Please find the link to Raj Kudchadkar’s BRAC presentation below:
CLICK HERE for a copy of the BRAC Presentation
Many economic forecasters believe that recovery from the Great Recession will be very difficult unless the housing market recovers as well.
“Elkridge has been hit hard because there was a lot of new construction there just before the bottom dropped out of the market,” said Yvonne Deardorff, vice president of Lakeside Title Company in Columbia. “Condos were especially hard hit. Some people have watched prices drop more than $200,000, [representing] over 50 percent of their home’s value.”
Owners in Elkridge hoping to sell newer homes often are competing against builders who are still selling new construction in their developments at drastically reduced prices.
Today’s market bears mixed news for Elkridge. Clearly, there are signs that the market is not well: In 2010, 28 percent of all transactions in Elkridge were short sales or foreclosures, compared with Howard County’s overall 22 percent rate.
On the other hand, while Howard County saw a 27 percent increase in distressed home sales in 2010, Elkridge experienced a 20 percent increase. (Real estate sales are counted as distressed if they occur by means of a short sale or foreclosure.) And although the absolute number of distressed sales remained small here–65 for Elkridge and 562 for the county as a whole–these numbers were significant given that distressed sales were all but unheard of in Howard County as recently as three years ago.
Short sales head off foreclosures
Historically, lending institutions would foreclose on mortgages and take possession of bad debtors’ homes. In strong housing markets, banks saw foreclosures as satisfactory solutions because properties commanded good prices and sold quickly. Foreclosures were generally viewed as an accepted cost of doing business.
In today’s market, however, foreclosures are dragging down banks, threatening to put them out of business. This is especially true in consumer-friendly states like Maryland.
“Maryland’s new foreclosure laws, on the books since July, are not bank friendly,” said Deardorff. “It can take many months to move through the foreclosure process, and when they go to foreclosure, they [typically] lose an extra 25 percent of the home’s value. Just the transfer taxes amount to 2.5 percent.”
In addition, foreclosures take up to a year to complete. “In Howard County, [foreclosures] are taking 60 days to be ratified after the sale on the courthouse steps,” said Deardorff.
Hence the increasing popularity of short sales. “Simply put, a short sale is one in which the bank accepts less for a home than the principal balance of its mortgage. It is a way for the bank to cut its losses,” said Steven James, a broker with James Real Estate Group in Howard County.
Real estate statistics bear this out. In Elkridge, for example, the average price for homes sold via short sales was $38,900 higher than the average price of homes sold through foreclosure.
Nonetheless, until recently, banks resisted short sales. “I just don’t think they were set up to do them. When short sales came along, they had to hire and train a new staff. That took a while,” said Deardorff, who estimates that 65 percent of her time is spent on short sales. She currently has 75 short sales pending through her law firm, Deardorff and Moon, which is closely affiliated with Lakeside Title.
“It’s getting easier to work through the short sale process; they used to take eight or nine months to complete, but now the lenders have expedited processes in place. Communications are better than they used to be,” said Deardorff.
Still, short sale approvals can get complicated “because the bank you may be dealing with often doesn’t own the mortgage, so there is a whole other level of due diligence and approval required by the secondary mortgage institution,” said Deardorff.
There is a lot of short sale fraud, according to Deardorff. Banks have to make sure that the seller is not related to the buyer and that there is a legitimate reason for the sale other than a desire on the part of the borrower to escape a poor purchase decision.
“We get a lot of people who want to do strategic short sales. They are struggling…and they know that market allows short sales, so they say ‘let’s try it now,’” explained Deardorff.
When lenders review short sale applications, they look for sustained life changes, meaning changes in borrowers’ lives lasting more than six months that affect their abilities to afford their mortgages. These may include death of a co-borrower, divorce, job loss, income reduction and illness.
In recent months, some lenders have been willing to modify the terms of loans, including reducing interest rates, and, in some cases, even principal balances.
“Going into 2011, I see positive signs and good indications that our market is on the rebound here,” said James.
Currently, there are 14 active foreclosure listings in zip code 21075, of which 4 are under contract, ranging in price from $74,900 to $534,204.
“There is pain everywhere, including here,” said Nancy Corporon, a real estate agent and FHA 203(k) rehabilitation loan specialist serving the Elkridge area. The 203(k) program helps buyers purchase distressed homes and rehabilitate them by rolling the purchase price and cost of improvements into a first mortgage. “The upside of foreclosures is that they create opportunities for people with good credit and cash to buy and restore these properties to the community.”
Corporon added, “I purchased an uninhabitable townhouse in Elkridge at auction, refurbished it, and now it is a viable part of the housing stock.”
Article by Frank Hazzard in the Elkridge Patch (http://elkridge.patch.com)
Kettle drive – a little history and how Lakeside Title and Wells Fargo are teaming up for great cause
In 1891, Salvation Army Captain Joseph McFee was distraught because so many poor individuals in San Francisco were going hungry. During the holiday season, he resolved to provide a free Christmas dinner for the destitute and poverty-stricken. He only had one major hurdle to overcome — funding the project.
Where would the money come from, he wondered. He lay awake nights, worrying, thinking, praying about how he could find the funds to fulfill his commitment of feeding 1,000 of the city’s poorest individuals on Christmas Day. As he pondered the issue, his thoughts drifted back to his sailor days in Liverpool, England. He remembered how at Stage Landing, where the boats came in, there was a large, iron kettle called “Simpson’s Pot” into which passers-by tossed a coin or two to help the poor.
The next day Captain McFee placed a similar pot at the Oakland Ferry Landing at the foot of Market Street. Beside the pot, he placed a sign that read, “Keep the Pot Boiling.” He soon had the money to see that the needy people were properly fed at Christmas.
Six years later, the kettle idea spread from the west coast to the Boston area. That year, the combined effort nationwide resulted in 150,000 Christmas dinners for the needy. In 1901, kettle contributions in New York City provided funds for the first mammoth sit-down dinner in Madison Square Garden, a custom that continued for many years. Today in the U.S., The Salvation Army assists more than four-and-a-half million people during the Thanksgiving and Christmas time periods.
Captain McFee’s kettle idea launched a tradition that has spread not only throughout the United States, but all across the world. Kettles are now used in such distant lands as Korea, Japan, Chile and many European countries. Everywhere, public contributions to Salvation Army kettles enable the organization to continue its year-round efforts at helping those who would otherwise be forgotten.
Lakeside Title has been corporately participating in this Salvation Army charity for over three years now. This is their main holiday charity and the proceeds go local Howard County families in desperate need and will help to subsidize heating bills, rent, provide food, clothing and some toys for children.
Our local Wells Fargo Mortgage office organized the contest format with local real estate industry offices and called it “The Wells Fargo Salvation Army Kettle Challenge.” So Lakeside Title is competing to raise the most money as a team. It’s for a great cause and Lakeside Title likes to win (they have won two of the last three years). Join them on 12.20.2010 to ring the bell outside Macy’s at The Mall in Columbia. Come ring the bell for at least an hour that day with them. When you speak with co-workers who have participated in the past, you will find how gratifying the experience was for them and how you play a necessary role in assisting local neighbors in serious need. Everyone who volunteers their time will be so glad they did.
Additionally, this year there is an online kettle at the link below where anyone can donate via credit card and the online donations are credited to the Lakeside Title’s team total.
In an effort to support a worthwhile cause, Lakeside Title Company donated all its services for the settlement of the recent Habitat for Humanity Howard County home.
This build was called the Apostles Build as 12 congregations were to each raise $12,000 toward the costs of construction.
This Elkridge property is now home to the Ali family, refugees from Somalia. Their tale is truly amazing. This family trekked from Somalia to Uganda with no food or water to escape the Somali coup.
To view the video of this family’s struggles and wonderful outcome here in Howard County, click on this link: http://howardhabitat.org/
As with all Habitat for Humanity families, they must apply to be selected and they must volunteer at least 500 hours of sweat equity either on the job site or with office assistance. For this particular build, applications were accepted at Wilde Lake High School. They were then reviewed by a family selection committee.
The home, a 3 bedroom, 1,100 square foot single family home with a walk out lower level was one of the larger homes Habitat has constructed.
Khalid Ali, his wife and their six children now live in a wonderful new home and with the generosity of Lakeside Title Company, they did not have to pay any of their settlement expenses at this June’s settlement. Raina Rath of Lakeside’s Columbia office actually did the settlement.