About Riverside County, CA

California Foreclosures and Deficiencies Balances
by John Occhi, Hemet CA REALTOR  
Mission Grove REALTY


I just received an email from a member of the public, Reid Pi*zz*   who found Brad Andersohn's  post The California Foreclosure Process & Timeline.

                                                                                               

Reid is in a jam and on top of that his wife is stressed.  Anyone who has read much of my work knows how I feel about keeping the wife happy, I cover my personal story in great detail in the blog article I wrote called, Why Do I work the PreForeclosure Market and Want to Help?

Reid is upside down in his mortgage.  He owes $305K on a home that is worth $250K and the mortgage has triggered to a new higher payment that he and his family just cannot afford.  The debt is not for purchase money, but for equity that he has taken out of the home and spent - allegedly on credit card debt, yet he is still buried by credit card debt today.  (I don't want to sound judgmental Reid, but this was foolish and in hindsight I am sure you would agree.) The big concern that Reid has is about a deficiency balance and whether the lender can or will come after him for the difference.

Reid has been very diligent.  He has spoken with a number of bankruptcy attorneys and has conflicting answers.  It is interesting that he divides the two answers into attorney that he has dubbed the "old-timers" and the "newer and younger".  Brad reports:

Some said that in a foreclosure in California there is really no need to worry about the deficiency...they said it would be too much trouble for them to do (the old timer bankruptcy lawyers said this) The old timers said "Foreclose, walk away and don't worry about it". And some said that they WILL in fact go after us for the remaining money.... (the newer (younger)  lawyers said this).

Bear in mind that the bankruptcy laws recently changed and much has changed with them.

Reid did additional research at this official looking website and found:

One of the major differences between the two foreclosure methods is your right to obtain a deficiency judgment, which is available when the loan is a "non-purchase money" mortgage or deed of trust. If the Property is other than one to four residential units, or if it is one to four residential units and the borrower did not intend to occupy, your loan (as distinct from a seller "carry-back") would be "non-purchase money." When your loan is used to finance or refinance the equity of the Property (no sale transaction is involved), the loan is also "non-purchase money."

If your loan is "non-purchase money" and you determine the protective equity is insufficient to repay the entire amount owed by the borrower, including all of the fees, costs, and expenses of the foreclosure, you may want to consider a judicial foreclosure. Deficiency judgments are not available when the non-judicial foreclosure method is utilized. However, collateral actions (a separate judicial action) for fraud, waste, or malicious destruction of the Property may still be possible.

Reid had a very interesting observation based on his extensive research and concluded: 

**I seems as if CA has strict anti-deficiency laws in place that came from the great depression where owners had to foreclose and then were further burdened by the lender suing for the deficiency! Which in turn made borrowers even "broker" after losing their home. 

Reid has read much of what I have written on the topic, so he has asked me to chime in and offer what information I could.  Please understand Reid, that I am not an attorney and cannot give you legal advise.  I have summarized what I believe to be your situation - I may have some of it wrong and there may be elements that have been left out - so what I have to say is just that, what I have to say and that and $5 and you can get a cup of coffee at Starbucks.

Will There Be a Deficiency Balance Owed?

I do not know of any lender that has perused a deficiency judgment against anyone.  This does not make it so.  My guess, if they are going to start, they will start with the homeowners who live with a bitter taste in their mouth and act destructively towards the home as they leave.

I also know that in order to obtain a deficiency balance they have to take judicial action against you this means to sue you in court.  To do so is time consuming and expensive.  Certainly to foreclose is much more advantageous because they get their home back so much quicker and they then can go ahead and sell that much quicker and recover at least some funds.  In case you missed it, you might want to read Why would a Lender Consider a "Short Sale"?.  The principals between a judicial and non-judicial foreclosure are pretty much the same as discussed here.

I suppose the big unknown is what will happen when the 2^nd gets wiped out in foreclosure or a short sale.  The first will be barred from pursuing you for a deficiency (if there is one on the first) - but what about the second who might receive nothing in a foreclosure or only $1,000 in a short sale?  No one really knows.

TIMES CHANGE

However Reid, there are no guarantees, as you well know.  My fear is that we will see a class of scum sucking bottom feeder attorneys who emerge buying these types of debts (non-purchase money second mortgages) and pursuing them - happy to make ten cents on the dollar.  For them it will be a windfall - for those they target it can mean nothing but additional hardship and pain on top of an already ugly situation.

                                                            

Based on what I know of your situation Reid, you need to consider listing your home with a REALTOR® right away and pursue a short sale.  It can be a complicated process, time confusing and stressful for everyone involved.  Not everyone is cut out for them and not every REALTOR® should be handling them.  I have written over 25 articles on the topic of short sales here in ActiveRain that you should consider reading.  They describe the process from several points of view - which will give you a good overall understanding of the process.  In addition to the other articles I have directed you to, I would suggest you start with What Is A Short Sale?

Reid, give me a call and lets chat.  You can reach me direct at 951-443-6259

Now Have a Blessed Day,

John Occhi, Hemet CA REALTOR®
Hemet California Real Estate

Ten Tips: How to Fix up a Home
By John Occhi, Hemet CA REALTOR

If you own residential property that you either want to rent or sell, you should be prepared to fix the place up a bit in order to attract the best renters or buyers for your Hemet CA Real Estate.

Yes, we know that fresh paint and new carpet are almost always required to rehab any property and these two expenses often cost thousands of dollars. In order to maximize the return on this investment there are a number of other projects that should be considered - and the good news is that all of these are very inexpensive.

So, if you own Real Estate in Hemet CA, or anywhere else in Riverside County the Inland Empire - or heck, anywhere - these tips should help you receive the highest return on your investment (ROI).

One last note before I serve the meat and potatoes - these tips are not just for homeowners looking to sell their Hemet home. No -if you own rental property in Hemet CA and you want to attract a quality renter for your home for rent apply these simpe techniques to separate yourself from your competition. Lastly, if you are an investor looking to capitalize on today's hot investor market consider what a difference these tips might make in adding valuable equity to the property once you have bought your investment property.

1. New Electrical Switch Plates
   It amazes me as a Hemet Realtor, how often I'll preview a home that has just been freshly painted just before being put on the market only to observe the old nasty switch plates! Believe it or not, but many times I'll even see where they cracked them re-installing them after the paint. These are so inexpensive - you can pick up the basics for about $.50 each - or less on eBay. Go ahead and spend $4 or $5 each on nice ones in the visible living spaces of the front entry, living room, dining room, family room and kitchen.
   
   
2. New Interior Doors
   There are some funky doors hanging in some of the homes in Hemet. Can you believe that people patch a door and paint over it. Tacky. Then there are the old brown doors. Yes, you can paint over the dark colors (about 3 coats of paint) - but why when you can get a brand new white door starting around $15. Then you can be a big spender and really move into the 21^st century with raised panel doors for less than $30 each at Lowes. If nothing else, consider changing the downstairs doors.
   
   
3. New Door Handles
   So, if you spend a few dollars on the doors you might as well replace the handles. Inexpensive brass handles can be found at Lowes for about $8.50 each. This is especially helpful if the old ones are painted around the edges. You can even step up and install the Euro-Style S-Lever for about $12.50 each. Again, this is such a minor expense that can have a great impact on separating your Hemet CA Real Estate from every other home for sale in Hemet CA.
   
   
4. Paint, Replace of Add Trim
   Perhaps the entire home does not need to be repainted but the molding looks off. The standard in new home construction today is an off-white wall with a bright white trim. If you are going to go ahead and re-paint your existing trim, use a semi-gloss bright white on all of the trim. Whatever you do - DO NOT STOP the trim partially in ANY ROOM. If the trim is worn on the floor - consider replacing it. I found a great website that you can order foam crown molding very inexpensively - as low as around $50 for a 16' X 16' room and they have some easy to follow tutorials on installing it right the first time.
   
   
5. First Impression - A New Front Door
   Yes, the first impression is from the curb and takes in many aspects, including the exterior condition of the home, the landscape and the front door. However, the front door is the threshold from the exterior to the interior and will be just as visible from the inside as the outside - so if you have a shabby door - replace it. If you have a nice heavy old wood door - then consider painting it a bold contrasting color. There are many great door resources - perhaps on of the best made doors today is through Pella - you can find more out about them here.
   
   
6. The Front Entry
   Once passing the threshold of the front door, more often than not you find yourself in the entry. Many older homes in Hemet CA open right into the living room. More often than not, the entry is an extension of the living room carpet. Perhaps there may be a small area of linoleum. By 21^st century real estate standards in Riverside County and the rest of southern California this is a must go item. The standard today is to replace or define the entry with a nice tile. A typical 8' X 8' area should not cost more that $100 to $125 in materials. I would recommend using a minimum of a 12" tile - depending on how large the overall room is, you should consider moving up to a 16" or even 18" tile.
   
   
7. The Bathrooms
   It really is amazing how many bathrooms just are not up to standards. Especially in the older Hemet homes for sale, old tubs and sinks are often pitted and just look funky - a real turn off to many women. It is not a difficult process and the supplies can all be bought online inexpensively - or just do a Google search (just add your city) to find a company near you to restore the tub and such. One Last note on the Bathroom - put in a new clean shower curtain and rod. It may be the best $40 you can spend. Remember most real estate purchasing decisions are made be women - so do yourself the favor and appeal to them.
   
   
8. The Kitchen
   Like the bathroom - it is one of the most important highlights (or lowlights) of the Hemet CA real estate. As a Hemet Realtor I am always pleased to see that attention has been given to this critical center of the home. New granite countertops, tile floor and new cabinets are very expensive and very time consuming, as far as do-it-yourself projects are concerned. Perhaps the least expensive modification you can make on old kitchen cabinets is a fresh coat of paint and even go ahead and add some new updated drawer and cabinet pulls.
   
   The other inexpensive change you can make to a kitchen that can make all the difference in the world is to replace the faucet. I would recommend one that has a flexible spray. Overstock.Com is a great resource for this type of item and you can often find faucets with a retail price of $200 or more for less than $100.
   
   
9. Dress Up the Exterior
   Many homes for sale in Hemet CA have ugly aluminum windows. One of the best ways to cover this eyesore is with some inexpensive exterior window shutters. As I mentioned earlier when I was talking about the front door - the exterior of your Hemet Home for sale is critical if you art going to command top dollar - in any market. Make sure you use a contrasting color on the trim - if your home is a light color, use a dark green or brown. If the exterior is a dark color then offset it with a bright white or other contrasting color. Often the exterior of the home does not need fresh paint, however give careful consideration to the fascia and the rest of the trim.
   
   The exterior includes your landscape. Do whatever you can to ensure your grass is as green as the neighbors. Nothing goes further than a couple of flats of seasonal flowering plants strategically placed in a planter next to the home, along walkways and around larger trees.
   
   
10. Mailbox and Other Exterior Accessories
    Try separating your Hemet home for sale from every other piece of real estate on the block. Do away with the plain ugly black mailbox everyone else has and add a nice new updated mailbox. Perhaps put it on a post. The same goes with the address numbers - step up and do something special and unique. Why not really go all out and add a weathervane. A couple of hundred dollars spent on exterior designer details will be noticed and can make all the difference in the world.
    
    

I hope that you have found this article helpful. It is roughly the same advise I offer a client who is looking to sell their Hemet Real Estate. Not everyone has the time or skills necessary to do this work themselves. In this case, I often recommend a contractor to come in and do a professional job in a defined time period.

The links that I have provided are just random links that I researched on Google as I wrote this article. Other than Lowes, Home Depot and Overstock - I have never used any of their services or bought their products. Neither do I profit in any way from these resources nor do I endorse them - again, they are provided as a convenience to you as a result of my online research.

I also give the same basic advice to those who want to buy Hemet CA real estate. When I take a prospective home buyer through a home, I will often point out many of these quick and inexpensive fixes that they can easily do to enhance the value of the house and make it into their home. It just amazes me though, how a home seller can avoid so many little obvious areas and yet think their home is worth more than any other in Hemet CA.

Likewise, when I am looking at a home as an investment for either myself, my partners or my clients I will pencil out the number for these projects as they apply to the particular project in an attempt to see how much sense the investment actually makes.

Now have a Blessed Day,

John Occhi, Hemet REALTOR
Mission Grove Realty
TheHouseSeller@GMail.Com
951-443-6259

A "Localism Tip" and How to Leverage the Search Engines
by John Occhi, Hemet CA Realtor
Hemet CA Real Estate

The weather in Southern California has been very cold the last few days and we have had some very light rains in Hemet. Obviously though, other areas received much more, than what we have in Hemet CA. You see, there is snow in the mountains that surround us and it looks beautiful. The air is clean and brisk and the mountains are just gorgeous with the fresh fallen snow - at very low elevations.

I set out with my digital camera to capture some of my favorite shots around town and capture the beauty that can only be captured after a fresh rain. Now I'm no more a professional photographer than I am a professional SEO guru, but I think I did pretty well.

So, I come home to my computer and start uploading to Localism -as a way to help dominate my community long before it goes active. I have already seen amazing results with the search engines just with my blog, so I know once Localism goes live - I will be in a very powerful position.

As I uploading the pictures, first to the state page and then the county and then the city and finally the different community pages I am thinking about the way I have searched for pictures on line. I realize that Google has a whole search engine dedicated to looking for pictures, based on the keywords used to describe them on websites - typically a caption.

I realize that every picture on Localism has a link back to my blog and I know that every search return Google Image generates, not only does it generate a thumbnail of the desired images but they provide a link back to the source page, where the original image was found.

Therefore, the more images I load on Localism, the more links will be coming to my blog and the more likely I will climb in the search results.

So now my brilliant deduction is to make sure that all the images I load have the right keywords so they and I can both be found. Now, I wont be as tacky as putting my web link in the description, but I will make sure that my city name as a minimum is included and any other appropriate keyword I can use.

I don't want to take credit for this observation - it's just that I figured it out all on my own and makes perfect sense to me. One more very powerful reason why Localism is just going to rock the search engines as soon as it is released on the public.