Program to help homeowners delinquent on their mortgages to be terminated December 31, 2008.

HUD has announced that the FHASecure program, where they have been able to insure refinances (refi’s) for borrowers who are delinquent on their mortgages, will terminate at the end of 2008. In a memo issued by HUD, they state that maintaining the program past the initial termination date would have a negative impact on the MMI Fund.

HUD explains that the only way they could have maintained the FHASecure program would have been to offest the losses by substantial across-the-board premium increases for single family homes, or to suspend the FHA single family insurance programs altogether.

If you are looking to refinance via the FHASecure program, you MUST have a case number prior to December 31, 2008. They will continue to process files with case numbers and loan applications taken prior to that date, but will not issue any new case numbers or loans.

All standard FHA refinance programs will remain in place, including cash-out and streamlined refinance products. However, these will only be available to homeowners who are current on their existing mortgages. In addition, the HOPE for Homeowners program is still available for homeowners who are delinquent on their current mortgages.

It’s hard to say what the impact of this will be on the short sale and foreclosure market, but it’s likely that this change will make it harder for troubled homeowners to refinance, and thus it will mean that more homeowners will be forced to either sell their homes via the short sale process or lose their homes through foreclosure. Seems that we’ll likely start seeing an increase in the number of distressed properties for sale in the Santa Clarita area, which is a shame after seeing a few months of reduced activity.

Los Angeles County Foreclosures for October decline 51% from September’s numbers.

The October foreclosure numbers for Los Angeles County show a steep decline in new foreclosures, or trustee sales, for the month, with 2,389 foreclosures for the entire region. This represents a decline of 51% from September’s foreclosures, which is the largest decline for the last two years according to PropertyShark.

October foreclosures follow the same pattern as in prior months, with the Palmdale / Lancaster area leading the region in the number of foreclosures for the month.  Palmdale’s zip code 93550 tops the list of new foreclosures with 98, with the other areas rounding out this month’s Top 15 zip codes significantly lower. To summarize the Top 15 for the month, the Palmdale / Lancaster area has 303 of the total 640 foreclosures in the Top 15, Norwalk comes in at number 4 with 49, Pacoima is at number 5 with 47, and the rest of the list is rounded out by Southgate, Sylmar, Long Beach, Los Angeles and Baldwin Park, with zips 91706 in Baldwin Park and 90002 in Los Angeles at the bottom of the Top 15 list with 30 foreclosures each.

The Palmdale / Lancaster area fortunately was able to share in the downward trend for foreclosures this month, with declines of 50% or more in many of their zip codes. Compared to the August 2008 foreclosures, Palmdale’s zip code 93550 had 196 foreclosures in August vs 98 in October, for a 50% decline. Lancaster’s zip code 93535 had 162 foreclosures in August vs 73 in October, for a 55% decline.

 For Santa Clarita, foreclosures remain relatively low with 100 foreclosures for the entire region. Valencia’s zip code 91355 leads the region in foreclosures with 15 for the month, followed by a tie at 14 for Valencia’s zip 91354 and Canyon Country’s zip 91387. Foreclosures continue to hit the low-to-middle priced homes the hardest, with an average loan of $445,424 for foreclosures in the Santa Clarita area.

If you are behind on your mortgage payments, remember that there are options available to you that may help you to either save your home or at least have less impact on your credit report than a foreclosure would. Ask your lender about the possibility of a loan modification, which would help you to stay in your home, or a short sale, which would allow you to sell your home for less than the current mortgage balance. A qualified Realtor® should be able to help you to work through either of these options. Need help? Call Santa Clarita Realtor® Linda Slocum at 661.670.0349.

Homes sales in Southern California area are up 65% for September 2008 as compared to the same period last year.

The good news for the Southern California economy is that homes are selling once again. September 2008 home sales in the Southern California region were higher than in any month since December 2006. and the year-over-year gain was the highest for any month since 1988 according to DataQuick.

Although this increase is astounding, everything must be looked at in context to get the true picture of the real estate market. September 2007 sales represented a record low, since changes in the lending industry had bumped up the rates for jumbo mortgages the month before. And 50% of the homes sold in September 2008 had been foreclosed on sometime within the prior year.

“More impressive was that this September’s sales volume bucked the seasonal norm and rose above August,” says DataQuick president John Walsh. Foreclosure resales by county continues to tell an interesting story, as Riverside County once again tops the list at 68.9%. Los Angeles County is near the bottom of the list this month, with foreclosure sales at 39.1%.

With the higher level of foreclosure resales comes a decline in prices. The median price for the SoCal region dropped to $308,500, which is the lowest since May 2003. However, the median price never tells the complete story, since it is affected by regional price depreciation, relatively slow high-end sales, and the rising market share of foreclosure resales, which tend to sell at a discount. Also, remember that the Palmdale-Lancaster area continues to dominate the foreclosures in the Los Angeles County region. For 3rd quarter foreclosure (trustee sale) stats, click here.

Foreclosures continue to rise in Los Angeles County, although Santa Clarita foreclosures still remain relatively low compared to the surrounding areas.

Foreclosure auctions (trustee sales) continue to rise in Los Angeles County for the 3rd quarter of 2008, increasing 9% compared to the previous quarter according to data provided by PropertyShark. Foreclosures from 2007 vs 2008 for the 3rd quarter are up 196%.
The most foreclosures in Los Angeles County were by Countrywide, followed by Washington Mutual. The Palmdale/Lancaster areas continue to top the list of foreclosures, with Sylmar near the top of the list as well. Palmdale’s zip code 93550 has the highest rate of foreclosures, at a rate of one in every 45 homes. Lancaster’s zip code 93535 follows close behind, with one in every 46 homes in foreclosure. The Top 15 zip codes in Los Angeles County for the 3rd quarter of 2008 are below.

Los Angeles County Foreclosures 3rd Quarter 2008

Santa Clarita’s foreclosure hot spots continue to be Canyon Country zip codes 91351 and 91387, with over 100 foreclosures during the quarter for each zip code. This puts these zip codes at rankings 35 and 36 of the top foreclosure zip codes for Los Angeles County for the 3rd quarter of 2008. Remember that each zip code can have significantly more or less homes than surrounding zip codes, so while Valencia’s 91355 has 53 foreclosures for the quarter, that’s only about 0.5% of the total homes in the area.

Santa Clarita Foreclosures 3rd Quarter 2008

 

Santa Clarita single family home sales statistics for August 2008 and 2007

The Santa Clarita real estate market is showing some signs of recovery, with new escrows for single family homes for the month of August up by 120 vs August 2007, and active listings down by 619. New listings were 348 in August 2008 vs 506 in August 2007, for a decrease of 158. The ratio of new escrows to new listings has improved as well, with the number of new escrows representing 75% of the number of new listings in August 2008 vs 28% in August 2007.

Homes are still taking some time to sell, with average days on market at 115 days in August 2008 vs 90 days in August 2007. This is partly due to short sales, which generally remain as active listings until an offer is accepted by the bank. This approval process can take 30 days or more, depending on the bank (or banks) involved.

Sales were relatively constant, with 199 sales in August 2008 vs 186 sales in August 2007. However, the median price of single family homes sold was down by $200k in August 2008. However, this number may be a bit misleading, since the median price is affected by both the price level of homes sold (lower priced vs higher priced) as well as the price reductions that have taken place in this timeframe.

The good news is that homes are selling, and that investors are starting to jump back into the Santa Clarita real estate market. The not-so-good news is that a lot of these homes are short sales and bank owned (REO), which is an indicator that there are still some troubled homeowners out there. However, the percentage of truly troubled homeowners (meaning that they have a true financial crisis) vs the homeowners who just want to “bail” so they can buy a larger home at a lower price, is hard to determine. Also hard to determine is the number of homeowners who are having trouble making mortgage payments due to “resets”, or mortgage rate adjustments, vs those who did cash-out refi’s for $200k or more and now want to walk away from that free and clear via the short sale process.

Santa Clarita Valley real estate sales for August 2008 continue to show median price declines from the previous year in most areas.

While the majority of the Santa Clarita Valley continues to show median price declines for August 2008 as compared to August 2007, the number of homes sold is showing some improvement. Investors are starting to buy homes again, and many Realtors are reporting that they are receiving multiple offers once again. In addition, many of the banks have finally put systems in place that make it possible to get final approval of a short sale in 30 days or less, so more of these distressed properties are being sold.

Acton had a surprising 24.4% increase in the median price of homes sold in August 2008 as compared to August 2007, and Castaic had the smallest decline for the remaining part of the region at only 4%. Canyon Country’s zip code 91351 had the largest decline in the Santa Clarita Valley at 45.7%, and also the area’s lowest median price at $282,000.

The table below shows single family home sales only, with the percent change in median price between August 2008 and August 2007. Remember that the median price is determined somewhat by the price range of homes that have sold, where a larger number of lower-priced homes sold will bring down the overall median price. Jumbo loans, or those over $417,000, continue to decline in the Southern California region.

According to DataQuick, a total of 19,366 new and resale houses and condos closed escrow in Southern California in August 2008. That was down 4.7% from 20,329 in July but up 9.1% from 17,755 in August 2007.  So does this mean that the Southern California real estate market is recovering? “Some expect prices to bottom out soon, too,” says John Walsh, DataQuick president. “That may happen, but history suggests that few of us will time the bottom precisely.”

What about foreclosures? How are they affecting the current statistics? DataQuick reports that foreclosure resales made up 45.5% of all Southern California resales last month, up from 43.7% in July and 10% a year ago. These figures represent the percentage of homes resold in August that had been foreclosed on at some point in the prior 12 months, and exclude short sales or preforeclosures. Foreclosure resales were highest in Riverside County, at 65.2% of resales. Riverside County also shows the largest overall sales increase in the Southern California region, driven mainly by bargain hunters picking up bank-owned (foreclosed) properties.

Many homeowners in the Santa Clarita Valley are asking about whether they should consider a short sale or not.

So you’ve found yourself upside-down on your house, where the mortgage balance far exceeds the current market value, and you can no longer afford the payments. What do you do?

Your options include 1.) stay put and wait for the market to recover (historically the real estate market goes in cycles); 2.) walk away and let the bank take the home through foreclosure; 3.) buy a lottery ticket and pray that you win; or 4.) consider a short sale.

What is a short sale? In a nutshell, a short sale is when the bank agrees to settle your mortgage(s) for less than the home is worth. You list the home for sale as though it is a regular sale, but with a “short sale addendum” that explains that the bank must approve the sale before it can be completed. The bank will generally pay for all fees and costs associated with the sale, including real estate commissions, escrow and title fees and property tax prorations. Often they’ll also pay for delinquent property taxes and homeowner’s dues as well.

Don’t expect to walk away with any proceeds from a short sale - the bank is already taking a loss, and they’ll not be letting you put anything in your pocket from the sale of your home. However, whatever you owed on the home is most often eliminated without recourse, no matter what those funds were used for.

So why do a short sale instead of just letting the bank take your home through the foreclosure process? Your credit score takes less of a “hit” with a short sale than it does with a foreclosure, and your neighbors don’t have to ask why there are notices posted on your windows and local law enforcement pounding on your door as your home gets scheduled for the foreclosure auction. You also have at least a small amount of control over your move-out date in a short sale, where you don’t with a foreclosure.

The short sale process can be relatively long, although some banks are becoming much more efficient lately and quite often we’re seeing approvals within 30 days from the date a buyer’s offer was submitted. Be prepared to provide the bank with information as to your current financial situation (income and assets), as well as a hardship letter as part of the short sale process. Also, be sure to hire a Realtor who is experienced in short sales… short sales take a lot of extra jumping through hoops and follow-up, and a file that is not prepared properly will just get sent to a deep, dark corner somewhere never to see the light of day.

Need help with a short sale? Call Santa Clarita Realtor Linda Slocum at 661.670.0349.

Foreclosures in the Los Angeles area declined in August 2008, but still remain high.

The Top 15 zip codes in the Los Angeles area for August 2008 finally show some movement in the Palmdale and Lancaster areas, giving way to the San Fernando Valley for two of the Top 5 slots for the highest number of trustee sales (foreclosures) for the month according to PropertyShark.

Most of the foreclosed homeowners obtained loans in 2005, 2006, or the first half of 2007. Many of these were cash-out refi’s, not original purchases.

If you’re behind on your mortgage payments and likely facing foreclosure, it’s best to consider listing your home with a reliable Realtor® as a short sale instead. The impact on your credit report will be less, and you’ll have a bit more control over your destiny, since you’ll generally be able to extend your auction date and have time to find a new place to live. We’ve been finding that the banks are becoming much more cooperative on short sales as they establish the staffing and policies required to process these more efficiently. Need help? Call Santa Clarita Realtor Linda Slocum at 661.670.0349.

After a lull in foreclosure activity, Los Angeles County experiences foreclosure surges in April and May.

The start of 2008 looked promising on the foreclosure front, but the April and May numbers indicate that foreclosures in the Los Angeles area are far from over.

Before you freak out too much over this foreclosure spike, remember this: All real estate is LOCAL. Repeat after me: "All real estate is LOCAL!"

The Top 15 zip codes from Los Angeles County look pretty much the same month after month… if you live in Palmdale, Lancaster or Quartz Hill, the real estate market isn’t looking very pretty right now. Of the 1,460 total foreclosures in the Top 15 zip codes, 820 are in these areas, or over 56% of the Top 15. The remaining eight zip codes in the Top 15 all have 100 or less new foreclosures (as in foreclosure auctions, not NODs) for May. The chart below, courtesy of PropertyShark, shows all Los Angeles County foreclosure auctions from May 2006 through May 2008.

So how is Santa Clarita real estate faring through all this? Here’s a quick run-down of the foreclosure numbers for May 2008:

No real suprises here for those who have been following the Santa Clarita foreclosure trends. The lower priced homes make up the largest number of foreclosures throughout the Santa Clarita area, so Canyon Country has been hit pretty hard compared to the rest of Santa Clarita. Remember that the amount owed on these is not necessarily the entire picture though - these numbers are just the mortgages being foreclosed upon, not the 2nds (and 3rds and 4ths) that were written off during the foreclosure process. 

What happens with homes that are bought through these foreclosure auctions? If they’re upside-down (the mortgage is higher than the home is worth), then it’s likely that the bank took back the home. For those that are now bank-owned, or REO, expect to see them on the MLS sometime soon, if they aren’t there already, at competitive prices.

Don’t confuse these bank-owned homes with short sales… with bank-owned properties, the bank now has full ownership and needs to sell.

With short sales, the current owners are playing "Let’s Make a Deal" with the bank, so they are not guaranteed sales, nor are they guaranteed to sell at the prices you see on the MLS. In fact, many of the short sales are listed on the MLS at "come-on" prices meant to encourage buyers consider writing offers, and are nowhere near what the banks are willing to accept. Once an offer is in hand, then the lengthy process of negotiating with the bank will begin, often lasting up to 6 months only to fall out because the buyer and the bank are a mere $6,000 apart. Remember that the bank is not obligated to agree to a short sale - they can take the home back at the foreclosure auction and re-market it themselves at a price of their choice.

Interested in exploring foreclosures and short sales? Call Santa Clarita Realtor Linda Slocum at 661.670.0349 or send her an email.

Foreclosure numbers decline each month for the first quarter of 2008.

Santa Clarita continues the trend of having low foreclosure numbers compared to the rest of Los Angeles County for March 2008. Important to note is that the number of March 2008 trustee sales was 1.3% lower than the February 2008 trustee sales, which had declined 34.6% from the January numbers, showing a downward trend in the number of new foreclosures. Thankfully, none of the Santa Clarita zip codes are on the Top 20 list for trustee sales in Los Angeles County provided by Property Shark, which has been true since we first started reporting these numbers several months ago.

Palmdale and Lancaster once again retain the top positions on the Los Angeles County foreclosure list, with zip codes 93550 and 93535 showing the highest number of new Trustee Sales in Los Angeles County for March 2008 according to Property Shark with 91 and 96 Trustee Sales, respectively, and 348 and 338 Trustee Sales for the quarter. Next in line are Palmdale’s zip codes 93551 and 93536 with 186 and 171 Trustee Sales for the quarter, respectively. Notice the big jump between the top two zip codes and the rest of the list.

The average owed per these foreclosure data sources can be misleading, since often this includes only the mortgage being foreclosured upon, while often there are large second mortgages and possibly third and fourth mortgages being written off as well. The average loan amount for single family homes, with 8,073 new single family trustee sales for the quarter, was $389,728, down slightly from the average as of the fourth quarter of 2007, which was $397,279.

There are no new additions to the Hot Zone list this month, and some areas have now stayed off the hit list for three consecutive quarters (zips 90220, 90011 and 90043). There are also some areas that re-appeared on the Hot Zone list after being absent for several months (zips 91766, 91744, 90221 and 90280). The trend in the number of new Trustee Sales reported monthly is finally starting to trend downwards each month after a big jump in the number of Trustee Sales during January 2008. Here are the numbers for Los Angeles County, including all types of properties (single family, multi-family and other residential).