Hold Your Breath

Check out this article for the latest news on Marin homeowners who are underwater. More than you thought? Fewer? Share your thoughts....

Foreclosure Database

Because of the seemingly never-ending fascination with distress sales, we thought we'd again offer up the link to the Marin County foreclosure database.

As always, we add the caveat that many homes that are in the foreclosure process, especially those that have received a Notice of Default, may never be offered for sale. In some cases, homeowners have "deliberately" gone into default as part of a strategy to achieve a loan modification.

More advice...be cautious when pursuing foreclosures. Auctions on the court house steps are the first place that novices stumble. But even when purchasing through an agent, disclosures are limited and contracts tend to heavily favor the bank's interests. Do your risk/reward calculations carefully. And, as ever, please buy and sell real estate responsibly. We're always here to help.

The Biggest Investment That Isn't

Apropos of today's earlier post, we were thinking about the conventional wisdom that one's home is usually one's largest investment. In light of the number of people walking away from their "largest investment," it's worth asking...if a person buys a home with zero down and an interest-only loan (as was the case for more than a few buyers during the boom time), is it really an investment at all? The only thing the buyer is risking is his credit score. There's no judgement or political statement implied by the previous sentence. Just an observation meant to spark debate.

Rubber-necking Real Estate

Sometimes it's hard not to look. If you're curious to know more about foreclosures in Marin, check out the IJ's forclosure database. Please note, however, that while this information is public, it's also personal. Let decency prevail. You should also know that many home listed as "in the foreclosure process," will never become bank-owned. These days, most people attempting to do loan modifications are being advised to go into default on their mortgages. This starts the foreclosure process. In many of these cases, the lenders will modify the loan before the house is reposessed and the owners will remain in possession.

Default Setting

Marin IJ or SF Chron: two sources for the same info. Notices of default were down last quarter, but we're not ready to draw any conclusions yet. There are too many forces at play in the marketplace right now to say whether a trend can sustain.

New Wave

If you've talked to us recently, you've heard us say that we're not out of this mess yet. The shadow inventory of bank-owned properties yet to be released to the market, and mortgage delinquencies that will result in additional waves of foreclosures are harbingers of further erosion in statewide real estate values. As usual, our local neighborhoods appear to be in better shape than most, but the damage is wide spread. Today's Chron spells out the ugly truth. The market will continue to be friendly to buyers for the foreseeable future. And if your were thinking of selling but thought you'd be better off waiting a year until things pick up, you may want to rethink that strategy.

On My Soap Box

Ordinarily I try not to choose sides in the mortgage crisis debate. Was it caused by irresponsible borrowers, unscrupulous lenders, greedy investors? Short answer, yes. There's more than enough blame to go around.

But when I read an article in the Times yesterday morning about mortgage service companies dragging their feet on loan modifications because they can make more money from delinquencies and foreclosures...well, my stomach turned.

As many of you know, many home loans are owned by investors, but serviced by mortgage servicing companies. These companies collect and disburse payments and, among other things, notify borrowers who are in default. They also are responsible for negotiating loan modifications and/or short sales for borrowers in distress. While the new Obama administration plan offers financial incentives for mortgage service companies to modify loans for borrowers in distress, the Times article reveals that they can make far more money by allowing borrowers to languish in default.

We happen to know people who are working to get their loans modified. While these people are not clients of ours, they have sought our advice as friends and professionals. I have been amazed (though not surprised) by the challenges they've faced. It is all but impossible even to get a mortgage service representative on the phone. I chalked this up to gross understaffing are mortgage service companies coupled with the backlog of borrowers seeking relief. It appears that the reasons may be far more insidious.

Put On Notice

The Dow cracked 9000 today. Ford turned a quarterly profit. Home resales were up 3.6%. All good news, right? Yes. But...

The broader economy my be starting to recover, but there are some troubling signs that our local real estate market may still have a way to go.

Specifically, Marin and San Francisco, which have had lower foreclosure rates than almost all other counties in the state, may not be immune much longer. An article in today's Chronicle indicates that Notices of Default (the firstpart of the foreclosure process) are up 30%-40% in San Francisco and Marin. This is a distressing sign.