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You are here: Home » 2011 » April

WHY IS THE TOWN PURPLE?

If you drive around town at all on May 1st, you are going to see a lot of purple on buildings and even on people. What is going on? Well, it’s the annual “Paint Our Town Purple Day!” This purple-fest is a celebration to get the word out about the upcoming American Cancer Society’s Relay For Life to be held June 11th and 12th at Liberty High School in Brentwood.

You’ll see flags flying, business store fronts decorated, personal residences decorated and lots of purple t-shirts. Feel free to join in! For more ideas about how you can join in, go to www.relayforlife.org/brentwoodca. The website lists creative ways you can display the color purple in support of Relay For Life.

While you are on that website, be sure to poke around to learn more about Relay. While raising funds for cancer research is a big part of Relay, it is also an important way for us to support those who are currently fighting cancer, have survived cancer, or to honor those we have lost due to cancer. I’ll bet that everyone reading this has been touched by cancer in some way in your life through a close friend or relative, or even yourself.

If you’d like to donate money to support this event, you can also do so at the website link I’ve given you above. You can even take it up a step and form your own team to be a part of this great day. Or just plan on coming out to Liberty High School in June to see what all the fuss is about! There were be events happening nearly every hour of the day for 24 hours including vendors, bands, family-friendly movies and more! Some families even camp out overnight. Check the website or contact me if you have any questions.

FREE LOAN MOD/SHORT SALE SEMINAR

I wanted to let you know about a free upcoming seminar I’m putting on about short sales and loan modifications. This will not be one of those seminars where I just “tease” you with partial bits of information and then the rest is a sales pitch for something else. There are just so many people who have questions in this area and there is a lot of bad information floating around that I wanted to share what I’ve learned. I will present for about 50 minutes, and then I’ll stay after for as long as it takes to answer questions.

I’ll go over when you should try a loan mod vs. a short sale, and we’ll discuss if it is ever OK to just walk away. I’ve recently gone through a successful loan modification on my own home. I’ll be happy to share with you what worked for me so you can try your own (I don’t do loan mods for other people), and what your odds of success are. I’ll also discuss how short sales and foreclosures work in the event that a loan mod doesn’t work out. I’ll also discuss how we got in this real estate mess, and my prediction for the future of our market. I’ll also talk in general terms about the 1099/forgiven debt issue, and whether lenders can pursue you after a short sale, loan mod or foreclosure for the deficiency balance.

The last time I did this, the seminar filled up quickly and I had to turn people away, so this time I’m doing the exact same seminar three times on May 4th at 7 pm, and then May 7th at 2:00 and 4:30 pm to give you some options. You must RSVP to reserve a seat. Best way is to email me at Brian@SharpHomesOnline.com, or call at (925) 998-9712. If you can’t make one of these dates/times, shoot me an email and I’ll put you on list for next time. Or go ahead and contact me anyways and we can discuss your situation over the phone or in person. I’m happy to be a resource for people during these difficult times, and I don’t charge just to talk about your situation!

LOAN MOD LAWSUIT

There is an ongoing lawsuit in California regarding a loan modification that turned into a foreclosure that may have a BIG impact soon. Both banks and borrowers can claim a “win” in regards to this case.

Here are the facts of the case. A homeowner fell behind on her payments. The lender started foreclosure proceedings. The borrower filed for bankruptcy protection. The bank sent letters to the borrower’s attorney saying they really wanted to modify her loan, but couldn’t contact her directly because of the bankruptcy filing. The borrower contacted the lender, and they told her they did really want to modify her loan if she would cancel her bankruptcy, which she then did. The bank came back with a modification plan that was still unaffordable to the borrower, so she declined it and the bank foreclosed. The borrower sued for damages due to the bank defrauding her, and she wants her house back free and clear because the foreclosure was done improperly.

Here is the “win” for the banks: The court ruled that despite some “irregularities,” the foreclosure process itself was valid, and that the borrower can’t sue to get her house back. So this is now a defense the banks can use against those borrowers that want to use the “show me the note” or “robo-signing” arguments to have foreclosures undone. This court put a fairly high bar out there to try to un-do foreclosures.

Here is the “win” for the borrowers: The court did rule that the suit for fraud could proceed regarding the bank reneging on their promise to negotiate a mortgage modification. This is one of the first cases where a bank may be reprimanded for not negotiating a modification in “good faith” and then rushing to foreclose. If this borrower prevails in court, this will open a BIG can of worms for lenders!

NEW HOMES VS. RESALE

A new home is nearly always more expensive than an existing home. I’m not talking about “value” here, just raw sticker price. Of course the new home builder will argue that the new home has the latest in construction technology, the latest appliances, etc. plus you get the psychological “new” factor, to boot. So buyers, if they can afford it, usually prefer a new home, even though they’ll wind up spending more money in total by the time they put in landscaping, window coverings, etc.

In the past, new homes were about 15 percent higher than resale homes. However, there is a recent study out that shows that the premium for new homes over resale homes has risen to a staggering 45 percent! The authors of the study come to the conclusion that it’s not that new homes have risen in price that accounts for the disparity. It’s that resale homes have fallen so dramatically in price. It’s to the point where many resale homes are selling for LESS than what it would cost to rebuild them. I have a client that is a relatively small home builder and he recently bought a home through me off the MLS rather than build it himself, saying, “I can’t build it this cheap!”

So this large difference in price between new and resale homes means that either new home prices will have to come down, or that resale prices may have room to go up. With apologies to my friends in the new home industry, I think many buyers are going to look at that 45% new home premium as being too high, and decide to look a little harder at the resale homes.

***ANNOUNCEMENT*** I’ll be having another free short sale/loan mod seminar in May. This filled up fast last time, so I’m doing three this time, all the exact same presentation. May 4th at 7 pm and then May 7th at 2 pm and 4:30 pm. You must RSVP to reserve a seat.

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