News
All California Auctions is the Next Generation of Real Estate, Don't Get Left Behind!
All California Auctions is providing a new approach to Real Estate. With our online marketing system, we are selling homes at market value more efficiently than ever! Whether you own a one bedroom Condo or a 6,000 sqft Estate, our method works for you. We also specialize in pre-forclosure sales, and work hand in hand with your lender to get the deal done!
To see if your property qualifies for the online marketing system, please contact All California Auctions, Inc at (858) 380-4295.
Current Featured Listings as well as other property listings can be viewed at US Auction Advantage.
Press Releases
Legislating a way out of the housing crisis
Politicians offer help for homeowners, and tighter rules
Carolyn Said, Chronicle Staff Writer
Sunday, April 27, 2008
In every crisis lies opportunity - for politicians to pass new laws.
The nation's escalating foreclosure cataclysm is no exception. Federal and state legislators are scurrying to craft bills that aim to help struggling homeowners stave off foreclosure, buoy the sagging real estate market and prevent similar problems in the future.
While that sounds lofty and admirable, the proposals have plenty of critics. Advocates say some are handouts to corporate interests. Mortgage bankers say others would worsen the credit crunch. Then there's the question of whether some proposals actually would assist homeowners facing foreclosure - or amount to a government bailout for people who made foolish decisions.
Legislation is a moving target, of course. The pending bills are likely to end up considerably changed if they pass, but here is a roundup of some major initiatives on the table in Washington and Sacramento.
FEDERAL BILLS
Hope for Homeowners Act: Championed by Sen. Chris Dodd, D-Conn., and Rep. Barney Frank, D-Mass., this is the most-aggressive solution in play for struggling homeowners.
It would allow the Federal Housing Administration to refinance up to $300 billion in unaffordable mortgages for up to 2 million owner-occupied homes. It would also give states $10 billion to buy and fix up foreclosed homes.
Lenders would voluntarily submit shoddy mortgages for refinancing, taking a drastic haircut on the amount owed in exchange for a lump-sum payoff. Mortgages would be issued for 90 percent of homes' current values - which are likely much less than the original amount of the mortgage. The FHA would take part of the new loan as a fee, and then would share in future appreciation. Democrats project the government might lose 1 to 2 percent of the $300 billion if refinanced borrowers later default.
Consumer advocates strongly support the bill, but it draws fierce criticism from the White House and Republicans. "This will help those in need who are on the verge of losing their homes," said Pam Banks, an advocate with the nonprofit Consumers Union in Washington.
Mortgage bankers are positive too, although they'd like to get a share of future appreciation, as well as the option to write off less money on each mortgage.
But David John, a senior fellow at the conservative Heritage Foundation in Washington, said the bill presents "a risk to the taxpayer" if borrowers still default on their refinanced loans. Further, he says, it's important not to help out people who may have exaggerated their income to get a home. "If there's a lie at the beginning of the transaction, it shouldn't be rewarded," he said.
Foreclosure Prevention Act: This bill, which is fairly far along in the political process, would modernize FHA loans, increasing the agency's mortgage limit to $550,000.
It provides funds for pre-foreclosure counseling, and $10.9 billion in mortgage revenue bonds for loan refinancing. It gives $25 billion in tax breaks to home builders, as well as domestic airlines, automakers and other manufacturers. It also encourages purchase of already-foreclosed properties, with $4 billion in grants for communities to buy foreclosures and a $7,000 tax benefit for people who buy them.
The bill has the rare distinction of uniting consumer advocates and conservative economists in disdain. "Big tax breaks for home builders is the centerpiece, which we think is atrocious," said Paul Leonard, West Coast director for the Center for Responsible Lending. "It's a triumph of lobbying over need," said John from the Heritage Foundation. Consumer advocates support the FHA reform and counseling money, though.
Bankruptcy reform: Changing the nation's bankruptcy laws is the single change that consumer advocates say would do most to help people facing foreclosure - but it faces fierce industry and Republican opposition.
The proposed change would allow Bankruptcy Court judges to modify terms of a mortgage, such as writing down its principal to whatever the house is currently worth, lowering the interest rate or changing the contract length.
Consumer advocates say it could save 600,000 homes, but the banking industry says it would erode lenders' confidence in mortgages by making the collateral less dependable. If mortgages become similar to unsecured credit like credit cards, their interest rates are likely to be significantly higher, in line with those of credit cards, the Mortgage Bankers Association said.
"We think this would help a select group of borrowers at the expense of every other borrower in the marketplace (in the future)," said Stephen O'Connor, senior vice president of government affairs for the Mortgage Bankers Association in Washington.
Neighborhood Stabilization Act: This bill sets up a $15 billion fund for states to buy, fix up and resell or rent out owner-vacated foreclosed homes as low-income housing. The homes would be sold to families with incomes below 140 percent of an area's median.
"We support it because it is putting funds back into neighborhoods and preventing blight," Banks said. O'Connor said the bankers are neutral on it.
CALIFORNIA PROPOSALS
SB1137, state Sen. Don Perata, D-Oakland: The state Senate could take up this mortgage relief bill on Monday. It was introduced as an urgency measure, requiring a two-thirds margin to pass (it previously failed by one vote).
The bill would require lenders to make more effort early in the foreclosure process to contact struggling homeowners, require 60 days notice to tenants in foreclosed properties, and impose a $1,000-per-day fine on lenders who "fail to maintain" foreclosed homes, for example, by allowing trespassers or squatters, or not trimming foliage.
Consumer advocates support the bill. The industry, which previously opposed it, now weighs in as neutral.
AB69, Assemblyman Ted Lieu, D-Torrance: This bill would require lender-specific reporting on loan modifications - rewriting a mortgage's terms to make it more affordable, such as by freezing the initial interest rate.
Loan modifications are the keystone of many foreclosure prevention efforts, and lenders are submitting information to state and federal authorities about how common they are. The problem is that when that data is made public, all lenders are lumped together so there is no way to gauge which banks are truly trying to help borrowers. This week, state regulators reported that 70 percent of borrowers seeking "loss mitigation" are not getting assistance.
"The inability to examine in anything approaching real time the specific efforts of individual lenders is very problematic as a matter of public policy," Leonard said.
Dustin Hobbes, spokesman for the California Mortgage Bankers Association, said bankers oppose the bill because they think compliance would be onerous and they're already reporting loan modification results to several agencies.
AB1830, Lieu: This act tightens underwriting standards for future mortgages. It outlaws "yield spread premiums" which Lieu characterizes as "kickbacks paid to mortgage brokers to steer customers into pricier loans than they qualify for."
It requires lenders to assess a borrower's ability to repay over a loan's full life; bans negative amortization loans; prohibits prepayment penalties; and requires financial literacy counseling for some high-cost loans.
Leonard and other consumer advocates wholeheartedly support the bill as helping to stamp out predatory lending.
California mortgage bankers oppose it but said they are working with Lieu on modifications. "It will really restrict subprime lending in the state whole cloth," Hobbes said. "That's throwing the baby out with the bathwater. There absolutely is a need in California for subprime lending. There are working families out there who don't have perfect credit who need the subprime market."
AB2880, Assemblywoman Lois Wolk, D-Davis: This bill would tighten standards for individual mortgage brokers, specifying that they have a fiduciary duty toward borrowers; eliminating yield spread premiums for subprime, high-cost and nontraditional loans; and requiring brokers to post bonds to get a Depart of Real Estate license.
AB2740, Assemblywoman Julia Brownley, D-Santa Monica: This act establishes ground rules for loan servicers to have more accountability in dealing with borrowers. It regulates the fees they can charge, requires them to respond quickly to requests for information and dispute resolution.
AB2359, Assemblyman Dave Jones, D-Sacramento: Mortgages are packaged for sale on Wall Street to investors. This bill would make those investors accountable for shoddy subprime loans, allowing borrowers to make claims against them if those loans go sour.
"What got us into this mess was everyone making money and losing accountability as mortgages ran up through the food chain," Leonard said. "We hope that by extending liability to assignees or purchasers of loans, they would do a better job of policing the loans they buy."
But Hobbes said the measure would further chill lending. "The market on Wall Street (for mortgages) is already weak and strained," he said. "The last thing we want to do is make more disincentives to invest in California mortgages. This absolutely would turn off the spigot for capital coming into California."
Hope for Homeowners Act by the numbers
A congressional proposal to refinance struggling homeowners into 30-year fixed mortgages works like this:
The FHA would refinance homes with mortgages for 90 percent of their current value, leaving 10 percent equity in each home. That equity would be split between the FHA, as its cushion in case of defaults or further market collapses, and the homeowner, to give some "skin in the game" as incentive to stay in the house.
Suppose you bought a house for $600,000 two years ago, putting no money down and it has lost about 16 percent of its value.
-- $500,000 - home's current value
-- $450,000 (90 percent of current value) - the new FHA mortgage. Of that, $425,000 (85 percent of current value) goes to the lender and $25,000 goes to the FHA as a fee.
-- The lender is now swallowing a total loss of $175,000, or 29 percent of the original $600,000 mortgage.
-- $50,000 (remaining equity in the home) - split between FHA and borrower. When the home is sold, the FHA would get a share of any appreciation.
Calif. bill requires lenders to maintain foreclosed homes
By DON THOMPSON, Associated Press Writer
Monday, April 28, 2008
(04-28) 18:25 PDT SACRAMENTO, (AP) --
Banks and mortgage companies face fines of $1,000 a day if they allow foreclosed homes to become run down and a source of neighborhood blight under a bill that passed the state Senate on Monday.
California has one of the highest foreclosure rates in the nation. Many communities, particularly in the Central Valley, are riddled with homes that have been abandoned by buyers who could not afford their mortgage payments when they reset to higher rates.
In many cases, the vacant properties are overgrown with weeds and shrubs and have become magnets for squatters and vandals. Swimming pools often become stagnant, turning into breeding grounds for mosquitoes.
Under the bill by Senate President Pro Tem Don Perata, local governments could impose the fines on lenders after giving them 14 days' notice to fix the problems.
"Senator Perata's bill not only tries to help those in danger of losing their homes, it tries to make sure property values don't go down in neighborhoods where foreclosures already are problems," Perata spokeswoman Lynda Gledhill said.
The bill, supported by consumer groups and local governments, and was sent to the Assembly on a 28-10 vote. Because it is urgency legislation, it would take effect as soon as it is signed into law.
Perata said quick action was needed because adjustable rate mortgages continue to reset to higher interest rates. He cited consumer groups' projections that as many as 400,000 California families will lose their homes in the next two years.
"Having dilapidated or blighted ... unkempt properties in neighborhoods seems to have a spiraling effect," said Bill Higgins, lobbyist for the League of California Cities. "When they look unkempt, they seem to attract more squatters, crime."
Abandoned homes and lowering property values also mean less tax revenue for cities, compounding the problem because it can lead to reduced police and code enforcement services.
Having a uniform state law with a stiff penalty for lenders could help communities as they try to combat the growing number of abandoned homes, Higgins said.
"Certainly we've seen the number of these calls (about neglected homes) come up, but we've so far been able to deal with it effectively," said Stockton Police Officer Pete Smith, a department spokesman. "But the feeling here is we need to have something more in place."
Stockton is one of the hardest-hit communities and is developing an ordinance that would require property owners to provide a local contact and pay a minimal fee for each vacant home.
An earlier version of Perata's bill was killed in January because of objections by banks and mortgage companies.
They withdrew their objections after Perata removed requirements that lenders give four months' notice of mortgage rate increases and have face-to-face meetings with borrowers before foreclosing.
Under the revised bill, lenders must try to reach borrowers in person or by telephone 30 days before starting foreclosure proceedings. It also requires owners of foreclosed properties to give renters 60 days' notice before they can be evicted.
Speaking to business and civic leaders in Orange County on Monday, Gov. Arnold Schwarzenegger criticized lenders for awarding loans to people who lacked the income to afford them.
"The lenders still said, 'Take that money. Come on, you need a house.' They pushed it on people," the governor said. "Big mistake. Big mistakes by the borrowers, and big mistakes were made by the lenders. That's why a lot of them are in trouble now."
He also said he was optimistic that the housing market was near the bottom. The Republican governor said he expected home construction to pick up over the next year to keep pace with the projected growth in population.
Within a year "it's going to boom again. It's just they overbuilt," Schwarzenegger said.
Last month's California foreclosure report showed records for notices of defaults and notices of trustee sales.
Article published - Apr 9, 2008
Seller's alternative
In tight housing market, Internet bidding gives homeowners another avenue to sale
By MICHAEL COIT
THE PRESS DEMOCRAT>In an era where you can bid on everything from Beanie Babies to boats on the Internet, it was only a matter of time before you could auction off a house online.
Some home sellers in Sonoma County are turning to Internet auctions, tired of waiting for their houses to sell during the region's worst real estate slump in more than a decade.
The traditional way of selling a home takes four months, on average, in Sonoma County. An auction offers the prospect of selling a home in a defined time period, rather than watching it sit on the market and continue to go down in value.
"We get the seller the fair market value on a specific date," said Stacy Kennedy, spokeswoman for Sima Auctions. "It's the time value of money. When they choose the date of the sale, they can calculate holding costs and move on."
But just like the old-fashioned way of selling a house, there is no guarantee a buyer will offer a realistic bid to purchase a home during an auction.
One local Internet auction staged by Pleasanton-based Sima ended Tuesday evening without a sale agreement. The Penngrove estate attracted 22 bids, topping at $1.79 million, but none reached the minimum price set by the seller.
The Penngrove family decided to put their home on the auction block after the house sat on the market for six months, with the price listed at $2.45 million.
"They wanted to try it because of the timing, to sell more quickly," said Erick Larson, their agent with Sotheby's International Realty in Sonoma.
Next week, a luxury home in the Fountaingrove area of Santa Rosa that hasn't sold for $1.19 million after two months is set to go up on Sima's Internet site, with bidding starting at $899,000.
The successful bidder must exceed an undisclosed minimum price, known as a reserve. If the winning bid equals or tops the reserve, the seller must do the deal.
"It's a gamble. The auction will tell you in a short period of time what your house is truly worth in today's market. It's a good snapshot," said Jim Scally, a real estate analyst with North American Title Company in Sonoma County.
Online and off, residential real estate is the fastest-growing area in the auction industry. Sales of homes through auctions increased 47 percent from 2003 through 2007, according to the National Auctioneers Association. Last year, the group launched a Web site listing real estate auctions in a multiple listing style format.
Most real estate auctions are conducted at home sites, with some also simulcast on the Internet for bidders who can't attend. Internet-only auctions are on the rise, said Chris Longly, an association spokesman.
"We're seeing a lot of new growth. The Internet allows you to market to a much larger audience," Longly said.
In Sonoma County, real estate auctions are relatively rare. Most in the past year have been more traditional live sales by developers needing to sell condominiums in bulk quickly.
Sima Auctions, a Pleasanton company founded by real estate agents who also are accredited auctioneers, recently started marketing its Internet auction service in Sonoma County.
Most of the firm's auctions are done at home sites, but Sima officials said more sellers are looking to Internet auctions.
"We believe the Internet auction is the most advanced and certainly the fastest-growing element in the real estate auction industry," said Steve LaRocque, a Sima co-owner.
For buyers, the Internet provides anonymity and a way to purchase property without sitting in a room shouting out prices with other bidders.
"There are a lot of people who are uncomfortable, who have experienced live auctions and won't go back," LaRocque said.
The Penngrove family figured an Internet auction would generate new interest in their home. They started the bidding at $999,999, less than half the original listed price, Larson said.
"This is trying to speed up the process," he said.
Interested buyers had several opportunities to walk through and inspect the 3,700-square-foot, five-bedroom home on 5 acres.
Bidding was done online with each bid disclosed, including whether the reserve price had been met.
A successful bidder must pay a deposit with a credit card online, with deposits typically between $1,000 and $5,000. The buyer then must pay 10 percent of the sales price within 48 hours.
A premium, paid by the buyer, is added to the final price to cover agent commissions and fees. The premium was 10 percent for the Penn-grove home.
"We love real estate agents. They might see us as a tool," LaRocque said.
More real estate agents are seeking training to become certified auctioneers, Longly said.
Santa Rosa agent Craig Saxon, who has sold homes for 25 years, earned the certification and now offers clients the option to auction homes.
"It's more transparent than the traditional list-and-sell because the buyer knows that someone sitting next to them is willing to pay about the same," Saxon said. "Internet auctioning is an option. I may do that with other properties."
You can reach Staff Writer Michael Coit at 521-5470 or mike.coit@pressdemocrat.com
© www.pressdemo.com
Real Estate Auctions an Important Tool in Home Sales During a Transitional Market
January 22, 2007
New Orleans, November 12, 2006 - Today’s Real Estate professional may likely rely on Auctions as an important part of their Real Estate practice, particularly in a transitional market. More and more, Realtors® are seeing Auctions as offering sellers an advantage in the current housing market.
In the forum held yesterday at the 2006 REALTORS® Conference & Expo, a panel of experts told Realtors® that Auctions can provide an enhanced level of service for today’s seller.
The latest statistics by the National Auctioneers Association report that growth in the Auction industry has increasingly come from residential Real Estate Auctions, which grew by 4.5 percent in the third quarter of 2006.
“Many Realtors® increasingly work in a full-service environment that may offer insurance, title and property management along with brokerage services,” said NAR President Thomas M. Stevens of Vienna, Virginia. “Auctions should be seen and can be a part of an array of services that Realtors® offer to their customers, and should not be seen as competition to the existing range of services provided by a traditional brokerage. Auctions keep Realtors® at the center of the Real Estate transaction.”
“Auctions are a fair and speedy process of selling or buying a home,” said Ben Anderson, chair of the NAR Auctions Committee and President of Anderson Auctions in Destin, Fla. “For homes that take a long time to sell, using Auctions creates a sense of urgency about the property often helping to sell a property before it goes to Auction.”
Panelists included Bill Sheridan, Mason, Mich., president of the NAA; Lynn Gardner of the Institute for Auction Learning, Purcellville, Va.; Craig King of J.P. King, Gadsden, Ala.; Tracey Clay of Clay and Co. LLC, Miramar Beach, Fla.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the Residential and Commercial Real Estate Industries.