Buying a foreclosure home can provide great opportunities for people who want to buy a house at a great price. One company helps would-be homebuyers navigate the pitfalls of buying a bank owned home or other house that has been affected by foreclosure.

San Francisco, CA July 3, 2008 — Foreclosures and the American real estate market’s price declines have continued to dominate news headlines across the country for well over a year, but one company is bucking the bad news trend. Sacramento, CA-based The Home Buying Center.com (www.TheHomeBuyingCenter.com) has been helping connect home sellers who want to sell a house quickly with investors for years, and they have expanded their service offering last year to help consumers find and buy foreclosure homes.

“For the first time homebuyer who waited until now to buy a home the deals are everywhere,” said company president, Patrick McGilvray, J.D., CFP®. “It’s important that prospective buyers understand that buying a foreclosure house can be a great opportunity to buy a house at a cheap price, and they must be aware of some of the possible pitfalls.”

The pitfalls McGilvray mentioned can include buying houses in an ‘as-is’ condition with hidden problems that may not have been visible during a casual inspection such as dry rot or problems with a cracked foundation. Buyers, he cautioned, must do significant homework before signing on the dotted line. Additionally, he said that it is crucial for would-be home buyers to be pre-qualified for a mortgage loan.

“That’s why working with a team like ours can be a real advantage,” McGilvray said. “We provide the consumer access to the nation’s largest network of foreclosure and pre-foreclosure homes via thousands of real estate investors and real estate agents who specialize in bank owned homes. We also have the resources needed to help hopeful house buyers get qualified for a mortgage.”

The company was originally founded as a website devoted to connecting people who wanted to sell a house quickly at a discount to a real estate investor, but, because of requests from customers, they started offering a foreclosure location service for buyers in 2007. McGilvray said that their company has been growing rapidly since their inception and that they had recently taken some venture capital money in exchange for equity from an angel investor.

Despite the downturn in America’s housing market, which McGilvray thinks could still take years to fully recover from, he is optimistic about real estate services and the internet’s ability to connect consumers with exactly what they are looking for quickly and easily. When asked where he thought should consumers turn to first to help them find answers to their real estate questions, he answered with a smile, “Other than The Home Buying Center.com? Why Google, of course.”

SACRAMENTO, CA – In the first quarter of 2008 home foreclosures in the United States reached a peak and the pain was felt by all types of borrowers, not just those with the now infamous subprime adjustable rate mortgages (ARMs).

While subprime borrowers led the pack in allowing their homes to go to foreclosure many so-called prime and alt-a borrowers were unable to consecutively make payments on their houses as well. According to the Mortgage Bankers Association (www.mbaa.org), .99 percent of home loans in America entered the foreclosure process in the January to March time frame. The number the previous year was .58 percent.

The trade association first began measuring loan delinquency rates in 1979, and this year’s results were the highest on record at 6.35 percent.

On a positive note, the Mortgage Banker’s Association senior researcher, Jay Brinkmann, predicted that most states should see a trailing off of foreclosure activity by years end. But, troubled states like California, Florida, Arizona, and Nevada, which saw record prices spikes in residential real estate values, may see their foreclosure woes persist well into 2009.

For the homeowner who is trying to sell a house in the current market the challenge can be finding a qualified buyer who is pre-qualified for a mortgage loan. Many buyers have reported that they are simply not able to get funding for a house purchase despite having good credit and down payments available.

Real estate and foreclosure expert Patrick McGilvray, J.D., president of Sacaramento, CA-based The Home Buying Center.com (www.TheHomeBuyingCenter.com) said, “For people looking to buy a foreclosure house there are opportunities aplenty. It’s important for these buyers, though, to get pre-qualified for a home loan before they go shopping because sellers, especially lenders with a large inventory of bank owned REO houses don’t want to spend time with people who aren’t ready, willing and able to buy.”

All data point to escalating foreclosure numbers through the year

Foreclosures have flooded North County’s housing market, and indicators show that the waters will be rising, not receding through the rest of the year.

Just as April’s sales data was the best in months and provided some encouragement for real estate agents, the month’s huge foreclosure numbers offered more ammunition to housing market bears who see San Diego County’s housing recession dragging on for two or three years.

All indications are that North County will see more foreclosures, not fewer, come up for sale over the next six months:

– Fewer than half of San Diego County variable-rate subprime loans —- where interest rates jump after a set period and typically carry high payments because of a borrower’s poor credit score or low down payment —- have already seen payments escalate, according to a report by the New York Federal Reserve Bank.

– Of all North County foreclosed homes that went back to the bank within the last 120 days, 60 percent have not been listed on the market, according to a North County Times analysis of foreclosure, listing, sales and pending sales data. And there have been more finalized foreclosures —- 1,800 homes —- over the last four months than the previous seven months.

– Notices of default, the first step in the foreclosure process, have shot up in North County, reaching a peak for this recession of 1,100 in April, according to data from ForeclosureRadar, a California foreclosure tracking service. Notices of default preceed bank-owned foreclosures (widely viewed as the chief culprit of San Diego County’s home price decline) by six months to a year.

The data put foreclosure analysts at odds with real estate agents, who say that a flurry of buyer activity foretell a housing market recovery locally.

“I am more wondering when is this thing going to blow up, and you’re already talking about the light at the end of the tunnel,” said Ramsey Su, an investor and former real estate broker in San Diego. “It’s going to get worse before it gets better.”

Small-time investor could lose big

Many housing analysts said they think option-adjustable rate mortgages will further exacerbate the foreclosure problem. The loans allow homeowners to pay less than the interest accrued, meaning the amount owed on the mortgage increases, rather than decreases, with each payment.

Eventually, the mortgage balance becomes so large the lender forces the homeowner to pay all interest and some of the principal each month to start drawing down the balance.

For Diane Goodwin of Oceanside, that move would force her to lose two of her investment properties. And if the market does not improve, she said she could lose her other three homes, including her primary residence, over the next year and a half.

All five properties she owns carry the option mortgages, also known as negative amortization loans.

“Yup, big mistake,” she said. “However, we wouldn’t have any of them except the original house if we didn’t use neg-am, so it was a gamble. And at the time, it seemed like a good one. Obviously, we didn’t know what was going to happen to the market.”

There are 19,200 homes with neg-am, non-suprime loans in San Diego County, according to the Federal Reserve report. All of those loans are known as Alt-A, which indicates a more qualified buyer than subprime loans but less qualified than prime loans. In total, there are about 95,000 non-prime loans in the county, according to the data.

That prevalence has raised concerns among foreclosure analysts that neg-am loans will cause a new tidal wave of bank-owned foreclosures.

“I still haven’t seen a real wumph,” said Ward Hanigan, founder of Innovest, a San Diego-based company that tracks foreclosure statistics and buys bank-owned properties.

Hanigan said he thinks San Diego County’s housing market will decline for two more years before any sort of recovery and that an increase in foreclosures will lead the decline.

Based on that prediction, his company has not invested in foreclosures yet, he said.

A few unknowns will play a significant role over the next year.

For example, Goodwin is desperately trying to get her banks to freeze her mortgage payments to avoid foreclosure. But because she has not missed a payment, she said, they will not talk about such a freeze, known as a loan modification.

If more banks engage in loan modifications, more homeowners and investors like Goodwin might dodge foreclosure.

To help even more families facing foreclosure, the state and federal governments have moved aggressively to pass foreclosure-prevention legislation and have organized networks where homeowners can seek free help in securing loan modifications.

However, much of that legislation will not help Goodwin because she is an investor and politicians have repeatedly said they want to avoid bailing out speculators.

But Goodwin said she does not fit the speculator-investor prototype.

“I just wanted to make sure I wasn’t a burden to my family when I get old. It was not to be rich, but to have something so that my kids wouldn’t have to worry about me when I’m 90,” Goodwin said. “So now, instead of being able to retire when I’m 65 or 62-and-a-half, now, realistically, I’ll have to work until I’m 75.”

The negative intangibles

Some unknown factors could increase, instead of reduce, foreclosure numbers. For some housing analysts, the trajectory of the nation’s economy will play the biggest role in foreclosure numbers over the next year.

Housing analysts have said that the primary cause of foreclosures so far has been creative loan products, such as neg-am or subprime loans, that put people into homes they could not really afford.

In contrast, job loss, divorce and death have been the largest foreclosure factors historically. If significant layoffs come —- as some analysts, such as Su, expect —- foreclosure numbers will multiply as traditional home losses combine with evictions brought about by exotic financial instruments and a housing rush from 2000 to 2005.

“I don’t think it would be a linear growth of foreclosures. It would be exponential. It would be catastrophic,” said Su, the San Diego investor. “It would be a situation we have never seen before.”

Some real estate agents, such as Kurt Kinsey of Oceanside, disagree with analysts such as Hanigan. Though Kinsey said he acknowledges there will be more foreclosures through 2008, that does not necessarily mean they will depress home prices.

“It will definitely add pressure to non-distressed sellers, no doubt about it. But most of them (foreclosures) are coming back at price points that are affordable,” Kinsey said. “And from where they started at, they’re starting to come up in price. So if anything, they’re starting to heal some neighborhoods.”

Shadow inventory

Even if foreclosure numbers leveled off next month, it would take a long time to work through the homes already in the foreclosure process.

Notices of default, the first step of the foreclosure process sent out after homeowners start missing payments, are considered a leading indicator of foreclosures.

Hanigan said his statistics show about 50 percent of notices of default are turning into bank-owned foreclosures in San Diego County.

North County has seen notices of default escalate recently, accumulating 4,100 notices in the first four months of the year, according to ForeclosureRadar.

With Hanigan’s 50 percent conversion rate, the notices of default during the first four months of this year will translate into 525 foreclosures per month. During those four months, North County posted an average of 460 foreclosures over the same time period.

And even many of the homes that have completed the foreclosure process have yet to hit the market.

Of the 1,300 North County homes to be seized by banks over the last 120 days, 750 are still not on the market, according to an analysis of ForeclosureRadar data and listing, sales and pending data from Sandicor, a service real estate agents use to post homes for sale.

“I think that the banks are in an analysis paralysis,” said Norm Miller, a real estate professor with University of San Diego’s Burnham-Moores Center for Real Estate. “They’re trying to figure out whether to put it on now and bite the bullet or wait because they think we’re at the bottom. But everyone else is thinking the same way and there’s no way to avoid the rash of foreclosures.”

Some housing analysts disagree with Miller, saying that banks are moving the foreclosures as quickly as possible, but that the process of evicting families and readying homes for sale is time-consuming.

Either way, there are plenty of homes to be sold not listed on the market, called by some as “shadow” or “phantom” inventory.

Many analysts look at inventory, the number of homes for sale divided by the number of sales, to determine the relative health of the housing market.

Some analysts, like Miller, think that current inventory numbers —- though high —- are artificially low because of foreclosure properties not on the market and regular homeowners who do not want to sell in a struggling market.

Still, some neighborhoods, especially those along the coast, have exhibited strength in pricing and few foreclosures.

Further, some areas, such as parts of Oceanside and Escondido, have been so wracked by foreclosures that prices have dipped to $160,000 and most analysts do not expect further declines.

“You look at 10 homes for sale, one is aggressively priced and another is priced at the same price as a year-and-a-half ago. … They’re going to be on the market for a long, long, long time,” Miller said. “So this home is close to bottoming out, and the other one is in la-la land with the assumption that real estate never goes down.”

Real estate industry feels heat as home values continue to fall in much of the nationSACRAMENTO, CA – Real estate continues to be a sore spot for the US economy as prices for single family homes were down 7.7% in the first quarter of 2008 compared to a year earlier.

The National Association of Realtors reported the recent numbers and indicated that this was the biggest yearly decline since they began record-keeping in 1982.  Median sales prices were down to $196,300 at the end of March, a 4.8% drop compared to Q4 of 2008.

In Sacramento, California prices fell more than 29% and the median dropped to $258,500.  Prices in Riverside, California dropped more than 27% to $287,100.

An internet real estate company based in Sacramento, www.TheHomeBuyingCenter.com, reported an increase in consumers requesting help with selling their houses as well as an increase in buyers who are looking for deals on foreclosure houses.  “Deals on foreclosure houses are one of our specialties, and we’re getting a lot of traffic to our website because of that,” said company president Patrick McGilvray.

The Home Buying Center reported that a lot of their activity is happening in the states hardest hit by the housing crisis that occurred in the wake of the subprime mortgage meltdown.  According to McGilvray the biggest numbers of homeowners seeking help, and buyers seeking deals, are occurring in California, Florida, Nevada, Ohio, and Michigan.

Foreclosure activity resulted in more than 155,000 homes taken back by lenders since last year, and mortgage payment delinquencies more than doubled during the time as well.

 By David Prosser,

Confidence in Britain’s housing market has sunk to its lowest level for more than 30 years, figures to be published today will reveal, as property prices continue to fall and mortgage lenders restrict home loan finance. The Royal Institute of Chartered Surveyors (Rics) says that 95 per cent more surveyors reported a fall in house prices in April than a rise, the worst figure it has reported since it began publishing monthly property market surveys in January 1978.

In some areas of the country, including East Anglia, the North and North-west of England, not a single surveyor reported house price increases, with 100 per cent reporting declines during April. Even in Scotland, where the housing market has been more robust in recent months, Rics says more surveyors are now reporting house price falls than rises.

“Many would-be-buyers are either struggling to raise the necessary finance or are exercising caution in the light of current economic uncertainty,” Rics warns. “With the official interest rate cuts not being fully passed on to the high street, lenders continue to pull back on the range of mortgage products and further scale down loan-to-value ratios, there is little expectation that demand will improve in the near term.”

Rics also warns that Britain’s property market may yet deteriorate even further, because a shortage of supply of homes coming up for sale is acting as a brake on price falls. If economic problems were to cause an increase in the number of homeowners forced into selling their homes, much more significant price falls would be likely.

Worryingly, there is some evidence that this trend has already begun. Stephen Thornton, a spokesman for Rics, said that there had been a sharp increase in the number of properties coming on to the books of surveyors in London last month. He warned: “When there is a big jump upwards in new instructions it can indicate forced sales – either repossessions or sales from those attempting to avoid the repossession process.”

This may reflect the sharp rise in the number of homeowners facing the prospect of losing their homes that was reported by the Ministry of Justice last week. It said the number of repossession orders made in the English and Welsh courts during the first quarter of the year was 17 per cent higher than in the first three months of 2007.

The Ministry of Justice also said the number of repossession claims from lenders, the first stage in the legal process of confiscating the home of someone who falls behind on their mortgage payments, had risen by 16 per cent in the first quarter. It is at this stage that many borrowers would seek to sell their homes, in order to avoid the repossession process.

Nevertheless, estate agents insisted yesterday that Britain was not on the verge of a house price slump. “The house prices falls that are taking place are modest and the picture is still patchy, with some areas of the country finding it tougher than others,” said Peter Bolton King, chief executive of the National Association of Estate Agents. “It is still important to remember that the underlying factors that support the property market remain – low unemployment, historically low interest rates and a pent-up demand for houses.”

However, the figures from Rics show an increasingly gloomy picture across every important housing market indicator. The number of sales completed by surveyors over the three months to the end of April was the lowest since 1997. The number of unsold properties on their books is at its highest level since 1998, and the number of sales as a proportion of unsold properties is now at a 12-year low.

Moreover, Rics’ figures are in line with the most recent warnings on house prices from Halifax Bank and Nationwide Building Society, the country’s two biggest mortgage lenders. Both have said that annual house price growth went negative in April for the first time since the property market began correcting, taking the average home below its value 12 months ago. Halifax is now expecting prices to fall by an average of 10 per cent during the course of 2008 and 2009.

There are also increasing fears about the impact of housing market setbacks on the wider economy. “The real issue is the collapse in the number of housing transactions, which has very real implications, not just for the property industry but also the high street and the wider economy,” added Ian Perry, a spokesman for Rics. “Sellers of white goods, for example, are likely to suffer if this low level of turnover persists for much longer.”

The British Retail Consortium said yesterday that retail sales during April were at the lowest level for three years. However, despite calls for aggressive interest rate cuts from estate agents and other housing market professionals, the Bank of England’s Monetary Policy Committee is finding it increasingly difficult to justify reductions in the cost of borrowing, in the face of rising inflation. Official statistics yesterday revealed that prices at the factory gate are now at record levels, with rampant cost increases in the energy, food and transport sectors now beginning to feed through.

Michael Saunders, an economist at Citigroup, said: “The housing market is already extremely weak, and house prices are likely to fall further in coming months. Consumer spending is starting to give way and also seems likely to slow sharply in coming months.

“The strength of cost pressures adds to the economy’s downside, not least because it greatly reduces scope for the MPC to respond to the credit crunch with rapid easing [of interest rate policy].”

Jose Canseco, the former AL MVP who made millions during his baseball career, has had his home foreclosed.

Canseco told the syndicated TV show “Inside Edition” that he walked away from his $2.5 million, 7,300-square foot home in suburban Encino because it didn’t make sense to continue making payments.

“I do have a judgment on my home and it to me is very strange because it didn’t make financial sense for me to keep paying a mortgage on a home that was basically owned by someone else,” he said in an interview that aired Thursday.

“You know my life, this financial thing, is a very complicated issue. Obviously, when you make all that money, people think, `OK, let’s assume it is $35 million.’ People have to understand that $35 million, you’re paying the government 41 percent. That leaves you with about $17 or $18 million, not even. Then you’re taking care of your whole family.”

He added that a couple of divorces cost him $7 million or $8 million.

Canseco said his top earnings year was $6 million and that his financial situation obviously is different than most people who are losing their homes.

“What about other families that we’re hearing on TV, that they’re saying, `We have nowhere else to go,’” he said. “I mean, that is amazing. I’ve got books (he’s put out two expose-type books on drug use in baseball), we’re now trying to produce the movie to both.

“Like I said, my situation was a little more different than most. I decided to just let it (the house) go, but in most cases and most families, they have nowhere else to go.”

Housing market helped by low mortgage rates but hurt by high inventory

SACRAMENTO, CA – April 16, 2008 - According to a widely watched indicator of the health of America’s residential real estate market, the Standard & Poor’s Case-Shiller National Home Price Index, homes for sale in the United States fell more than 10% in value from June 30, 2006 to December 31, 2007.

Federal attempts to jumpstart the housing market

The Federal Reserve and Congress are attempting to jumpstart the housing market with low interest rates and legislative rescue proposals, but many market watchers say that time will be the only real cure. The Federal Government is attempting to increase the size of the loans that Freddie Mac and Fannie Mae may purchase from mortgage issuers in order to allow these lenders a way to free up capital and re-lend it to other prospective home buyers.

According to Freddie Mac the average rate for a 30 year home mortgage loan is 5.88%. A year ago the figure was 6.22%. Despite these attempts to help the housing sector there are reportedly 4.5 million homes for sale in the US in March of 2008. This large inventory of homes for sale has roots in the large numbers of foreclosure houses that are owned by banks as real estate owned (REO).

Focus on California real estate

In California alone, according to RealtyTrac (see http://www.RealtyTrac.com), the number of homes in some stage of foreclosure proceedings increased more than 20% in March. This figure represents approximately 65,000 houses or 1 in each 200 homes.

Another company that counsels homeowners facing foreclosure, TheHomeBuyingCenter.com (see http://www.TheHomeBuyingCenter.com), reported that they are receiving hundreds of requests for assistance every week from homeowners who are looking for a way to sell their house quickly. Company president Patrick McGilvray said, “we help homeowners and home buyers nationwide who want to buy or sell a home by providing them with access to real estate investors eager to buy houses in their area as well as a complete range of real estate services such as agent referrals, foreclosure homes for buyers, and corporate relocation services.”

McGilvray commented that the central valley cities of California such as Stockton, Modesto, and Sacramento are still reeling under the strain of falling home prices. He said that this is the result of unrealistic house prices that went to ‘absurd’ levels primarily because of the easy availability of adjustable rate mortgages and generally unrealistic housing prices that were not supported by people’s incomes. “There is, unfortunately, more pain ahead for American homeowners, but we’re a strong country and will get through it.”

By Jim Wasserman

Sales of new and existing homes in the Sacramento region registered a typical seasonal bounce in March, with 2,522 transactions closing escrow, according to the newest statistics from DataQuick Information Systems. Still, the prolonged housing slump continued as median prices fell throughout the area and sales of new homes dropped sharply.

March’s numbers were a change from the 2,162 homes sold during February in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties.

The sales price statistics showed that investors and first-time buyers continue to focus on bank repos. The Sacramento Association of Realtors reported that almost half of March closings in the county and West Sacramento were for homes valued at $250,000 or less.

Yuba County saw median sales prices dip below $200,000 for the first time since January 2004, DataQuick reported. Median is that point where half cost more and half cost less.

Overall, Sacramento county sales of new and existing homes combined were up 19 percent in March from the previous month. While encouraging in light of a slumping housing market, the 20-year average is 36 percent, according to DataQuick.

Closings on new homes showed the weakest March numbers as many buyers shop for bank-owned bargains. DataQuick reported that year-over-year sales of new homes were down 35.6 percent in Sacramento County, down 42 percent in Placer County and down more than 70 percent in Sutter and Yuba counties.

By contrast sales of existing homes were down just 9 percent in Sacramento County. That was the lowest year-to-year sales dip of all eight counties.

Other March highlights:

• Sacramento County’s 1,501 March closings on new and existing homes combined were the fewest since March 1997, according to DataQuick. The tally was down 14 percent from the same time last year.

• Median sales prices also dipped to $247,000, a level not seen in the county since May 2003. Median prices are now 36 percent below August 2005 highs of $387,000.

• Placer County’s 464 new and existing home sales were the lowest since March 1996, and were down nearly one-third from the same time last year.

• The county’s March median sales price of $355,000 is 19 percent below a year ago and off one-third from the August 2005 high of $525,000, DataQuick reported.

• The El Dorado County median sales price dipped again in March to $362,250, down 21 percent from the same time last year.

• Yolo County’s March median sales price fell to $327,500, down 16 percent from a year ago.

SACRAMENTO, CA –OBSNews.com- April 8, 2008 - People looking to buy or sell real estate in Sacramento, California and across the nation are looking for deals and banks and other lenders are often the place to look. Bank owned homes, also known as REOs are coming on the market in record numbers and prospective homebuyers are sometimes having to bid higher on properties just to buy a house. This is reminiscent of the housing market in California’s Central Valley years ago.

Real estate investors are buying houses again in the Sacramento Valley because prices have fallen significantly from their peak in 2006. While many prospective homebuyers are having trouble qualifying for loans there is still an increase in home sales in many parts of the region.

“One of the greatest things about our company is that we’re a nationwide network of real estate investors who still say, “we buy houses” but we’re also a resource for home buyers who want great deals on foreclosure houses either from investors directly or from banks,” said Patrick McGilvray, president of Sacramento real estate solutions company, www.TheHomeBuyingCenter.com. Our investors across the nation report that in many areas they feel prices have hit bottom and they are actively buying to hold or to resell to first time homebuyers.

The housing market may, as a whole, have somewhat further to fall in terms of average house prices, but there is considerable good news for buyers who want to find discounted houses to buy for the long term. The key in this market, say real estate experts like McGilvray, is to get prequalified for a loan, preferably a government FHA loan or other type loan that has a fixed interest rate. Once that step has been taken there are plenty of deals for the savvy buyer.

Median home prices in the Central Valley have dropped to 2004 levels – or further, according to figures compiled by DataQuick Information Systems of La Jolla, a real estate information company.

But the president of a Sacramento company that matches distressed homeowners with investors and prospective buyers says this could be a signal for buyers to re-enter the market.

Patrick McGilvray, president of the Web-based company TheHomeBuyingCenter.com, a unit of Online Broadcasting Systems Inc., says the drop in prices means more average workers will be able to afford home ownership.

Gone are the sky-high prices of 2005, he says, and in their place are homes in the Stockton, Modesto and Sacramento areas priced as low as $100,000. Sellers are more realistic about asking prices, he adds.

“What we’re seeing out there is a return to sanity in terms of housing prices relative to people’s incomes,” he says.

Mr. McGilvray says a key to success in today’s market for buyers is to be pre-qualified for a mortgage before they start home shopping. He says this allows buyers to move quickly when they spot the right property.

Mr. McGilvray talks about the Central Valley housing market in today’s CVBT Audio Interview. Please click on the link below to listen or to download the MP3 audio file to your computer or iPod.

http://www.centralvalleybusinesstimes.com/links/mcgilvray.mp3

http://www.centralvalleybusinesstimes.com/stories/001/?ID=8215