Mortgage Fraud has affected Eagle Ridge BIG TIME, and I mean in a huge way. Today, there are still 20 homes here that have been given a notice of default, and they are not even up for sale yet. It appears that mortgage fraud was used to acquire these homes, hoping for a quick profit, or perhaps easy money. Eagle Ridge is a great place to invest in, for YOUR OWN RESIDENCE, but not for investment property, meaning holding a property to rent, as rents will not cover your outward cash flow. Eagle Ridge is mostly Owner occupied, but there were some who bought to flip. Huge loan balances, and now they want to just alk away. The good news is that the properties are being maintained very well, except for one, but that one just sold. It also means there are a lot of homes priced below market, so now is a good time to buy (thanks to low interest rates). It's sad, as I live here, and have seen my property value decrease, but I'm not worried about that so much as I am in it for the long haul.
My basic premise as far as real estate investment goes is that money is made over time, not overnight. Period.
Historically, the data shows that. The cost of building new, with an ever decreasing supply of buildable land, will constantly make housing more expensive. Couple that with the rising wages (when is the last time you saw minimum wages go down?) one sees that housing, a basic need, will most certainly always increase in value.
All real estate is local, based on the local, regional economy, and here in Silicon Valley we seem to constantly reinvent ourselves and are on the leading edge of whatever drives the economy, which in this time period is technology. So, I am not concerned about a flattening of the market or actually losing money on my home. Basically, I am confident. Why? Because people like nice weather. People from all over the world. Silicon Valley is the research capital of all things technological, and people from all over the world want to live here. High paying jobs, good weather, plenty of places to go for recreation make a wonderful combination for a place to call home.
Back to mortgage fraud... I think I have identified what I call "Patient Zero" which is the term used by the medical community to identify the one flight attendant who brought aids to America. I have noticed one loan agent who I believe is directly responsible for at least, in my opinion, 5 homes in foreclosure in Eagle Ridge.
Currently, they have two homes under a Notice of Default at the time of this writing. Will they go to jail? Who knows? The D.A. is aggressively pursuing the fraud cases, and I hope the lenders aggressively follow suit. The penalty for mortgage fraud is 30 years in jail with a one million dollar fine. It has happened all over the country, and people are going to jail and it will get worse before it gets better.
As a Broker, I am often called upon to do a "BPO" which is a Broker's Price Opinion for various lenders who have one of their loans in default. Recently, while checking comps on a non-performing loan, I noticed that the owners in default actually had TWO homes in default. Peeling away the onion, what I was using for a comp enabled me to discover that the owner of the house in default had another one in default, and both houses were purchased within 28 days of each other. How did this happen? Absent further evidence, I would assume they used the same loan application for both houses... It really was that simple. The First house did not show up on the credit report because the loan was too new. Now, if it did, usually an agent made up a bogus rental agreement showing a high rent being paid which covered the debt service, coupled with a stated income loan, and viola-perfect recipe for mortgage fraud. Plus, the fact that nowadays one can have automatic payments made to the lender, how does the lender know that the person is occupying the house as their primary residence??? All it takes is a small correction in the market, perhaps a vacancy for more than a month and the borrower is upside down. BAM. Foreclosure time.
Interest rates were at historical lows, for this generation's lifetime. (To see a chart, go to my website and click on the link on the front page: Signature Homes & Estates . Now, is really a good time to buy, if fraud had not put so many homes on the market, driving the prices down...
Gary Frimann
Broker / Owner
Signature Homes & Estate
Eagle Ridge Realty
(408) 846-8284
Eagle Ridge Realty
Signature Homes & Estates
