San Diego Real Estate Defaults: How to Avoid Deficiency Judgments
March 1st, 2008 Categories: Market Trends, New Homes, Real Estate News, San Diego Real Estate
I am a huge believer in individual responsibility and paying my own way in life even if its the price of an expensive mistake.
But what about San Diego area homeowners who absolutely cannot hang onto their homes any longer? What are they to do when rising interest rates cause payments to exceed monthly incomes and they cannot refinance because their homes are now worth less than what they owe the mortgage lender?
They often feel they are stuck in a can of worms.
We receive lots of calls from concerned and ethical San Diego homeowners in this situation. They are ashamed, embarrassed and scared. Aside from the trauma of losing their homes, they fear income tax consequences and the possibility of a deficiency judgment from their lender(s).
I had intended to address this thorny issue here sometime next week, but blogging friend, New York real estate broker and attorney Joseph Ferrara tackled mortgage default issue this morning in an excellent article over at Sellsius Real Estate Blog.
He points out that income tax consequences for forgiven mortgage debt were thrown out last fall and that the chances of a deficiency judgment may be slim especially if the purchase moneoy mortgage(s) were not refinanced. And even if they were, most lenders will choose to foreclose under the terms of the trust deed instead of the courts.
I encourage you to read and bookmark the article!
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Luxury Builder Claims 2007 is Worst in 40 Years
December 10th, 2007 Categories: Luxury Homes, Market Trends, New Homes, Real Estate Juice, San Diego
If San Diego real estate investors are looking for blood in the streets, they had better be wearing galoshes.
Even the fat books of venerable Toll Brothers, Americas largest builder of luxury tract homes, are in the red. For the first time in 21 years, the company is suffering its first quarterly loss (Oct. 31) in the amount of $81.8 million. Much of this loss can be attributed to $314.9 million in pretax writedowns for homes it could no longer sell at a profit. Even Robert Toll, the companys founder, concedes that 2007 has been the most challenging year in the companys 40 year history.
But every loss also registers a gain somewhere and somehow–especially with ther San Diego real estate market.
It has been evident that newer tract home subdivisions have been hit especially hard the past couple of years. Many San Diego homeowners needing to sell had bought during market highs and more than a few a have been forced to sell at a loss. Funds spent on landscaping, hardscaping, flooring/ surface upgrades, and window coverings (and perhaps even the down payment) have gone down the drain.
It is a tough time to be a San Diego home seller.
This has forced a number of builders with standing inventory to offer costly upgrades as an incentive for potential home buyers. Those buyers, who once had to budget for many of these improvements, are now getting them for free sometimes packaged with interest rate buydowns and other incentives. It is a spiral that has forced builders and their prior home buyers to compete.
Many shrewd Southern California real estate buyers have been renting and waiting for opportunities such as these and are coming out of hiding. Real estate investors who sold at or near the top of the market a couple of years ago are also back into buying mode. And so are foreign investors, who benefit not only from depressed real estate prices in the prime San Diego markets, but also the strength of their Euros and Canadian dollars against the US dollar.
This may explain the recent phenomenon in our beaten-down San Diego real estate market, where multiple offers are being made on properties that are priced under market. Its something we havent seen in a long time, and just may be the beginning of a market bottom.
If you have any questions (or need to borrow a pair of rubber boots), just give us a call at 877-818-8197 or 760-402-9101.
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