptcy code. That idea was bad anyway.
Posted by Harrison K. Long, Explore Group, April 2, 2008.

In Short Sales, Lenders and Loan Servicing Agents Should Make It Easier for Buyers

In Short Sale situations, lenders and loan-servicing institutions should make it easier for buyers and Realtors. Lenders should help the market and provide sellers and agents with location of online department and person responsible for processing the short sale applications. Lenders should use a single industrywide short sale application and list of supporting documents that all lenders and servicers would agree to accept. The Uniform Loan Application is an industry standard. Lenders should agree to use a Uniform Short Sale Application. Lenders and servicers should update the listing agent and seller information on the status of the short sale application throughout the process. Lenders should deliver a clear answer, in writing, yes or no, within a reasonable time, to buyers, perhaps 30 days from receipt of the complete application.
Posted by Harrison K. Long, Explore Group.
[source: David Silver-Westrick]