Last week I took additional course work on short sales.  We don’t really anticipate seeing many foreclosures this year because the banks are beginning to work with their customers to stave them off.  This year will see short sales.  The Alt-A loans are almost all gone and now what will be coming up are some loans that should affect our market.  The people who purchased homes in the mid to late 2000’s and who took out ARMs of 5 or 7 years are going to see them resetting this year.  If they reset now, they’ll reset for lower then the original rate for the first year only.  Should they reset once the Fed plays around with interest rates, then who knows how they’ll reset so they might be higher.  How do I know this?  Take a look at this great chart from Credit Suisse.  We are currently in month 36 where the arrow is.  You can figure it from there, that we anticipate seeing a peak number of short sales by the end of the summer, September to be exact.

If you are one of the multitude of homeowners sitting with this kind of mortgage you have a couple of choices.  First, refinance it immediately.  Second, if you are unable to do so, get your home ready for resale and get it on the market this spring.  Yes, it will be under water, and yes you will need to go through the process of applying for a loan modification with your lender.  If you are denied, as most appear to be, ask for a short sale and find a Realtor with suitable experience and training to help you.  We are CDPE trained and SFR trained.  These are the Cadillac of certifications for short sales.  Do not wait to sell, get ready to do it this spring because there will be much competition for short sales.

Another consideration for you.  If you sell you home in a short sale, you can buy a new one within 90 days using a conforming FHA loan.  This means you will be in a home around $900,000 and there are many to select from in our area.  You may have to swallow your pride in reducing your home size and location but at least you can still own a home without the tax ramifications of a foreclosure.

Do you want more information on how to do this?  We’re here to answer your questions so go here for more help.

Back in 2005, the California State Legislature pass a bill making it manditory to put your headlight on when it is raining during daylight hours.  If you’re out and about this week, make it a point to do this.  Your life, my life and anyone else’s life is at stake.

It’s really easy to do, too.  So why isn’t it being done and why hasn’t this been publicized more?   Beats me, but I am telling you this.  So do it!

Just in case you think this is another urban ledgend, here’s the law.

San Mateo County residents who are under water today have an additional problem to content with because banks aren’t being forthcoming with us.  Are you wondering why you can’t get your loan modified?  Are you wondering why every time you call they can’t find your file?  What  about the voices of the people you’re talking with, do they have strong accents making it hard for you to sometimes understand them?  There’s a reason this is happening and it’s not to help you, but to help the bottom line of your lender. These people you’re trying to talk with don’t live and work in the US, they live and work off shore, mainly in India, but also in some other countries, too.  The worst offender doing this is Bank of America but they’re not alone as most of the major banks are doing the same thing. They are doing this to save money but according to year end reports, almost all banks made record profits last year and off-shoring added to their profit line.

The only bank NOT doing this is Wells Fargo, who incidentally only uses US citizens and doesn’t consider off-shoring as an option.  Thank you Wells Fargo.

Right now the bankers are sitting and testifying in Washington about their obscene bonuses and this should become a part of that discussion.  These banks aren’t out to help you, they’re out to help their bottom line.  If you don’t like this, call Jackie Speier’s office if you live in her district, or your own Congressional Representative where you live.  Then call your US Senators and complain loud and clear that this must stop.

I believe the only way to stop it is to write a law prohibiting off-shoring for all banks. No matter what you are told about privacy laws,  they don’t matter outside the continental United States boarders.  You are, as they say, up a creek without a paddle should your information – think social security numbers – get lifted.   Our laws only count within the continental US border and not in another country.  This won’t stop unless we make it known.  Will you help me with this?