More from the foreclosure tour – see youtube tour below.
It is harder to find the smoking deals when looking mid-range, and investor action has been heavy.
In the last 30 days there have been 28 successful trustee sales of SFRs in Carlsbad and Encinitas, with 14 going back-to-bene, and 14 being purchased by third-parties. There were also 39 cancellations.
How does trustee sale financing work?
I imagine any end buyer will want the full protection of a mortgage (single action, no recourse).
Is it possible to get a mortgage on a house when it is not purchase money? Or is it considered purchase money?
“1.How does trustee sale financing work?”
I bet it works like a ‘payday loan’ ie. high interest rate and your first-born until you get permanent financing in place.
“I imagine any end buyer will want the full protection of a mortgage (single action, no recourse).”
lol … Good luck with that.
The trustee-sale financing from Bruce N:
12.5% for one year
35% down payment
3.5 points
no prepayment penalty
I’m hoping to have something similar available, hopefully better. The important part is to have the refinance lined up.
BTW, the state assembly passed the non-recourse bill for refinances, and it’s off to the senate (or visa versa).
JTR, I am in a dogfight right now with the county assessor trying to get them to honor my purchase price as base assessed value on the REO I bought last year. If this does not go my way, I am going to liquidate the house and pay cash for something down at the steps. If you can buy a house for 25% above the 1989 price who cares about taxes.
If we elect to do this, I would be delighted to pay whatever fee you are currently charging for your services. I would have went this route before but I could not find an agent willing to do what you do.
I’m interested as well. As you know looking in the RB area.
pemeliza-That should happen automatically (the taxable value resetting to the purchase price), with the exception of a true insider transaction (I don’t mean just dual agency, or a trustee sale purchase, I mean somebody selling a house to his son for 20% of the fair market value-that’s cheating and the tax guys will catch it). Why didn’t it in your case? What possible excuse do the tax people have?
pemeliza
‘lol … Good luck with that.’ Why is that funny?
Aren’t mortgages issued today in CA single action (i.e. ends up being non-recourse)?
“pemeliza-That should happen automatically (the taxable value resetting to the purchase price)”
Unfortunately, this is a myth. Our transaction was a sale with two separate agents the only distinguishing factor is that it was a REO. The tax assessor is claiming that since it was a “distressed” sale that the market value should be based on comparable sales and not the sales price. It has happened to several houses in my neighborhood.
Anonymous, maybe I misunderstood what you said. A trustee sale loan is like a bridge loan. The sole purpose is to allow you to acquire a property at the courthouse so that you can immediately refinance with a traditional mortgage. I would think that the terms of the trustee sale loan would be heavily written in favor of the lender as they should be.
A word of caution. This is something that may need to be looked into for Jim’s program. Last week I heard of a case where a bank turned down a refinance because the current loan was from a “Private Party” non-institutional lender. The owner had purchased the house a few months back at a trusee sale and placed a hard money loan on the property at the time of purchase–30% down. He is now having a difficult time refinancing, even though it is legit–owner occupied, no cash out–it seems that they are questioning the legitimacy of the loan being from a “Private Party” lender–what next!
Local Boy, please keep us posted. I wonder why that would cause problems? Maybe its just that particular lender and they should try another?
Pemeliza, I didn’t know that happens with REOs! Good to know.
From a new listing in Carlsbad today – sellers get tougher every day:
Seller will not entertain any offers until the 8th listing day at which time ONLY offers from NSP Buyers,Municipalities, Non-Profit Organizations & Owner-Occupant will be reviewed.Offers from all buyers will be review on 13 Listing Day
LB,
Yes, not every lender will refi one of these. The recordation of the trustee’s deed is a problem too, because that doesn’t happen until a week or two after the sale.
The hard money guys can live with it (we’ve devised a solution) and we’ve gotten title to OK it. But getting the refi lender to sign off is not easy.
JtR,
That appears to be some legalese required by some government program.
If you Google the phrase, you find lots of places all over the country using the exact same language.
Yes, more crazy bank verbiage to cover themselves, and show that they are catering to the poor, the disadvantaged, the homeless, etc.
The zeal being inflicted by sellers upon buyers is going backfire – buyers don’t like it, and are happy to stay on the fence, rather than concede.
Do you think there are any investors that are going to wait around 13 days to see if anyone else bought it first? By then, it’s already been proven that it isn’t worth it, if the priviledged didn’t jump at it first.
Jim this was in the listing on a house I want to offer on in corona.
“Agents: No offers will be considered for the first 7 calendar days a home is listed. The date the property is listed is counted as day 1. **Seller will not entertain any offers until the 8th listing day at which time ONLY offers from NSP Buyers, Municipalities, Non-Profit Organization & Owner-Occupant will be reviewed.”
DOnt like hearing bout those foreclosures Thanks
James Curtis of San Diego
pemeliza-What county tax assessor is making this argument? There’s nothing in the law that mentions “distressed sales” being valued at comparable sales in the neighborhood.
Here’s the law:
http://www.leginfo.ca.gov/.const/.article_13A
The tax assessor is breaking the law.
JtR,
What of 2327 VALLECITOS in LJ – auctioning today I believe for $1.275m.
“The tax assessor is breaking the law”
Whether this is true or not I don’t know. What I do know is that they certainly think they have the authority to do this.
Would like to see Vallecitos get auctioned, it’s another SS listing thrown directly into pending last August at $899,000 – WaMu has $2.5 outstanding in two loans.
Do you think there are any investors that are going to wait around 13 days to see if anyone else bought it first? By then, it’s already been proven that it isn’t worth it, if the priviledged didn’t jump at it first.
Jim the Realtor | June 7th, 2010 at 5:46 pm
——————
Personally, I applaud this. It would be wonderful to see “investors” eliminated from the market, completely.
Housing is supposed to be shelter for families. The goal should be for owner-occupiers to own their homes outright before retiring. There’s nothing wrong with normal families competing to buy a place with conservative mortgages. They should not have to compete with limited-liability, hard-money/investor funds for basic shelter.
Speculators/investors should be a minor part of this market because housing is a basic necessity, and owner-occupants should be prioritized before investors.
Let them speculate in stocks, bonds, currencies, or at the tables in Vegas. It’s wrong for them to drive up prices for families who are simply trying to buy a place to live.
IMHO, “investors” are one of the primary causes of the housing bubble and ensuing collapse in the credit markets. They’ve done enough damage already.
CAR, I think your anger is a little misplaced. IMHO, everyone who buys a house is to some extent an “investor”. I am not a flipper or a speculator but I have bought 3 houses in San Diego and each took me on average of 1-2 years of constant looking to find. I sold two of them because of life changes and am now just holding a single property that I plan to retire in (If I get this tax problem worked out!).
If I was just interested in basic shelter, I think I would have just rented rather than thrown away that kind of energy. All three times that I bought (1998, 2000, 2009) I never got the impression that buying a house worthy of my time and money was “easy”. In all three cases, my goal was to make the best possible long term investment that I could easily afford.
I believe the problem is not thinking of housing as an “investment” but rather the problem arose when people began to think of housing as a “can’t lose investment”. The old “housing never goes down” saying. The sad thing is that such statements were very easily refutable. The facts were there but the magnitude of the greed caused an unfortunate “blinding” effect.
pemeliza,
I’m not talking about regular people who are buying a primary residence. It’s perfectly logical for someone to want to control their monthly housing costs and to control when/if they move (as opposed to having a landlord control this), and it’s right to have a paid-off house upon retirement. This is the type of “buying” that **should be** encouraged.
What I have a problem with are the flippers and those who hoard houses with the intention of forcing organic buyers to pay them a premium for their “services.” These specuvestors remove inventory from the market and increase demand — which causes prices to rise beyond fundamental values **on a temporary basis.**
The problem is when our govt and other home “owners” see these prices and think they should be made permanent via artificial means (artificially suppressed interest rates, artificially low/withheld inventory, tax credits/deductions, etc.).
If we don’t like the extreme swings in prices, then we should do everything possible to keep speculation and easy credit OUT of the housing market.
BTW, I think you have a good case regarding your property taxes. I really, really hope you win!