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Are You Upside Down

I received a call from a client about a possible short sale of his home in Walnut Creek. We discussed his various options specifically the pitfalls of a Deed in Lieu. It's surprising to me how many people are presently in foreclosure, even in central Contra Costa county.

While he is still current, due to the declining values in his area, he thinks he is currently upside down in his mortgage. I plan to meet with him this weekend and determine the best course of action and minimize the negative impact this could have on his financial situation.

Posted by Bill Clemente on 01/09/2008 07:31 PM

Comments (3)

deed in lieu, foreclosure, short sale, walnut creek

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3 Comments on Are You Upside Down

Hi Bill -

I just recently pulled some numbers on foreclosures in Contra Costa and was surprised as well. Concord is leading the way when it comes to the condo market, and Antioch is the leader in single-family homes. If you want, you can see the numbers I pulled:
Condos
Single-Family Homes

Good luck with your client,
- Brian ~ www.sparrproperties.com

01/09/2008 11:56 PM

by Brian Sparr ~ SPARRproperties (Keller Williams Realty)

Hi Bill -

Hopefully he doesn't have a loan that is adjusting. If not, then it is like the stock market and you don't loose until you sell...even if today's value is less than what he paid. Hope he can just live there and enjoy his home....and not worry. It will get better. The rate of recovery really depends on his city and Walnut Creek will be one of the first to come back. Hope he can hold tight.

BTW... Good for you for taking the plunge.

01/11/2008 07:55 PM

by Rossmoor Retirement & Walnut Creek CA Real Estate, Susan Kingsley (Empire Realty Associates)

Bill,
It is not suprising to me how many forclousers are in CCC: falling home values; a loan which is about to or already as reset to higher rates (payments); pre-payment penalties; little or no equity; tighter guidelines which include lower loan to values to qualify. I have had so many conversations in the last several months where the home owner is upside down and there is no chance of finding financing for them. Their alternative is a short sale or forclouser. It is a tough conversation when the outcome is either forclouser or a short sale,(unless their is some type of intervention soon). This is both emotionally and financially debilitating, not only to the client but to the community as well.

My recomendation is for anyone who can refinance out of loan that will reset in the next year or two to do so now while they still have equity and rates are low. But, in a declining market (California), LTV/CLTV guidelines are being reduced by 5% (if we were able to do loan to 95% CLTV, now it will be to 90% CLTV). Market conditions are check quarterly but I do not expect the "declining market" condition to be removed in the near future.

Bill, call me an lets have coffee soon!
AJ

01/19/2008 01:05 PM

by Alan 'AJ' Nisen California Contra Costa Mortgage Officer (A Large Bank in America)

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