Lawmaker Costa discusses housing troubles with Merced County Realtors

jsmith@mercedsunstar.comApril 2, 2013 

Rep. Jim Costa, D-Fresno, met with the Merced County Association of Realtors on Tuesday to discuss issues facing the local housing market.

At the top of the list were concerns about dual-tracking, a situation in which a homeowner negotiating a loan modification or a short sale with a bank unexpectedly gets foreclosed on.

"They're still having problems with financial institutions, and that's an area that we work on with our constituents," Costa said. "A lot of times, banks are not responsive to avoiding foreclosure."

"I think there's financial interest on the part of these banks that doesn't reflect the property owner's interest," he added.

The recently implemented California Homeowners Bill of Rights prohibits dual-tracking.

However, the practice -- intentional or not -- of foreclosing on a homeowner while he or she is negotiating a loan modification or short sale continues, according to local real estate agents.

"The seller is on an emotional roller-coaster, thinking, 'I'm finally going to get this part of my life behind me.' And then boom, they're foreclosed on," said Andy Krotik, manager of Coldwell Banker Gonella Realty in Atwater. "And you have the poor buyer who's missed out on all the other houses he could've purchased."

About 36 percent of all homes for sale in Merced County are short sales, according to the Merced County Association of Realtors. About 28 percent of those sales close.

"We get behind our clients and we help them with a short sale and (the bank) will all of a sudden foreclose, and then everything we did was basically for nothing," said said Ernie Ochoa, a local Realtor with Century 21.

Costa proposed holding a housing workshop at the Merced County Fairgrounds.

"We'll continue to work together and host a workshop here in the next two or three months, and give all of the segments of the housing industry here in Merced County an opportunity to meet with these financial institutions," Costa said.

The idea was met with enthusiasm at the meeting. "That is going to be huge," said Tina Deleon, president of the Merced County Association of Realtors and a Realtor with Century 21. "If he can do that, it will be the biggest help to the public."

The workshop would be beneficial for distressed homeowners, Krotik said.

"If you're struggling, you're going to be able to talk directly to Fannie Mae or Chase Bank or Bank of America, as opposed to being on hold for two hours," he said. "We all work short sales and every one of us has been on a two-hour hold."

Reporter Joshua Emerson Smith can be reached at (209) 385-2486 or jsmith@mercedsunstar.com.

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