National Association of Realtors recently reported that pending home sales rose an average of 3.2 percent in March. This confirms our local market conditions. We saw a sharp increase in the number of active listings that went to contract in March and April as I reported in an earlier post.
GILROY HOME VALUES are down more than in the surrounding areas. http://activerain.com/blogsview/1023816/Home-Sales-in-Gilroy. About 30 percent of homeowners are "underwater" which means that their loan or mortgage amount is higher than the current value of their home.
"Underwater" what now - - swim or drown?
I have had several people approach me and ask me what they should do in their current situation. Others don't ask for help because they are too embarrassed. Every case is different and what works for one may not work for the other. I try to be sensitive and not ask too many questions. I found that distressed homeowners prefer to find the information themselves.
It is important to know what kind of loan/mortgage they have. Do they have a Fannie Mae or Freddie Mac backed loan? If they aren't sure they can look it up at the following website: http://loanlookup.fanniemae.com/loanlookup/ or https://ww3.freddiemac.com/corporate/
If this is the case they would be able to get help through the "Making Home Affordable Program" and I refer them to the appropriate website. http://www.makinghomesaffordable.gov/
It is also important to know what the loan to value ratio is. I explain to them that they would have to estimate the value of their home and if they don't know it I would be happy to give that to them. Then they need to calculate the current debt on the house (first and second loan if they have one) and divide that by the value of their home. If this is within 105 percent than they would qualify for a loan modification. However, the majority of people will not qualify for this.
Refinancing is another option if the loan to value ratio is about 80/20. This is not an option for distressed homeowners but would be a great solution for those who have adjustable mortgages (ARMs) that have adjusted upward. Often homeowners have already contacted their lenders who are not willing to help. The majority of the advise given to distressed homeowners is to continue to make their monthly payments and not to fall behind. Under the "Making Homes Affordable Refinance and Loan Modification Program" the government wants to encourage lenders to work with the distressed homeowners to lower their monthly payments to about 38% of their monthly income and then the government will help bring it down to 31 percent by subsidizing the interest rate.
However, when homeowners contact their lenders they hear that the lenders are not willing to help them since they are current on their payments. I have never advised my clients to stop making payments but that is the dilemma that many distressed homeowners face. Do they stop making payments to "force" the lenders to work with them?
The loan modification effectiveness in reducing foreclosure is not encouraging. Many who benefited from this program are defaulting on their payments again within the first 6 months.
Gilroy Home Sales
Presentation High School's 43rd Fashion Show at the Fairmont
Presentation High School in San Jose is holding their 43rd annual fashion show on April 3, 2009. This year the fashion show will be held at the Fairmont Hotel in San Jose and the theme will be "A Walk on the Styled Side".
The afternoon show will be from 11:30 - 2:30 p.m. and lunch will be served before the show. Tickets are $100 per person. The evening show will include dancing after the show. Tickets for the dinner show are $175 per person. High school students can purchase student tickets just for the evening show and dancing afterwards, no dinner is included, for $25 per person. The fashion show will benefit the endowment for financial aid. Last year the show contributed more than $165,000 to the fund.
Presentation is an all girls Catholic high school in Willow Glen, San Jose. I have two daughters attending the school and am proud to say that my Senior daughter and many of her friends from both Presentation and Bellarmine College Preparatory in San Jose are participating both as models and hosts. They have spent countless hours practicing for the show, going to fittings and shopping for the additional necessities (that is always a nice excuse they can use for another shopping spree) such as shoes, boots and dress or tuxedo. It is a great show and countless volunteers have spent the past year organizing everything into the details to produce a show as fine as this one.
I will be a back stage dresser as I have done in the past and will have to miss part of the show. However, this is a "thrilling" job and there is no time for mistakes. The girls come in quickly and need their next outfit ready to go. This year the fashion partners are: Betsey Johnson, Cache, Club Monaco, Eddie Bauer, Eli Thomas, Ibiss, J.Jill, Levi's, Macy's, The North Face, Prana, Talbots, and White & Black.
The Family Committee has organized another Easter Egg Hunt for the young Eagle Ridge residents. This event will take place at the Eagle Ridge community park on Troon Court on April 11th from 1 to 4 p.m. This event will include an easter egg hunt, face painting and balloon artists will treat the youngsters with their art. As always, this events is free and sponsored by the Homeowners Association. Participants are asked to bring a dish to share and 10 filled eggs for the hunt. The Family committee organized three events a year for the membership. This is the first event followed by the July 4th parade and Halloween party in October. 
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I am a proud member of the professional team at Signature Homes and Estates, a boutique full service brokerage. With Eagle Ridge Realty I specialize in the Eagle Ridge Golf Course Community.
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