My older brother is here from Australia and we were discussing the fact that when he leaves Australia at the end of this job they will require him to cash out his pension. He has talked about purchasing a home in this area as a rental to have a place to shelter his money. This is the first time for as long as he can remember that he even considered purchasing a home in Southern Oregon. It appears that on the family wages paid in this valley that folks can afford to purchase a home again!

Short sales are still a difficult proposition no matter who the lender is. I can sense the frustration of the sellers who feel that they have bent over backwards, sometimes for years, trying to work out something with the lender so that they can afford to keep their homes, only to be ignored, I recently had a home listed as a short sale as my client had been out of work for two years. I listed the house and within two months I had an offer to bring to the bank on their behalf. My clients needed to write a hardship letter and give them a written budget to get this offer to be looked at. My clients flat-out refused to ‘do another thing to help the bank out when we have been through all of this with them ten times already’. I explained to them that the foreclosure department was a totally different department than the others but they didn’t care. They were fed up and had had enough. Sad to say I had to take the property of the market and it will proceed to foreclosure. It was just a case of the bank just not ‘hearing’ the sellers for months on end leaving the sellers what they felt was no way out.

I feel that unless the government puts some sort of regulation in place where the lenders are required to HONESTLY attempt to work things out with the buyers, and unless short sales become more manageable we will continue to see people opting for foreclosure rather than dealing with the hassle and stress. It is a difficult situation we are in as a nation. If we don’t learn to manage money better as a people this can happen again. There are always those circumstances where jobs are lost, illness and divorce cause the loss of a home and those things cause great hardships on a family. We are in uncharted waters here. Hopefully there will be good economic news as we move into the fall months!

The past two years have shown weak growth in the economy. Although there has been population growth there has been no housing demand growth. Builders incomes have dropped 70-90% and have been constrained by the lack of construction loans. Yun stated that is possible that in 2-3 years there will be a housing shortage due to the lack of new construction. He did state that housing starts are stable; but at a very low level.

According to Yun economists think that the recession ended last summer as we as a nation are beginning to produce more goods. The first signs of new jobs being created are out there. It will likely take more than 4 years to regain the 8 million jobs lost and from 6-8 years for us to recover from this recession. With the over-correction that took place on housing prices it has created a negative psychology among the people. He stated that this over-correction needs to be halted so the collateral damage of negative emotions is stopped. Only then will people begin to jump back into the market. As a rule, people don’t buy homes with cash. Rock bottom interest rates along with rock bottom pricing indicates an over-correction. The economic trenders, Case-Shiller data shows that we are currently at the zero line having returned to ‘normal circumstances’ regarding home
prices and the ability to buy homes by those that live in the area.

Medford has had 10 straight years of job losses while Washington DC has had the same number of years of job growth….likely driven by government jobs he said. He stated that to keep foreign investors confident in our growth we need to have a credible plan to reduce the debt. If they loseWeight Exercise their belief in us, rates will likely rise to between 7-9%. The government is trying to chip away at some of our tax deductions for home ownership such as mortgage interest and property tax deductions and having a capital gains tax for all sales. The National Association of Realtors are fighting these on your behalf. It is a proven fact that homeowners perform better in social
standards such as test scores,, juvenile delinquency and other standards. Artificially boosting the ability to be a homeowner is what created the housing bubble that eventually sunk the economy. Yun predicts that the mortgage rates will rise to approximately 6% at about this time next year.

The commercial real estate market follows the housing market by 12-18 months. This market is following the same bubble even though the bubble was not driven by  sub-prime loans. At this time since the loans are not government backed the now-profitable banks don’t want to let go of the money for commercial loans. Look for foreclosures and great prices on commercial sales and leases in the next few years. Fannie Mae has played a huge roll in keeping the interest rate low on home loans. They created a hedge fund that bet on the rise of the housing market which increased their profits. When the housing market crashed, the public took the hit.
NAR is advocating in Washington DC that Fannie Mae would never be allowed to do this again. Take the profits and ask the public to pay for them.

To sum it up Yun said that the increase in stock market activity was indicative of economic action by the wealthy where economists watching the housing market to take the pulse of the middle class. He was cautiously hopeful although the going is much slower than normal in a recovery. Be on the watch for political moves that take away the tax credits for homeowners.

Let me know if I can help you buy or sell your home….I am in it for the long haul!

Well, the numbers are out again for the sales in the area. I have downloaded the whole file so that you can see them all. It appears that some things look promising…the number of ‘normal’ sales which are
the ones that are not bank owned or soon to be bank owned such as a short sale. These seem to be a large number of the sales at first glance. For existing homes they add up to 51% of the sales where REO’s or properties commonly called foreclosures are only 38.8% of the sales.  Click on this link to see the stats in detail. stats may 2010

The most telling number…the short sales. These constitute 10.2% of the sales. When you add up the short sales and the REO’s which are basically transactions controlled by banks, it is approximately 50% of the market. Of properties on the market foreclosures are only 6.6% of the total. That tells me the banks are doing a good job of unloading their properties. In order to unload them they have to price them ‘to move’. What this means is that all other properties are in need of the same kind of pricing. If you want your home to sell or get looked at, the market demands you are at the same price as a foreclosure.

Consumers tend to believe that a foreclosure is a ‘great house at a great deal’. In some cases this is true. Generally a foreclosure is a home in which the seller lost all hope and let it go in more ways that one. They let the yard go, general maintenance on the home, sometimes the home has been stripped of appliances and even fixtures such as cabinets, lights and other removable items. When you purchase a foreclosure, you get what you get.

In a deal I recently closed my buyers got a great price on a house in East Medford. It was a foreclosure and it needed work. After the whole house inspection there were FIFTY items that FHA required to be repaired before the transaction could close. These weren’t minor items either. The buyer ended up having to raise the price of the property to cover the repairs. The repairs ranged from a HVAC system that actually worked, to ducts that weren’t full of water and mold, to a range/oven that turned on, and then a whole host of other repairs including a new shower that wasn’t covered in mold and held together at the drain by duct tape. Fortunately for us the buyers were well connected with contractors and got the whole thing done for an amazingly low price.

As you look at foreclosures, just remember, when the bank says ‘as-is’ that is generally exactly what that means! It appears that the banks are holding a bunch of properties off the market in order to not flood it with foreclosures and thereby driving up home prices a bit as people are competing over the available properties. That does not change the fact that there are whole flood of foreclosures yet to come!

On a final note, the stats show that home prices in our valley have dropped as a whole by 30.2% over the past five years. Talent and West Medford have lost over 40% of their value. It appears the pricing is stabilizing and with the lenders expecting a 1% increase in rates over the next year it might be somewhere close to the bottom in pricing. But then, my crystal ball could be a bit cloudy…..

The Treasury Department has come out with some new incentives to try to make the process of a short sale palatable to all parties involved. The program will begin April 5, 2010. Under what is called the Home Affordable Foreclosure Alternative Program, the servicer (lender) will receive a $1500 incentive and the homeowner could receive $3000 when a short sale or deed-in-lieu of foreclosure transaction is completed. The $3000 is a ‘carrot’ for the seller to at least attempt to do a short sale instead of just walking away. The Treasury Department has also increased the amount that the second (subordinate) lien holder can receive. The have increased that amount to up to 6% of the loan amount with a cap of $6000. These second mortgages would then be extinguished under this new HAFA program.

I closed a short sale just today so this information is hopeful for other people like my clients. I had the property listed for two years before we were able to get the bank to allow us to complete a short sale. As we were at the signing table I felt the need to make a phone call to my attorney regarding something the client had brought up regarding collection activity by their second lien holder.

The attorney told me that unless the second lien holder pulled the collection activity back from the agency they had placed it with my clients would still be responsible for the amount of the second lien regardless of what our contract stated. Needless to stay I jumped on the phone with the collection agency and verified that the collection activity indeed had been stopped and that the account was back with the original lien holder.

After many emails and lots of questions I was able to find out that the lender indeed could give us a full release of the property as stated in the offer and that my clients would not have any deficiency judgment against them. Had we not done that it was possible that the entire second lien could have been still held against my clients personally even though the property had been released from it.

I am getting ready to take another short sale listing in the next week or so. I am hoping that the April 5th deadline helps me with communication as I begin to try to put together another puzzle.

If you want to know more about short sales and if you and your property qualify for one, please feel free to drop me and email at jan@valleysavvy.com or give me a call at 541.944.6040. I will be happy to sit down with you and discuss all of your options with you. Until then, I love this quote by Christopher Robin when he was talking to Pooh….Promise me you’ll always remember: You’re braver than you believe, and stronger than you seem, and smarter than you think.

To me that is a good motto to live by in this economy!

I always look forward to February as it always brings the hope of a few more sunny days, a little less fog and of course, the promise of spring! There is that ‘fake spring’ week or two that shakes off the winter blues and teases all the bulbs in the yards to pop their heads up! That ‘fake spring’ did not let us down this year! It was beautiful!

I have been doing a little ‘light reading’ in the Oregon Real Estate News Journal. It is a publication sent to realtors that really keeps us up-to-date regarding changes in laws and practice requirements. (It also has a list of who lost their license and why. I am very careful to read over those to be sure I never end up on that page!!!)

These are just a few of the items discussed that I thought might pertain to you in your life even if you aren’t selling your home or buying one at this time.

Arsenic ~ As of January 1, 2010 the requirements for a seller who receives their domestic water from a well has been expanded to contain a test for Arsenic also. In the past I have always requested my buyers to do a ‘Great 30” which shows the top 30 occurring minerals in the water. Arsenic was one of those tests. Now it will be incumbent upon the seller to test for that and correct it if is higher than the EPA required amount. It wouldn’t hurt to have your water tested now for those of you using a well. You may take a sample from your well head or anywhere else that it is
not filtered and take it to a testing source. I usually use Neilson’s in Medford or Grants Pass Water Lab on the north end of the valley.

Tenant rights ~ There is a new change in the law for tenants living in a property subject to a foreclosure sale. If a tenant is in good standing the tenant can remain up to 60 days or the end of their lease time which ever comes first upon the foreclosure of the property. If the purchaser intends to live in the property then only a 30 day notice needs to be given. New law for non-foreclosures allows for 30-day notice no-cause termination of a rental agreement by the tenant in a month-to-month tenancy. It allows for a 30-day no-cause termination by the landlord within the first year of a month-to-month tenancy. After the tenant is there for over a year in the month-to-month tenancy, 60 days notice is required for a no-cause termination.

Carbon monoxide ~ If your home has a carbon monoxide source (gas furnace or appliances to name a couple) there must be a properly functioning carbon monoxide detector located outside all sleeping areas or you will not be able to transfer the title. All landlords will need to install carbon monoxide detectors by April 1, 2011.

Solid fuel burning devices: ie Woodstoves, pellet stoves: ~ If the device is more than fifteen years older than the more stringent standards guidelines, or does not meet the certified criteria, the device must be removed and disposed of prior to close of escrow. This is documented through a form filed with the county. This is to help with the air quality issues. There is a list of certified woodstoves on the Jackson County website. There is a usually a plate on the back of the stove that gives the make and model number to compare the device to the list.

I hope you can take these tips and apply them as necessary to your property when you get ready to remodel, or just do regular maintenance or sell. As always, you are the best and I couldn’t do it without you!!! Thanks for your business and Happy Spring!

These are the stats for the year-end of 2009. If you would like me to email me a copy just drop me a line at jan@valleysavvy.com or call me at 541.944.6040 and tell me your mailing address. Here’s to an even better 2010! Just click on the link above to see the stats as provided by the Southern Oregon MLS.

In this uncertain economy many people find themselves in a position they never thought they would be in…behind on payments.

My husband is a victim of identity theft so we have spent many years, tons of hours and lots of words on the phone with debt collectors explaining to them that the debt is not ours.

The interesting part is that by-in-large most of the collectors said to us ‘why don’t you just pay it and then
you can be done with it.’ 

I don’t know about you but I am not overly fond of paying off other people’s debts ESPECIALLY when the person is committing a felony act by using my credit!

I recently have had the unfortunate opportunity to get a new phone number that belonged to someone who had many debt collectors after them. 

With a common name like Garcia we also get every call from anyone ever named Garcia who might be in collections wondering if we are related to them.

I found this article in Kiplinger’s Personal Finance Magazine in September regarding how to deal with debt collectors. I have added some of my own experiences to help you navigate the calls. I hope you find it helpful if you end up in a debt collection situation whether it is of your own doing or not.

First off, whether you actually owe the debt or not, you have rights.

There are different types of collectors.

The first line of collection is usually the creditor themselves.  The money is owed directly to them and they are trying to collect it.

The other type of call might be a third-party collection agency.  This could be a debt collection service or in our case there is an attorney’s office in Chicago that once a year tries to collect on the thousands of dollars of parking tickets the identity thief runs up each year. 

With this collector in particular I repeat myself on the phone about the identity theft and then I fax them 54 pages of documentation from police reports right down the the fact that Rich was given a new social security number.  That usually stops them for 12 months until the next round of unpaid tickets hits.

When the creditor first calls they usually ask for the debtor by name.  I ask them who they are by name and where they are calling from.  If they won’t give me any information then I just tell them I can’t help them and I politely hang up. After a couple of times they begin to get the message that they really need to just give me the basics about what they want.

I can then tell them accurately if I can help them. This works best when they call on my phone number that is associated with the other person. I just explain that I was given this number and that I don’t even know who she is.

We recently recieved one of the ‘Is ???? Garcia there.’ I respond with there is no one by that name that lives here. When they asked if we were related to this person I respond with ‘I have no idea as there are probably thousands of people in the world with that name. You will need to give me more details to figure that out. ‘Of course they can’t give me details so I tell them they won’t find that person in particular at this number. I also asked them to remove me from their calling list since that person does not live here. We will see how well that works long term.

Debt collectors are not allowed to harrass you or be abusive to you according to the federal Fair Debt Collection Practices Act.  Unfortunatley that only protects you from the third-part debt collectors, not the creditors themselves.  You can visit www.privacyrights.org for more details.

The first place to start is the facts. In their first letter they are required to give you the name of the creditor, and the amount of the initial debt, breakdown of penalties and interest and an explanation of your rights. If the first contact is by phone remind them that they are required to give you the information in writing within 5 days. I personally make them spell their name, the agency they are calling from and I write down their phone number and the date and time they called.  One debt collection agency called asking us to pay a $20,000 debt. When we asked what the debt was for they said they couldn’t tell as they were about the third debt collection agency that purchased the debt. When we asked the original amount of the debt they said around $600.  At that point in time I recommended they get more information before they tried to collect on that debt but that either way, it wasn’t ours.

Set the record straight.  If you don’t recognize the debt. Tell them so.  Make them prove the debt exists and why they think it is yours. When we pulled our credit report during this identity theft time we found that there was a collection placed on the credit report for a place in Klamath Falls. We called it up and found out that they rent RV’s. They gave us the details of the collection. As it turns out they had someone with a similar name and since this person could not be located they just ‘put it on our credit report.’  Seemed like an interesting concept, you didn’t get enough information when you rented the RV so you just assigned the debt to the closest R Garcia to the location. We, of course, disputed that and it was removed from our credit report.

When disputing anything be sure to send your documentation certified, return receipt requested.

Collections agencies are prohibited from calling you between 9pm and 8am. They are also not allowed to use threatening and abusive language.  If you don’t want to be called or contacted in the future at all, just write the agency and say so. They may contact you one more time telling you how it will proceed.  If you have an attorney call, the creditor is allowed to talk only to the attorney in the future. Feel free to hang up on anyone that is threatening or abusive. I try to remember that they are just people trying to earn a living but I have to admit…sometimes that is very challenging! 

If you continue to have problems you can feel free to complain to the Federal Trade Commission (www.ftc.gov).  It probably won’t help your case but it will cause the offending parties to come under scrutiny by the authorities.

And lastly, you can always sue them.  If the collection agency does not follow the federal law you can collect up to $1000 in statutory damages, plus real damages and attorney’s fees.  To find a lawyer in your area you can log onto www.naca.net.

These are tough economic times for everyone.  It is more important than ever to keep a close eye on your credit. If you have more questions just send me an email or give me a call and I will get you hooked up with the right person to help you.  Just remember, they need to prove it and if it isn’t your debt, don’t pay it!