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Page 8 of 9

Is “Buy and Bail” Appropriate?

“Buy and Bail” homeowners find ways to get past loan restrictions.  Real estate professionals call it “buy and bail,” acquiring a new house before the buyer’s credit rating is ruined by walking away from the old because it’s “underwater,” or worth less than the mortgage. It’s an attempt to escape payments on a home whose value may never recover while securing a new property, often at a lower price with a more affordable mortgage.

To read the full story, please click here.

Why do homeowners do this?  Many may believe they are just “working the system” and so it’s okay.  When did it become “okay” to deliberately breach a contract?  That is exactly what a “buy and bail” transaction involves.

This is not to denigrate in any way those Tehachapi or Kern County area homeowners that are legitimately looking for help to resolve their mortgage issues.  Some of those actions may include hanging on if you can possibly make the mortgage payment, investigating refinance possibilities, considering a short sale or even a foreclosure.

If you find yourself “underwater” or even if you’re not sure, call, text or send an email from the Contact page to discuss your options.  As always, feel free to share your thoughts down below regarding this topic.  How many of you agree that “Buy and Bail” is wrong?
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Real Estate News Roundup

What will the new consumer protection bureau do for home buyers? Part of the financial reform bill signed into law by President Obama includes the creation of a Consumer Financial Protection Bureau, which plans to write new rules and monitor problems and abuses in areas such as residential real estate settlements, credit scores, “truth in lending,” and equal credit opportunity.

Is setting up yet another bureaucratic agency really going to provide any significant benefit to consumers?  Well, it may be a way to finally get rid of the poorly thought out and implemented Home Valuation Code of Conduct (HVCC) rules imposed by Fannie Mae and Freddie Mac in 2009.  HVCC is responsible for many of the late and undervalued appraisals we have been seeing since it’s implementation.

The new Bureau will include a hotline that will allow aggrieved mortgage borrowers and others to issue complaints and alert the Bureau to unfair and deceptive practices.  Does that make you feel more protected?

It will also include rules requiring mortgage loan officers to verify mortgage applicants possess the ability to repay the loans they’re seeking.   Is this different from making sure that a mortgage loan applicant is qualified to get the loan?  Isn’t this already part and parcel of the mortgage application?

Does this new Consumer Financial Protection Bureau really offer any benefit beyond getting rid of HVCC or is it just another bureaucratic agency that will slow down transactions while providing more government jobs to staff the Bureau?  Please share your thoughts by leaving a comment.  For more on this story check out this article.

California Home Buyers Tax Break funds are low or gone. Did you know that California had to build a new computer system to handle the faxed applications for the home buyers’ tax credit?  You may recall that the tax credit was available for first time home buyers or for new home buyers in two separate blocks of $100 million.  If you missed it the first time, you can get the scoop here.

The Franchise Tax Board is allowing people to submit applications for the first time home buyer tax credit even though they reported having allocated all the available funds by the end of June.  They claim they are continuing to accept applications  because they want to make sure that they really use all the funds available and don’t have leftover funds as a result of duplicated, incorrect or incomplete applications.

I wonder how much the new computer system cost on top of the $200 million in tax credits we are giving these first time home buyers?  You can read more about this here, but please share your thoughts below.

Home ownership rates are down. CNN reports that home ownership rates are lower in the second quarter of 2010 than they were a year ago.  In fact the rate is the lowest it’s been since 2009.  What do you think accounts for that?  could it be all the foreclosures?  Despite the fact that home ownership is down among individuals, it’s rising among investors.

What do you think is responsible for the decline?  Are foreclosures the result of bad underwriting for loans, loss of jobs, a combination of both?

Agents for buyers rate higher. Home buyers rate real estate agents higher than home sellers this year as compared to last year, according to a national consumer satisfaction study released last week by a leading marketing information company.  Moreover, home buyers were more satisfied with their real estate experience in 2010 than they were in 2009.  On a 1000 point scale, home buyers on average ranked their experience at 803 points in 2010.

It doesn’t seem much of a surprise that home sellers were less satisfied.  It is more difficult to be on the selling end lately when every buyer seems to be looking for a bargain.

To read the full story, please click here.

What are your thoughts?  Comment on this story and let us know what you think.

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Are House-hunting Priorities Different for Women and Men?

ZipRealty conducted a survey in June that highlights where men and women differ in their house-hunting priorities.  Overall it seems the survey respondents had fairly similar priorities.  I wonder if any of them were house-hunters from the Tehachapi area.

It is interesting to note that men are not focused on “man-caves” or home theater rooms.  Instead, they are even more interested than women in a nice master suite.   Would you be surprised to know that women placed a higher priority than men on a garage?

Men and women agree about the top three home features.  They both rank garages, master suites, and ample storage space as first second and third in importance.  The next five items appear on both lists, although not in exactly the same order: large or walk-in closets, outdoor entertainment areas, guest bedroom, gourmet or updated kitchen, and breakfast room or eat-in kitchen.

Finally, for women the last two top ten features are a large yard and wood floors.  For men, it’s a view and a large yard.  I guess men don’t care about wood floors and women probably figure they don’t have much time to enjoy a view.

The survey only included 1000 participants.  Do you think this is enough to provide a representative sample nationwide?  What about for the Tehachapi or Kern County area?  Share your thoughts below.  If you want to see the entire survey results, click here.

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Foreclosure Alternative?

There’s been lots of talk about how to get out from under a mortgage that is more than the value of your home.  One of the possible choices is a short sale. definitely a better choice than foreclosure.  Another choice that may be often overlooked is a deed-in-lieu-of-foreclosure, or deed-in-lieu for short.

Choosing a deed-in-lieu might be a viable option for many.  It allows you to cancel your mortgage in exchange for turning over the deed to your house.  In most cases, it is a much faster process than either a short sale or foreclosure.  Another advantage is that Fannie Mae has reduced the time that a borrower has to wait from four years to two as compared to a foreclosure.

Want to know more?  Check out this article from the LA Times, or use the Contact page to phone, text or email with your questions.

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