Another of San Diego’s Finest Neighborhoods, Carmel Valley. Here Is The Scoop -Rina Podolsky San Diego Exclusive Properties_ Carmel Valley Homes For Sale

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Carmel Valley is a community in San Diego county that has become one of the prime Neighborhoods for many reasons, from its privileged location just a short distance from the beach, it’s top ranking schools and it’s easy freeway access. It has fared better than many local areas through the Real Estate market ups and downs and continues to be a very sought after place to live.

• LOCATION

Carmel Valley is bordered to the north by the North City Future Urbanizing Area (NCFUA) and Pacific Highlands Ranch; to the south by Los Peñasquitos Canyon Preserve and Torrey Hills; to the east by Pacific Highlands Ranch and Del Mar Mesa; and to the west by Interstate 5 and Torrey Pines. Nearby is the Torrey Pines State Preserve, where one of two stands of the endangered Torrey Pine is found to occur.

While many people in the area are now referring to the entire 92130 zip code as Carmel Valley, the actual boundaries of the community remain unchanged from the original community plan. The remainder of the 92130 zip code is filled by the surrounding communities of Del Mar Mesa, Pacific Highlands Ranch, and Torrey Hills.

Original Carmel Valley Area Map

• HISTORY

The earliest inhabitants of the area are believed to have been the earliest settlers in the region. There have been some artifacts found along the Carmel Creek area that are said to belong to this Native American tribe, confirming their settlement in the area, however, little is known about their life in this region.

Later in time, around the 1800 to 1900 the area was known as “Cordero” in it is where we find “Ranchers” it is thus known as the Rancho Period. The main activity in the region was producing and trading cattle hides and tallow. This was immediately followed by a period of agriculture became the main trade. At this time in history, we had the California Gold Rush going at full swing and some of these gold rushers did come to settle in the area, among those settlers we had the McGonigle Family who acquired  2,040 acres of what is today known Carmel Mountain preserve. It was then that the area became known as “McGonigle Valley.

Around the 1890’s the sisters of Mercy came from San Francisco down to the region. When they established themselves in the area they gave medical care to the McGonigle family and established a dispensary in 1000 acre parcel of land that they purchased from the same family. They also established a dairy farm and a vegetable garden. They also built a three story Victorian home that has played different roles through out time, it played the role of housing orphans, dispensary for the nuns and that is what later became Mercy Hospital, it later became a private home and horse ranch and most recently, after the Carmelites land was divided in two by the passing of the 56 freeway in the middle of their land, the home became property of the Chabbad center and it is currently on sale. The other half of the property houses a Church and burial grounds.

This nuns  from the Carmelite order and were instrumental in naming the area when they named a mountain “Carmel Mountain” and their ranch “Carmel Mountain Ranch” after it. That is how the area got it’s name.

Sisters of Mercy Victorian House

However in 1975 the area was mapped out and a plan was established it was named the “North City West Master Plan” and the name of the area was changed to North City West.

Construction in the area began in 1983 and by that time the original name had stuck to the region and so in 1990 the local planing board change the name back to Carmel Valley. The area is designated with the 92130 zip code.

Today Carmel Valley has grown to include surrounding areas such as: Torrey Hills, Del Mar Mesa and Pacific Highlands Ranch.

• SHOPPING + ENTERTAINMENT

As of Today there are 3 main shopping Areas.

The largest is Del Mar Highlands Town Center It includes fast food restaurants such as Mc Donalds, El Pollo Loco and Rubio’s,  it also has Red Robin, Sammy’s Pizza and Champagne bakery, Starbucks and Chuao chocolatiers. It is divided in upper and lower level and houses some clothing boutiques, Gepetto’s Toy store,  an Aveda and a Barnes & Noble book store. It houses two major groceries stores, Ralphs and a Jimbo’s which is a more natural and organic store. This shopping center included the Carmel Valley Ultra star movie theaters, however they ar currently close for remodel and will re-open sometime this summer.

There is another shopping center called Piazza Carmel  It is a smaller plaza that includes Souplantation, Villa Capri a Vons grocery store, some boutiques and banks. Across the street you will find a Shell Gas station and a Pat & Oscar’s restaurant.

The other shopping area is  Torrey Hills Shopping Center located in the southern part of Carmel Valley, this plaza is the most recently built but it is also the smallest one, it has a Vons groceries store as well, Starbucks, an italian restaurant three banks and the Carmel Valley office of Windermere Exclusive Properties.

The Scoop is that there will be 3 more shopping areas built in Carmel Valley, 2 of them are expected to be big shopping centers. One is located on the corner of Del Mar Heights and El Camino Real right across of Del Mar Highlands Town Center and construction is expected to begin soon.

The other major shopping area that is expected to be built is in the Pacific Highlands Ranch Neighborhood, it is said that it will include some major department stores but no word yet on which ones or when it will be built.

Finally, in the corner of Carmel Mountain and Carmel Country, Pardee is building a new community, part of the land, the south-west corner of it to be precise, is designated to be commercial/retail, No word yet what stores will be there but it is a much smaller space.

There is also a little known secret, here is the Scoop there is an Organic Farm right in the middle of Carmel Valley called Sea Breeze Farms

Also coming to the neighborhood we have 3 restaurants opening their doors in 2011, all of the in Del Mar Highlands town center. Rimel’s Rotisserie, The Counter which will be a burger place, Searsucker a great downtown restaurant is also working on opening up a new restaurant as is Swirls, a yoghurt ice cream store.

The movie theater will re-open with a new concept of VIP theaters where patrons will be able to reserve their seat ahead of time and there will be drinks and dinner served to your seat.

There are many excerisze places that go from yoga and pilates studios to full out sport centers. There are 2 in particular that are worth mentioning:

Pacific Athletic Club – One of San Diego’s  finest sports resorts.

The Training Club – An innovative, high energy, and fun workout facility, totally committed to creating exercise programs for groups and individuals.

 

• REAL ESTATE MARKET

There are currently 230 Homes listed as Active

Here is a brief chart of the current listing statistics

out of which 160 are Detaches homes 70 are attached

There are 33 homes showing as contingent (this is a recently added status that means an offer has been accepted by the buyer and an approval is being negotiated with the bank in the case of a short sale)

There are 62 homes in escrow or listed as pending

In the past 30 days there were 35 homes that Sold here is a chart to view the stats of past months sale

out of those 35, 22 were detached homes and 13 were attached

There are 224 properties in the public records list of homes in some stage of Foreclosure, you can search foreclosures here

In general this area has fared very well thru the Real Estate market downtown.

You will be able to find many different communities within the area and prices go from $205,000 to $7,980,000 but the average sales price is around $1,ooo,000. If you want to look for homes in this area be sure to check out this site

• SCHOOLS



ELEMENTARY

There are 3 main School District operating in the area as far as elementary schools go.

Solana Beach School District

Solana Highlands: 3520 Long Run Drive; Office: 858.794.4300, Fax: 858.794.4350, CDC: 858.794.4377

Carmel Creek: 4210 Carmel Center Road; Office: (858) 794-4400, Fax: (858) 794-4450, Absence: (858) 794-4451, CDC: (858) 794-4477

Solana Pacific: 3901 Townsgate Drive; Office: (858) 794-4500, Fax: (858) 794-4550, CDC: (858) 794-4577, Absence: (858) 794-4551

Del Mar Union School District

Ashley Falls: 13030 Ashley Falls Drive; voice 858.259.7812, fax 858.259.1828 Carmel Del Mar: 12345 Carmel Park Drive; voice 858.481.6789, fax 858.481.7418

Del Mar Heights: 13555 Boquita Drive, Del Mar, CA 92014; voice:858.755.9367, fax:858.509.1412 Del Mar Hills: 14085 Mango Drive, Del Mar, CA 92014; voice: 858.755.9763, fax: 858.755.6107 Sage Canyon: 5290 Harvest Run Drive; voice: 858.481.7844, fax: 858.481.7949 Torrey Hills: 10830 Calle Mar de Mariposa; voice: 858.481.4266, fax: 858.481.0344 Sycamore Ridge: 5333 Old Carmel Valley Road; voice: 858-755-1060 Ocean Air: 11444 Canter Heights Drive; voice: 858.481.4040

Poway Unified School District

MIDDLE SCHOOL

Both Solana Beach and Del Mar Union school districts merge when it comes to upper grades but Poway remains separate. We have:

Carmel Valley Middle School 3800 Mykonos Lane 858-481-8221

Earl Warren Junior High 155 Stevens Street, Solana Beach, CA 92075 858-755-1558

And Poway Unified School District

HIGH SCHOOL

Torrey Pines High School 3710 Del Mar Heights Road 858-755-0125 (Torrey Pines High School Foundation)

Canyon Crest High School 5951 Village Center Loop Road 858-350-0253 (Canyon Crest High School Foundation)

And Poway Unified School District

Only a very small section of Carmel Valley falls into the Poway School District designated boundaries and most people don’t even know that this is the case, so make sure you confirm that the home you are considering moving into falls into the boundaries of the school district that you are looking for. All of the schools in the area have received top rankings you can check the scores in this CA state website

You will also find Private schools in Carmel Valley:

San Diego Jewish Academy Upper School (grades 6-10) 11860 Carmel Creek Road voice (858) 704 3770 fax (858) 704 3771 Lower School (grades K-5) 11860 Carmel Creek Road voice (858) 704 3761 fax (858) 704-3701 Cathedral Catholic High School 5555 Del Mar Heights Road 858-523-4000 Notre Dame Academy pre-school to 8th grade 4345 Del Mar Trails Road 858.509.2300 thesisters@ndasd.org

Del Mar Pines (grades K-6) 3975 Torrington Street San Diego, CA 92130 858-481-5615

If you have any other questions about Carmel Valley, would like any additional information or want information in any of the surrounding areas please feel free to contact me at : info@SanDiegoExclusiveProperties.com

 

 

Least Expensive Homes For Sale in Carmel Valley, San Diego -Rina Podolsky – San Diego Exclusive Properties-

I Have compiled a list of the Homes for Sale in Carmel Valley, including all neighborhoods such as Torrey Hills, Ashley Falls, Pacific Highlands Ranch, Etc. and selected the ones with the lowest price per square foot.

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Here is a quick Snapshot of the “Homes for Sale  market” in Carmel Valley, 92130 area.

There are:

• 164 Detached Homes for sale listed on the MLS as of today.
  • Lowest asking price per SF is $226.13. Highest is $812.79 which leaves an average selling price of $380.81
  • Lowest Priced Home is$535,000. Highest Priced Home is $7,695,000. Average price is $1,528,565

• 81 Attached homes for sale on the MLS.
  • Lowest asking price per SF is $283.16. Highest is $431.45 which leaves an average selling price of $354.97
  • Lowest Priced Home is$189,500. Highest Priced Home is $739,900 . Average price is $434,396.

Within the 92130 zip code, there are 3 school districts as far as elementary schools go. 2 for High School. Most homes in Carmel Valley are zoned for Del Mar School USD)  or Solana Beach School District (SBSD). Leaving only a few homes that are within the Poway School District designated Boundaries.

The homes within the Poway school District area, have been selling for less than those zoned for either of the other two Districts.

The homes that I have selected today are those that fall within the boundaries  of DMUSD or SBSD. And they have been selected for their asking price per S.F. Plain and simple.

Click on the pictures to display more detailed information on each of these homes.

1.

Santa Barbara Short Sale @ $252.17 per s.f.

2.-

Short Sale in Senterra @$277.13 per s.f

3.-

Rural Carmel Valley @ $278.27. Home built in 1905

4.-

Short Sale in Portico @ $280.32

5.-

Short Sale Watercolors @ $288.86

6.-

Watercolors @291.71 per S.F.

7.-

Torrey View @ $296.36 per S.F.

8.-

Seabreeze Farms @ $297.85

9.-

San Raphael @ $298.90

10.-

Bank Owned Stone Canyon @ $302.84

11.-

Belmont Short Sale @ $304.75

12.-

Breakers Short Sale @ $304.79

13.-

Short Sale in Rancho Pacifica @ $304.17 per S.F.

Even though the last home is not the least expensive one per S.F., this is a true SCREAMING DEAL! It is a Custom made home while most of the other homes in the area are what you call Track Homes, it is inside a very exclusive Gated Community.

If you want any information on any of these homes or on the trends of the local market, please contact us by going to our web site at www.SanDiegoExclusiveProperties.com we will be happy to answer any questions you might have.

If you want to make an appointment to view this or any other homes or if you would like to get together and talk about the value of your home please call us and we will arrange it.

In Foreclosure… Not Everyone Is There to Help -Carmel Valley Real Estate- Rina Podolsky

 

I was recently at an appointment with a homeowner who wanted to sell his home in Carmel Valley. For people familiar with the 92130 zip code in San Diego, it is an area that has held its value very well through the whole market crash and beyond. Which in turn means that we have less Short Sales than in many other areas in San Diego County and that also has translated into a market where Foreclosures are not as common widespread. Having said that, I do have to say that there are several homeowners that find themselves in a tough situation, and need to make a decision on what to do.

Some of this homeowners will sit down with me or other Real Estate professionals trying to get an idea of what their options are. At this point a reputable professional, will advise them to first talk to their lender, try to work something out and also will ask them as many questions as possible regarding their current situation, their short, medium and long term plans, their wants, their needs. This helps not only the  person asking the question but the homeowner who is forced to go through the excercise of prioritizing and looking at the big picture.

Unfortunately, it is not entirely uncommon for people at this stage to do one of two things after a meeting with a Real Estate professional.

The first one, is for them to still ignore the problem and continue pretending like something will happen that will make things ok at the end. In this case I sometimes get contacted by them when it is imminent that they won’t be keeping the home. Sometimes we can still do something but we are so much more limited at that point and that is if we can help them at all.

Or the second situation that happens and it pains me as well, is that I get a call back a couple of days later saying that they have not called their bank yet but it is ok because they have found another option. While doing research on the computer they found a company that is guaranteeing they will save their home and solve their problem. Or something along those lines. Here is where I want to be very clear. I am ok with people using other reputable Professionals, I want them to succeed in their aim of solving their problem in the best way possible. However (yes and this is a big one) The are SCAMS galore out there pertaining to Foreclosure aid. If they are promising something that sounds to good to be true…you know the rest.

Now being a homeowner in distress you have heard this before yet how are you supposed to know who is legit and who is not. Why waste a good chance when it can turn out to be a true saving grace? right?

Here are just a few pointers to be aware, if you come across any of these, please, STOP, and do a lot of research or actually, just stop altogether and go somewhere else for help.

The following list was compiled by Brian Olenik from Corinthian Title who has spent ample time researching this matter.

• Anyone asking for a fee in advance, before providing any services
• Instructs you to stop making mortgage payments to the lender and instead start paying into an account that he will set up for you. It might be under his own name or someone else other that yours.
• Instructs you not to contact your lender, lawyer or consult with any of the people you trust in regards to this matter
• Requires payment only in the form of cash, cashiers check or wire transfer.
• Advises you to transfer your property deed or title to his or her company
• Fills out paperwork themselves without allowing you to fill it out.
• Encourages to lease your house and says you will be able to then buy it back at a later date.
• Requests something to be done immediately and without delay. This includes pressuring you into signing something that you do not fully understand or have not had a chance to read, or are not sure you feel comfortable with. In many of this cases, time IS of the essence, but some hours or one day to go over paperwork carefully are time well spent, not wasted.
• Offers to buy your house at a fixed price that is not set by the housing market at the time of sale.
• Requests you to give power of attorney
• Requests signatures in a grant deed or deed of trust.
• Request signatures in forms that are not completely filled out.
• Refuses or fails to give promises or commitments in writing.
• Promises that no matter what the circumstances are, he will be able to stop the foreclosure.

 

These are the most common types of scams that are currently happening, and although there are others not listed here, the main thing is to keep a level head, try to think things through, many of these scammers are amazing at getting people to trust them, they have explanations of why and how to most questions yet disappear two days after they have gotten what they wanted from you. This is the time when you want someone to help you look at thing from a clear perspective. Run it by someone you trust before committing to anything.

There are a few places where you can go for help.  You should go to the HUD web site www.hud.gov there you will find valuable information on scams and foreclosures as well as a list of approved agencies.

There is also a special line created to guide and help homeowners , it is the Homeownership Preservation Foundation their number is 1-888-995-HOPE.

If you do come across a situation where you feel you are being a victim of a scam, you can contact:

California Attorney General  http://ag.ca.gov

California Department of Real Estate www.dre.ca.gov

Department of Housing and Urban Development  www.hud.gov

Federal Trade Commission  www.ftc.gov

Your local Better business Bureau www.bbb.org

You can always start by talking to a trusted Realtor or Real Estate lawyer of your choice, they should be able to help you figure out what your options are and steer you in the right direction and in most cases they will do this as a free consultation, we certainly do this for any of our clients.

Please feel free to contact me even if you are not in the state of California I  help guide you towards someone who is reputable in your area.

You can contact Rina and Sergio by going to our web site at www.SanDiegoExclusiveProperties.com and clicking on the contact us button or on any of our social media links.

But please remember, the sooner you take action the better your chances of having choices.

Foreclosure Moratorium Lifted

The ink wasn’t even dry on the newspaper (or this blog for that matter) regarding some of the largest banks putting all foreclosures on hold for what analyst thought would be a long time, and here comes Bank Of America proving them wrong and making us re-write our news and commentary pieces.

What happened? On Monday BOFA announced that it is lifting the foreclosure halt Partially, only on those states that have judicial foreclosures, that is, states that require a court to approve the Foreclosure, the ban will be lifted, these states, were the first ones to be put on a foreclosure freeze last week and the first ones to be put out of it.

BOFA said is that they will resume foreclosures in 23 courts starting october 25. They also said they are very confident and have reviewed their process and find it to be sound. As for the rest of the foreclosures in non-judicial states, those will resume soon after the bank begins refilling amended affidavits.

It is estimated that 30,000 foreclosures will resume now and 102,000 will resume thereafter the corrected affidavits are in place.

GMAC who also declared a temporary moratorium is also lifting the halt and moving forward with the foreclosure process.

The question remains, why halt the foreclosure process one week and bring it back to working order the next? Could they really have sorted out the state of this foreclosures in a short week? I highly doubt it specially when we are talking about institutions that have continued to make mistakes, and who take 9 months to approve a short sale.

Now don’t get me wrong, I did not want a moratorium knowing that it would mean for these homes to start accumulating on the banks  inventory, instead of them coming at a steady pace into the market. We learned that lesson already. However, Now that the fact that there might be serious questions about the banks process not only on the foreclosure end, but on the ownership of some loans, even if it is a small technicality, has hit the mass media, there WILL be reactions from many ends, legal reactions that is. And that will only tie up and bring more complications and cost more money. So, in conclusion, I am glad they lifted the moratorium but I hope that their process is really as clean as they say and that the banks are as confident as they claim to be because they will have to prove it in court.

TimesFootnote:
Since I last published this last night, there is already an update that I deemed pertinent to this note. This morning there was an article on the LA Times http://www.latimes.com/business/la-fi-bank-of-america-loss-20101020,0,5193498.story , it states that some of the investors that bought faulty mortages from BOFA have sent a written request to the bank, asking that they buy back improperly procesed loans. BOFA has so far refused to do so.

Now What? The foreclosure halt and its consequences explained

First it was GMAC halting foreclosures in 23 states, then JP Morgan Chase said it will delay the process of more than 56,000 foreclosure proceedings and from there all the way to Bank Of America announcing last week that it was pausing foreclosure proceedings in all 50 states while they review the process and paperwork for “defects”.

Today it was announced that California will be joining a task force created as a multi-state inquiry into foreclosures.

All this comes when it seemed like foreclosures where starting to ease up.

But what is this latest crisis all about. What is it that the banks are corned with at this point of the game?

Lets start by a quick explanation of the life of a mortgage .

Once a mortgage is created, it does not usually stay with the bank or institution that originated it. Mortgages will change hands several times through its life span. When a mortgage gets sold and changes hands the new owners have to get an “assignment”  from the buyers. An assignment is a document signed by both buyer and seller acknowledging the sale of the loan, this note has to be attached to all other documents and delivered to the new owner.

It gets a little more complicated from here. Many mortgages are the “securitized” this means that it get pooled in with a a large number of other mortgages by an investment firm and becomes part of a pool of mortgages that will be sold off in slices to different investors as an investment vehicle. Then someone is assigned with being the one in charge of properly dividing the money that comes in from the monthly mortgage payments and also of foreclosing on the ones that have stopped paying. This person is called the “servicer” . When a mortgage is securitized, what happens to the note, who gets the note? Neither the investor nor the servicer gets this note or assignment, not even the investment vehicle has the assignment, instead they go to a repository company and the transfer is noted in an electronic base.

So where did the break down occur? well, at the height of the mortgage wave, Notes were coming in at such a fast pace and paperwork was not being filed, revised or monitored. This was the barely -doc to no-doc era and so paperwork was more of an afterthought in many cases and this lack of concern went from the origination of the loan all the way to all the transfers.

Making matters even more complicated is the  fact that some of the institutions went under or were acquired by larger ones.

You might ask, how does dis impact the foreclosures and why if that had been happening for all this years, why the halt now?

Well, there were warning signs and some people did raise their concerned voices but they were not paid attention to, probably because the crisis  and the bubble burst seemed so large and that was the main concern, so it was until  Jeffrey Stephan a loan officer for GMAC admitted in a deposition to the signing of about 10,000 foreclosure proceedings per month for five years straight without reviewing the paperwork properly, that serious cracks in the process were revealed in a very public way that caught so many people’s attention and brought forth a probe into  GMAC (Ally) foreclosure proceedings starting a chain reaction to other banks since Jeffreys signed foreclosures for other institutions as well.

Initially the halt was done in 23 states that had what is called Judicial foreclosures. This means, that their foreclosure process, requires the lender to go through a court process and file a claim and turn in the appropriate paperwork which includes  a sworn and notarized affidavit of a loan officer and submit the mortgage documents.

Often, however, judges will issue foreclosure orders without the mortgage documents so long as the borrower doesn’t contest this point.Once the do this the get the court approval to move ahead with the foreclosures.

As I said not all states require this, some states, like California, do not need to get a court approval in order to complete a foreclosure. So the first states where the pause was enacted where those where the bank had to initiate a court process and had been required to turn in paperwork which in many cases was nowhere to be found, so how could they have foreclosed with court approval without all of the paperwork in order?

In many cases the foreclosures were not contested by anyone and so in those cases the banks went ahead and foreclosed even with the missing assignment documents, but in some other cases there are allegations of banks  and evidence has been produced to show that notarizations have been faked, documents forged.

Even though the situation looks worse in judicial states because there is forgery that was sent to court involved, this dies not exempt the other states from misdoings so, that is why the halt was extended in many cases to all 50 states.

In many cases, the notes do exist it will just take a big effort to find them and complete this files propperly. So this might sound like it is simply a case of paying to much attention to a paper trail. However, the fact that all this got through the banks, that there are allegations of forgery and in many cases there simply are no notes or assignments, this has the potential to become a huge mess.

There is lawsuit written all over this one from so many sides that it will look like lawyers playing fields.

Homeowners who have been paying their mortgage regularly are wanting to make sure the one they are paying actually owns the note, and if it turns out they don’t, well they will be suing for money paid to an institution that had no rights. Now there are those who properly securitize the loan and did not get the assignment note, they are looking into lawsuits from investors because tis bonds usually include a representation and warranties that the bank has obtained all documentation related to the mortgages included in the loan.

Without going into detail on this one, there is also a problem between senior and junior liens, and when the froze the foreclosure process, senior leans are responsible to pay junior liens some money even when the mortgage is not bringing in any, until this mortgage is foreclosed, so this puts senior liens in a delicate position.

And then, what happens if a note is never found? who owns that mortgage? Is the homeowner free and clear? who is he supposed to make payments to? If they stop making payments, who will have the right to foreclose?

Now let’s take it a step further. What will happen with all those people whose home was foreclosed and sold? If they come after the bank and actually prove that the foreclosure was improperly done? Their home was already sold, there is a new owner who might be facing a legal battle he did not sign up for.

Finally, if this situation takes a year to correct, once the halt is lifted, we will find ourselves with a wave of foreclosures that had been accumulating instead of slowly coming into the market at a regular pace, how will this new flood be absorbed by a weakened market?

 

 

Since the news on this one broke I have also been hearing some homeowners not currently in default that are not happy to hear that so many people will be living rent/mortgage free for a year (or two) while they are doing things correctly.

We should be paying attention to this one closely!

How to buy a Short Sale….Succesfully Carmel Valley Real Estate

In past posts we have talked about the different type of sales, covering Foreclosures, Short Sales, Deed in Lieu, and regular Sales. However we have done so from a seller’s perspective mainly.

I very often work with buyers and in this market, most people who initially approach me to help them find and purchase a home, will bring up the idea of snatching a great Short Sale for them to purchase at an amazingly discounted price. Some of them will have already heard some of the horror stories of people waiting months on end for the bank to approve the sale, yet many have no idea what it really implies and all the emotional and labor intensive process that a short sale can be. As an agent, a very important part of my job is to prepare my clients to what lies ahead, so when any new client approaches me, I ask them to give me at least 20 minutes of their time just so we can go over what I consider the ABC’s of buying : 1) A Short Sale  2)Foreclosure  3)Regular Sale. Only after they have heard what each of them entitles will we come up with a specific search plan for them.

So when it comes to the Short Sale portion, there are basically 6 points that I consider crucial for them to understand and be aware:

First, The timeline is what we call a moving target, it is NOT set in stone and will shift as we move along, so if they are in a situation where they have a set date by when they have to be living in their next home, short sales might not a good choice. Banks are taking anywhere from 60 to 130 days average to approve a short sale. Although some lenders like World Savings have set up faster programs where they are able to approve a short sale in as little as 7 days, and then on the other end of the spectrum I have seen others take as long as 9 months to approve a short sale, specially in the higher end loans where the bank will be forgiving a considerably higher amount of  debt.

Second, although it varies greatly in each case, I have seen a trend lately of banks not covering closings cost of a short sale and most of the time they will not pay for money owed to the Home Owners Association So it will be up to you as the buyer to bring some extra cash to the table and cover those extra expenses, this sometimes makes that initial price you offered and got an acceptance on, not such a great deal after all. Be very careful that you ask all the  necessary questions before you open escrow, have the listing agent disclose to you what the bank has agreed to pay for as soon as they know and most of all, ask them if there are any back payments to the HOA, any other liens, back taxes, etc.

Third, Don’t assume that because it is not a foreclosure the home will be left in good shape. Many of the short sales will have delayed maintenance issues, some will come up during the inspection face, and some will come out a little while after living in the home so it is highly advisable to buy a service insurance policy at least for the first year after purchase. Also, you will need some extra cash to fix up the property once you buy it, it is a house that has been lived in and that will need some repairs.

Fourth, Don’t fall in love with this property, an acceptance of your offer does not mean it is yours. Although your chances of buying this home did increase by getting an acceptance, it still has to go thru a long approval process and then there is the pending auction date you have to beat, many people assume that since the bank has approved the short sale, that means that they have cancelled the foreclosure proceedings and that the home is now ready to close. Sadly, one is independent of the other, sometimes the bank will grant you an extension on the auction date just so you can close a sale however more and more lately, banks have started to be less agreeable to grant extensions, they will allow one but no more than that and they WILL sell it in auction two days and even one day prior to the closing escrow date, so be very vigilant of those auction dates and if there was an extension on the auction date, make sure that it has gone into effect.

Fifth, On a typical transaction you have 17 days to complete all of your inspections before you are required to remove your contingencies, in many short sales situations, since ironically you are running against the auction date clock and some times because the bank has requested it so, you only have 5 days to do all your inspections, so make sure you have all your inspections ready to go in a moments notice as soon as you open escrow and know beforehand what you are willing to accept and what will make you pull out of the deal.

Sixth, Expect to be making offers along with people who are looking for investments and are all cash. If a short sale is looking like it is a good deal, there will be some competition so make sure that along with your agent you know how to write an attractive offer that will increase your chances of getting accepted. There are some key points that banks and therefore listing agents are looking at to select the offer that will get the house.

Probably right about now you are ready to give up on short sales altogether, however, the fact is that many of the homes that are for sale in today’s market, are short sales and they will be around for many years to come still, so it is not the best idea to discard any short sales as an option unless you are really pressed for time. Short Sales are a reality so it is wiser to learn how to deal with them and what to expect, it is also smart to have an experienced agent guiding you to the process and even better yet if there is a solid qualified short sale negotiator dealing with the short sale part of the process, one that knows exactly how to deal with the specific bank that holds all of the loans on this property and that has a proven track record of succesful closings. Be aware that sometimes, the agents will have NO information from the bank for a long period of time, so bear with them but stay on top of it.

The one thing that I tell my clients is to keep their emotions in check and to keep looking, hope for the best but don’t close your options just yet. Once you are in escrow and have a clearer picture you can stop actively looking but don’t start mentally placing the furniture just yet…keep a clear head and be realistic that this deal might not happen.

And last, please, whatever you do, DON”T make any big purchases that will disqualify you or affect your income debt ration making your own loan a new issue to deal with, this sometimes only comes up at the eleventh hour when there is not enough time to correct it, so help and don’t hurt your chances when you are trying to close an escrow on a short sale.

Cancellation of debt, might have Tax implications

I want to share with you some information that came to me from Chris Sorensen and the HELP project.

If you are in a situation where you are considering; A Short Sale, Loan Modification, Letting your property go to Foreclosure or even Bankruptcy, there are Several Tax implications to consider before taking any of the before mentioned routes. I would really hate for you to be in a position where after the fact you learn that you not only lost your home, but now owe money to the IRS.

Here is the information that Chris suggest you take to your CPA so he can help you understand where you and your particular situation would stand.

DEBT CANCELLATION OVERVIEW
Prepared by Jerrie Muir, IRS Tax Consultant
March 5, 2010

I. General Rule. When a taxpayer borrows money from a commercial lender and lender later cancels or forgives the debt, the cancelled amount may have to be included in income.

II. Common Exceptions:

Qualified Principal Residence Indebtedness- IRC Section 108(a)(1)(E)
Bankruptcy- IRC Section 108(a)(2)(A)
Insolvency- IRC Section 108(a)(1)(B)
Certain Farm Debts
Non-Recourse Loans

III. Mortgage Forgiveness Debt Relief Act of 2007 (Public Law 110-142)
a. Generally allows taxpayers to EXCLUDE from income debts forgiven or cancelled which were used to buy, built, or substantially improve a home OR refinance debt used for one of those purposes
• Debt must be secured by a home
o Principal residence defined under Treas. Reg 1.121-1(b)(1)
• Maximum amount treated as Qualified Principal Residence Indebtedness is $2 Million ($ 1 Million for taxpayers who file a Married Filing Separate Tax Return
• Applies to 2007, 2008, and 2009 Tax Returns
• Forgiven debt excluded from income is reported by taxpayer on IRS Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Adjustment), which is attached to the filed tax return
• Forgiven debt of a taxpayer is reported by the lender on Form 1099-C, Cancellation of Debt
• Taxpayer can also exclude debt if they are insolvent or debts are discharged through Title 11 Bankruptcy
o Taxpayer may make an election to reduce the basis of depreciable property by the excluded income rather than the other tax attributes- IRC Section 1082
• Forgiveness of a Non-Recourse Loan, which is a loan where the lender can ONLY repossess the property and not pursue you personally- Cancellation of this type of debt is NOT TAXABLE
• Mortgage Forgiveness Debt Relief Act does NOT apply to debt forgiven on second homes, rental property, business property, credit cards, or car loan
• Capital Loss on the sale of a primary residence is NOT deductible on a tax return

• EXAMPLE:

2002
Home Purchase $435K
1st Mortgage $420K
Down payment $ 15K

2003
2nd Mortgage obtained to build $ 30K
to build additional room

2006
1st and 2nd Mortgages $440K (Loan Balances)
(Before Refinance)
Fair Market Value of Home $500K
Refinance Amount $475K (Cash out of 35K)

2008
1st Mortgage $475K (Loan Balance)
Fair Market Value of Home $425K
Loan Modification Amount $ 40K

• Taxpayer has 40K in cancelled debt
• 35K Non-Qualified Principal Residence Indebtedness is reported on Form 1040, Line 21, as Other Income
• 5K Qualified Principal Residence Indebtedness is reported on Form 982

IV. The Emergency Economic Stabilization Act of 2008 (Public Law 110-343)
• Extends the mortgage debt relief on Qualified Principal Residence Indebtedness for tax years 2010, 2011, and 2012

V. Recourse Debt- When the amount of debt discharged exceeds
Fair Market Value of property
a. Difference is cancellation of debt and considered income
i. Treas. Reg. 1.1001-2(c), Ex. 8; IRS Revenue Ruling 90-16

VI. Non-Recourse Debt-
b. Foreclosure/Deed of In Lieu of Foreclosure treated as deemed sale with proceeds equal to the amount of nonrecourse debt
c. Abandonment of real property that has nonrecourse financing treated as deemed sale
d. NO cancellation of debt when treating the nonrecourse debt principal as the amount realized from a deemed sale

Please seek good counsel with an acredited CPA and depending on the case perhaps you will need a lawyers advice as well.

Please be wary of companies charging up front fees for any help with one of the situations mentioned before, it is many times not legal and in most cases a bad idea.

On The Way To Foreclosure? What Are You Doing About It?

It used to be that Short Sales and Foreclosures where terms only few people knew, mostly people inside the industry, and even then very few knew what it entitled and how the process worked. Thing change, and this two terms have come to be part of every day conversation for people like you and me and everyone else.

The shift occurred when the number of people having to go thru this process became so high. So now, it could be you or anyone we know going thru one of this situations.

Because of the high number of people in this situation, programs had to be put in place to help homeowners trying to save their homes from Foreclosure, so in a sense if it was to happen to you at any given moment, this is the time when you will find more help, you can use the phrase “there is safety in numbers”  Also socially, there used to be a big stigma associated with going thru this process, there was a sense of shame, today there is mostly a sense of being a victim of the current times.

But knowing that there is help out there is not comforting at all if you do not know what that help is or how to find it. Here are some suggestions on what to do if you find yourself in such a position.

• First things first.- Take the situation seriously and confront it, take charge. The worst mistake that many people make is to be in denial until the very last-minute when there are no more options. so first;  Try to contact your servicers, it won’t be an easy task, it will take a lot of holding on the phone, so be patient and plan on being on the phone for a while.  Ask for the “Home retention team” and alway take notes of everything that you say and the names and dates of who you spoke to and when.
• Get informed on what help is out there.-  One of the first tools available is the ” Making Home Affordable Mortgage Modification Program” it  is the government’s main program to prevent foreclosures. More than 2,300 servicing companies participate, covering about 85% of all single-family home loans, according to the Treasury Department’s Laurie Maggiano. Your servicers will have other options that might range from making a new loan to changing the terms on your current one. Also check the web sites out there that will give you all the information you need. Here a few sites to use:

http://www.hud.gov/hopeforhomeowners/

http://makinghomeaffordable.gov/

http://www.hopenow.com/

http://www.homeloanlearningcenter.com/YourFinances/ForeclosurePreventionResourceCenter.htm

• Stay on top of it.- You will have to manage the whole process, there will be a lot of papers and forms you will have to fill out, keep records of every conversation and every form and paper you turn in, make copies of everything, you should have a complete file with you. It will require a lot of following up on your part, you can not assume that they will call you if something is missing, you have to call them and make sure they received everything you sent and that they have everything they need. Send things in the order they ask for them, make sure each page is clearly identified as belonging to your file, the easier you make it on them the greater the chances of getting a faster response. This does not guarantee that you will have the outcome that you would like, but in case you don’t you can re-apply and you will already have much of the work done and organized.

 

• Do I have any other options?.- The answer is YES, however, it is important that you first try to contact your loan servicers before considering any other options. If you are not succesful at that you can always look for options such as  turning in the house and walking away, selling it as a Short Sale, etc.

I have to warn you, there are many scams out there right now, if you feel you need someone to help you thru the process there are genuine options out there but please make sure you are in good hands and not just fallen into a scam.

If you have any coments or questions let me know.

www.SanDiegoExclusiveProperties.com

www.twitter.com/RinaPodolsky

http://www.facebook.com/home.php#/group.php?gid=123662939207&ref=ts

Brief overview of the Foreclosure process

As I had mentioned in y previous post, The Term Foreclosure is one that we now hear everyday, but let’s explore what it means exactly and what are some of its implications.

Definition:  Foreclosure:  The legal proceedings initiated by a creditor to repossess the collateral for loan that is in default
wordnetweb.princeton.edu/perl/webwn

The causes for a Foreclosures can vary greatly,  some of the common ones are, Death, Divorce, unexpected tragedy or illness.  However, the most common one and the reason why we are hearing the term so much in recent years, is an economic downturn leading to a Real Estate Market downfall in prices. If the prices are not down, property owners going thru most situations, as difficult as they may be, have options, they can refinance or they can sell the house and if the market is on the rise they can still come out ahead. When people face hardships and on top of that they find that if they sell their home they are still on the hook and will owe a lot of money to the creditors, lenders, IRS, etc. well they feel trapped and Foreclosure might be the only option they see., not that the Foreclosure process is the end of the road for their hard times however they view it as the only option and in some cases it might be so.

 

To understand the process clearly we have to understand that there is more than one Type of Foreclosure. This is determined by the key characteristics of the loan. We can split them in two basic categories.

1)Judicial Foreclosure.- This is when the lender actually files a lawsuit in civil court against the borrower and as it is to be expected, this process will be handled by a court in its enirety. The court might  decide to do an a)Auction (Sheriff Sale) where the home is sold to the highest bidder.  b)Strict Foreclosure .The Court initially sets a date by when the borrower has to become current in its mortgage payments and if he fails to do so then they will award ownership to the Bank or lender without having to go thru a sale process.

The judicial foreclosure process begins when the lender files their lawsuit, at which time they also file a  document that is recorded at the County called a  “lis pendens (LIS)” on the property.This public information tha allows potential buyers, lenders, and others be aware of the pending foreclosure lawsuit. A second notice, the Notice of Foreclosure Sale (NFS), is typically filed once the court has set the auction time and bid amount.

2)The other option is a  non-judicial foreclosure- The core difference is that  this is a process that allows the lender to advertise and sell the property at a public auction, without court involvement,  As the process is laid out in state laws, or statutes, (also referred to as Statutory Foreclosure).The reason why this process is allowed, goes back to the loan itself it is a key requirement for this type of foreclosure that the borrower agreed to the process from the time of the origination of the loan.This is accomplished by adding a specific clause called Power of sale clause  which gives a third-party trustee the right to sell the property if and when the borrower is not making their payments. Non-judicial foreclosures are sometimes referred to as foreclosure by power of sale.

 

In most states, the foreclosure process begins at the moment the lender files a “Notice of Default” (NOD)  with the County Recorder’s office,Once again this is public information and it makes interested people aware that this propety might be foreclosed upon. The next step is a second notice, the Notice of Trustee Sale (NTS) typically filed 30 to 120 days later, varies acording to state law; this will set the auction date and time. But might be re-scheduled or changed

Two important factors to note are that both types of Foreclosure vary greatly according to state law and a Foreclosure Sale does not necessarily provide the buyer with a clean title, there are some liens and conditions that might not be wiped out at the time of the sale, this is the case for example with a Tax lien past due property taxes will be the responsibility of the new title owner.

Although I did not go into great detail here on the Foreclosure process itself, I would be happy to answer any questions regarding the details of this process, you can contact me thru this post or bo my web site www.my858realtor.com or following me on twitter www.twitter.com/rinapodolsky

I do want to go briefly into the implications of a foreclosure.

As with Short Sale, those going thru this process will see their credit being impacted, for how long will depend and vary I  advise you to contact a specialist,  but typically it is safe to estimate that it will be impacted for about seven years.

 

Another important concern and one that is not that widely known is the fact that when there is more than one loan involved  and only one of them forecloses, the borrower still remains liable for the other loans, even when the borrower does not own the property anymore. Because they did not foreclose, that loan remains in full force and effect against that borrower!!!

 

Finally, you will also be smart to get counsel from an accredited and l informed accountant because there are some Tax implications that it is very important to be aware of. You might be taxed for the difference between the price the property sell for at the auction and the amount of money you owed as capital gains and that in itself might even put you in a different tax bracket.

Please feel free to contact me should you have any questions or comments.

 

You can find me by leaving a comment here or at www.my858realtor.com as well as www.twitter/rinapodolsky.com

 

This is not intended to be taken as advise and as with any other postings I strongly encourage you to seek the proper counsel with your CPA and attorney. Also cases vary in circumstances.

Tax Credit’s all but gone…

Last year Both the Obama administration and the State of California rolled out tax incentives for first time home buyers and for New Homes sales.

 
The First Time Home Buyer incentive of up to $8,000 dollars is still available for those New Home buyers (New meaning you have not owned a property within the past three years) however they have to close escrow on the purchase of their home before December 1st, no word yet on whether this program will be extended, up to this point there are no signs showing that it will be. What this translates to for people looking to take advantage of this Tax Credit is that, you must be under contract by early September if you intend on using financing, it also means that people looking to buy a Short Sale property or just starting to look are running against the clock in a big way.

 
Regarding the $10,000 dollar tax credit for new homes, unfortunately that one has gone away. They had allocated $100 million dollars for that program and by July 2nd applications to qualify for this Credit were no longer available according to the State of California Franchise Tax Board Web Site http://www.ftb.ca.gov/aboutFTB/press/2009/Release_36.shtml They were slammed with request and the money has all been allocated.
Many buyers are still unaware of both tax credit’s expiring and they are doing their numbers taking this into account. Please talk to your CPA for more details on both and whether you qualify for the $8,000 credit.

 
The question at this point remains, how is the market (particularly home buyers) going to respond to this, many experts believe that this money back from the government played a big part in the market reactivation specially in the $600,000 and bellow price range that has become a sellers market in many parts of the State of California. This together with the “upcoming wave” of foreclosures that is expected to hit the market during the fall according to some analyst.
Next question would be, is there something that can be done pro-actively to mitigate both things happening at once? if so, is it being done?
I always appreciate your comments and questions, please keep sending them my way.
If you want more information on this or any other Real Estate related subject please visit my web-site at www.my858realtor.com. You can also follow me on Twitter http:/twitter.com/rinapodolsky or on Facebook  http://facebook.com/