Foreclosure Relief in Sight for Santa Cruz, California.

Foreclosure Relief in Sight for Santa Cruz, California.

Four of the larger lenders promise to help California borrowers avoid default. They will principally maintain the loan rates when the borrower got the loan and not at the reset rate for 5 years. Many of these borrowers had sub prime loans. Our governor Schwarzenegger has been actively involved with Countrywide Financial Corp.,GMAC Financial Services,Litton Loan Servicing and HomeEq Servicing for an agreement.

Many borrowers have requested rate resets for rate relief and been given no or at times, long delayed responses. Banks have been cavalier towards their borrowers' credit plight in my opinion. In some cases it is because the loan was sold to a servicing company and the servicing company, with whom the borrower sends their money, has no personal relationship. Oftentimes lenders sell their loans in the secondary market to loan servicing companies. These are the firms that collect a small premium on millions of dollars of loans, to administrate the collection and billing of the monthly mortgages. Most home loans these days are sold so that the original bank no longer has any direct contact with the borrower. For this reason sometimes one can get frustrated in trying to get an answer from who you think is your bank, but is in fact only a servicing company.

One needs to find the original loan documents and speak with the party named there, or the successor. If you had been fortunate enough to deal with a reputable mortgage lender, they can help you find a solution. Local reputable mortgage brokers like Woodward-O'Connor Mortgage don't usually have these problems because they wouldn't sell the loan product in the first place. Talk with whom you got your loan from and they may be a good resource or other reputable mortgage brokers to help you out of the dilemma.

This wholesale greed that afflicted the industry has far reaching implications. While I laud the governors' efforts, many banks don't seem to understand that by extending these original terms for 5 years, they will likely stave off wholesale devastation to many many communities. Not only do they keep their borrower in tact, they will likely have forged a stronger relationship with the customer, and that may be beneficial in the future for them. The other thing is that in 5 years we will most likely be in a different economic cycle, most likely better.

Tens of thousands of people now can potentially stave off the pitfall of foreclosure. This is turn helps all of us. The ramifications are broad if you consider the big picture. A slew of foreclosed homes drive down the value of the neighboring homes, and are often vandalized. The loss of value decreases the revenue the local governments have to pay their personnel, road maintenance, etc.. The people who are forced out of their home, become renters and that often can cause rents to increase, which is positive to investors, but difficult on the other renters. When one owns a home, generally more money is spent in keeping the place up than for an investor owned property. Owners usually spent locally, helping all businesses. As neighbors are forced to leave neighborhoods the bonds that one has to a community, tear apart. The foreclosure process is damaging financially, emotionally and physically. If you have ever been through it, you will have a very different perspective.

I have been blessed to have had older clients and older friends. They offer a wealth of perspective and bring a conservative view to discussions of finance and life and real estate. Many were the product of depression families. Even though asset rich or cash rich, that knowing the value of a nickel, never goes away. Unfortunately that lesson was not passed on.

In the Santa Cruz County area we have had almost 400 foreclosure sales this year and about another 800 in process. The hardest hit area of the county is Watsonville. Neighboring Monterey County, also an agricultural rich are has had about 1200 foreclosure sales and have about 2400 more in process. You can keep track of these things on the Santa Cruz Record, a legal newspaper.

By the governor stepping in proactively and the banks starting to see the big picture, hopefully the worst will have been averted.

If you are concerned about losing your home or a property in Santa Cruz, give me a call. Banks would prefer to sell loans rather than take back a home. The sooner you realize there is a problem, the better the outcome. The biggest obstacle in many cases is dealing with the fear and self image issues.

If you are in investor for Santa Cruz real estate, the property varies and is not often in the best location or condition. Lets talk, as there is so much out there, it is difficult to sort out what a value is and what is junk. That is where an experienced agent can help save you time and make you money. My perspective is that real estate is a 5-10 year investment except for the sophisticated investor. There are great deals and good values to be found for those who step forward. This is one of the best times to buy real estate in about 10 years;give me a call.