Phillips Ranch, CA

If you cannot afford to pay the mortgage anymore, Instead of walking away from your house, this is what you can do:

Contact your lender immediately to see if you are qualify for a loan modification. Explain to your lender that you can no longer afford the mortgage payment due to your current situation (sickness, lost of job or income, divorce...) to see what the lender can do to help you stay at your home. If you owe more than the house's worth, ask for lender's loss mitigation department will help speed up the process.

To help homeowners keep their houses, lenders can lower your principle and/or lower your interest rate through loan modification. By doing so, it will lower your mortgage payment tremendously provided that you have enough income to pay for the reduced payment.

Here's a real story about one of my coworker's client. Her client loss 50% of his income because his full time job was reduced to part time. After working with the lender on loan modification for 6 months, his mortgage payment was reduced from approximately $3000 to $1000 per month by lower the interest rate from about 6% to 2%.

If for any reason your lender can not help you with loan modification, contact a local Realtor who is experienced in working with distress owners immediately and put your house on the market for sale. If you owe more than your home's worth, you will need find a short sale specialist. An agent with experience in rental properties will be a plus to assist you in finding a suitable rental if you are credit challenged.

I am a license Realtor/Broker who have experience working with distressed owners, short sales and rentals. If you are looking for a qualified agent who can get your house sold quickly and help you transition into a nice rental smoothly, please contact me immediately for a free consultation.

What "loan buy down" does is if you pay more at the beginning for your loan fee, your interest rate will be lower and thus lower your monthly payment.

As an example, suppose you can find a 30-year fixed rate mortgage at 7 percent with no points (=$0 loan fee). On a $300,000 30-year mortgage your payment would be $1984.32 per month.

If you're willing to pay 1 point (1% x $300,000 loan = $3000) at closing, you can then "buy down" the rate to 6.75 percent so your payment will drop from $1984.32 to $1934.90 saving you almost $6000 over the next 10 years or $18,000 over the next 30 years.

The more you pay to buy down the loan, the smaller monthly payment becomes.

8 properties in Phillips Ranch were sold in October 2008. 6 out of 8 are either short sale or bank owned properties that offer outstanding value.

In order for the property to be sold in Phillips Ranch, sellers need to offer exceptional value to entice buyer to purchase their houses.

Seller can either offer 10% to 30% below market price like what banks are doing or upgrade their property in immaculate move in condition with new paint, hardwood/travertine/marble floor, modernized light fixtures/faucets, and/or granite countertop to fetch fair market price.

Once buyer's offer is accepted, it is time to think about how to hold title to the property. Since there is a legal and tax consequences on how title is vested, professional consultation from an attorney and/or CPA are strongly recommended.

The comparison above is provided for information only, it should not be used to determine how you hold title.

There were 2 similar homes went into escrow this month in Phillips Ranch. Both of them have same floorplan and both are 2940 sq ft.

One is regular sale with pool that is listed for $855,000 and another is a bank owned property listed for $659,900. The bank owned one was sold in 9 days and the regular sale was sold in 99 days.

If banks are so penny pinching on service fees, why are they selling bank owned home at 30% below market? Are they out of their mind?

To answer this, let's look at the recently revised instruction on how to perform BPOs (Broker Price Opinion) on pre-foreclosure and foreclosed properties from the lenders.

Lenders now want "A realistic, low end 30 day liquidation price, most importantly achieving multiple offers within 1 week of listing." They are desperate to convert their idle assets into cash.

This is why we are seeing bank owned homes dumped into the market at an outrageous low price making it excellent opportunity for buyers to seize great deals.