Foreclosure Deficiency Rule Review

Anti-Deficiency Protection Almost There: On Thursday, August 19, the California Senate approved SB1178. This bill extends anti-deficiency protections to homeowners who refinanced their mortgages, but didn't take any cash out, and are now facing foreclosure.
According to C.A.R. under existing law, if a homeowner defaults on a mortgage used to purchase a home, the home owner's liability on the mortgage is limited to the property itself. However, homeowners who refinanced the original purchase debt, even if only to obtain a lower interest rate, were not extended the same protections. C.A.R. sponsored SB 1178 to close this loophole and extend foreclosure protections to consumers who refinance their home loans but don't take cash out as part of the refinance.

SB 1178 still must be signed by Governor Schwarzenegger
Extracted from Bay East Government Weekly Report

Mid August Jobless Claims higher

Initial unemployment claims rose to 500,000 in the week ending August 14th, a spike of 12,000 from the previous week. Economic recovery is critically dependent on creating employment. The level of new claims had fallen steadily from a high of 651,000 in March 2009 to a low of 439,000 in early February this year.

4 More Home Pending for Week ending 8/15/2010

Sales in Ruby Hill seem to be humming along with 4 more being added to the homes which went pending or were sold since the beginning of this year. This brings the total to 52 pending or sold in 2010 for the week ending July 15th. The 4 homes which went pending this past week were 1137 Via di Salerno, 2578 Grappa Ct., 473 Sangro Ct.  and 3906 Vierra St.
Looks like the buyers remain positive about for Ruby Hill values!

July California Foreclosure Status - Mixed bag

From Foreclosure Radar: , August 12, 2010 - ForeclosureRadar issued its monthly California Foreclosure Report for July 2010. Foreclosure activity was again mixed in July. Foreclosure filings and cancellations dropped after rising last month, while foreclosure sales rose after dropping last month. "Despite a tsunami of mortgage delinquencies we continue to see no signs of a foreclosure wave" says Sean O'Toole, Founder and CEO of ForeclosureRadar.com. "Lenders and government intervention continue to delay foreclosures despite their continued failure to find a long term solution to unsustainable negative equity."
For the full report click here.

Weekly Ruby Hill Update

Active           22
Pending          9
Sold YTD     39

Montori Court, 2680 sf., priced at $995,000 went pending in 2 days! There are definitely buyers out there looking to move to Ruby Hill!

2578 Grappa Court ($1.375m., 3,818sf, lot size 24,138sf) and 1907 Zenato Place ($1.89m., 4,576sf, lot size 37,176sf) were new to the market last week.

Unemployment rate - mixed bag

Last Friday's Jobs Report showed that 131,000 jobs were lost for the private and government sectors, versus the 87,000 job losses expected. To add insult to injury, the revisions for June showed nearly 100,000 more jobs lost than had been previously reported. While some of the losses were due to the government laying off temporary census workers, the private sector was also disappointing, showing 71,000 job creations for July, worse than expectations of 83,000... and well short of the market's hope of 100,000. Rounding out the report, the Unemployment Rate remained steady at 9.5%, just below the 9.6% anticipated.

So the rate is not worsening - jobs in the private sector are being created in reasonable numbers.
Hower, the unemployment rate needs to improve considerably faster, before the ripple effects are felt throughout the economy and the housing market is positively impacted.

Some Changes in Pleasanton’s Ethnicity –diversity increases

While waiting for the latest census data, it is interesting to note some figures about Pleasanton’s changing ethnicity included in the final draft of the Youth Master Plan. The ethnic composition according to the 2000 census data showed 74 percent of Pleasanton’s population was Caucasian or white, 10 percent Asian, 7 percent Latino or Hispanic, and 1.4 percent black.

According to figures obtained in 2008, the Caucasian population was 61 percent, Asian - 17 percent, Latinos comprised 9 percent, and 1.9 percent were black. Other races totaled 6 percent in 2000 and 9 percent in 2008.

The State of the Ruby Hill Market

Ruby Hill continued to show a healthy level of activity this past month. The summer inventory is low compared to previous years and sales remain strong with a total of 47 homes having sold or gone pending since the beginning of this year.

July                 Total               Bank owned share          Short Sale Share

Active              22                     0                                        1

Pending              9                     0                                       5

Sold YTD        38                     3                                       5
2010

Only one of the 22 homes currently active on the market is a potential short sale and none are bank owned. Short sale and bank owned properties can negatively impact prices as they are sold at a discount. The number of homes receiving notices of default in Ruby Hill is not significant -the first step of the foreclosure process.

For those of you who are not familiar with this process, foreclosures begin with the Trustor (borrower) not making the monthly payments to the Beneficiary (Lender). The first missed payment is technical default, but in practical terms, most Beneficiaries do not begin the process until the third payment is missed. If the Beneficiary cannot resolve the defaulted payment amount with the Trustor through forbearance or other loss mitigation measures (see HAMP below), the Beneficiary will instruct the Trustee to begin foreclosure proceedings. Many lenders prefer to accept the short sale(where the lender receives less than is owed upon the sale of the property) route rather than foreclose, as this path can be cheaper and less cumbersome. As evidenced by the numbers above, short sales make up approximately 20% of the homes which have sold or are currently pending.

Pleasanton overview

Homes are selling faster in Pleasanton as compared to this time last year, with only a 3 month supply at the current absorption rate. There has been an upward pressure on prices with median home prices up over 20% from this time last year at $822,500.
Compared to last year homes in almost every price point have been selling in higher numbers, which should lead to an optimistic outlook. So why is there such an air of uncertainty about what the future holds?

Air of uncertainty

With headlines such as “40,283 of our neighbors are in mortgage limbo” (Tri-Valley Herald) there is a question in the buyers’ minds about how many more homes might hit the foreclosure market and hence depress future prices, even though all recent trends have shown an upward trend. Many homeowners cannot afford to pay their mortgages or are choosing not to pay because they are upside down with their home values. Government is continuing to work closely with the banks to ensure that homeowners can continue to stay in their homes through the mortgage aid program known as HAMP – Home Affordable Modification Program. The success of this program and the creation of more jobs will determine of many of the homes on the default list will ever turn up as foreclosed homes.

The economy continues to show many positive signs with the stock market ending with the best monthly gain this July since 2009. Many local companies such as Chevron and Intel have had record profits this past quarter. Google has added 2,000 employees in the first 6 months of this year and Cisco Systems and Intel have indicated plans for increased hiring. There are plenty of reasons to be optimistic, but caution prevails nonetheless.

Please contact Anju Bhatia for further information or comments: Anju@RubyHillLiving.com or visit www.RubyHillLiving.com