More short sale shenanigans

Walking away, is this irresponsible. Don't ask a banker!

I recently read this article in the New York Times regarding bankers and politicians call to not have homeowners not walk away from their mortgages.  Interestingly enough the article makes it clear that business and in particular their business do this all the time. It even cites how Morgan Stanley actually chose to stop paying on an office buildings they bought in San Francisco. 

As quoted from the article.  Brent White, a University of Arizona law professor has argued that the government should stop perpetuating default “scare stories” and, indeed, should encourage borrowers to default when it’s in their economic interest. This would correct a prevailing imbalance: homeowners operate under a “powerful moral constraint” while lenders are busily trying to maximize profits. More important, it might get the system unstuck. If lenders feared an avalanche of strategic defaults, they would have an incentive to renegotiate loan terms. In theory, this could produce a wave of loan modifications — the very goal the Treasury has been pursuing to end the crisis.

To be sure if you are a homeowner you should try every available avenue before walking away. i.e. loan modification and possibly a short sale.  These damage a homeowners credit rating less.  Being in the business of help people into or out of a home by their own choosing I am furious at the mess created by these large banking institutions and the government that relaxed the rules enough to let them do it.

So I say if you are a homeowner and have not gotten any satisfaction from whoever owns your loan now, walk away.  Free from the notion that you have some moral obligation to the bankers.  If you are trying to get a loan modification and have not had any luck with your lender give me a call I recently met someone who has had success with these.  If you are interested in exploring the idea of a short sale I can help you.

Fast facts courtesy of CAR

Click here to view a snapshot of Alameda home sales from 2009.

A few fast facts about the real estate market courtesy of the
California Association of Realtors.
Right now the affordability index is at an all time high.
I remember that sometime around 2004 I saw this and it was hovering around 15%

Calif. median home price: November 09: $304,520 (Source: C.A.R.)
Calif. highest median home price by C.A.R. region November 09:
Santa Barbara So. Coast $750,000(Source: C.A.R.)
Calif. lowest median home price by C.A.R. region November 09:
High Desert $124,710 (Source: C.A.R.)

Calif. First-time Buyer Affordability Index - Third Quarter 2009: 64 percent (Source: C.A.R.)
Mortgage rates - week ending 1/7/10 30-yr. fixed: 5.09 Fees/points: 0.7%
15-yr. fixed: 4.50% Fees/points: 0.7%
1-yr. adjustable: 4.31% Fees/points: 0.6% (Source: Freddie Mac)

Happy New Year! And welcome 2010!

The New Year is here and probably a welcome sight for many in the real estate business.
This year was filled with many ups and downs for those looking to buy or sell a home.
For those who were buying the tax credit combined with declining prices were probably good news.
For those looking to sell a home declining prices were the opposite.  In Alameda we suffered from a low inventory.  Which made the good homes on the market even more competitive.



I worked with many first time home buyers this year. Many were excited to be bidding on homes they might have been priced out of even a year ago. Despite whatever was going on in the media I still found myself in competetive bidding situations with almost all my buyers.  The national news stories about the real estate market give you very basic and general information about what is going on.  Particular area's in Alameda remained strong but more specifically particular homes were the hot ticket... or not.  Great presentation combined with a competitive price brought in multiple offers.  Even lousy presentation but a great starting price on a bungalow brought in multiple offers.  I see prices stabilizing and can expect the same to continue through the beginning of the year.  This spring and summer will be a litmus test to see if we have really turned a corner and are on our way back to a "healthy" housing market.