The availability of loan modifications or loan workout options for homeowners should slow the rate of foreclosures and help stabilize home prices
San Diego, CA (PRWEB) October 14, 2008
The Emergency Economic Stabilization Act (the $700 Billon Federal Bailout Plan) was enacted on October 3, 2008 and will benefit many San Diego homeowners, according to HouseRebate.com. The planned mitigation of foreclosures through loan modifications should decrease the flow of foreclosures into the marketplace. Fewer foreclosures, in turn, will help stabilize housing prices in San Diego. Currently, the plethora of San Diego Foreclosures homes is fueling the continued price declines in the market.
One feature of the act that benefits taxpayers directly is that many defaulting homeowners will now be able to keep their homes. Another feature of the bill will extend the tax break to homeowners that lose their homes who had a portion of the debt forgiven. The debt forgiveness on home loans under the Mortgage Forgiveness Debt Relief Act of 2007 will be extended until Dec. 31, 2012.
California taxpayers recently received similar tax breaks on their California State taxes. On September 25, 2008, Governor Arnold Schwarzenegger signed it into California law to offer similar tax relief for debt forgiveness relating to foreclosures. Senate Bill 1055 will cover forgiven mortgage debt discharged in 2007 and 2008. This bill may need to be amended in the future to match the extended Federal date of December 31, 2012. Taxpayers should note the maximum qualifying debt under Federal law is now $2,000,000 and it is only $800,000 for California. California has a maximum income exclusion of $250,000.
The San Diego foreclosure inventory continues to be abundant, giving potential San Diego homebuyers and investors great buying opportunity. At the end of September 2008, there were 7,016 San Diego bank owned properties and from this number, more than 2,000 San Diego foreclosure properties are actively for sale on the San Diego Multiple Listing Service (MLS). The remaining 5,000 plus bank owned properties are being processed to be available for sale or are currently in escrow.
4,589 San Diego foreclosure properties are scheduled for auction in the next 90 days; a portion of these properties may be foreclosed on by the banks. There are over 10,000 San Diego homes and properties in the pre-foreclosure phase. These owners of the San Diego real estate properties have received a Notice of Default to notify them that a foreclosure auction is pending. Many of these homeowners may be eligible for loan modifications once the Federal $700 Billion Bailout Program begins the implementation process.
Brian Yui, CEO of HouseRebate.com, expects the volume of foreclosures to stabilize due to the recent Bank of America/Countrywide settlement and the Emergency Economic Stabilization Act, which offer loan modifications to existing delinquent homeowners. "The availability of loan modifications or loan workout options for homeowners should slow the rate of foreclosures and help stabilize home prices," states Brian Yui. "Savvy investors are jumping into the market knowing that entry-level homes can achieve breakeven cash flow with only 25 percent down payments," he added.
According to Sandicor, there were 2,753 San Diego home sales in September 2008. Approximately 36 percent of these sales were San Diego bank owned REO properties due to San Diego foreclosures. For buyers who wish to take advantage of bargain basement prices on San Diego homes, a current list of San Diego Foreclosure properties is updated daily at HouseRebate.com.
HouseRebate.com, a member of the National Association of Realtors®, is a full service value real estate company that maintains a seasoned staff of agents. They provide all the services that traditional real estate offices offer at discount prices, with reduced commissions on sale, and rebates of 33 percent on commissions of purchases. HouseRebate.com features a virtual foreclosure tour bus that shows currently available San Diego foreclosure properties.