Roseville, Rocklin, Lincoln, Loomis, Granite Bay - Placer County, California - Real Estate Blog - Souza Realty

Your Home Has Been FORECLOSED...Why Do You Still Think You Can Stay For Free?

This post was inspired by Richard Weisser of Better Homes and Gardens Metro Broker's featured post "Has the old adage "you don't pay, you don't stay" become obsolete?" as well as a recent experience with a young professional couple who thought they still had the right to stay in their already-foreclosed home in Roseville, CA for free.

First of all, I have to admit that it's really disappointing to find out that people who seem like they should be "reasonable" or "intelligent" enough to know better (both of them work at a local Sutter Hospital, he's a lab scientist and she's a nurse) think they're entitled to continue to live in a house for free, even AFTER it has been foreclosed.

You see, this couple was offered a chance to stay and pay rent until they were ready to move out...but they claimed they were too busy to move out (husband said he works 12-hour days) and that they didn't have any money to pay rent (wait, didn't he just say he worked 12-hour days?)

Wasn't the 7+ months of not paying their mortgage (while the foreclosure process took place) enough of a free ticket for these people? I wonder if people who already have a foreclosure on their credit report think it's no big deal to have an eviction on there as well. That's not very smart if they plan on becoming renters...unless their landlords are mom & dad, of course! :)

When people default on a mortgage (whether it's a strategic default decision or not), they still have the legal right to stay in the home until it is foreclosed.

However, as soon as the foreclosure at the trustee's sale takes place, the homeowners should give up possession immediately... because at that point, they are no longer the "owners" of the house. In California, the foreclosed homeowners are generously given a 3-Day Notice To Vacate before the eviction (unlawful detainer) process can begin.

Sylvia Jonathan of Coldwell Banker Platinum Properties raised a good point in comment #114 of Weisser's post:

"...given the state of affairs in the foreclosure world, it takes months and on occasion years for the lender to finish the foreclosure. If the borrower moves out, there is a vacant home in the neighborhood. Stuff happens to vacant homes. It is my belief, therefore, that the borrower should act as a dutiful and careful custodian of the property."

I know that every situation is different. Some homeowners can't stay in their homes during the foreclosure process for whatever reason, and others can. Personally, I think what people do with homes they still own is their business and their decision. It's the people that refuse to pay and want to stay in a home that is no longer theirs that I have a problem with. At the end of the day, foreclosed homeowners will eventually be evicted...it's just a matter of time and money.

Just last week, the big real estate industry news story was that due to robo-signer issues, Bank of America, Ally's GMAC and JP Morgan Chase announced a foreclosure freeze in 23 states:

Connecticut, Delaware, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Nebraska, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Vermont and Wisconsin.

Today, Bank of America announced that they were halting foreclosures in all 50 states. Wow. Can you imagine the effect that will have on the real estate market? Here are some things I thought of:

1. Reduced inventory: supply vs. demand = prices increasing?
2. Traditional sales will be even more desirable, especially for buyers who don't want the long wait for short sale approvals.
3. Short sales will diminish, as more people will stay in their homes without risk of foreclosure anytime soon.

What is your opinion on how this will affect the national housing market as well as your real estate business?

Foreclosure Report - Placer County, California (August 2010)

This is a foreclosure report for Placer County, California as of August 2010. The data has been compiled to give you an idea of foreclosure trends this past year, such as the number of new foreclosure filings (Notices of Default and Notices of Trustee Sale), foreclosure outcomes (whether the properties went back to the bank, sold to 3rd parties or were canceled) and the number of days to foreclose.

Filings of New Notices of Default / Notices of Trustee Sale in Placer County, CA:

Foreclosure Outcomes (Sold to Bank / Sold to 3rd / Cancelled) in Placer County, CA:

 Time (number of days) to Foreclose in Placer County, CA:

Foreclosures by Year Built in Placer County, CA:

Foreclosures by Loan Balance in Placer County, CA:

Click to Search Foreclosures

Foreclosure Activity - Placer County, California (July 2010)

The foreclosure activity in Placer County, California has decreased for Notices of Default (NOD) and Notices of Trustee Sale (NTS), but the REO inventory and sales to 3rd parties have both increased as compared to July 2009.

Here are the exact numbers:

Notice of Default

• 381 in July 2010 (down from 564 in July 2009)
  

Notice of Trustee Sale

• 378 in July 2010 (down from 465 in July 2009)
  

Back to Bank (REO)

• 184 in July 2010 (up from 168 in July 2009)
  

Sold to 3rd Party

• 55 in July 2010 (up from 16 in July 2009)

In Placer County, we have seen an increase in the amount of short sales and loan modifications this past year, so that explains why there haven't been as many NOD's and NTS's. The REO inventory seems to remain pretty stable, with only a slight increase...but the number of 3rd party sales has skyrocketed!