I spent last week in Northern California which perhaps isn’t typical of most of the United States, but I hit several areas one of which was Sacramento, known as a hotbed of foreclosure activity in California. My view of Sacramento was limited to the downtown area and there certainly wasn’t any air of despair there. Restaurants were busy, stores seemed to have customers, in general it looked like any thriving downtown, not an urban wasteland. Outside the city, I couldn’t say.
Spent a little more time in Silicon Valley, it was even more active than Sacramento downtown. Several times we had to re-adjust our plans due to the large numbers of people patronizing restaurants in both free standing locations and at locations in open air malls. So, it’s not an economic analysis, but the casual observation seems to indicate those areas aren’t being impacted significantly by overall recession.
February 19, 2010 – 11:14 am
From WLWT
Like many people, Terry Hoskins has had troubles with his bank. But his solution to foreclosure might be unique.Hoskins said he’s been in a struggle with RiverHills Bank over his Clermont County home for nearly a decade, a struggle that was coming to an end as the bank began foreclosure proceedings on his $350,000 home.”When I see I owe $160,000 on a home valued at $350,000, and someone decides they want to take it – no, I wasn’t going to stand for that, so I took it down,” Hoskins said.
It’s fairly easy to understand the frustration this man felt in dealing with his bank and the IRS over money owed on the property, but bulldozing the home wasn’t a rational act. The article states Mr. Hoskins had an offer from someone for $170,000 on the home but the bank felt a foreclosure sale would bring a higher price.
Ohio foreclosure procedure requires an appraisal and a minimum price at the foreclosure sale to be no less than 2/3 of the appraised value of the property. If the stated value of $350,000 is accurate, the minimum price at auction would be $233,345. The owner states in the article the bank was owed $160,000 so it appears there would be a minimum overage after the foreclosure auction of about $73,345
If there are no other liens against a property, auction overages will go to the homeowner, so it doesn’t make a whole lot of sense to bulldoze a home when there’s a significant possibility of a large overage. Although the article says the IRS had filed a specific federal tax lien against Mr. Hoskins’ commercial property, if that lien(s) was a general lien instead of specific, then any overage from the foreclosure sale of the home would go to the IRS instead of Mr. Hoskins.
Taking a guess, I think Mr. Hoskins wasn’t going to get any overage from a foreclosure sale, so he decided the bank and the IRS shouldn’t get the amounts they were owed. “Jumping out of the frying pan into the fire” comes to mind.
February 3, 2010 – 5:59 pm
Following article is from Fannie Mae announcing seller assistance on HomePath properties. Call it a discount or call it seller assistance, it’s a positive move to change properties from being in REO limbo into productive members of a neighborhood.
From Fannie Mae
WASHINGTON, DC — Fannie Mae (FNM/NYSE) announced today that people purchasing a Fannie Mae-owned HomePath® property will receive up to 3.5 percent of the final sales price to be used toward closing cost assistance or their choice of appliances. The offer is available to any owner-occupant who closes on the purchase of a property listed on HomePath.com before May 1, 2010.
“Attracting qualified buyers to the market and reducing the inventory of vacant homes is critical to stabilizing neighborhoods and helping the market recover. Many families are taking advantage of the federal homebuyer tax credit to buy a new home so this is a great time for Fannie Mae to offer some additional help,” said Terry Edwards, Executive Vice President of Credit Portfolio Management. “Homebuyers have the option to choose between financial assistance toward closing costs or new appliances for their home.”
Properties eligible for this incentive are listed on HomePath.com and most listings include detailed property descriptions, photographs, community and school information and more. In addition, many Fannie Mae-owned properties are eligible for special HomePath Mortgage and HomePath Renovation Mortgage financing which offers homebuyers an opportunity to purchase with as little as 3 percent down.