Foreclosure info AND loan modification info for So. Cal.

The Los Angeles Times had two interesting articles about our local real estate market yesterday.  The first is titled Foreclosure activity soars in third quarter, ending lengthy lull.  No, this isn't the much discussed "shadow inventory" hitting the market.  It's just that the lending banks have stopped suspending foreclosures due to the robo-signing scandal.  Other salient facts from the article, as if you didn't know: "Defaults hit lower-cost neighborhoods harder. Areas with a median home sale price below $200,000 saw 11 default notices filed for each 1,000 homes, compared with 8.1 per 1,000 homes statewide and 2.8 per 1,000 homes in areas with a median sale price above $800,000." And people wonder about the 99% protestors.

The second article is titled Plan would allow refinancing of some underwater mortgages.  Don't get excited yet.  The article states: "The new proposal would apply to people who are underwater on their homes but making mortgage payments on time. Only mortgages owned by banks — about 20% of all mortgages — would be eligible. Most mortgages are owned by investors as part of mortgage-backed securities."  How and who is this going to help? I think the amount of mortgages owned by banks are much less than 20%.  Why not just write down the interest rates if people aren't behind (yet) on their mortgage payments? 

How to Buy a Home After a Bankruptcy ?

Buying a house after you have filed bankruptcy and put in something that is difficult. Your credit score is basically what you live with and if you need to file for bankruptcy, your credit score goes down, down, down, and frankly, it can be very difficult for you to recover. However, if you are looking for a way that you can search for a new house, are - you need to do your research.

After you file for bankruptcy, there are many different things you need to do to ensure that you are actually back by lenders confidence. The first is for sure that you pay all your bills on time and not always a payment, as something that will go on your credit and will certainly lower your credit score immediately.

Then you will need to go anywhere from one year to wait three or four years to buy a new house and even then you might not get approved - it's all just starting.

BofA gets foreclosed on! Way to go, homeowners!

Bank of America wrongfully forclosed on home owners who paid cash for their home.  So, as you'll see in this video, the homeowners foreclosed right back in order to get their legal fees paid.  There's a little twist at the very end of this, so you'll want to watch all the way through.  I know; I shouldn't be so gleeful, but it is the evil empire Bank of America, after all!

Why did the foreclosure we tried to buy sell for less? Courtesy of About.com

Normally, About.com's answers are a little generic for me.  Hey, you can't please all of the people all of the time. But here's a good one: Why foreclosures sell for less.  Thanks, author Elizabeth Weintraub; this answers are short, to the point, and TRUE.

Foreclosures and REOs - there is a differnce.

I'm often asked by potential property buyers if I will help them find a foreclosure. My buyer clients often think that these properties are offered for prices below market, and perhaps need just a little fixing to make them habitable. Umm, that's not quite correct.

First, there are two delicious flavors of foreclosure: plain foreclosure and REO. The differences bear repeating. A foreclosure property has not had its mortgage or other obligations paid in several months, and the lending institution is in the process of taking the home back from the owner. There are several stages to this; and the foreclosure can be "cured" at any of these stages. If the default is not cured by a certain date, the house usually goes to a trustee sale, which is often held on county courthouse steps. Very important to know: these homes are not on the multiple listing service, but you can find them on paid sites like ForeclosureRadar.com. Anybody can go and bid on a house at a trustee sale, but potential buyers will have to exceed the amounts owed to the lender on the property.

An REO stands for "real estate owned" -- by the lending institution that held the defaulted mortgage. This designation comes at the trustee sale when nobody has outbid the bank (frequently, nobody does). The lending institution now owns the property. The lending institution will eventually place the now-vacant home with a Realtor, and it will be available on the multiple listing service. And here's more bad news: once it goes on the multiple listing service, it usually goes out at market prices as well. There aren't usually deep discounts.

Yes, there are other details, and sometimes homes go for auction. (See auction.com post below.) But these are the main differences.

From today's LAT: re-fi turns foreclosure nightmare

L.A. Times columnist David Lazarus has written an excellent article today about Lana Ashford, who attempted to re-finance her home with BofA and, through no fault of her own, ended up getting foreclosed instead.  Click here for the link, the title should work too.  I promise that you'll be even more scared to deal with the big banks after reading this.

If you've read this blog before, you'll remember my BofA refinance saga.  My husband and I tried to do a simple home refinance in January 2009.  We were immediately approved, but somehow it still inexplicably took six months to go through.

Here's my question, as a bank customer and also a Realtor who deals with short sales: why, two years into the lending crisis, haven't the banks ramped up enough to service their own loans in a timely, correct manner?  Have they just not hired enough people?  Are they stalling? What's going on?