Although sales are up and market activity has increased, expect short sales, foreclosures and loan modifications to continue in 2010, Robert Cruz, director of REO/Short Sales at Intero Real Estate Services told members of the Silicon Valley REALTORS® at a tour meeting this month.
Cruz said early reports indicate there are 3.1 million homeowners who are eligible for loan modifications, and only about 10,000 have received permanent loan modifications. These are homeowners with an unpaid balance of $729,000 and a 60-day delinquent rate.
The U.S. Department of Treasury and Department of Housing and Urban Development recently kicked off a nationwide campaign to help borrowers who are currently in the trial phase of their modified mortgages under the Administration's Home Affordable Modification Program convert to permanent modifications. The modification program is part of the Administration's broader commitment to stabilize housing markets and to provide relief to struggling homeowners. Roughly 375,000 of the borrowers who have begun trial modifications since the start of the program are scheduled to convert to permanent modifications by the end of the year.
While praising the Administration's efforts to assist in keeping troubled homeowners in their homes, the data shows the loan modification failure rate is high, according to Cruz.
"A vast majority will not be able to catch up on their mortgage and the alternative for them would be short sales," says Cruz. "Be ready to help your clients in any way you can. When they seek advice you aren't qualified to give, be careful; have them consult the right people, such as a good CPA or lawyer."
During the third quarter of 2009 (July-through-September period), lenders sent out 111,689 default notices to California homeowners. Cruz said indications are the number will not peak till the second quarter of 2011.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
For further information, please email or call the SILVAR office at (408) 200-0100.