In order to prevent another public relations nightmare, lenders are holding off on some foreclosures or evictions during the holiday season.

Irvine Home Address … 134 ECHO Run Irvine, CA 92614

Resale Home Price …… $215,000

I'll be home for Christmas

You can count on me

Please have snow and mistletoe

and presents on the tree

Christmas Eve will find me

Where the love light gleams

I'll be home for Christmas

If only in my

dreams

Frank Sinatra — I'll Be Home For Christmas

Each year during the holidays, lenders are faced with the unenviable choice to allow more squatting or take away the family home at Christmas. With the bad public relations that go along with holiday foreclosures, most lenders hold off until the new year.

Banks will hold off on some holiday foreclosures

Andrew S. Ross, Chronicle Columnist

Friday, November 25, 2011

Season of sharing, take 1.

Got an e-mail from Wells Fargo responding to my column this week suggesting that banks consider a moratorium on home foreclosure activities, at least during the holiday season.

“Wells Fargo is suspending eviction actions from Nov. 23 to Nov. 25, and again from Dec. 19 to Jan. 2, 2012. We will not physically evict or conduct lockouts on the foreclosed properties in our owned portfolio during these times,” said a Wells Fargo spokeswoman.

“For loans we service for others, foreclosure-related actions may still occur, but Wells Fargo will not evict tenants during these periods.”

So Wells Fargo will foreclose, they just won't evict. I guess the people had already been there for years squatting already, what's another couple of weeks, right?

I checked with the other major banks, and with the government-run Fannie Mae and Freddie Mac, the nation's two largest home loan originators.

JPMorgan Chase said it “will not complete foreclosure sales or evictions from Dec. 22 through Jan. 2, though this does not apply to Fannie and Freddie loans.”

Fannie Mae said it “will be announcing a suspension of evictions for the holiday period. Details should be available next week.”

Bank of America said, “For loans we own and those we service for investors who do not provide other guidance, we have a policy and procedures to avoid foreclosure sales or displacement of homeowners or tenants around the Thanksgiving and Christmas holidays. In addition to internal notifications of the policy, the contracted foreclosure attorneys and trustees have been instructed that they are not to schedule foreclosure sales, evictions or lockouts on covered loans during those periods.”

So some will foreclose but not evict, and some will not foreclose or evict. None of them said they were going to forgive the loan balance and let people keep the houses — in case anyone was holding out hope for that….

Ally Financial, which owns GMAC Mortgage, said, “Should a suspension of foreclosure activities be issued, GMAC Mortgage will follow the applicable investor requirements.”

Citigroup and Freddie Mac had not responded by Wednesday afternoon.

Blogging: www.sfgate.com/columns/bottomline. Facebook page: sfg.ly/doACKM. Tweeting: @andrewsross. E-mail: bottomline@sfchronicle.com.

My first holdover owner tenant

Whenever I buy an occupied property at auction, I always try to keep an existing occupants in place. I will renovate around people if I can get immediate cashflow from the property. You would think such an arrangement would be a no-brainer for a squatting former owner, but that generally isn't the case.

What I have found is that most people who strategically default do not wait until someone comes to evict them. Many properties I have purchased have been empty, or the occupants vacated just before I bought it at auction. Most holdover tenants are renters or unemployed former owners who have nowhere else to go.

Last month I bought a property which was occupied by the former owner. Before they quit paying, their mortgage payment was $2,200 per month. When Jacki approached them and asked if they would stay on for $1,000 per month, they didn't think we were serious. When we offered to fix up some lingering maintenance items, they asked us if they had to pay for it. They couldn't believe their good fortune that came from their foreclosure.

Now these people are very happy tenants. They didn't have to move, and their housing costs are less than half of what they were when they were making payments. Of course, they have to pay rent now, so the deal isn't as good as squatting, but this new arrangement is stable. It's a win-win as far as I can tell.

An Irvine Flop

Today's featured property was sold as REO on Halloween. In less than a month, it is on the market with a 25% markup. It certainly doesn't look like the listing agent for the REO got the best possible price for Fannie Mae.

What could this flipper have done in 30 days to increase the value 25%, particularly at this time of year when demand is weak and prices are falling?

Do you think the realtor might have represented to Fannie Mae that the value was less than the true fair market value? Do you think this investment was steered toward a favored client?

Or is it possible that this flipper is merely delusional and this property is really worth only $167,500? Perhaps it a bit of both. What do you think?

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This property is available for sale via the MLS.

Please contact Shevy Akason, #01836707

949.769.1599

sales@idealhomebrokers.com

Irvine House Address … 134 ECHO Run Irvine, CA 92614

Resale House Price …… $215,000

Beds: 1

Baths: 1

Sq. Ft.: 750

$287/SF

Property Type: Residential, Condominium

Style: One Level, Contemporary

View: Faces South

Year Built: 1980

Community: Woodbridge

County: Orange

MLS#: S680358

Source: CRMLS

On Redfin: 4 days

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Must See! Great Condo in a Great Irvine Community, within the boundaries to attend Woodbridge High School. Beautiful 1 Bedroom, 1 Bath condo. Recently remodeled with major upgraded finishes. Travertine countertops in kitchen and bath, upgraded cabinets, recessed lighting in kitchen, upgraded kohler kitchen sink, designer selected paint, travertine flooring in kitchen and dining area, upgraded carpet in living room and bedroom and upgraded lighing. Woodbridge Community Associations has two lakes, pools, tennis courts and beautiful parks. All that is left is for you to move in!

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Proprietary IHB commentary and analysis

Resale Home Price …… $215,000

House Purchase Price … $167,500

House Purchase Date …. 10/31/2011

Net Gain (Loss) ………. $34,600

Percent Change ………. 20.7%

Annual Appreciation … 340.3%

Cost of Home Ownership

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$215,000 ………. Asking Price

$7,525 ………. 3.5% Down FHA Financing

4.02% …………… Mortgage Interest Rate

$207,475 ………. 30-Year Mortgage

$70,979 ………. Income Requirement

$0,993 ………. Monthly Mortgage Payment

$186 ………. Property Tax (@1.04%)

$0 ………. Special Taxes and Levies (Mello Roos)

$45 ………. Homeowners Insurance (@ 0.25%)

$239 ………. Private Mortgage Insurance

$371 ………. Homeowners Association Fees

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$1,834 ………. Monthly Cash Outlays

-$154 ………. Tax Savings (% of Interest and Property Tax)

-$298 ………. Equity Hidden in Payment (Amortization)

$11 ………. Lost Income to Down Payment (net of taxes)

$47 ………. Maintenance and Replacement Reserves

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$1,439 ………. Monthly Cost of Ownership

Cash Acquisition Demands

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$2,150 ………. Furnishing and Move In @1%

$2,150 ………. Closing Costs @1%

$2,075 ………. Interest Points

$7,525 ………. Down Payment

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$13,900 ………. Total Cash Costs

$22,000 ………… Emergency Cash Reserves

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$35,900 ………. Total Savings Needed

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