California housing market may be stabilizing, but Cynthia Kroll, a senior regional economist for the Fisher Center for Real Estate and Urban Economics, at UC Berkeley, reports prices are unlikely to fully recover in 2010. Read her research report titled "California Housing in the Subprime/Credit Crisis -- Overview and a Forward Look at Recovery." This may drive more homes into foreclosure.
The article does a study on median home prices, and provides statistical analysis on California trends as compared to US home prices. The extended recovery will affect everyone with real estate interests (lenders, investors, borrowers) in California.
With commercial property, Brady W. Dunnigan at Dinsmore & Shohl LLP reports in his article "Why is a "financeable lease" crucial to your loan?", that lenders are focusing on financeable leases to ensure consistent cash flow and terms that protect them from liability in the event of property foreclosure.
In analyzing whether a lease is financeable, the lender will review the creditworthiness of the tenant. Security deposits and personal guarantees of the tenant's obligations are important.
The lender may require each tenant to sign a subordination, non-disturbance, and attornment agreement (SNDA), to ensure stable occupancy and rental payments if there is a loan default and subsequent foreclosure of the loan by the lender. In the SNDA the lender and tenant agree that:
• the lease is subordinate to the lender's mortgage;
• as long as the tenant is not in default of the lease, it will not be affected by the owner's loan default and subsequent foreclosure; and
• if the lender or a new owner takes over from the original owner, the tenant will acknowledge the new owner as its landlord under the lease.
Information about foreclosure procedures and ways to stop a foreclosure can come from many sources. Turn to a responsive foreclosure attorney for straight answers on market and legal options.
