Dorene Shirley Silicon Valley Real Estate

As we all know, mortgage delinquencies have risen sharply, especially among riskier loans since 2006.  Even though foreclosures have increased, the overall ratio of foreclosures in our marketplace is low.  Some areas felt the pinch of foreclosures more than others.  We've been lucky here in the Campbell are.  The public records reflect few homeowners losing their homes in a lender's Trustee Sale.

Those who know me have heard my complaints about the media making this issue bigger than it is.  I do feel most of our problems could be directly related to the Media driving public hysteria.  Let's face it the doom and gloom of homeownership sell papers and airtime. In my view had the lenders cut back on their creative underwriting ways, the industry would not have felt such a devastating impact. Home price wouldn't have fallen so dramatically.  Borrowers could have had more options. 

How lenders can help

There are certain steps lenders can take to relieve this current situation. Here are a few at the lenders disposal:

Repayment Plans

Lenders and servicers have always relied on repayment plans as their preferred loss-mitigation option. Under these plans, borrowers typically repay the mortgage arrears over a few months in addition to making their regularly scheduled mortgage payments. The plan works if the borrower had a job loss or illness.  Historically borrowers given repayment plans re-default at a high rate, especially when the arrears are large.

Interest Rate and Principal Reductions

Loan modifications, which involve any permanent change to the terms of the mortgage contract, may be preferred when the borrower cannot cope with the higher payments associated with a repayment plan. In such cases, the monthly payment is reduced through a lower interest rate, an extension of the maturity of the loan, or a write-down of the principal balance.

Most lenders are reluctant to write down principal. They say that if they were to write down the principal and house prices were to fall further, they could feel pressured to write down principal again. Moreover, were house prices instead to rise subsequently, the lender would not share in the gains.

I'm sure there are tax-related, accounting, and legal obstacles to expanding the use of principal writedowns.  I'm sure they've contacted their company accountants and tax attorneys for advice. 

Sadly, the wheels are turning pretty slowly for many of these borrowers who are willing to stay in their homes.  Foreclosures not only create personal and financial distress for individual homeowners, but can significantly hurt neighborhoods. Efforts by both government and private-sector entities to reduce unnecessary foreclosures are helping, but more can, and should, be done.

  It's like money blowing out the window.

The statisitcs for the Campbell area are as follows:

January 2008

New Listings 54

Current homes listed 135

Closed Sales 14

Average Days on Market 54

Average Sales Price $777,825

Total sales volume $10, 889,550

February 2008

New Listings 59

Current homes listed 126

Closed Sales 36

Average Days on Market 52

Average Sales Price $747,911

Total sales volume $26,924,800

From the above numbers we can see that the number of homes closed have increased and the prices have come down a bit. The days on the market are pretty close. I'm sure listings will pick up in March. All in all a great time to buy in Campbell.

These statistics are based on figures provided by on our local MLS and. If you would like a report on your individual neighborhood, please email me at Dorene@DoreneShirley.com.

Well most of us know there is a dog park in Campbell, which is divided into an enclosed area for small dogs and one for big dogs. Both dog areas are partially covered with grass and partially with wood chips. There are logs and boulders for the dogs to play on, trees and awnings for shade, benches, water fountains and garbage cans with litter bags. It's a great place to take kids and teach them how to interact with our four legged friends. We take our two American Eskimo's, Kimo and Bruiser, as well as the grandkids for an hour or two of fun.

Bruiser, Kimo and Anglica resting.

I love this picture with the dog's playing with the kids...the kids learn to interact with the dogs in a less intimidating maner.

Not a lot of grass at this vist.

You can see the large dog section of the park. We never get to go to that side, our dogs are too small.

When the dogs are done...the kids get to play on the playground. What an inexpensive day of fun. You could pack a lunch for a picnic, don't forget the dog treats and a camera. This is what memories are made of.

The parks play area for kids

Street scene of the park

Visit Dog-Park-USA for additional dog parks and directions

From time to time The Mortgage & Property Connection sends out specialized surveys to selected groups for marketing and educational services. With the recent changes in the real estate market place, as well as the wedding season around the corner, we decided to gather information about local newlyweds. I think you will find the results thought provoking.

The majority of responders were between the ages of 33-40 and first marriages. Most did not have a written budget. Every responder lived in our area for more than 2 years. An incredible percentage eats out on a regular basis. Only 23% of the responders owned their own homes. The parents helped with the down payment in most situations. A small percent knew what their credit score was or even if their spouse had good credit. One question we asked, "what is your biggest complaint living in the Bay Area". The answer... It wasn't the price of gas, food or taxes. Traffic was the overwhelming response.

Problems with the equations

Some of the main concerns I had with the responses were in the area of budgeting and credit.

I'll tackle the budgeting issue first:

When my husband and I purchased our first home as newlyweds, we had to make sure the payment could be made each month and we could live off what was left over. At times, God forbid the car broke down or some other emergency arose. Somehow we got through. The most important fact was that we knew where we stood at all times financially. At the time I didn't work (student). We lived off one salary. Guess what...some weeks we ate beans and wieners. No Starbucks, no eating out each night for dinner. Every dollar was accounted for. My concern for newlyweds today, as well as most young people, is the lack of money education.

Everyone must effectively mange the money they bring home. Regardless of how much you make, the foundation of building wealth is spending less than you make.

Credit reports and credit scores:

With today's volatile market, it more important than ever to make sure your credit is good and your scores are high. There are many ways to accomplish this. Some lenders have access to credit analyzing software. Here's how it works, your credit report is pulled with the credit analyzer software. The analyzer reviews all data contained in each repository and formulates an exact plan designed to reach the maximum credit score possible based on the specifics of the credit report. This is an in depth program and is customized based on savings and income.

During the months of March and April, The Mortgage & Property Connections will be providing workshops for those interested in improving their personal finances. Please call or email for more information.

Any questions on the above subject should be directed to:

Dorene Shirley, The Property Connection

2380 S Bascom Ave #100, Campbell CA 95008 408-558-9333

Email: Dorene@DoreneShirley.com Website: http://www.doreneshirley.com/

I wanted to take a minute to wish much success to the new President of the Campbell Chamber of Commerce, Art Low.

While Art has held this post before, he takes over after Carl San Miguel held the position for the past 4 year. I have no doubt he will continue to improve the Chamber's position in this great community.

The Chamber has been an asset to the community for over 100 years now. The Chamber is a vital part of the economic growth to any region, here in Campbell that is no different. I know Art will be a strong and influential leader and his devotion to the city's success is surpassed by none.

If you are not sure what the Chamber is about feel free to check out the website and become a part of the solution...... http://www.campbellchamber.com/