Rama Mehra Certified Pre Foreclosure Specialist

Hardship, Foreclosure and the Homeowner
In an uncertain real estate market and troubling national economy, too many homeowners are faced with the immense challenge of maintaining their mortgage by living paycheck to paycheck, taking a large pay cut, having to pay unexpected medical bills, or losing their job entirely. In addition to perhaps having little to no savings and little available credit, the situation can be very grim.

There are options for homeowners feeling stuck in this situation and faced with certain foreclosure. Some may be able to sell their home with barely enough money to pay off their mortgage. Some may be able to sell their home with barely enough money to pay off their mortgage. Others may be able to refinance, however a majority of homeowners in this situation do not have enough equity to acquire a new loan.

Options include reinstatement, loan modification, forbearance, and the list goes on; however, many of these options are a drawn-out process that do little to ease the future financial pressure and foreclosure still looms even if put off for several months. Foreclosure is entirely avoidable, however, through the process of effecting a short sale.

A short sale is a real estate transaction in which the proceeds from the sale do not cover the balance owed on a loan or loans on the property. Lenders, quite simply, accept a discounted payoff on the loan and allow the sale to close escrow. The bank or mortgage lender will agree to discount the loan due to an economic hardship on the part of the mortgagor, and the homeowner will sell the mortgaged property for less than the outstanding balance of the loan, turn over the proceeds to the lender or bank, most often in full satisfaction of the debt.

A short sale is accomplished through negotiation with a bank’s loss mitigation or workout department on the part of the real estate professional, but the lender has the right to approve or disapprove any proposed sale. Main factors contributing to the lender’s decision are the borrower’s financial situation and the current state of the real estate market.

It is neither the lender doing the homeowner a favor nor an easy way out for the homeowner, but a process enabled by the real estate professional nor homeowner when they are committed to avoiding foreclosure. It can be likened to a circus, under a not-so-big top in which the animals and acts do not seem inclined to respond to the skilled direction of their leader, the real estate professional.

The main goal of a short sale is to prevent foreclosure; however, the bank’s decision to move forward with a short sale is dependent on whether there will be a smaller financial loss taking the short sale or in the carrying costs associated with foreclosure. Typically, a bank will determine the amount of equity by determining a probable selling price from a broker price opinion (BPO) or appraisal, and decide to approve or deny the short sale based on the offered short sale price difference compared to the costs of foreclosure.

Banks will not accept all short sales, and a trained, knowledgeable real estate professional is paramount to the process of getting a short sale approved. Advantages for the homeowner are avoidance of a foreclosure on their credit history and some partial control of the monetary deficiency.In foreclosure a homeowner will receive a 1099A (Abandonment) which there is very little tax relief for. In a Short Sale a seller would receive a 1099C (Cancelation of Debt) Based in section 108 of the tax code found at www.irs.ca.gov with a letter of insolvency from a CPA and IRS form 982 there is less exposure to an ongoing tax liability from a 1099C over a 1099A

Additionally, the process of a short sale is faster and less costly than a foreclosure. Controlling that deficiency and paying off one’s debt via a short sale is a sure-fire way to sidestep immense financial hardship and get back on one’s feet. While a short sale does adversely affect a person’s credit history, the impact is far less than that of a foreclosure.

In San Ramon itself, since January 2009, there are 33 Active Short Sale Listings; 165 Pending Short Sales and 149 Sold Short Sales.Do Banks Accept all Short Sales? No. That is why it is critical from the correct presentation of the short sale package to the lender, to working with the lenders’ loss mitigation departments is our best weapon to keep the file moving towards approval.

Would a Bank Accept a Short Sale if the Homeowner is Current on Payments? The answer is, maybe. Some lenders will accept a Short Sale file for approval on loans that are not delinquent; however, this is very rare. Other lenders will not accept the file until the loan is delinquent. One way to find out whether your lender will accept a short sale file for approval on a loan that is current is by submitting a short sale file to your lender.

A short sale/ pre-foreclosure trained and certified real estate agent is central to the process of executing a short sale.They are responsible for identifying financially distressed homeowners as candidates for a short sale as well as compiling a file for submission to the lender in hopes of having the short sale approved through their loss mitigation department. The homeowner trusts the professional to work hard to avoid foreclosure via the short sale, and the professional is the linchpin on which the entire process hinges. Even more than just allowing the homeowner to “sell” their house and exit on their own terms, the real estate professional enables the homeowner to save themselves the embarrassment of excessive legal postings or the threat of a visit from the sheriff as well as helping them maintain their dignity in a time of financial hardship.

Weekly Market Trend Reports for San Ramon
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All it takes me is an overseas trip to a third world country to start realising my blessings and thanking God for them. I would highly recommend all the pundits going crazy with their" The US is going down and everything is bad" negative raaga to go visit a far away country- that would show them what a great life we have here.



Why are we, as a society, becoming a bunch of whiners and complainers? I know when you lose your job, or your healthcare or lose anything else that is important to you- the tendency is to cry about it but somewhere in the crying we forget to count our blessings.I just got back from India where people living in the cities are breathing the most toxic air, drinking the most infected water, living in abject poverty( or living in complete opulence), sleeping on the streets in the extreme heat or cold- yet they go about without stress !! This is the one thing that amazed me because at some deep level there is the confidence that things are ok.

When I landed at SFO, I almost kissed the ground !! I thanked God for bringing me back to my family, where I can breathe fresh air, see the blue sky, live in a beautiful environment, drink clean water and have 24/7 electricity and water !! I am not here lecturing anyone but sharing my thoughts and experiences- People, PLEASE be positive and thankful,things could have been worse. Do not forget the art of compassion for one another and do not lose the respect for one another. Life is good and will get better.

In a growing city like San Ramon and a heavy demand for housing, we currently have just 150 homes currently available for sale. Out of these 150 homes for sale in San Ramon, 46 homes are Short sales and 16 are Bank owned.I am quite sure that out of the 46 short sales there are atleast 50% pending but because the listing agents want to play games by not marking it pending, there really is lesser inventory than the numbers show.

As for the pending homes in San Ramon,264 homes are pending YTD. Out of these 163 are Pending short sales !! Astounding numbers that shocked me too. 26 bank owned homes are pending as well, with an average of only 14 days on the market as opposed to the short sales with an average days on market being 45 for detached homes and a lot higher DOM for condos and townhouses.

Here is what the Windemere market looked like till last week:

Here is one example of a home in the Saville community that sold today. As you can see that the plan 3 in the resale market just went up in price from what the builder just sold:

If you have any questions about homes that are available for sale or have sold in San Ramon, please feel free to contact Rama Mehra @ 925.698.1815 or via email.
Homes For Sale in San Ramon, $100,000- $200,000
Homes For Sale in San Ramon,$200,000-$300,000
Homes For Sale in San Ramon, $300,000- $400,000
Homes For Sale in San Ramon, $400,000- $500,000
Homes For Sale in San Ramon, $500,000- $600,000
Homes For Sale in San Ramon, $600,000- $700,000
Homes For Sale in San Ramon, $700,000- $800,000
Homes For Sale in San Ramon, $800,000- $900,000
Homes For Sale in San Ramon, $900,000- $1,000,000
Homes For Sale in San Ramon, $1,000,000+

The Housing market in San Ramon has heated up so much that I think its time for me to pack up for the year and go for an extended vacation !!!!!! There are so many cash buyers writing offers well over asking price, how does anyone really compete?? I just wrote an offer on a property in Windemere that came on the market for a ridiculous price of $623,000. After writing $110,000 over asking, my buyer still got beat out by a all cash buyer who paid a lot more for the same house.

It is difficult for the buyers to comprehend what happened to the market ! For me too buyers, and this is great news for sellers. Unfortunately for many buyers who check comparables and make their offers based on that, are being outpaced by the pace of the markets recovering climb. The banks are not slowly showing Contra Costa county as a stable market on appraisals but they are still not giving full value for the homes. Hence buyers are coming in with the difference in the price an dthat is why all cash offers are getting priority over all others. I just Listed and Sold 165 Landsdowne Loop in Windemere for $499,000 and sold it for $545,000 in 2 days, and with 9 offers ! Where does this leave our FHA buyers?? I am now beginning to see listing agents writing in confidential remarks that FHA buyers are not welcome... quite outrageous but considering tough appraisal guidelines with FHA loans, it becomes extremely difficult to claim the value the sellers want.

Some homes, specifically short sales, are now closing and here is detailed information of closed sales from July 1st 2009 in Windemere, San Ramon

This new day and age in the history of America brings forth a new disease alongside the H1N1 virus- LOUSY APPRAISALS, short for 4 letter words that I cannot use on this forum. And dealing with the worst in the business, Bank Of America- I am today openly accusing them for using Landsafe and their hand in glove deal to screw over appraisals. These damn banks want the disease to spread and want to hold values artificially under the water.Give me one good reason why an appraiser will not use a higher priced active comp ON THE SAME STREET but use a lower priced active comp 1 mile away??????????? Do they have their head up their.........????? Large banks using cheap appraisers who will drive out 50 miles out of their area of business to give values on areas they probably have never seen in their lives

I am sipping my cup of tea in the morning and watching the news and the media( let me not start on them or I will surely tear my hair out) and Wall Street is reacting favorably to the news that July home sales jumped to a 2 year high. Selling homes everyday, we know how few homes there are on the market and how multiple offers are driving prices up. heck, I just sold one on a listing side with no appraisal contingency !! I don't think we have even one month of inventory in Contra Costa county and yet the banks are calling us a declining market?????????? Give me the explanation? Why and How?? This administration has tried to correct some problems but at the same time created morphed monsters that have taken on new identities.

WHo is regulating the banks and their appraisers? I called the appraisers boss to complain that he came in for 15 minutes, stayed outside for 10 minutes and only 5 min on the inside and came in 20K under value???? The boss tells me he cannot talk to me, I threatened that I would make a compliant against Landsafe with the department of RE appraisers and his attitude clearly indicated that he did not give a damn.... where should I go?? WHo should I complain to?? The last time Bank Of America did this to me on a deal 1 month ago, my buyer had to come in with a difference of 20K. Oh Oh and I forgot to tell you that it was a BofA property on short sale with their BPO coming in higher than their appraisal for the buyer !!!!!!!
This industry is inundated with goons, asses, thieves and smooth talking liars who are raping the public openly and I say the administration is equally responsible for the garbage being funnelled down the pipeline for us to tackle. We do have choices- as an industry that gets hit all the time, we realtors should raise hell on a national platform or drown in the garbage that piles upon us. Because if we are in a profession of assisting people with the largest purcchases of their lives, then we should have a say in making reforms. Please BANKS stop being the jerks that you are- ALWAYS