Marc Guzman's West County Blog

The time to buy real estate for investments is NOW! Morgan...

Fri, 25 May 2012 15:28:18 -0700

The time to buy real estate for investments is NOW!

Morgan Stanly Housing Chief, Oliver Chang, stepped down to follow this same path by starting an investment fund to buy, hold and rent real estate. In addition, RealtyTrac came out with Top 10 markets to buy foreclosures and San Francisco made #5.

Marc Guzman

Mark, I saw a propoerty that you have listed on Craigslist. Its the 240 Fleming propoerty in Vallejo. Is this propoerty still for sale? On hold? Please let me know, I would like to see it. Thanks, John

Mon, 21 May 2012 17:23:16 -0700

Hi John,

The property on 240 Fleming Ave is still on hold at the moment. Email me about a private showing (marcshomes@yahoo.com)

Marc

States taking money from banks, that were meant to help...

Wed, 16 May 2012 18:55:03 -0700

[Flash 10 is required to watch video.]

States taking money from banks, that were meant to help homeowners, and using it to pay… bills?

Bank of America Short Sale Cash Incentives of up to $30,000. A...

Tue, 15 May 2012 23:11:00 -0700

Bank of America Short Sale Cash Incentives of up to $30,000.

A few weeks ago, Bank of America announced a new process to streamline Short Sales. Now they have announced a new cash incentive for homeowners conducting short sales. There is a catch though… watch the video above to find out.

For a history on Bank of America’s new policy, check out the following.
Video: Bank of America Announces Short Sale Streamlining

by
Marc Guzman

Email: MarcsHomes@yahoo.com

do you have any suggestions as to how in this competative market how to get your offer in on the top considerations, with the ultimate goal is to have your offer accepted. Now with our FHA loan we will need a 45 day escrow and that seems to be an issue, how can we catch the eye and heart of the bank, for the foreclosures or short sales, or an owner for that matter. I was wondering if I should put together a letter from me the buyer to go in on our offer. any suggestions would be appreciated.

Mon, 14 May 2012 15:15:30 -0700

Today’s market is very frustrating for many home buyers because there are multiple offers on many properties. With FHA financing it becomes even tougher since many buyers are using the same type of financing, and since FHA has property condition requirements, the properties in good condition that qualify for FHA financing have even more offers. Below is a link to a video I did on offer statistics on a few of my listings.

http://marcguzmanhomes.tumblr.com/post/21838711535/offer-stats-for-bay-area-real-estate-market

Here is my recommendation… do not be afraid to get aggressive when making an offer. Aggressive FHA buyers are making offers from $25k-$100k over the asking price. They are doing this because they know the in the end, their bank will only lend based on the Value as determined by the appraisal report. Appraisers today are under a lot of pressure to not exaggerate values (due to market crash), thus tend to be conservative on their valuations. Appraisers must also use the most recent and closest comparable sales.

So review comparable sales with your Realtor to get an idea of what the property may be worth, then get aggressive with your offer. An aggressive offer will catch any seller’s attention. But keep in mind that if the appraisal comes in lower, the seller can still refuse to reduce the price and the decision would be up to you to close the deal or withdraw. It may not always be wise for the seller on a FHA deal to not reduce the price because the FHA appraisal stays on file with the FHA for 90 days, but some seller’s do refuse to lower the price.

Here is a real world example: I had a foreclosure listing in the City of American Canyon, CA and received 17 offers. Highest offer was FHA and $115,000 over asking. The seller, my client, was a bank and the asset manager accepted the FHA since it was the highest. Appraisal report came back at $20,000 above the asking price. Buyer requested a $95,000 price reduction and my bank-seller allowed it. This FHA buyer now beat out offers that were cash and conventional financing and ended up buying the property for less than what the cash/conventional offers had offered.

Now will this same situation happen everytime? No it will not. But do not be afraid to get aggressive with your offer.

Marc Guzman

Wow I am loving the new Google+ mobile layout. Very clean and...

Thu, 10 May 2012 19:17:36 -0700

Wow I am loving the new Google+ mobile layout. Very clean and user friendly.

Are You Using TaskRabbit.com in Your Small Business?

Wed, 09 May 2012 21:14:00 -0700

Are You Using TaskRabbit.com in Your Small Business?

Please answer this question and provide me with feedback. Thank...

Wed, 09 May 2012 00:04:00 -0700

Please answer this question and provide me with feedback.

Thank you,

Marc Guzman

As a Real Estate Professional, would you subscribe to a Statewide/Nationwide online software that aims at becoming a socially connected Multiple Listing Service for agents?

Nine Other Websites Besides Craigslist for Rentals Craigslist is...

Mon, 07 May 2012 16:28:00 -0700

Nine Other Websites Besides Craigslist for Rentals

Craigslist is a good resource in finding rentals and listing your rentals, but it is not the only source. This video gives you 9 other popular websites for rentals.

Thanks to Mashable for the great article. I use Hotpads quite often, but the other sites mentioned are great too. Below is a list of all the websites mentioned.

HotPads.com
ForRent.com
RentJungle.com
MyApartmentMap.com
Apartments.com
MyNewPlace.com
ApartmentSearch.com
PeopleWithPets.com
PadMapper.com

Marc Guzman

Video for Real Estate Agents: Use QR Codes Correctly byMarc...

Tue, 01 May 2012 11:42:00 -0700

Video for Real Estate Agents: Use QR Codes Correctly

by
Marc Guzman

Link mentioned in the video:
http://dl.dropbox.com/u/22469485/SPRE/SPRE%20Changes.jpg

Link to article (Not by Mashable.com - my mistake) on QR codes by TechSavvyAgent:
http://techsavvyagent.com/text/cursing-at-your-cell-phone/

My friend convinced me to add some bloopers at the end. I wasn’t too thrilled but gave in anyway. What do you think?

Video: Costco Home Mortgage and Interest Rates! Will you apply...

Sat, 28 Apr 2012 15:56:59 -0700

Video: Costco Home Mortgage and Interest Rates!

Will you apply for a Costco home mortgage or refinance? What do you think about this?

And it appears interest rates will stay LOW, LOW, LOW!!!

Marc Guzman

Offer Statistics for Bay Area Real Estate Market - Foreclosures,...

Thu, 26 Apr 2012 00:15:00 -0700

Offer Statistics for Bay Area Real Estate Market - Foreclosures, Short Sales and Regular Home Sales.

This video and chart easily explains the Bay Area real estate market and the multiple offers being received on properties. It also provides tips to home sellers and home buyers to achieving your goals in today’s challenging market.

TIP For Watching Video: To see the chart better, open the video in YouTube and maximize the screen. (http://www.youtube.com/watch?v=7zFX3aIJRnQ)

Marc Guzman

New Short Sale Timelines, CA Foreclosure Delays and Bay Area...

Tue, 24 Apr 2012 01:38:00 -0700

New Short Sale Timelines, CA Foreclosure Delays and Bay Area Housing Market update.

The top real estate industry buzz today.

Link mentioned in video: http://marcguzmanhomes.tumblr.com/post/19999943839/25-billion-settlement-with-big-banks-may-actually-benefi

Marc Guzman

333 30th Street, Richmond, CA 94805 Not the best looking...

Thu, 19 Apr 2012 16:10:43 -0700

333 30th Street, Richmond, CA 94805

Not the best looking house right now but great investment opportunity! This is Back on the Market and at a reduced price of $154,900.

House features 3 Bedrooms, 1.5 Baths and 2,263 Living Sq Ft. Located in desirable North and East neighborhood of Richmond, CA. Near park and many amenities.

Contact Marc Guzman for private showing.

(510) 662-8536

I was interested in purchasing the property. Are you willing to do a seller carryback and if so what are the terms? Are there any prepayment penalties if I choose to pay it off early?

Mon, 16 Apr 2012 12:36:00 -0700

What property are you referencing to? Please contact me directly regarding these questions so I can answer in more detail: marcshomes@yahoo.com

Benefits of a Home Warranty (Interview w/Peg Adams) Find out why...

Thu, 12 Apr 2012 16:51:33 -0700

Benefits of a Home Warranty (Interview w/Peg Adams)

Find out why a home warranty is essential when purchasing a property. And if you currently own a property, find out why you need a home warranty!

Marc Guzman

Bank of America to Streamline Short Sales with 20 Day...

Tue, 10 Apr 2012 19:49:00 -0700

Bank of America to Streamline Short Sales with 20 Day Decisions

With the recent $25 Billion settlement between 49 Attorney Generals and the 5 largest banks, Bank of America has announced they will streamline the short sale approval process and provide decisions within 20 days.

Here is the link to the article regarding the $25 Billion bank settlement and my prediction that this would happen: http://marcguzmanhomes.tumblr.com/post/19999943839/25-billion-settlement-with-big-banks-may-actually-benefi

Marc Guzman

Will Bank of America Be Your Next Landlord?

Wed, 28 Mar 2012 08:30:05 -0700

Last week Bank of America announced it is launching a pilot program to rent properties to delinquent homeowners. If you have been a reader and follower of West County Blog, this will come to you as no surprise since I posted an article back in December discussing Bank of America preparing for this type of program.

The first pilot program will affect just under 1,000 homeowners and Bank of America will be targeting homeowners that are 60+ days past due and who cannot qualify for any type of loan modification.

How the program will work, the homeowner must first give title of the property back to Bank of America. Bank of America will forgive the debt owed and the now former homeowner will be allowed to rent the property for up to three years at or below current market rental rate. In addition, the former homeowner will be relieved of property taxes and homeowner’s insurance.

The program is called “Mortgage to Lease” and is currently targeting homeowners in Arizona, Nevada and New York. Some homeowners have already reported being contacted by Bank of America. Right now, the program is being conducted on a solicitation basis, homeowners cannot request or apply.

Marc Guzman

$25 Billion Settlement with Big Banks May Actually Benefit...

Mon, 26 Mar 2012 23:39:56 -0700

$25 Billion Settlement with Big Banks May Actually Benefit Them

Yes you are reading the headline correct. The $25 Billion settlement that 49 attorney generals negotiated with the large five banks, which is being described as a punishment, may actually benefit the banks.

WARNING: This article will contain more details than my average post, but just stick with it. I recommend reading the entire article but if you are familiar with the details of how loans were originated and ownership structure, skip down to Part 2.

Part 1: Brief History

Let me first start off by providing a very brief explanation on how many of the bad loans from 2002-2007 were created. We are all familiar with the 100% Loan in which a home buyer could purchase a home with no money down. Some loans even went as high as 110%. These were very different than the conventional loans that required a 20% down payment. After the bank originates a loan, they package the loan into portfolios and sell them to investors, but the bank normally retains the Mortgage Servicing Rights (MSR). What is MSR? The bank collects the monthly payment from the borrower and then pays the investor, but charges the investor a fee to service the loan.

But the banks had a problem. They had trouble selling 100% loans to investors. Investors wanted some skin in the game from the borrower but with the booming housing market, a huge government push to increase homeownership and insurance companies such as AIG willing to insurance everything, the big banks came up with the “perfect” loan. It was the 80/20 loan. To the borrower, it was still 100% financing but to the finance world it was a loan made up of two loans. The 80% 1^st loan was originated by the banks and sold to investors like normal, but the 20% 2^nd loan was in many cases the actual banks money.

Main thing to remember at this point: The 1^st loan is made up of investor money (not the big bank’s money) and the 2^nd loan is made up of big bank money. It is also important to note that 60-70% of all 2^nd loans are owned by the big banks.

Now comes the housing crash. The economy took a turn for the worst and the housing bubble popped and we saw prices plummet. In the Bay Area of Northern California where the majority of my business is, prices were greatly inflated and dropped 80-90% in some areas! So what happens to the loans on a distressed property? Well, the 1^st loan has top priority over the 2^nd loan meaning in the case of a Short Sale the 2^nd loan gets paid a few thousand dollars and the 1^st loan gets the majority of the proceeds. SIDE NOTE: A Short Sale is when a home owner sells the property for LESS than what is owed in loans. Now what happens if there is a foreclosure? Then the 2^nd loan gets wiped out completely meaning they get $0 and the 1^st loan takes back the property. In a case of a loan modification, the 2^nd loan has to write down losses first before the 1^st takes losses.

So in short, with the housing crash and massive foreclosures, banks were recording massive loses because the foreclosures were wiping out their assets on 2^nd loans. The banks did not own the 1^st loans, they only serviced them on behalf of investors but the banks actually owned the 2^nd loans. Keep this in mind, at one point JPMorgan Chase’s stock was worth $198 Billion yet they owned a little more than $200 Billion in 2^nd loans. This was also a conflict of interest in my opinion when a bank like Chase serviced the 1^st loan and also owned the 2^nd loan. How can they truly service the 1^st loan on behalf of investors when they knew they would wipe out their own money in case of foreclosure?

I truly believe that all the foreclosure delays created in the past several years on a national scale by our government have been ways to keep the big banks alive. If the foreclosures continued at the rate they were happening, many more banks would have been wiped out and the credit market could have been much worse. This would have then made our economic recession into a sure depression. So this is one of the reasons why foreclosures have been delayed and there is a huge backlog, also a reason why Short Sales take so long to be approved, IF they even get approved, and a reason why many attempted loan modifications fail.

Second thing to remember at this point: With distressed properties, the 1^st loan would get back about 25-50 cents on the dollar of their original investment, sometimes more. But the 2^nd loan would get back 1-10 cents on the dollar, if they were lucky enough. Obviously a big difference but the 1^st loan has top priority over the 2^nd according to principles of contract and property law.

Part 2: Back to the $25 Billion settlement.

A part of the settlement changes how liens are prioritized by making the 1^st and 2^nd loans share losses equally. In simple terms, if the property value is half of what the original loan amounts total then both the 1^st and 2^nd loans take a 50% loss. This basically means the 1^st loan (owned by investors) gets less and the 2^nd loan (owned by banks) make more. According to CoreLogic, 11.1 Million borrowers are underwater and 4.4 Million have both a 1^st and 2^nd loan… that’s a HUGE pay raise for owners of the 2^nd loans.

So in your opinion is this “punishment” really a punishment? The big banks will essentially be credited for the $25 Billion payout by making more money on the 2^nd loans. Also remember that the $25 Billion payout is split among the top five big banks. JPMorgan Chase made $18.9 Billion Net Income in 2011 so this payout for them, and the other banks, are basically 1 or 2 month’s worth of profits. Rumors right now are that investors that own 1^st loans are planning a lawsuit to battle the settlement.

The potentially good news? With the 2^nd loans now making more money on distressed properties there may be a lot more motivation to foreclose, approve short sales and approve loan modifications. Or maybe foreclose and turn properties into rentals, making the bank even more money…

Marc Guzman

How Many Of You Would Like a Live Q&A Session? Let’s...

Sun, 18 Mar 2012 10:00:05 -0700

How Many Of You Would Like a Live Q&A Session?

Let’s do a live Q&A! Date to follow shortly.

I think I decided to go with Spreecast. Absolutely FREE. Sign in at http://www.spreecast.com

Thanks!

Marc Guzman