Costa Mesa's Neighborhood Blog

Orange County Short Sales - A Trend Without End?

Short sales have become a hot topic in the last couple of years in Orange County.  How many people before that were even familiar with the term which refers to the difference between what a home is worth and what is owed on the mortgage when a person owes more on their home than it's worth.

Perhaps you have heard of the foreclosure crisis and the number of foreclosures that are hitting the real estate market.  But, when you really look at the numbers, the true crisis is in the short sales.

There are currently 11713 homes either for sale or in escrow in Orange County.  Of those homes, 5318 of them are in the foreclosure and/or short sale process.  This is over 45% of the homes currently for sale or already in escrow.

The number is even higher when looking at only those homes that are in escrow.  Of the homes in escrow in Orange County, nearly 66% or 2/3 of the homes are in the foreclosure and/or short sale process.

Why is the number of homes in escrow that are short sales so much higher than those that are actively on the market (30%)?  My expectation is that there are probably a few reasons. 

First, it is likely that a portion of the homes that are not short sales, probably should be, but there are many sellers who hope to sell their home as a standard sale and are avoiding pricing the home properly, which would result in a short sale.

Secondly, short sales may represent a better deal to buyers.  A distressed property may sell for less than fair market value as banks attempt to get short sales and distressed homes off their books and off their desks.

Please click the link for more information about short sales and foreclosures in Orange County, CA or contact me at 714.319.9751 for a free consultation to discuss your options to avoid a foreclosure.

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About the author: Christine Donovan is a California Residential Real Estate Broker with experience in assisting clients buy and sell residential real estate.

Are you upside down in your home? Is it worth less than you owe? Are you concerned about making your mortgage payment? For more information see Options to Foreclosures or contact me at christine@donovanblatt.com to discuss your options.

Want to buy a home or to list your property for sale in Newport Beach, Costa Mesa, Huntington Beach or Orange County? Contact me at christine@donovanblatt.com or 714-319-9751 to learn about her system which will make your buying and selling experience easier.

Disclaimer: All information in this blog is deemed reliable but is subject to change at any time and is not guaranteed to be accurate nor are there any warantees either express or implied. This blog is not intended to offer any legal, tax or other advice.

Click Orange County homes for sale to view all OC homes for sale. Copyright © 2010 by Christine Donovan, All Rights Reserved. Orange County Short Sales - A Trend without End?

Orange County Short Sale Realtor - Saving Homeowners from Foreclosure - by Obtaining

Additional Education - CDPE (Certified Distressed Property Expert) Designation Awarded

Getting Involved with Short Sales

A few years ago, I realized that short sales were going to be part of the Orange County real estate market for the forseeable future.

A short sale occurs when the home owner owes more on his home than its worth and is unable to pay the difference between the home's value and the amount owed to the bank upon the sale of the property.  This has unfortunately become all too common in Orange County with the 40% drop in median values.

With my background as an attorney, decades of experience in my family's mortgage business and and as a real estate broker, I felt it was my responsibility to help distressed Orange County home sellers through the short sale process.

And, I have learned just how rewarding it is to save homeowners from the emotional and financial difficulties of a foreclosure.

Getting Educated about Short Sales

With a desire to further my knowledge of distressed properties, I have spent many hours and days taking classes and educating myself about short sales and how to successfully complete them for my sellers.  

Most recently, I completed the extensive training in foreclosure avoidance and short sales required to obtain the Certified Distressed Property Expert (CDPE) Designation. 

Short sales offer a better alternative to foreclosures and having this addtional education allows me to better understand market conditions and how to guide the seller through this difficult and emotional experience.

The information provided by the Certified Distressed Property Institute was incredible.  They are extremely knowledgeable about not only short sales in general, but also about the ever changing practice of obtaining short sale approvals as banks change their requirements frequently.  As a result, I will be continuing with the Institutes advanced program so that I keep current and can continue to help my sellers.

Do You Want Some Help? 

If you are facing foreclosure and would like to know the options, please contact me at 714.319.9751 for a free consultation or e-mail Me for a free e-book about alternatives to foreclosure.

Wondering what we can do for you? Below are testimonials from two of our successful short sale sellers.

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About the author: Christine Donovan is a California Residential Real Estate Broker with experience in assisting clients buy and sell residential real estate.

Are you upside down in your home? Is it worth less than you owe? Are you concerned about making your mortgage payment? Contact me at christine@donovanblatt.com or 714-319-9751 to discuss your options.

Want to buy a home or to list your property for sale in Newport Beach, Costa Mesa, Huntington Beach or Orange County? Contact me at christine@donovanblatt.com or 714-319-9751 to learn about her system which will make your buying and selling experience easier.

Disclaimer: All information in this blog is deemed reliable but is subject to change at any time and is not guaranteed to be accurate nor are there any warantees either express or implied. This blog is not intended to offer any legal, tax or other advice.

Click Orange County homes for sale to view all OC homes for sale. Copyright © 2010 by Christine Donovan, All Rights Reserved. Orange County Short Sale Realtor - Saving Homeowners from Foreclosure - by Obtaining Additional Education - CDPE (Certified Distressed Property Expert) Designation Awarded.

Short Sales and Foreclosures in Orange County, CA 

Perhaps you've heard the latest buzz words: "loan modification," "short sale," "Obama's plan," and you want to know if they apply to you.

We know what your options are when you owe more on your home than it's worth and don't know what to do

• Over 12% of people are not making their mortgage payments.

• 6 in 10 Orange County homes purchased in 2006 are upside down, meaning they owe more on their home loan than their house is worth*. 

•  In 2007, the numbers drop slightly to almost 4 in 10*.

• Orange County median home values have dropped approximately 40% from their high just a few years ago.

•  REINSTATEMENT and FORBEARANCE

Reinstatement means that you pay the loan current including all past due amounts, charges and fees to bring your mortgage completely current.

Forbearance occurs when the borrower obtains a payment plan with the bank to bring the loan current over a certain period of time, while the borrower gets back on their feet. 

• LOAN MODIFICATION and OBAMA'S MAKING HOME AFFORDABLE

 A loan modification on an Orange County, CA home occurs when an agreement between the borrower and the lender is made to change the terms of the original loan agreement. This may result in a change in the interest rate, the monthly payment amount, the length of time to make repayment (30 years vs. 40 years) or even, in very rare cases, a reduction in the principal balance owed.

Making Home Affordable

1. Available on existing Fannie Mae & Freddie Mac loans.
2. Eligibility

•  
  • Obtained loan prior to 1/1/09.
  • Owner occupied.
  • Must be delinquent or expected to default soon.
  • Fully document income.
  • Financial hardship.
  • Modification must occur before 12/31/12.
  • Only one modification may occur.

   3. Monthly payment must be 31% or less of gross monthly income.

   4.  Lender incentives for loan modifications.

 Making Home Affordable - Refinance

Under the Making Home Affordable program requires the following to be eligible:

•  
  • Existing mortgage must be Fannie Mae or Freddie Mac.
  • Maximum loan to value can be no more than 125% of the current value of the home. (ie. if you owe $125,000, the house must be worth at least $100,000).
  • Mortgage must be current.
  • No minimum FICO/credit score required. 
  • Refinance is rate and term only.
  • Mortgage insurance may be required.  
  • Income and employment verification are required. 

• SHORT SALES

A short sale occurs when the bank who currently holds the mortgage on a property agrees to accept less than it's owed when the house is sold.

This is known as "shorting" the bank; thus, the term "short sale".

Many homes currently selling in Orange County, CA homes are short sales because of a 40% drop in median values in the last couple of years.

HOW DO YOU QUALIFY FOR A SHORT SALE?

1. Hardship
2. Monthly shortfall
3. Insolvency

WHY WOULD A BANK AGREE TO SHORT SALE AN ORANGE COUNTY, CA HOME?

1. The bank may net more money from a short sale than a foreclosure.
2. If the short sale is completed, the bank may not have a non-performing asset on its books for as long.
3. The property is likely to be in better condition than if it were a foreclosure because the seller is more likely to take care of the property while attempting to sell it as a short sale.

• FORECLOSURE on Orange County, CA homes

California is a non-judicial foreclosure state, meaning a lender does not have to file a lawsuit in order to foreclosure on an Orange County, CA home.

Steps to non-judicial foreclosure on an Orange County, CA home:

1. Lender files Notice of Default

• Usually when borrower is at least 3 months behind on the mortgage.

   2.  Lender files Notice of Trustee Sale

• A Notice of Trustee Sale filed 90 days after the Notice of Default.
• Once a Notice of Trustee Sale has been posted, the bank can sell the house in 21 days.

In California, a lender can foreclose on a home in 111 days, including the 90 day time period for the Notice of Default and the 21 days for Notice of Trustee Sale.

If you have received a Notice of Default on your Orange County, CA home, do not delay!  It is time to look at your options and attempt to avoid foreclosure on your home. 

DEED IN LIEU OF FORECLOSURE on ORANGE COUNTY, CA HOMES

• Also known as a "friendly foreclosure."
• Sometimes results in "cash for keys."
• Borrower give the home back to the lender without forcing the lender to go through an official foreclosure.
• May not be available where there is more than one lender unless the junior lenders will agree to the deed in lieu.

 SHORT PAY REFI

• Lender forgives some portion of the debt owed when it is paid off.  
• Instead of selling the house to a new buyer, the owner actually keeps the house.

 EFFECT OF SHORT SALES and FORECLOSURES on CREDIT and YOUR FUTURE

• Fannie Mae will allow you to obtain a new home loan in as little as 2 years with a short sale, instead of 5 to 7 years with a foreclosure.
• Effect on credit for short sales is at least partially dependent on how the bank reports the payoff and is greatly effected by the number of late mortgage payments.
• There may be tax consequences to the forgiveness of debt.  It is strongly recommended that this be discussed with a tax specialist before a decision is made.

If you would like to receive my e-book with more information on short sales and foreclosures, please e-mail Me!

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About the author: Christine Donovan is a California Residential Real Estate Broker with experience in assisting clients buy and sell residential real estate.

Are you upside down in your home? Do you owe more on your Orange County home than it's worth, and you don't know what to do? Are you concerned about making your mortgage payment? Contact me at christine@donovanblatt.com or 714-319-9751 to discuss your options.

Want to buy a home or to list your property for sale in Newport Beach, Costa Mesa, Huntington Beach or Orange County? Contact me at christine@donovanblatt.com or 714-319-9751 to learn about our system which will make your buying and selling experience easier.

Disclaimer: All information in this blog is deemed reliable but is subject to change at any time and is not guaranteed to be accurate nor are there any warantees either express or implied. This blog is not intended to offer any legal, tax or other advice.

Click Orange County homes for sale to view all OC homes for sale.

Copyright © 2009 by Christine Donovan, All Rights Reserved.  Shorts Sales and Foreclosuresin Orange County, CA. 

* According to Zillow.com

Short Sale is a word that has become very common in real estate in the last year or two.  For more information on short sales in general see Do You Need a Short Sale  or What is a Short Sale.  

One of the questions I have been asked by my sellers is we really need to sell our home, but it's going to be a short sale, and we're concerned that we won't be able to buy another home later?  What can you tell us about buying later?

How long it takes to buy another home will depend upon several factors.  Will the bank report the short sale to your credit?  If it doesn't, it will likely be easier for you to buy a home quite soon, depending upon your general credit profile and any late payments, as well as the other usual factors for getting a mortgage. 

But, if it is reported on your credit, then according to Lynn Nelson of MetLife Home Loans, a seller should be able to qualify for an FHA loan between 2 and 3 years after a short sale if they establish new credit and keep their old credit in good standing. 

 Currently FHA requires 3.5% down payment and has a loan limit of $625,500.

So, under current FHA guidelines, in Orange County, a person with a short sale in their history should be able to obtain an FHA loan about 2 to 3 years after the completion of the short sale if they maintain good credit.

Under Fannie Mae guidelines - a person who sells a home as a short sale, may qualify for a new loan in 2 years, while it is 5 years with a foreclosure.

Click for a free list of Orange County foreclosures or a free list of Orange County short sales or e-mail Me!

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About the author: Christine Donovan is a California Residential Real Estate Broker with experience in assisting clients buy and sell residential real estate.

Are you upside down in your home? Is it worth less than you owe? Are you concerned about making your mortgage payment? Contact me at christine@donovanblatt.com or 714-319-9751 to discuss your options.

Want to buy a home or to list your property for sale in Newport Beach, Costa Mesa, Huntington Beach or Orange County? Contact me at christine@donovanblatt.com or 714-319-9751 to learn about my system which will make your buying and selling experience easier.

Click Orange County homes for sale to view all OC homes for sale.

Disclaimer: All information in this blog is deemed reliable but is subject to change at any time and is not guaranteed to be accurate nor are there any warantees either express or implied.

Copyright © 2009 by Christine Donovan, All Rights Reserved. If I Sell My Home as a Short Sale, Will I Ever be Able to Buy a Home Again?