Palm Springs Foreclosure Information

Palm Springs Foreclosures – Palm Desert Foreclosures

Welcome and thank you for visiting my Palm Springs REO and short sale page. I am so excited being a buyer’s agent these days. The inventory is tremendous and the competition is fierce! There are half price houses in every price range. Houses that used to be $2M are now $1M. Houses that used to be $900,000 are now $450,000, and houses that used to be $300,000 are now $150,000. Heck, we even have houses under $100,000 for sale in the Coachella Valley!! This market will turn around. This IS California after all. If you are lucky enough to be able to buy a house now, you will have a lot of equity in a short amount of time! This is an opportunity like we have not seen before. Yes the lending terms are more strict than ever, but there are lending options such as an FHA loan which requires only 3.5% down, and they money can come from anywhere – i.e. it van be a gift. The key is to get pre-qualified up front so you know what you can afford. There are excellent tax benefits for first time buyers. Don’t delay in your due diligence to learn if you can afford to purchase property. NOW is the time!

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Palm Desert REO & Short Sales

The difference between a short sale and an REO (a bank owned home) is who is still holding the note on the house. A foreclosure is technically the process of the lender/bank seizing the property. Once the lender has completed the “foreclosure process” the home is now a Bank Owned house. Another term for Bank Owned is REO, or Real Estate owned. In either case, the lender, who once held the mortgage for the borrower, is now the owner of the property.
The definition of a short sale is: A sale in which the outstanding obligations (loans) against the real estate are greater than the amount for which the property can be sold. A short sale usually happens when the owner of the house, (the individual or individuals owning the home) chose to sell it before the foreclosure process begins, or before the house becomes an REO. The owner of the house has had some sort of a hardship and they can no longer pay the mortgage. Also, a common occurrence in this real estate market is there is more money owed on the house than it is worth. Therefore the bank agrees to accept less for the house than what is owed.

How to buy a Foreclosure in Palm Springs

First of all, you must be pre-approved to purchase a home. There is no sense in beginning your search until you know exactly what you can afford. Looking at homes before you have been pre-approved proves time and time again to be a futile effort. Ultimately you will fall in love with a home that is out of your price range. The most important thing to do before you start looking is to insure what price range you can afford. If you do not have a lender, I will refer you to one I trust and use frequently.
The search can be fun and also a little daunting at times. Do you have money to fix up a fixer? Are you handy and can you do the work yourself? You should be prepared for what you might see while looking for property! Sometimes the homes have been stripped of all appliances. Sometimes the windows have been broken and graffiti has been sprayed. It is so unfortunate that these homes stay vacant for so long. Vandalism is a common occurrence; however Bank owned homes are not always trashed. Its just the longer that they are not lived in; there is a greater possibility that these things could happen.
When you are ready to write an offer, it is imperative that the offer is accompanied with the pre-approval letter and a decent (3%) earnest money deposit. The EMD shows the bank that you are serious about buying the house. This money is held in escrow, and can be refunded should you pull out of the deal for some reason. Ask me about this should you have questions. Sometimes the Bank/Owner will require you to get a pre-approval through them. You can then use your own lender, but the Bank/Owner knows that if your lender can’t get the loan funded, they can do it themselves to insure not losing you as a buyer and having to start over.
The REO homes are sold “AS IS”, which means the Bank/owner is not going to make any repairs. There are certain mandatory requirements such as the water heater must be strapped, and smoke detectors are required. If the home doesn’t have a refrigerator, the bank will not be purchasing one for you. I recommend a home inspection to all of my buyers. Only a professional can tell you that the house is coming off of its foundation, or the roof is on it’s last legs. These high ticket expenses are not something that should come as a surprise to a new home owner. If you should find out that the house is unsound, we can pull out of escrow and you would be able to get the earnest money deposit back, assuming that we have had the inspection prior to contingencies being removed.
The amazing thing about REOs now is they are available in almost every price range and half price houses are plentiful! Houses that used to be $2M are now $1M. Houses that used to be $900,000 are now $450,000, and houses that used to be $300,000 are now $150,000. Heck, we even have houses under $100,000 for sale in the Coachella Valley!! This market will turn around. This IS California after all. If you are lucky enough to be able to buy a house now, you will have a lot of equity in a short amount of time!

Homeowners, AVOID Foreclosure at all Cost!

First of all, if you have had a hardship situation and can not afford to make your mortgage payments, please call your lender to see if they will work with you to keep you in the house. Unfortunately, there are so many hardship stories these days. People are losing their jobs. People who bought their house on an adjustable rate mortgage can’t keep up with the raising interest rate. There are a few alternatives. Once you get too far behind it may be difficult to get caught up. Perhaps you have heard of these Temporary loan alternatives. Here are definitions to these terms you may have heard before.

Forebearance – An agreement to temporarily let the seller pay less than the full amount of their mortgage payment, or pay nothing at all, during the forbearance period. Mortgage companies may consider forbearance when the home owner can show funds from a bonus, tax refund or some other source will bring the mortgage current as a specific time in the future.
Reinstatement – occurs when the seller pays the mortgage company the total amount they are behind, in a lump sum, be a specific date. This is often combined with forbearance.
Repayment plan – is an agreement that gives the seller a fixed amount of time to repay the amount they are behind by combining a portion of what is past due with their regular monthly payment. At the end of the repayment period, the homeowner has gradually paid back the amount of the mortgage which is delinquent.
Loan modification – is a written agreement between the homeowner and the mortgage company that permanently changes one or more of the original terms of the note to make the payments more affordable. Common loan modifications include:

Adding missed payments to the existing loan balance
Making an adjustable rate mortgage into a fixed-rate mortgage
Extending the number of years the homeowner has to pay

These situations do not happen frequently. You must have a temporary hardship issue to get these to be accepted by your lender.

The BEST permanent loan relief is to short sell the house and here is where my specialty comes in. I was chosen to participate in a new, short sale listing task force. This opportunity was only offered to Keller Williams realtors and only two realtors per office in the Inland Empire were selected. Keller Williams is partnering with ShortSalePlan.com and National Mortgage Consumer Counseling in order to save homeowners from the foreclosure process. Once a homeowner becomes 60 or 90 days late, they really must face the reality that they are probably going to lose their home. I deal with many people who are in denial and who refuse to face the facts that they actually will have their home seized by the bank. The good news about selling your house as a short sale is you do not have to pay realtor commissions, escrow or title fees. You also don’t need to do make repairs as the house will be sold “AS IS”. Many people, once they become delinquent, will live in the house without paying the mortgage until it sells, thus saving enough money for first and last month’s rent for their next residence. Now I am NOT telling you to not pay your bills….. I’m just telling you what others have done.

How Kimberly Helps with your Foreclosure / Short Sale Process

The process of short selling a house for most realtors is much different for them than it is for me, because I get to have ShortSalePlan.com do the negotiating with the lender. Through their negotiations, the lender will then tell us what they will accept for the house! Oh HAPPY DAY for me and my seller. The reason that this is SO IMPORTANT is that the short sale process is known by realtors to be a huge pain in the butt! Once I get an accepted listing price from the bank, I then get to write in my “comment section” on the MLS that “This list price is an accepted purchase price by the lender”. THEN, buyer’s agents know that if they write an offer for list price (or close to it…. or more!) the bank will accept the offer! This is SO HUGE you probably don’t understand, so I will explain how most other short sale listing agents have to work this scenario.

The Realtor will list the house with a price which they think is fair market value. If there is no comment stating “this price has been negotiated by the lender” then very few realtors will recommend that their clients even write an offer because the typical turn around time for a reply to a short sale offer is 4-6 months!!! By then the buyer would have given up and found a different house to buy. These lenders are so overwhelmed! They are not in business to own real estate. Their asset manager are overworked and surely under paid for their giant piles of paperwork which they do not have the time or the resources to get through.

The beauty of working with ShortSalePlan.com is that they will negotiate the purchase price for me, usually with upper management at these lending institutions. Therefore, buyer agents know that their buyer’s offers will be accepted, or perhaps countered in a reasonable amount of time. Our plan is to SELL HOUSES, not just list houses and sit on listings!

A seller should try to do a short sale instead of letting their bank seize the house for these reasons:

According to new Fannie Mae guidelines, after a two year waiting period from the completed short sale, borrowers can obtain new financing for any type of property i.e., primary residence, second home and/or investment – no other restrictions apply.
According to new Fannie Mae guidelines, after the required five+ year waiting period from the completed foreclosure, borrowers will be required to make at least a 10 percent down payment, and will need minimum FICO credit scores of 680. A foreclosure can adversely affect your FICO score to the tune of 150 points.In addition, borrowers will be limited to purchasing primary residence only.
A short sale saves your credit, you wouldn’t have to pay realtor fees and closing costs. You are still walking away from you house but to do it sooner rather than later is more beneficial to you in the long run.

How Does Foreclosure Work in California?

There is a time line which lenders usually try to adhere to. If the homeowner becomes delinquent, they typically have four months delinquency before the Notice of Default is filed. Some time the lenders don’t file this in time, but you should know that 120 days late is when they NOD is usually filed. Then you would have 90 days before the Notice of Sale. After the Notice of Sale, it usually takes 21-25 days before the house goes to a Trustee Sale. If the house is not sold, it becomes a foreclosed property. All in all the owner has about 8 months before the home is taken back by the bank. DO not delay here folks! You should not pretend that this situation will go away. It WON’T! You need to get your house sold as a short sale… you need to find alternative housing…. And you need to find a way to get on with your life. This is a temporary set back. You’ll get back on you feet, and things will look up in no time.