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Expert suggests foreclosure action

Real estate: Still a buyer’s market until mortgage crises are addressed, according to speaker at VIA

Posted: January 19, 2012 1:30 a.m.
Updated: January 19, 2012 1:30 a.m.

Fred Arnold, a mortgage consultant and public speaker from American Family Funding, discusses the mortgage crises at a VIA luncheon Tuesday at the Valencia Country Club.

The short-term real estate forecast will continue to favor buyers, as the current low interest rates and soft home values are expected to linger, according to Fred Arnold in a presentation on the mortgage and real estate industry at Tuesday’s Valley Industry Association luncheon.

The speech was the second forecast presented at a VIA luncheon by Arnold, a mortgage consultant and public speaker from American Family Funding.

Currently, nine of the top 10 foreclosure areas in the country are in California. In 2009, there were six in the state. There are 300,000 California homes in the foreclosure cycle at any time, Arnold said.

According to 2011 numbers, the foreclosure process now takes nearly a year for each home because lending institutions are reluctant to kick people out of their homes.

“This is the biggest challenge that our industry faces,” he said. “This means you can not make payment for a year and still live in the house.”

 The state and federal governments could have prevented this stagnant process a few ways, Arnold said, suggesting deals in which the homeowners sell the home in good shape for the highest price and receive a small stipend from the government to get out of the home or programs to offer lower interest rates to those defaulting, with immediate foreclosure if the homeowner can’t maintain the lower rates.

These programs would have either kept people paying on their homes or would have sped up the foreclosure process and gotten more homes on the market.

 “Now, these are really far-left ideas,” Arnold said. “But, unfortunately, we weren’t willing to do that.”

This year will continue to be a good year for those in the market to buy property, whether commercial or residential.

Europeans are dodging their own economies and investing in the U.S. real estate market, which is artificially keeping interest rates between 3.75 and 4.25 percent, Arnold said. This won’t last forever, but the next year or two will continue to be the best time to buy.

Unfortunately, this means property values are not rising, yet inventory is fairly low. And in the Santa Clarita Valley, a foreclosed home is valued nearly the same as a regular home on the market.

“People are so desperate in getting housing, they’ll pay the same for a foreclosure as they would for a normal seller house,” Arnold said.

Arnold also touched on consumer confidence — which is still low due to “political bickering,” job insecurity and uncertainty with homes, he said — and advocated for decreased business regulation in the state to encourage businesses to come to and stay in California.

Businesses still haven’t seen the economic boost to be able to hire employees back, he said, or to invest in new infrastructure or technology.

“We’re going to continue to struggle and slowly come out of that,” Arnold said.


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