The Big Bear Report

For the past few years, federal and state governments have rolled out   various programs to stimulate loan modifications and most have proved disappointing. The latest gimmick, (I mean program) being offered by The California Housing Finance Agency is to use $420 million to reduce individual mortgages by up to $50,000. Supposedly, lenders will be asked to match that amount which could make thousands of mortgages “newly” affordable. Unfortunately there will be more demand than funding and as with most government programs “the devil is in the details”. Although “first come, first serviced” is not scheduled to begin funding until November 1^st, don’t get too excited because there will be loopholes. For example, you can’t earn more than $68,000 a year and you must be delinquent (or in “imminent danger of defaulting”) but have adequate income to continue paying after getting the help. And, this new program won’t  help borrowers whose  troubles began with “cash-out refi’s”.

Short sales continue to be the current trend for financially strapped homeowners today. However, many large mortgage servicers and   lenders have been gearing up for one alternative that’s been around for decades but seldom used: deeds-in-lieu. The full name is deeds-in-lieu-of-foreclosure. They are voluntary transfers of property between the borrower and creditor that avoid the foreclosure process. This old   concept offers a win-win option that short sales can’t match. The   message is: let’s bypass all the time-consuming hassles of a short sale and/or foreclosure and simply deed over the property. It’s cheaper for the lenders and allows them to resell their inventory faster.

However, when the borrower walks away by using this alternative, credit scores and mortgage ratings will last as long as a foreclosure, which is seven years (short sales usually “ding” you for 2 or 3 years).

The appraisal process is still causing us a lot of grief as banks continue to control the market. They have been trying to “pick our pockets” and break into the real estate industry for decades. Banks own the appraisal management companies (which were supposed to be arms-length) and with all the bank owned properties, it won’t be long until we see “Bank of America” for sale home signs springing up all over the country.

Can you believe the year is half over? Sales are beginning to pick up in Big Bear as we move into the third quarter. Interest rates remain at historic lows and should remain stable for the rest of the year.

Stay tuned and remember, attitude is everything.

Mike Dolan

Big Bear’s Leading Realtor

(909) 866-6453 (Office)

(909) 936-6453 (Cell)

mikedolan@bigbearproperties.com

Mikedolan.com

DRE License #  00752899