Things are looking a bit sunnier in sunny California these days according to RealtyTrac’s May foreclosure report.

Foreclosure filings in the Sacramento area were down almost 13 percent in May compared with the same month one year ago, although May filings were up slightly (2.25%) from the prior month.

For California as a whole, foreclosure filings were down 22 percent on a year-over-year basis.

RealtyTrac also reported that bank repossessions were up 44 percent in May from the same month one year ago.

According to an AP report in the San Jose Mercury News:

Economic woes, such as unemployment or reduced income, are the main catalysts for foreclosures this year. Initially, lax lending standards were the culprit. Now, homeowners with good credit who took out conventional, fixed-rate loans are the fastest growing group of foreclosures.

To read the RealtyTrac report, go here.

The Sacramento Bee reports that as the number of short sales in the area rise, so do the imaginative ways some people can come up with to exploit them.

The SacBee article warns of these schemes:

• Unlicensed short sale “negotiators” are approaching homeowners, asking for thousands of dollars up front to negotiate with lenders, said Tom Pool, spokesman for the California Department of Real Estate. Only attorneys and licensed brokers can ask for money up front – and only after the DRE approves the agreement with an individual seller. The DRE recently published a consumer alert about this and other scams.

• Real estate agents or these negotiators are lowballing offers to overwhelmed banks, a practice called “flopping.” After the bank approves a short sale at a low price, the agent or negotiator quickly flips the house to a new buyer for much more. Elizabeth Weintraub, a Sacramento short sale agent with Lyon Real Estate, said would-be floppers often want to use their own title companies. That’s a red flag.

• Real estate agents say banks are illegally seeking extra money in hidden side deals before approving short sales.

• Some homeowners, especially savvy, well-off owners who owe far more than their houses are worth, are hiding savings and income to persuade lenders to agree to short sales. Many can afford their mortgages, said Coldwell Banker short-sale specialist Mike Toste of Roseville. But they also know it will take years to recoup their 2006 values.

A short sale fraud scheme known as “flopping” is on the rise across the U.S. and two Connecticut real estate agents may be on their way to prison for their involvement in this illegal activity.

Flopping is when an investor or homebuyer hires a broker to assess a property for less than its market value (certainly not hard to do these days) and convinces the lender to sell at that price. The buyer hides the fact that he already has a higher offer and then flips the property for the higher price and a profit.

According to an article in BusinessWeek:

“A majority of the short-selling fraud is related to LLCs and investment companies trying to make a quick profit,” said Tim Grace, vice president of fraud analytics at CoreLogic. LLCs refer to limited liability corporations.

The Treasury has “put reasonable protections in place” to prevent short-sale fraud, requiring that the buyer and seller have no hidden relationship and banning most resales within 90 days, said Laurie Maggiano, policy director of the department’s Homeownership Preservation Office in Washington.

Suspected property-valuation fraud almost doubled from the end of 2007 through the first quarter of this year, according to a June 8 report by Interthinx Inc., an Agoura Hills, California- based company that sells mortgage fraud detection software.

In addition to banks losing money, “flopping” may hurt homeowners who complete a short sale and face higher deficiency judgments as lenders seek to recover unpaid mortgage balances, Ann Fulmer, vice president of Interthinx, said in an interview on Bloomberg Television.

Investors often use real estate broker opinions, which may rely on drive-by inspections instead of full appraisals, to persuade lenders to sell at a low price, Fulmer said. She suggested an Internet search of “How to influence a broker price opinion,” which yielded 74,800 results.

The San Francisco Chronicle reported last week that foreign investors, mostly from mainland China, have their eye on more landmark San Francisco hotel properties, including the famed Sir Francis Drake Hotel, which is currently on the market.

Shenzhen New World Group, a Chinese real estate development company, purchased the Los Angeles Marriott Downtown in a foreclosure sale in March for $60 million, a bargain price from its 2007 purchase price of $110 million.

The San Francisco W Hotel was sold last July to a Hong Kong investment firm for $90 million, down from $212 million just two years prior.

From the Chronicle article:

As the state’s hotel industry continues to suffer from the loss of corporate and family travel spending, observers believe that the infusion of foreign capital into the California hotel industry will help stabilize the market and preserve jobs and tax revenue.

While other analysts agree that foreign investment will be part of the next wave of real estate buying, they doubt it will dominate the market. Domestic investment funds and real estate investment trusts have been inactive for two years now as real estate values have plummeted. And many are gearing up to start purchasing property again, said Tom Callahan, CEO of PKF Consulting, a hospitality research firm in Atlanta.

“Domestic investors are cautious about the stock market and the yield on bonds is very low, so they are trying to figure out where to put their money,” Callahan said. “The real estate market is so beat down, so that’s a place they are looking.”

The hotel business in California is particularly distressed. As of March, more than 400 California hotels were in foreclosure, including 79 that had been taken back by lenders since January.

Single women accounted for more 2009 home purchases than single men at a rate of more than 2 to 1, according to a recent National Association of REALTORS report.

Unmarried women accounted for 21 percent of home purchases in 2009, compared with unmarried men who were 10% of the buyers. The predominant markets for single women home buyers were in California, Texas and Washington, D.C.

From a MarketWatch article:

Still, some industry professionals have been slow to take note of females’ robust activity. Single women have held steady at the 20 % mark for more than five years, yet when the Urban Land Institute hosted its annual real-estate conference in late April, analysts had to remind the audience to expect big numbers from young, single female buyers.

“I’ve given some of my [home-building] clients lessons on how to be gender friendly,” said Brooke Warrick, president of the market research firm American Lives. He reminded sellers to treat young women as viable buyers, not bystanders, by doing something as simple as handing them a brochure when they enter a for-sale home.

Sara Barger, 26, plays with her tenant’s dog outside of the Columbia Heights home she purchased in January, her third buy in three years.

His advice to real-estate developers: “Make sure to pay enough attention to these women. You want these women.”

These women tend to stake their claim on homes in the 1,700-square-foot range predominantly in the Washington, D.C., California and Texas markets, Warrick said.

After segmenting the market, Warrick noticed that young women, especially those rooted in secure industries like health care, make more money than their male peers.

“I think it’s the fact that more and more women realize that a man is no longer the financial plan.”

CNNMoney reports that there is a growing boom in real estate auctions, fueled by the growing number of REOs, new developments that have gone bust and distressed homeowners who are tired of watching their home values continue to decline while awaiting a sale.

The National Auctioneers Association notes that real estate auctions have increased by 14 percent in the first three months of 2010. One of the biggest attractions for sellers is speed: the entire process can take less than 10 weeks.

From the CNNMoney.com report:

There is such a huge volume of REOs on the market — 92,000 homes were seized in April alone — that banks are anxious to turn the properties over quickly. Rather than waiting for the local housing market, they turn to auctioneers.

Another boost to the auction market has come from new developments gone bust. Big tracts of single-family homes and, especially, condominium projects planned during the boom didn’t get finished until after markets nose-dived. That left developers with huge loans on properties they could no longer move.

Price declines have added urgency for ordinary people, too. Today, sellers are resorting to auctions after watching their homes languish on the market for months.

Often, they’re disillusioned by brokers who have been over enthusiastic about the prices their homes can fetch. When markets were bubbling, even badly overpriced homes were selling, and buyers were rescued by soaring market values. It’s a different story in the downturn. As overpriced homes languish on the market, the gap between asking prices and market values only balloons.

Plus, sellers have little leverage these days. Buyers are filling contracts with contingencies that enable them to seize on any shortcoming to renegotiate, or back out of, deals.

Selling through an auction avoids that. Sales are quick and clean. “People appreciate the purity,” said one auctioneer.

Lender Processing Services, a technology firm that reports on loan delinquencies, says that its data – based on 40 million first loans and 5 million home equity loans and lines of credit — points to an escalation in prime loan delinquencies across the U.S.

According to LPS analyst Steve Berg, there is a huge inventory of delinquent loans and more deteriorating every day. Using 2005 as a base year, LPS says that prime loans have deteriorated 305 percent, which outpaces subprime loans at 230 percent and FHA loan delinquencies, which have been flat.

From a post at Inman.com:

Berg uses Los Angeles County, home to a significant number of very high-priced residences, as an example. Looking at the data at the end of last year, the number of “dirty sales,” either short sale or REO, as a percentage of all total sales in the $250,000-and-below bracket, reached as high as 78 percent. However, the number of homes in that bracket that were in default or foreclosure was relatively modest, meaning the pipeline was shrinking.

In the lower-price home bracket where short sales and REOs had been concentrated, prices are not going to drop much more because it is already totally saturated with REOs and short sales — and the damage has been done.

As a comparison, in the highest price band, $750,000 and greater, only 16 percent of transactions were dirty sales. But, the number of properties in default and foreclosure are now higher than in the low-priced bracket and that, says Berg, “is going to whipsaw the home-sale market.”

The five states with highest volume of prime jumbo loans outstanding were California, New York, Florida, Virginia and New Jersey. Together those five states represent about two-thirds of total delinquencies.

A study by MDA DataQuick for the Wall Street Journal has found that sales of homes over $2 million or more in the first quarter of 2010 rose to 2005 peak levels in some areas of the country, including San Francisco, Menlo Park and Beverly Hills.

The study showed that in San Francisco during the first three months of 2010, 49 homes sold for $2 million or more compared with 47 in 2005.

From the Wall Street Journal article:

After a near-disastrous 2009, the luxury market appears to be making a comeback, driven by growing buyer confidence, improved financing conditions and more-realistic seller pricing. Despite the housing downturn, attractively priced homes in some of the nation’s most coveted neighborhoods are selling, sometimes fast and sometimes with multiple offers. Nationwide, sales of homes selling for $2 million to $5 million in the first quarter totaled 2,461, up 32% from a year before, says CoreLogic.

In San Francisco’s Pacific Heights neighborhood, a four-bedroom home on Broadway, with a spa and views of the Golden Gate Bridge, was renovated by Gregory Malin. It went on the market in late January and sold two weeks later for $13.5 million, compared with the $14 million asking price. The listing agent, Val Steele of Sotheby’s International Realty, says the sale, at $2,146 per square foot, marked the first time a home in San Francisco topped $2,000 a square foot since early September 2008.