Q. I have heard underwater homeowners who can still afford their loans have stopped making mortgage payments because of advice from their financial planners. Is this true? A. True. This new class of borrowers is called strategic defaulters. They are believed to comprise 50% of all homeowners behind on their payments. The following is a simple scenario. Joe Smith is 55 years old. His 401k is dust and his social security check at 65 will be peanuts, his biggest investment in his life was the house he bought for $600,000 in 2005. That house is now worth $350,000. He has 25 more years of payments on a loan which may never equal the value of his home during his lifetime. His kids have left the

Q: I am considering flipping houses. Do you think this is a good investment? A: Flipping houses on TV looks like easy money and something that anyone can do. I can tell you from experience that it is thrilling, the highs and lows are what I equate to someone who likes to gamble. The saying that the two happiest days of a boat owner is the day he buys the boat and the day he sells the boat is so true with investment flips. From 2004 – 2006 it seemed that flips were a no brainer as real estate prices skyrocketed. Fast forward to 2010, property values in the Sacramento periphery have taken a 50-60% hit. Is it time for flipper to take the plunge again? Yes and no. First of all, the margins

Question: I keep hearing about the HAFA program. Can you please explain what it is and how it works? Answer: HAFA, the Home Affordable Foreclosure Alternative Program was implemented by the Treasury Department and took effect on April 5, 2010. The program provides a viable alternative and incentives for lenders and borrowers with a short sale or a deed-in-lieu of foreclosure. A short sale is when a homeowner sells their home for less than what is owed on the mortgage. The program is a compliment to HAMP, the Home Affordable Modification Program. The major benefits of the HAFA program versus foreclosure are the following: 1. The borrower is released from all future liability from the p

Question: "Where is the best place to find foreclosure listings? Because all of the MLS sites block out that information and only give you a general location-Why?" Answer: Most foreclosure listing websites are subscription based. They want a monthly fee for access. When foreclosures are entered into the local MLS by the listing agent there is a mandatory field filled in by the agent as to whether the property is a REO or Real Estate Owned (REO), short sale or traditional. Some foreclosure websites pick up on this criteria and post to their own. They may charge fees not only to the subscriber but agents who wish to place ads along side these listings. Some times it actually appears as if

Welcome to my new column. I have been a Real Estate Broker and brokerage owner for six years in Midtown and now in East Sacramento. For the past three years I have primarily sold foreclosures for banks and institutions. Before I became a Real Estate Broker I “flipped” older distressed homes in the greater downtown Sacramento area. I am a member of four professional associations and attend several conferences and workshops a year where I have direct contact with the real estate industry’s leaders and experts. This insight helps me greatly with the understanding of real estate’s future. As most people are well aware the real estate market is not going to recover soon and the foreclosure ma