Kris & Kim Darney

According to MDA Datequick statistics (Monitors Real Estate Activity), 135,431 NOD's sent to California homeowners in 1st quarter of 2009...up 80 percent from 4th quarter 2008.

What changed?

Banks sat on their hands while the government restricted foreclosures with moritoriums. The moritoriums expired and the flood gates opened.

What's going to happen?

The next wave of "toxic loans" are due to correct and hit the market. These loans have projected to have the greatest potential of default. The well known banks that originated these loans are none other than Countrywide, Indymac, Wells Fargo, WAMU (now Chase), World Savings (now Wachovia Owned by Wells Fargo).

The highest loan failure rate from a bank belongs to ResMAE (69.9% of loans resulted in failure).

Kris & Kim share a report from the Inland Valley Daily Bulletin. California Home prices are going to decline an additional 10-30% over the next 1.5 years. Where will your home fair in this decline? Are you facing foreclosure? Do you need to talk about your options?

If you need help selling your home that's underwater...Call Kris & Kim 714-615-7605

An eye opening article was just published, referring to an onslaught of people that are being referred to as the "Newly Poor".

Gary Madden, the director of San Bernardino County 2-1-1, states this...."We're on track for about 70,000 calls this year for people needing some kind of assistance," said Madden, adding that 60 to 65 percent of those calls are for people unable to pay for basic needs, such as utilities, food or rent or mortgage payments.

A new study released by Washington, D.C.-based group that favors increased government activity to help low-income earners afford housing concludes that life could get harder for those who already have trouble paying rent. "Competition -- not just for rental housing, but for low-cost rental housing -- could become particularly fierce because an estimated 40 percent of the households displaced by foreclosure are renters," is one finding of the National Low Income Housing Coalition's new report, which was released Tuesday. The report, titled "Out of Reach 2009".

Besides the Coalition's assertion that an influx of newly foreclosed-upon renters will make it hard for many people to find a place to live, the organization also reports that many people simply do not earn enough to afford an apartment.

The Coalition reports that the 2009 "fair market rent" for a two bedroom Inland Empire apartment is $1,125. The U.S. Department of Housing and Urban Development defines fair market rent as "the dollar amount below which 40 percent of the standard-quality rental housing units are rented."

The figure includes utilities like gas and electrical bills but not telephone, cable television or Internet expenses.

The Coalition estimates that an Inland Empire resident needs to earn $21.63 per hour to pay fair market rent in a two-bedroom apartment without spending more than 30 percent of their income on housing.

However, the estimated mean renter wage in the Inland Empire is only $11.49, according to the Coalition.

The organization further reports that 60 percent of Inland Empire renters earning the median regional renter household income of $36,656 cannot afford to rent a two-bedroom apartment in the Inland Empire unless household members work 75 hours per week.

Danna Fischer, the Coalition's legislative director and a former Freddie Mac senior director, maintained that her group's report illustrates a need for increased government efforts to build housing and subsidize rents for low income Americans.

.....So that's the basic article.

Call me crazy, but I think asking the government to build housing and subsidizes renters is flat out Stupid, and for "Danna Fischer"...this suggestion is job security!

Do we really need to "build" more housing???? If asking the government is a viable solution, let's mandate banks that received Government subsidies use their REO inventory as rentals and make the rents affordable for the average wage earner that has lost their home!

http://www.nlihc.org/oor/oor2009/oor2009pub.pdf

Something to think about when your trying to figure out how to keep that beautiful home you purchased a few years ago. If your like most homeowners, when you purchased your home, you placed a good chunk of money down on a beautiful home in your desired neighborhood. Oh and of course it didn't stop there....maybe a new kitchen, bathroom updates and some landscaping....bottom line you've got a lot invested in the home and the neighborhood!

While taking a Short Sale listing the other day, in a beautiful, newer housing development....

Our clients shared their story and what prompted them to choose a Short Sale. This family was hit with a decrease in income due to "Government" cutbacks in the husbands line of work. They really had thought long and hard about a Short Sale, and they did there homework.

The fact that they were barely scraping by was at the forefront of the decision. It was also a much easier decision to make due to the fact that an adjustable rate on the second was resetting very soon.

For me, listening to this mother of several beautiful children struggle with walking away from what was going to be the home they invested in to give their children a good life, send them to top schools and keep them in a good element... was heart wrenching.

You see, they had bought this home on a conventional loan, lot's of money down and then a little later added one of those nasty home equity loans to do some beautiful landscaping and a pool. It's now 2009, a pay cut and over $100,000 into the home in the first few months....not to mention the down payment...

This isn't an unusual story. I'm sure that many people reading this will relate or knows someone that is or has gone through a similar situation.

For this family the final decision to sell at Short Sale came when they realized they weren't the only families in the neighborhood having to sell. Some homes already have posted NO TRESPASSING SIGNS due to Foreclosure.

They chose this neighborhood to raise their children. Now, vacant homes were selling for less than half of what they had paid. The decline in value was not only devastating for the homeowners that had invested so much into their dream home, but the ultimate victim was that beautiful, safe neighborhood that their children once walked to school everyday.

It was no longer safe for the kids. The neighborhood was crumbling around them.

Face it, we not only buy the home, we're buying the neighbors and the neighborhood. There is an adage we used in our past lives of marketing: "Birds of a feather, flock together"...i.e. you probably have a similar life as your neighbor. Similar likes, shopping patterns, etc. When these similarities is disrupted, your disrupted.

When a different element or "look" to your neighborhood changes...you probably change the way you look at your home and it's importance to your family. In this case, it was obvious. The new neighbors, paying 50% less for the same property...weren't the same "birds." The family was seeing the change and it impacted their decision to sell short.

That day will be one I remember. A family that was willing to sacrafice their dreams of the perfect home in the nicest neighborhood because of a changing element brought on by a depreciation of home value.

A sign of the times? More to come...