Don't Get Behind on Your Mortgage in Palo Alto!

Real Estate Agent with eXp Realty of California Silicon Valley Probate, Trust, and Investment Sales B.R.E. 01191194


Many distressed homeowners have found that if they are unable to make mortgage payments they are frequently not foreclosed on for many many many months.  It appears as if many banks are trying to release foreclosures in a way that will not further depress prices and want to keep these delinquent homeowners in a home so that it is not vacant for long periods of time, which further devalues their investment.  

However, this does not seem to be the case for Palo Alto. 

While Palo Alto has had very few foreclosures come to the market, the ones that have are not in the delinquent phase for long.  If a homeowner misses 3 payments the banks can record a notice of default.  In Ca. they must give the homeowner 90 days to cure the default or they can set a date for the trustee sale, where the bank can buy back the home or an investor with all cash can purchase the home if they pay off all the liens. Since most homes in foreclosure have larger liens on them than the home is worth, investors do not often get to buy at the courthouse auctions.

In many areas the time between the notice of default and the trustee sale is quite lengthy, over a year in many cases. Sometimes it is because the owner tries to get a loan mod, or do a short sale, but sometimes it is because the bank is just not ready to take possession and sell the home.  

For the few foreclosures in Palo Alto this has not been the case.  There have only been 2 foreclosures in Palo Alto in the last year that have come to the market.  In both cases there was only 4 months between the notice of default and the notice of trustee sale.  There is one home that actually was purchased  by an investor at the courthouse auction and that one also had only 4 months between notice of default and notice of trustee sale (I think the investor may have held the second loan but it is a little confusing as to what actually happened). 

So the moral here is don’t get behind in your Palo Alto mortgage. The banks know this is an easy place to re-sell their assets. If you cannot pay your mortgage do not hide your head in the sand and hope for the best.  Contact a professional (accountant or tax attorney) and then either try to modify your loan,  sell as an equity sale or short sale depending on your equity, or do a deed in lieu of foreclosure if you only have one loan (click here for an article I wrote explaining the deed in lieu of foreclosure benefits and the process).

Marcy Moyer
Keller Williams Realty
D.R.E. 01191194


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Marcy Moyer eXp Realty of California  Specializing in Probate and Trust Sales, and Rental Investment Properties



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Richard T. Dolbeare
Keller Williams Realty Maui - Kahului, HI
R(B), ABR, CRS...Hawaii Multi-Island Specialist

Hi Marcy.  That's very different than in my market area here in Hawaii.  I've seen some live in their homes for years after stopping their payments. 

Jul 29, 2010 10:40 AM #1
Ellen Dittman
Watson Realty Corp. - Middleburg, FL
#1 Stop for NE FLA-JAX/OP 904.535.1199 (TEXT OK) r

I wish they'd get going here in Florida, not to displace the homeowner but to end the homes that have sat vacant for 3 years or so. 

Jul 29, 2010 10:44 AM #2
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Marcy great advice to home owners. Sadly they act like children if they close their eyes no one will see them mentality. I have heard that in cold climates during the winter Lenders intentionally do not foreclose so they do not have to pay the utilities.

Jul 29, 2010 01:38 PM #3
John Thomas
E3 Green HOMES - Boulder, CO
EcoBroker, MSEE, MBA

It doesn't surprise me that Palo Alto has a speedier process. It would be nice if other communities would do the same.

Jul 29, 2010 03:00 PM #4
Marcy Moyer
eXp Realty of California Silicon Valley Probate, Trust, and Investment Sales - Mountain View, CA
Probate, Trust, and Investment Specialist

I am not sure if this is good or bad, it just is what it is.  I think there will be more foreclosures in the coming year but not enough to totally disrupt this market.  I do not think short sales are going to be easy to acomplish because the loans here are mostly jumbo and with many seconds.

Jul 30, 2010 04:12 AM #5
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Marcy Moyer

Probate, Trust, and Investment Specialist
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