Your Questions About Foreclosures |

Your Questions About Foreclosures

Your Questions About Foreclosures

Ken asks…

Forclosed home, tenant didnt pay rent?

The tenant renting our home put a stop to this months rent of our property in Sacramento. She’s on a month to month based non-lease with no contract…I need to evict her A.S.A.P…shes been very difficult to get a hold of and to try to reach in person…what are my rights as the owner of the property? Our home is scheduled for foreclosure on Sept. 30th……
I’m currently working with the bank to try to get it on a short sale..

Your Questions About Foreclosures

The Expert answers:

She has no legal rights to withhold rent. That is BS.

Post a 3 day on her door and start eviction on day 3.

Have a friend serve her personally, at home, at work, whatever, you have no time to wait for the mail.

If all goes well she is out of there in 2 weeks. It takes 10 days after the 3 day notice, unless deadlines happen on weekends, you can only file paper mon-fri.

You can sue her and you will win your rent.

You breached no contract with the tenant, do not listen to trolls.

Your Questions About Foreclosures

Michael asks…

I’m thinking of buying a house in California?

Right now i live in Redwood Shores in the SF Bay Area, but i went to look at some house in El Dorado Hills just east of Sacramento. It’s a beautiful area, and the prices have dropped dramatically. Do you think it would be a good investment to purchase a home in this area? Isn’t it a sure bet that real estate in California would once again rebound in 3-5 years? Also what are the cons of looking at houses that are in short sale and foreclosure?
Thanks in advance!

Your Questions About Foreclosures

The Expert answers:

Skip the short sales, they take months and 80% never work. The biggest problem is that the sellers are seriously flakey and very few go about it the way they are supposed to. REO is better, the bank has valued the property all ready and is ready to go. If you are ready to go you can close in 7-10 days, where a short sale is closer to 12-16 weeks.

The areas is good. I have an investor friend picking up lots of high end properties there in the 350 range, absolute steals. He believes as you do, it is a sure bet.

If you are looking to invest stick with low income (never enough low income housing available) or high end homes. The market there is saturated with middle class, crackerjack box, track homes. They will not rebound as quickly in sales simply because there are so many of them. (I have to admit I have a biase, hating sub-divisions)

Your Questions About Foreclosures

Helen asks…

~Could we forgive all debts…Would it be feasible to forgive?

the indebtedness of those who are losing their homes?

My alarm is set to NPR, and this morning’s topic was about the tent cities that are springing up around the country–the subject of the story was in Sacramento.

The next wave of foreclosures that is being predicted–no, that is actually already happening–is not among buyers who bought irrationally, but among homeowners who have lost their jobs.

This is terrifying. We are neck-high in global financial ruin, and we must DO SOMETHING RADICAL

I will print all serious responses and mail them to my Congresswoman’s office in Washington. If you would like, do the same and mail to your own.

There is no reason why Yahoo!Answers cannot serve as a think tank and be the catalyst for humanitarian action. Ideas take on life when enough people think them…
(((Blueeyed Girl))) I was thinking along those same lines…
All–I can’t imagine that the solution that would be hammered out would forgive literally all debt; but there is historical precedence for this, and surely a modification of this strategy could be developed.
(((KAL))) A grassroots relief/disaster fund! Yes! I sincerely believe there are millions of us willing to work out a solution–at our own expense or the expense of our own time. I was here during the LA riots of ’92…once the City stopped burning, you can’t imagine the numbers of people who got out with shovels and brooms and trash bags…and simply went street by street.
Wonderful answers. Your postings have given me a sense of how this question can better be framed–more along the lines of a quest for some “out of the box” thinking.
Best answer to -M- for the amazing background info and the suggestion about interest rates, but I wish I had 70 points to hand out…every one was a winner. Thanks all.

Your Questions About Foreclosures

The Expert answers:

To me, the issue is not so much about forgiving debt, but looking at the way the economy uses debt as a mechanism towards growth, prosperity, and all the other buzzwords economists use to describe the benefits of a capitalist society.

Debt serves as surrogate term for what it really is: usury. Lending money to others at a certain interest rate gives people those that do have money a reason to lend it in the first place, namely a profit. The variance in interest rates of course depends on a number of factors, the most important ones being risk, the amount being lent – so on and so forth.

The intangible factor is what economists like to call opportunity cost – specifically, if I lend $100,000 and expect to get paid back over the course of 10 years at a rate of 5%, is that 5% back *worth* the TIME and benefit I could have realized if I had spent/invested that $100,000 elsewhere? (A simple interest rate of 5% would net $105,000 over 10 years, or $500 a year in profit. Caveat: take inflation into consideration and that $5,000 is worth about half as much by the time you get it all back in 10 years. [Your money is worth half as much every 10 years…])

One the reasons this particular economic mess is taking place is that very few believed there would be a contraction in the economy, namely in jobs. Without jobs, people don’t have income, and if they do not have income, how can a person/entity who is lending the money get any reasonable assurance that they will be paid back? Forget about paying back home loans – think of the people who cannot afford to pay their RENT or health insurance.

The economic model for prosperity does not meet up with the economic realities of America, unfortunately. While I believe something needs to be done to “stop the bleeding”, especially in the housing market, forgiving or absorbing that massive accumulation of debt would annihilate a great deal of incentive to lend money – for ANY endeavor – whether it would be for starting a business, expanding business, purchasing a car, you name it.

The problem or cause of this mess is that we live in a debt-financed economy. Without incurring debt, there is very little consumption. Why? Many people don’t have the means by which to save money for the staples of participating in an economy such as this: it is gone before it is even spent. But through years and years of analysis of income patterns, the banks and individuals who loan money to indiviudals and businesses take calculated risks and determine that it is better to loan money in the anticipation of realizing a profit versus just sitting on the money and have it not do anything, figuring that “paying over time” is a reasonable way in which to make a profit. That’s why many people who “buy” houses, cars, computers and vacations, do so over time – they simply do not have a large chunk of cash at their disposal.

So, in a sense, everybody “wins” but at what cost? The fear that has crippled the nation in the past 6 months has been at the hands of mutual anxiety. Banks don’t want to lend money because the job markets are suffering, and people do not want to spend any money for the same reason. It ends up what many economists have deemed as a “viscious cycle that feeds upon itself.”

It’s hard to say what is a good solution. There is a certain “flow” of money that lubricates the economy and it’s been crimped at two points: in lending and in spending. Forgiving mortgage debt wipes out the investors of the banks and wipes out the income stream coming from mortgage payments. (And to note, many investors in banks are not multi-millionaires; they are people with jobs, who have mortgages, who have done the same thing many Americans try to do in earnest: plan for the future and ensure long term security.)

I am not sure if it is possible, but one course of action could entail (And Shelia Bair of the FDIC suggested something very similar) is to restructure all debt across the board at lower interest rates, even at zero for a time if need be – that way, banks don’t get wiped out of their significant investments and people can keep their houses (Who have put equity into their homes as well). The more time people bicker about “fairness”, the more we will see an even greater problem – people getting thrown out of their homes, and not being able to HAVE, much less FIND, a place to live. It can snowball into a very real social and mental meltdown that can cripple society as a whole.

Your Questions About Foreclosures

Betty asks…

Real Estate Question: What Should I do?

I live in Sacramento, CA, and it is one of the cities that has been hit hardest by dropping house prices. I am a 19 year old college student living with my parents. I work as a freelance videographer/video editor and bring in anywhere from $1000-$3000 a month. I am also working on starting my own advertising/marketing company, but that cannot be considered since it is not a definite thing. I currently have no monthly bills since I live with the parents and bought my car in cash. I also have about $28,000 saved.

The prices in Sacramento are so low right now, that I really think it is a great time for the first time home buyer to get a house. So here is my question:

I need advice on whether to buy a house or not.

So here is some more info: In four-five years I will graduate with an MBA, and according to the regional average, I will be making between $60,000-$70,000 a year starting off.

Option #1 for me: I buy a house now that I would plan on moving into as soon as I graduate and get a full time job. A built in 2004 foreclosure house I wouldn’t mind living in would cost me about $260,000 right now. Since it is a foreclosure, say the actual market value is 280,000 So after buying it, I would then rent it out for the next four years. I would have my parents cosign(they have perfect credit) on my loan so I could get a low rate, say 6.25% (CA avg. 6.0% right now). After tax and insurance is added, I estimate my monthly total payments would be around $1650. I could rent it out easily for $1500 a month. So I would then lose $150 a month. Now I know that sounds stupid, but here is how I see it: Over a 4 year period I would lose $7,200+ 8,000 for repairs. $15,200 total. Now say the housing market goes up over the next 4 years and the house value goes up to $360,000. (It was higher than that in 2005). I then have over $100,000 in equity, and I only lost 15,000.

Option #2: I can buy a foreclosure house that I wouldn’t move into in four years. (it would be strictly investment). They go as low as $115,000 right now for ones not needing fixing. So say I get one for $140,000 to be safe. I can then rent that out and create a positive cash flow of about $200-300 a month after expected repairs and vacancy rate. The plan would be to then sell it when the market goes back up. Does that sound like a good investment to anyone? Keep in mind, I would have the extra work of managing the property and then I would also need to buy a second house for myself in four years.

Sorry for such a long drawn out post, but thank you to anyone who read through it. I could really use some advice on this. I aspire to be very successful and wealthy in life, and I think that starting off in real estate early will help me do that.

Thank You,

Your Questions About Foreclosures

The Expert answers:

Option 1. Seems like you have done your homework. Look for a property in your area that you want to live and will keep its value in the neighborhood you are looking for. Although you may not want to live in this property. Well if your having a hard time finding renter’s than you may have to so as not to lose to much money. Foreclosures are a great way to get into a home, especially since you have a great downpayment. If you need help with the area or recent foreclosures please contact me. Good luck and Happy Living!

Your Questions About Foreclosures

Donald asks…

Moving to California a good idea or bad idea? What do you think?

I have been thinking about moving to california for about a year now. I am currently in the military. I get out next year in 2012. – have no family there, only a cousin that lives in Sacramento. My friend is going to help me along the way of transitioning to the west. However now that I know what I know about California economy wise. I don’t think it is the smartest idea, for me anyways. My friend is from SoCal and all of his family lives there. I however want to move to Massachusetts to attend MIT so I can hopefully become a astronaut one day. Here is what I thought of it…..

1 I have no legitamite family in Cali
2 The unemployment rate is 12.0%, that is higher than my home state, South Carolina which is 9.9%, better than 12.
3 Housing is way over priced and foreclosure rate is among the highest in the country.
4 According to governor Jerry Brown, the state is cutting more than 12 mil in state budget, this means schools, welfare and medical help is getting cut in 2012.
5 Overall California is not the best place to be especially for a young person like me starting out by myself, I don’t think it is smart at all.

I honestly just think that the EAST is just more stable, reliable and considerate enough to give people a chance to survive. Born and raised on the east coast and I don’t think I can just turn my back on that.

That being said, when I do leave the military, I will be moving to Massachusetts to live my life or any where in the new england area.

What do you think about what I had to say on this matter. Good or Bad what do you think? Just looking for feedback.

Your Questions About Foreclosures

The Expert answers:

Well, sounds like you already made up your mind.

Yes, unemployment sucks. I was unemployed for 9 mos and now make alot less than i used to and am facing foreclosure. It’s a great time to buy a home now, prices and rates are great.

I live in So Cal and am thinking of moving to OR or WA but I’ve lived here all my life and the people and weather here are perfect. I don’t know if i really can move.

Good Luck

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Your Questions About Foreclosures
Your Questions About Foreclosures
Your Questions About Foreclosures
Your Questions About Foreclosures
Your Questions About Foreclosures

Your Questions About Foreclosures

Your Questions About Foreclosures