Real Estate in LA - How bad is it? (Los Angeles: low income, short sales)

[L4P12]

I am a girl down on luck with a nasty divorce and job lay off. I had to leave Los Angeles to live with family out of state. I left behind a condo I have been trying to sell in the San Fernando Valley. It went through one round of a short sale with an offer at 80% of what I owe. The buyer lost patience and walked. I can't blame them. The bank took 6 months to think about it and never gave an answer. Now I am on round two of a short sale. The comps in the area are coming in at 70% of what I owe. I am HOPEFUL the bank will pass some good luck my way for once. Fingers crossed on this offer.....

What is the news in LA on real estate? Has anyone had luck with short sales or know someone who has? Are the banks foreclosing right and left?

[RPV2NC]

It depends on where you are and at what price point. There have been many foreclosures in our area at the lower priced end.

[BRinSM]

how much do you have vested in the condo? of course a foreclosure would be bad for your credit, but it might be better for your financial future as opposed to dumping a large portion of your income into a place you don't even live in.

[L4P12]

I am already to that point of not paying the mortgage, hence the short sale... I can no longer dump any more money on payments. Just trying to keep food on my own table right now.

I am just floored at the banks taking so long on all of this. I am wondering if the banks would rather foreclose than take a short sale..perhaps some tax incentive on their part?

[EscapeCalifornia]

Originally Posted by LauraP12

I am already to that point of not paying the mortgage, hence the short sale... I can no longer dump any more money on payments. Just trying to keep food on my own table right now.

I am just floored at the banks taking so long on all of this. I am wondering if the banks would rather foreclose than take a short sale..perhaps some tax incentive on their part?

Yeah the banks seem to have a logic all their own. I mean, would you rather:

A) Take 80% of the loan value now and be done with it or,

B) Lose 6-12 months of payments, spend money foreclosing, take back a house that's likely to have been neglected and/or trashed, and sell it for 60% of the loan payoff?

Most rational people would choose Option B but the banks don't seem to see it that way.

[JTGJR]

Unfortunately, there are many folks in your boat and the load on the lenders is high. Flip side scenario from when it was taking them so long to approve loans and get through escrow because they didn't have the capacity to process everyone wanting to take advantage of such "great deals" for financing.

As for values RPV2NC is correct. Very much depends on where you own. Heard a report on the news, last week, that there was one foreclosure per every 4000 people in Los Angeles and one for every 900 in Riverside. Seemed like a strange statistic, so I don't know if they meant "people" or home. But, assuming an average of 4 people per home, that would mean 1/1000 homes in LA and 1/200+ homes in Riverside.

Local paper here, this morning, said that property values had dropped 7% yoy in cities in the South Bay with sales of more than 30 homes. There were not enough sales in each of El Segundo, Manhattan Beach, Hermosa Beach and Redondo Beach to report individual statistics. But they combined the sales in all 4 cities, and property values increased 22% yoy. New, high-end home purchases are skewing the data just a bit, I think.

[Charles]

Answer Desk: What if I can't pay my mortgage? - Answer desk - MSNBC.com

[CESpeed]

Have you considered renting it out? At least that way, you aren't losing money and maybe you can wait until the real estate market is more favorable. Another option is to lease with the option to buy. I hope this helps. Good Luck.

[Lake Conroe resident]

Just tell the bank that their going to have one more foreclosure on their hands if they don't take the deal...Bottom line is banks aren't in the Real Estate business and don't want your home, you just have to convince the person in the loss mitigation dept at the bank who really doesn't care as they are just an employee with no real vested interest. (see comment by escape CA as it hits it on the head, tell them to digest that and see what they say). Once they know you no longer care they will be more willing to work with you. Either way don't let them fool you into thinking that your going to "salvage" your credit by not having a foreclosure as your credit is almost certainly already trashed if you are behind/not making payments anymore. Almost better to just get it over with and start the rebuilding process now instead of 6 months from now...

[greggd]

Originally Posted by JTGJR

there was one foreclosure per every 4000 people in Los Angeles and one for every 900 in Riverside. Seemed like a strange statistic, so I don't know if they meant "people" or home. But, assuming an average of 4 people per home, that would mean 1/1000 homes in LA and 1/200+ homes in Riverside.

I would say riverside has more foreclosures because of the % of first time buyers, low income, and less desirable location compared to LA County.