Distressed Real Estate & Skateboarding, these are two things I have seen go hand in hand my whole life. In high school and college as a skateboarder and as a Real Estate Agent the lure of a vacant pool to today’s young riders. Here is a short film on Vimeo from the Skateboarder’s Point of View. There is a small amount of offensive language, so you are hereby warned.

Cannonball from California is a place. on Vimeo.

California foreclosure time frames. How much time do you have before foreclosure? The following information will outline issues you should be concerned with if you are facing foreclosure in the state of California. If you have any questions, please use the comments below, I’ll be happy to help where I can.

In the state of California, loans against real property are secured typically by a Deed of Trust. This benefits both the consumer and the lender with a very specific process for the lender to recover the property in the event the borrower defaults on their obligation. This also protects the consumer (borrower) with a set procedure and rights to redeem or cure their loan if and when the borrower default. This process is consumer friendly as it limits the recourse/deficiency rights of the lender.

Here are some the terms be familiar with:

Beneficiary – the lender.
Trustor - the borrower.
Trustee - third-party that holds the title in trust until the loan is repaid.
Power of Sale Clause - contained in most California real property loan documents that gives the Trustee the ability to recover or sell the property for the Beneficiary if the Trustor defaults.
Non-judicial foreclosure – the Power of Sale Clause in gives a Trustee the ability to recover or sell the property without going to court.
Purchase money – money borrowed to purchase real property which is secured by Deed of Trust.
One Action Rule – the California Deed of Trust system and its Non-judicial Foreclosure proceedings create a One Action Rule on most properties, meaning that once the Trustee Sale occurs the beneficiary has no deficiency rights against the Trustor. This is typically true for Purchase Money Trust Deeds. Refinance and home equity line of credit (HELOC) money secured by deeds of trust typically contain deficiency rights against the Trustor.

I’m going to give the typical outline and some time lines of a California foreclosure; however because of  the current market & economic conditions (2010), the banking system is not following the exact procedures as they try to deal with large inventory of non-performing loans. The Federal government and the banking industry is trying everything in their power not to flood the market with foreclosed inventory, so we are seeing delayed foreclosure proceedings. If you are a borrower facing foreclosure, do not count on delays even if you hear stories of other borrowers staying in homes for a year without making payments. Once the Notice of Default is filed, you could lose your home if you do not take the necessary steps to cure the default and/or protect your rights.

Typically when the borrower defaults on their payments, the lender will wait till the borrower is approximately 90 – 120 days behind in payments before starting the foreclosure process. There is nothing stopping them from starting at 60 days or at 31 days, however I believe because the ability for the borrowers to cure the default and the cost for the lender to foreclose and sell the property; lenders typically try to see if they can get the borrowers to catch up before starting the foreclosure process. The lenders are not in the property management business or property ownership business, they are far better off if they can get the borrower to cure the default and continue making payments.

Once the lender has determined that they must move forward the foreclosure process, the first step is that the lender contacts Trustee and instructs the Trustee to issue a Notice of Default. The default is recorded, mailed and sent certified mail to the borrower. This starts a 90 day period in which the borrower can bring the loan current and stop the foreclosure proceedings. To bring the loan current, the Notice of Default typically contains past due amounts, penalties, late fees and legal fees. At the end of the 90 day period, a 20 day notice of sale is recorded, mail to the borrower, posted on the property and is to be published to notify the general public of the upcoming sale auction. The sale cannot occur until 21 days after the publication. This is why when you ask most people how long does the foreclosure process take, figure approximately 120 days rather than 110 days. I guess if the trustee and the lender is organized enough, they can coordinate the publication to occur quicker but that would be the exception rather than what would happen in the normal course of business. In either case if you have defaulted on your loan, any mail or notices delivered to you or posted to discuss your loan being in default or your property being sold should be taken very seriously. I would be careful in ignoring certified mail as you may need the information in those notices to protect yourself.

The notice of sale will contain the date, time and location of the trustee sale, which is typically on the steps of the county courthouse where the property is located. The property will be sold highest bidder which includes the lender.

So this leads us to the question, you’re in trouble and you’re pretty sure you can’t save your home so when do you have to move out? The short answer is if you do not resist, approximately six months from the day the Notice of Default is filed. This includes the approximate 120 days it takes for the lender to get the property sold at the county courthouse plus an additional 60 days before the sheriff shows up and locks you out.

This above post is informational only.  THIS  IS NOT INTENDED TO BE LEGAL ADVICE. Each situation can vary and I strongly urge you to seek the advice of an attorney and tax professional to protect your rights.

Thanks for reading Simi Valley’s Premiere Real Estate Blog!

Author – Ted Mackel Simi Valley Real Estate Agent – Keller Williams Realty

Ted Mackel is a top producer at Keller Williams Realty Simi Valley,

specializing in Simi Valley Real Estate

(805) 432-7705

Simi Valley Foreclosures For Sale 671 Azure Hills Drive

• Price = $639,000.00
• Bedrooms = 4
• Bathrooms = 3
• Interior = approx. 2407 sq ft
• Lot Size = 12,302 sq ft
• Pool & Spa = Inground – Gunite
• Upgrades = Windows, Flooring, Ceilings, Kitchen
• RV = Boat or smaller RV
• MLS# = 10004666

This Simi Valley Foreclosure property is lender owned. I am an REO/ foreclosure specialist working with a regional bank. My assignments cover properties in the West San Fernando Valley including West Hills, Woodland Hills, Winnetka, Canoga Park, Northridge, Granada Hills, Chatsworth and East Ventura County including Simi Valley, Moorpark, the Conejo Valley.

Typically these properties come back and pretty poor condition. Mostly from deferred maintenance which sometimes leads to serious issues. This property is an exception is prior owners  appear to have taken good care of this property and left the property clean and peacefully.

This property is located in the Oakridge Estates on the south west end of Simi Valley near 1st St. and Royal. This neighborhood has a lower than average turnover rate and an HOA which  has done a good job in maintaining the community. Call to make an appointment today  and see this great property and terrific community.

Foreclosure Pitfalls – Buying Banked Owned Properties Part II

The following photos really illustrate how tricky the foreclosure market can be.  The damage in this property pretty much eliminates 75% of all qualified buyers as only very particular financing is available for this type of property.   What I could not capture in the photos is that this home is built on a hill and the whole front of this house is failing and sitting on unstable soil.  Prior Seller repairs cosmetically covered some of the evidence; unfortunately the next owner of this property will need to fix the hill, repair the foundation and the front walkways on this home.  

The numbered list corresponds with the pictures. The condition of Bank Owned – REO – Foreclosure  properties is very uncertain and if you plan to write offers on these properties, it is important that you take the right people with you.  Even more important you need to work with a real estate agent that can help pre screen these properties for serious issues.  There is no need to tie a property up into escrow only to cancel that escrow after spending money on inspections when many of these problems can be identified early.  Additionally, because lending is very tricky for these properties, your real estate agent can waste your time with these properties if your financing requirements do not match the property. 

The photos below show a home that was looted by the prior owner before leaving.

1. Master Bath Vanity and sink Removed.

2. Recessed Lighting Removed.

3.  Stove Removed.

4. Dishwasher Removed.

5. Master Bath tub Removed.

6. Air Conditioning Removed.

7.  More evidence on Air Conditioning Removed.

For the first part of the Series Foreclosure Pitfalls SEE: Top 3 REO Buying Pitfalls

12 Tips To Make Your REO Offer More Attractive (Bank Owned Homes)

Currently I represent a local Southern California Bank with their REO (Bank Owned) properties in Simi Valley, Moorpark, Camarillo, the Conejo Valley and West San Fernando Valley.  I have also represented buyers on other bank owned homes.  Below are 12 tips to help move your offer to the top of the stack for consideration.

1. Your offer must be in writing, include a financing pre approval, FICO scores and proof of funds to close (i.e. a bank statement that shows you have the money)
2. The Seller is a financial institution or sometimes a government agency. They work 9-5, Monday through Friday. Offers are sent to the asset managers during these times. Response times are at the discretion of the Seller and could take several days to a week. If your offer is reasonable then a time response is likely.
3. Currently Simi Valley Bank Owned (REO) properties are selling at 105% of list price. You will have competition from other buyers.
4. The Bank is looking for the HIGHEST AND BEST OFFER. Sometimes the Best Offer is not always the highest. Offers that are very straight forward with the fewest conditions, reasonably close to list price are attractive. Use of “Shill Buyers”, are easy for banks to spot, better to be straight forward than to use a shill. Your offer will look weak if it is assignable. The bank wants to sell the property, they do not want to be tied up with a property flipper who is going to drop out of escrow. The bank runs a spread sheet similar to the investor buyer, the bank has a formula for how much they will give on price and terms.
5. Don’t expect a counter, response or even a rejection. You may be granted an opportunity to submit your highest and best offer.
6. If your offer is accepted, it may take several days to a week for the Seller to put together their Addendum to the purchase agreement. Expect that many of the terms you have in your original purchase agreement will be eliminated in this addendum. Once the buyer receives this addendum, the buyer will have 24-48 hours to accept the addendum or back out of the purchase.
7. The bank is exempt from most property disclosures since the bank has never occupied the property. Many times the bank and it’s employees are located very far from the property; their knowledge of the property condition is very limited. Buyers are advised to conduct their own inspections. Do not expect the Seller to agree to any repairs.
8. Be prepared to operate with email and PDF documents. Fax machines are notorious in degrading the quality of documents. More and more REO agents are now requiring email only; if you agent is not familiar with PDF, Scanning and good with email, your offer could be jeopardized.  Try to get all your information in a PDF digital format with a scanner. When you submit your offer to the listing agent, make sure it is complete with all supporting documents together in one PDF file. You offer will need to be transmitted through Real Estate agents and the management at the bank. Email is the preferred way to transmit all communication.
9. If you need to reach the listing agent. Email is the best vehicle. Email will provide you with a contact log. Many REO agents have staff that will probably be your main point of contact. Those REO agents that provide cell phone numbers can be contacted through text and you will probably receive a quicker response.
10. If you plan to use FHA financing, the FHA appraisal may reveal required repairs. The bank may not be agreeable to repairs and may not even consider any offers that have FHA financing. Seller paid closing costs is not unusual, but don’t plan on more than 3%.
11. All properties are sold AS IS, with no guarantees. Home warranties sometimes may be included.
12. I can’t stress enough….the bank has sent out appraisers and hired out local real estate agents to give “Broker Price Opinions” (BPO). The listing agent has already given an opinion of value to the bank. The bank is educated on the area market conditions and is not going to give away property. Unreasonable offers get little attention.

Stealing as a strategy cannot be duplicated. There is a great opportunity to pick up good solid value in REO purchases. Do your homework, be reasonable, write your Highest and Best offer. The listing agent wants to sell the property too, so make sure your offer is complete, easy to read, easy to transmit and easy to understand.

For more information see:

• Forecl0sure Pitfalls Part I
• Foreclosure Pitfalls Part II

Thanks for reading Simi Valley’s Premiere Real Estate Blog!

Author – Ted Mackel Simi Valley Real Estate Agent – Keller Williams Realty

Ted Mackel is a top producer at Keller Williams Realty Simi Valley,

specializing in Simi Valley Real Estate

(805) 432-7705