The Foreclosure Report...

Short Sales are Easy!

2008-06-30T15:07:00.001-07:00

Really easy.
You call, you talk to the Lender, they accept the deal and you move on to the next one. Done!

Some people wonder why I start calling at 5 AM Pacific time.
Some people wonder why I have 26 different phone lines on my desk.
Some people wonder why I'm always on the phone.

I don't.

Are you the homeowner? Listing Agent is working on your short sale?

Be nice to the person that's working on your behalf.

How to use this site

2008-06-22T19:29:00.000-07:00

If you are here looking for ways to
"Cash in on Foreclosures",

This site is NOT for you!

However, if you are behind in your mortgage now, or may be soon, the site is just for you!

The opinions and views expressed on this site are those of many national unbiased Real Estate Professionals. They give this advice freely. They have your best interest at heart. To contact any one of them their links will lead you back to their site. They may also be listed on the Important Contributors page.

All of them have the same message, if you are in trouble or worried you may be in trouble...

The time to act is now!

Every day that goes by another
"Door of Opportunity" closes.

Before you do anything, we recommend you first read,
"7 Ways to Resolve".

The key to your future success is understanding all your options.

To find the latest contact information for your lender's
Loss Mitigation Department
- find your Lender on the list.

For additional reading, reports and resources:

For a recommended checklist on what to do,
Click on the topic that best describes your situation right now.

Please share your experiences as well here. You can add comments anonymously if you like.

Dear Mortgage Insurance Underwriter,

2008-05-13T18:36:00.000-07:00

I've got two perfectly good short sale negotiations that have been shot down by your Mortgage Insurance Company and I'm not happy!

I'm not talking about Mortgage Insurance that the Homeowner had. No. That would be too easy. I'm talking about a dark, sinister, evil form of MI that is killing perfectly good short sales everywhere.

Once the loan was put into place, some (not all) Lenders bought a policy with you (which they paid for) on either the individual loans or an entire pool of loans. Maybe you insured a tranched portion of those pools. It doesn't matter.

The Homeowner doesn't know about this policy. Nobody knows. Ok, you do and the Lender at some level does.

And in the case of a short sale, the Listing Agent, the Buyers Agent, the Buyer, and all the parties concerned don't know about this.

Until what we thought was the "Decision Maker" at the Lender submits the deal to their boss for final approval we don't get to find out about the presence of MI or your involvement.

So the Lender's Negotiator sent the approved deal to you. It was a good deal. It was inline with the comps. It was a good offer considering. But then you come back to me saying that you are requiring a Promissory Note of $XXX,XXX ?

Did you not read the comps? Did you not see the hardship? They don't have a job! No Income! They've drained their savings to make the payments.

Thanks for taking my call. I weaseled your number out of the Lender. I think they might have been a little tired of talking to me. You were pleasant enough. I understand your position. If the home goes to Trustee Auction, your company is set to pay to the lender $xx,xxx. In approving a short sale you are setting your company up for the same loss - ONLY if the Homeowner signs the Promissory Note. I get that too.

My problem isn't in the business decision to insure the loan. that's business. My problem isn't that you wasted a lot of people's time, I can blame the Lender for that.

My problem is that there is no room is this business model for humanity, empathy, or compassion. Your calculator shows either black or white - period. The only loss you are concerned with is the loss your company will have in paying the claim. If the home becomes an REO - you don't care.

You are forcing two perfectly good short sale transactions this week into foreclosure. Two perfectly good deals. Two family's who tried to sell, tried to refinance, tried to modify, and then finally tried to short sale, all in good faith. And to you, their efforts mean nothing.

Shame on you!

Why the New Trustee?

2008-05-05T09:50:00.001-07:00

When the Lender files the Notice of Default to start the foreclosure process often times they will also assign a New Trustee.

When that happens you'll receive all sorts of important registered letters announcing the New Trustee. By law they have make sure you are properly notified.

(you might call it being Spammed)

This is normal.

So why do they do this do you ask?

Maybe the New Trustee is better, faster and / or cheaper than the old one when it comes to the Foreclosure Process. That's all.

The Good News is that the New Trustee cannot change the terms of the Note. They only act as instructed.

The Bad News is that you still have a Notice of Default and it's been transferred to a company that might better process that.

Liable for a Deficiency Judgement?

2008-04-22T11:58:00.001-07:00

Each state has it's own rules.

For the State of California, for Residential Property (1-4 Units), Owner Occupied here's a quick chart.

Lender Purchase Money Loan	Seller Financed Purchase Money Loan	Refinanced (Non Purchase Money Loan)
NO Deficiency Judgment if Senior or junior Lien Holder * see Civil Code 580b.	NO Deficiency Judgment if Senior or junior Lien Holder * see Civil Code 580b.	YES - Deficiency Judgment if judicial foreclosure NO Deficiency Judgment if Trustee Sale Foreclosure see Civil Code 580b

* If a senior Lienholder forecloses on the property, the wiped out junior loan lienholder who no longer has a secured note may NOT sue on this promissory note for those categories indicated on this chart.

There are other factors and conditions which may change the result (such as borrower fraud).

Always consult a legal professional.

Conspiracy Theory #17

2008-04-17T08:30:00.001-07:00

We've all heard of PMI. It's Mortgage Insurance.
It reduces the risk of loss to the lender in the case of default.

In the case of default instead of the lender taking the entire loss, the purchased Mortgage Insurance steps in and covers a portion of the loss.

Who pays for the premium on mortgage insurance.

Normally it's the borrower.

BUT WHAT IF...

What if the lender, unbeknownst to anyone, quietly purchased Mortgage Insurance to protect their position, to hedge their bets?

Take the case of a lender who's issuing Home Equity Lines of Credit or Seconds on riskier borrowers. High Loan to Value? Stated Income? No Problem!

They bumped the rate just a little higher to cover the cost of a policy after the deal was closed.

This wouldn't show up in Title.
The Borrower would never know.
The Mortgage Broker wouldn't know.
Only the Lender would know.

FLASH FORWARD

Today that homeowner is in trouble. They are behind in payments. They owe more than what they can sell for. They are underwater, they've been struggling for months, they want to do the right thing and a Short Sale is the best option.

The house is listed, the offers come in. There's a $100,000 deficiency and we're asking the 2nd lender to absorb the greatest portion of the loss. Why not. If it goes through foreclosure they'll receive virtually nothing. Right?

"Hi Mr. 2nd Lender, I know you lent them $125,000 on a home equity loan a couple of years ago. You know they are behind, you've read their hardship letter. I've negotiated with the 1st Lender and they'll give $10,000 to settle. How about it? That's a whole lot better than zero. What do you say? Do we have a deal?"

SILENCE IS GOLDEN

Mr. 2nd Lender doesn't respond. Or they turn down the offer. Or they lose the package repeatedly. Or any one of the thousand complaints we hear on a daily basis about dealing with loss Mitigation.

Might this be because Mr. 2nd. Lender holds a policy on the loan? Does that policy have a stipulation that only pays if the home is sold through foreclosure?

Instead of a 90 something percent loss, the lender (with the help of his insurance policy) will lose substantially less. Very much less!

This cost the lender nothing - the bump in rate paid for the premiums.

Unfortunately, it cost the other players plenty. The Listing Agent, the Negotiator, the Buyers Agent, the Buyer, the Escrow Officer, and the Homeowner.

I know this isn't as exciting as Black Helicopters, Elvis, Reverse Alien Technology, Grassy Knolls, or Space Shuttles and Earthquakes.

Hey Scully, what do you think?

Feel like a Piece of Livestock yet?

2008-04-16T07:25:00.001-07:00

Cattle, Sheep. Goats, go ahead and pick your favorite. You are a now a piece of livestock in the eyes of Fannie Mae and Freddie Mac.

And you thought you were just another number?

As the pressure mounts for more and more homeowners, it's no surprise that Foreclosure Rates have risen.

Yesterday, Bloomberg News reported that,

"U.S. foreclosure filings jumped 57 percent and bank repossessions more than doubled in March from a year earlier as adjustable mortgages increased and more owners gave up their homes to lenders."

From the mouths of Lenders (thanks to Calculated Risk),

Don Truslow, Wachovia Corporation - SEVP, Chief Risk Officer

"Ken, that's exactly right. And Kevin, it's just this pattern almost that somewhere -- I don't know where the tipping point is, but somewhere when a borrower crosses the 100% loan to value, somewhere north of that and they presumably run into some sort of cash flow bump, whether it's reduced income or kind of normal things in life that have created past dues before, their propensity to just default and stop paying their mortgage rises dramatically and I mean really accelerates up and it's almost regardless of how they scored, say, on FICO or other kinds of character, credit characteristics."

Dowd Ritter, Regions Financial Corp. - CEO & President:

"I would tell you that in a few of those that you saw us basically write off, we did not write them down, and because some of those -- they did have firsts, but there are cases where people as early as 18 to 24 months ago had one value on that property, and as they started to sell it or refinance it, they realize that valuation was 40% below what it was 18 to 24 months ago, and they're walking away from those homes in those markets."

What we're talking about is a

Realized Fear of Herd Mentality

Make no mistake, the lenders are worried. This has moved up the food chain to Fannie Mae and Freddie Mac who came out with new guidelines for those wishing to finance in the future with a Foreclosure on their record.

As more and more people "walk away" from their homes, it becomes easier for the next person to make the same decision.

Herd Mentality

Cutting to the chase (a herding term) Fannie is saying to homeowners,

If you Walk Away today we're going to punish you tomorrow. We will now prohibit foreclosed borrowers from getting another mortgage for Five Years!

And even after that five year period is up, we're going to require you come in with at least 10% down.

Oh and we want you to have a really good credit score too. Better have better than a 680 FICO."

Five years isn't so long is it? Doesn't a foreclosure drop off your credit after a few years?

Foreclosure is Forever.

Remember, on the loan application is a cute little box for you to check Yes or No.

Check the YES Box and your loan application jumps out of the Automated Underwriting line (easier approval process) and is pulled into the black hole that sometimes is Manual Underwriting.

This makes it all that much more important for homeowners in trouble to fully examine all their options. For instance, by going through the "hassle" of a Short Sale, you'll avoid the Foreclosure Label.

I see that as a big positive in an otherwise negative situation. "I'm never going to own a home again!"

Who knows what the future holds? What if Grandma passes away and gives you her home? What if she had a reverse mortgage on that bungalow? Now what are you going to do?

By the way: Not checking the Yes box (with a foreclosure in your distant past) is grounds for Fraud.

"Mommy, why are they taking Daddy away?"

"Daddy was a very bad man, he checked the wrong box!"

The Dreaded 1099-C

2008-04-14T06:55:00.001-07:00

Here's what a blank form looks like. In a Short Sale or Foreclosure this is what the Lender might chose to file (a foreclosure might send you a 1099-A too).

Like any other 1099, one copy goes to the taxpayer (you) and another copy goes to the IRS.

(click to enlarge)

The most important box is

Box Number 2: Amount of Debt Canceled

This is not your loan balance. It's your loan balance, plus every single little nit picking fee the Lender can tack on. Add penalty and fees too!

In a Foreclosure, these fees and charges are pretty much left unchecked by anyone from the homeowner's side.

In a Short Sale, either the Listing Agent or a Negotiator can help negotiate a reduction of these charges. In fact everything in a Short Sale is negotiable including the very issuance of this 1099.

Remember, the Lender is reporting this to both you and the IRS as "income". While you may or may not fall under the protection of the Mortgage Forgiveness Debt Relief Act (HR 3648), there is also the State tax consequences to be considered.

When I hear homeowners who say they don't care about a short sale, "just let it go to foreclosure", because they are not going to gain anything from it - this is one of the first gains I think they don't see.

I can see that. If you didn't receive a 1099-C, because you completed a short sale and your Negotiator minimized Box 2 or negated the issuance of the 1099 all together, would you notice?

Maybe not.

But I can say, TurboTax (or your tax professional) would notice more if they didn't.

Suburban Renewal In The News

2008-04-04T21:36:00.001-07:00

I was interviewed by the San Jose Mercury News the other day. I had a couple of great in depth conversations with Sue McAllister, the real estate reporter for the paper.

You can read the entire article HERE, I cut the portion that directly involved S-R below.

Part of the problem is that lenders are overwhelmed by managing so many short sales nationwide, said Mike Mueller, co-founder of Suburban Renewal, a Concord short-sale negotiator. Another problem is that many agents handling such sales lack experience at it.

"Most don't know how to put together a compelling package and push the lenders' buttons," to get a swift sale, Mueller said.

Despite recent changes in federal laws, some sellers owe tax on the portion of their debt "forgiven" by the lender. But whether or not the lender reports the forgiven debt is negotiable, Mueller said.

One Bay Area homeowner in the midst of short-selling her home said so far, she's in favor of working with an intermediary company. The woman, an information technology consultant with three young children, said she needed to sell her Contra Costa County townhome following her recent divorce. She owes more for the home than it's worth, and her real estate agent suggested working with Mueller.

"He's given some amazing tricks and tips on what you need to do to make a short sale work," said the homeowner, who did not want her name published.

The townhouse was listed in February and got four offers, which her lender received about a month ago, she said. She hopes the lender will make a decision in the next week or so. "It's a stressful situation. It's nice to have someone else dealing with the ugliness of it."

Thanks Sue.

We're all doing our best, trying to make the best of the situation.

BTW: Sue writes a pretty mean blog: Square Feet Check it out!

Short Sales Do Close

2008-03-28T06:32:00.001-07:00

And here is Proof!

This is Lynn Pineda. Lynn works for Keller Williams Partners Realty in Coral Springs, Florida.

She is an experienced agent who consistently shows a great deal of caring for her clients. She runs a site specifically for those homeowners in trouble.

If you need help anywhere around Coral Springs I'll urge you to contact her! Office Phone: (954) 464-1100 or by email info@myshortsalehome.com

Today she shares a successful short sale story with us.

Short Sales Do Close
I'm happy to report that Short Sales do happen and do close. In fact, I just closed on one today that gained lender approval on a 1st and 2nd, including Countrywide, that took 39 days for combined approval!

The 1st took less than 82% of fair market value
The 2nd took what seems to be a standard for Countrywide at $3000
The Seller escapes foreclosure and experiences profound joy
The Buyer received a fabulous home at a great price
Today I've experienced an overwhelming feeling of knowing that I have made a difference in my seller's life; wow, who can put a price tag on that! And I'll sleep good tonight.
Join me in cheering on the short sale and never give up trying to make a difference. Short Sales are happening and knowledge is power.

Good Job Lynn!

Operation Homewrecker

2008-03-25T11:02:00.001-07:00

Sorry - Not this one. Not this one either.

Nor this one.

How about these Homewrecker's?

The Fed's have just busted a huge Foreclosure Rescue Scam, much of it operating in and around Sacramento, Tracy and Modesto. They were preying on the homeowners who were in danger of losing their home to foreclosure.

It's called an Equity Scam. It's nothing new. Here's how it works...

You are in trouble. You haven't paid your mortgage in over 3 months. Your Lender files what is called a Notice of Default. This is public record. That means the bad guys now know about you.

There's a knock at the door. It's a well dressed man. He's even smiling. He's obviously not a bill collector. He says he knows about your problem. He says can help.

Better than helping, he has a proposition you can't refuse!

He's going to help keep you in your home.
He's going to help you rebuild your credit.
He's going to help you keep your equity.

This sounds like an Angel was sent from above. How's he going to do all this you ask?

He's got people. He might even refer to his people as "Angel Investors".

"We're going to add my investor to the property title. She'll charge you a low monthly rent while you continue to live here and rebuild your credit. Then, in a year or two, when you are ready, she'll sell the property back to you. Sounds good? OK, sign here."

The problem is that his Angel Investor doesn't pay your mortgage. She never intended to. In some cases she might not even know she owns the property. She might have been duped the same as you. They do however collect your rent. They might even sell your property out from under you then next day. You don't get to keep the house, you don't get to rebuild your credit, you don't get to keep your equity. You don't pass go, and you don't collect two Hundred dollars.

If you fall for one of these schemes the next thing you'll hear might be

Honey, what's that For Sale sign doing in our front yard?

Honey, the Sheriff's here and he says he has to escort us off the property!

Two things to remember:

NEVER, NEVER, NEVER sign over your Deed of Trust.
If it sounds to good to be true...

So you already know that one - right?

And just because I would love to their Mother's to see what they've been so busy doing, here's the sweet 16 indictment roll call:

Charles Head, 33, of La Habra
Jeremy Michael Head, 30, of Huntington Beach
Elham Assadi, (aka Elham Assadi Jouzani, aka Ely Assadi), 30, of Irvine, California
Leonard Bernot, 51, of Laguna Hills, California
Akemi Bottari, 28, of Los Angeles
Joshua Coffman, 29, of North Hollywood
John Corcoran(aka Jack Corcoran), 52, of Anaheim
Sarah Mattson, 27, of Phoenix, Arizona
Domonic McCarns, 33, of Brea, California
Anh Nguyen, 36, of Los Angeles
Omar Sandoval, 32, of Rancho Cucamonga, California
Xochitl Sandoval, 29, of Rancho Cucamonga
Eduardo Vanegas, 28, of Phoenix
Andrew Vu, 39, of Santa Ana
Justin Wiley, 28, of Irvine
Kou Yang, 32, of Corona, California

If your loan is Serviced by Ocwen

2008-03-13T18:09:00.000-07:00

You just walked into a Bomb

Ever give up your 3 to sucker in a 2 to a bomb? Stratego.

I just got off the phone with Loss Mitigation at Ocwen. Correction, make that what used to be Loss Mitigation. As of noon-ish today, Ocwen has left the Short Sale playing field.

According to my contact, (a Loss Mitigator) they announced to the department today via email, that they were done.

Ocwen decided to stop negotiating all short sales. Period.

"None at all?", sheepishly I asked.

"Not a single one. Unless it was already approved", says he.

Curiously, yesterday the deal to sell Ocwen collapsed.

Here I am working on negotiating a short sale. I'm pretty sure the borrower did a Stated Income Loan and lied through his teeth about his income. I'm also pretty sure he used someone else for the Social Security Number. (No, I didn't do his loan!). And I'm pretty sure he has a sub sub prime loan (two subs intended).

There's no loan modification in the books for this borrower.

I asked my LM guy, "So this is going to go to foreclosure, become an REO, and Ocwen will take a bigger loss down the road?"

"Yup, That sure appears to be what they are planning!"

Ocwen, who's shares tanked yesterday, is primarily a loan servicer.

As of December 31, 2006, OCN serviced 473,665 loans under 487 servicing agreements for over 40 clients. These clients include Wall Street Alan-Greenspan-Age-of-Turbulence firms with mortgage securitization platforms, such as Deutsche Bank Bear-Stearns-Troubles , Lehman Brothers, Credit Suisse and Morgan Stanley, mortgage originators, such as Delta Funding, and governmental agencies, such as the United States Department of Veterans Affairs. Revenue from this segment comprised 80%, of its consolidated revenue, during the year ended December 31, 2006. (Reuters)

After I got off the phone I started thinking. This is all speculation on my part...

If Ocwen was the holder of the Note, they would have a vested financial interest in minimizing the overall losses. Accepting a short sale would minimize those potential losses. But Ocwen isn't the holder of the Note. Some Investor is.

In a Short Sale there is going to be a loss. Ocwen will negotiate for what they can, and then pass the remaining balance to the Investor. That loss will be absorbed by the investor. The key is not in the loss, but in the fee generation. In a short sale, Ocwen can charge only a small amount of fees.

On a foreclosure, Ocwen can and will charge up the fees. The Admin Fee, Processing Fee, reloading the Stapler Fee, talking to Mueller Fee. Pretty much any fee they can come up with. These are fees they just couldn't generate with a short sale.

After the Auction, when it goes on the market as an REO... Assuming it sells for the same amount it might have had it been a short sale, Ocwen stands to make much more in fees than had they negotiated a short sale.

Following me so far?

Oh yeah, and who pays for all the loss mitigator salary anyway? Ocwen!

So what do you do when the negotiations for your purchase fall through?

I can just see the BOD saying last night, "If we can't sell this pig of a company, we'll fire the Loss Mitigation Department, stop doing negotiations and rack up the fees! "

Of course, the REO probably won't sell for the amount they could have negotiated the short sale for. But who cares? Not Ocwen, They'll get their trumped up fees no matter what it sells for. It's the investor that's taking the hit - not them.

Ocwen is still in business. Are they not worried that by shooting their investors in the foot that they won't be able to attract new investors to service for?

Or since the buyout fell through, is the corporate plan to make as much as they can before closing shop?

2006 Net Income: 206 Million
2007 Net Income: 38 Million
4th Quarter Net LOSS: almost 7 Million!

Just thinking...

You can't fix UGLY

2008-02-28T07:08:00.001-08:00

I have a client who is dire need of a Short Sale to get out from under her mortgages.

She's upside down primarily due to the reasons I explained in my post, "You Can't Fix LTV".

In simplest terms, her homes value has dropped dramatically because the homes around her have drastically dropped in value.

Yes, she has no income. Yes, she has no chance to loan modify. Yes, she bought at the market high with the wrong loans and little to nothing down. But as I started looking at the "other" reasons why the neighborhood is in such decline and found a horrid tale that can only be described as Ugly, Ugly, Ugly!

How Ugly is UGLY?

There are currently 82 REOs in the neighborhood.

There are 139 NODs (soon to be REOs)

How about the record high HOMICIDES last year?

What about the other crimes?

How does 631 separate incidents in the last 90 days sound?

My package includes over 300 recent news stories about this neighborhood.

I don't know about you, but if I was a Loss Mitigation Specialist and had an offer presented that would keep my company from owning this potential soon to be REO, I'd take pretty much anything that came my way.

We shall see. The Listing Agent has a couple of real offers and I'm putting the Short Sale Package together today.

Local Notice of Defaults

2008-02-21T11:45:00.001-08:00

Notice of Defaults Last week (week ending Feb 20th) we saw the following NOD filings.

For the State of California: 8,178

By County

Alameda: 323
Contra Costa: 487
Sacramento: 678
Solano: 180

By City

Antioch: 89
Modesto: 163
Oakland: 107
Sacramento: 400
Stockton: 216
Vallejo: 70

Data courtesy of :

Labels: Investing in Foreclosures, Notice of Default

You Can't Fix LTV

2008-02-21T08:59:00.001-08:00

There's a comedian on TV who's gig is

"YOU CAN'T FIX STUPID".

Is it Ron White? I think so.

I've never seen him. Not for any other reason than I don't get a chance to watch much TV.

LTV isn't stupid. This has nothing about stupid. It's about LTV or Loan to Value.

It's a ratio of what the property you live in is worth by what you owe expressed as a percentage. Zero % would mean you own your home outright. 100% would mean you have no equity.

LTV has nothing to do with your intelligence. A low LTV doesn't mean you are smart, and a high LTV doesn't mean you are stupid. I prefer not to call anyone stupid anyway. It must be the father in me.

But high LTV can kill your ability to refinance or purchase. On a purchase, the remedy to High LTV is simple. Put more down. or put the same down on a cheaper house. I know that might not be simple to do but it's simple to explain.

On a refinance, your options are even simpler. Unless you actually have and want to come to the closing table with cash there is only one thing that you can do. Wait. What are you waiting for? Appreciation.

I don't have to tell you that appreciation is somewhat scarce these days. The problem with appreciation is that it's dependent on your neighbors. Appreciation is comparative. If your neighbors home goes up in value, so does yours. That's the rub. If your neighbors house goes down in value so in turn does yours.

The problem is that your "neighbor", not Old Mr. Wilson next door, but the ones that live within a radius of your home. Yeah, those people you don't know.

Almost a year ago I wrote "The LTV Crunch". I followed that 2 days later with "The Foreclosure Crunch". It's two of the highest traffic / linked posts I've written.

Let's draw a 1/4 mile circle around your home. Now, everyone in that circle who is in foreclosure, who has already foreclosed, who is in a short sale situation, or needs to really sell their property will all have a profound effect on dropping your value. That drop in Value raises your LTV.

Here's a chart showing a little street in Concord. It's called Mohr Lane. Currently there are 140 distressed properties on this map. The Blue P means they have been served a Notice of Default (the first step in the foreclosure process). The Purple B means they are bank owned (generally meaning they have already gone through foreclosure). The Light Blue A stands for Auction properties. You can easily classify them all as distressed properties.

What the chart doesn't show are the Short Sales. These are MLS Listings that need to sell at a price lower than what is owed to the bank.

Guess what? Most short sales sell below their actual market value.

If you live on Mohr Lane how long until your home starts appreciating? We're going to have to sell the above homes before we can start thinking about that.

Project Lifeline

2008-02-12T08:35:00.001-08:00

Will it help?

It's an addition of the Hope Now Alliance.

If you are 90 or more days late on your mortgage this new "plan" is aimed at you. Typically a lender doesn't even start the process before the loan is 90+ days delinquent.

6 large lenders are said to be on board. Bank of America Corp., Citigroup Inc., Countrywide Financial Corp., JPMorgan Chase & Co., Washington Mutual Inc. and Wells Fargo & Co.

They will stall the foreclosure proceedings for 30 days and give you a chance to catch up, refinance, short sell or modify your loan.

Not sure about other states but here in California the homeowner has the right to postpone the trustee sale. It's not complicated, you just have to ask.

Did you know that?

What's more, many times the Lender will grant them a postponement of 90 days!

Isn't this better information that should be delivered to the homeowners instead?

Are you surprised? Ready for another bigger surprise?

The Homeowner can postpone up to three times!

For Californians, I see this new plan as completely unnecessary and a bogus.

What do you think?

Has Stockton Run Out?

2008-02-12T07:57:00.001-08:00

Poor Stockton, CA.

We saw 60 Minutes, we read all the news, everyone knows or has heard that Stockton IS the

Foreclosure Capital of the U.S.

Is that because the good people of Stockton all got together and decided to call themselves that? No.

Maybe there was a contest, poll or election? Nope.

It was the media that planted the moniker on the city. I always assumed it was based on raw numbers. Maybe it was. I can't tell.

Yesterday I was working on a project and pulled the entire current list of Notice of Default filings for the entire State of California. It was dated Feb 5th.

As I was compiling numbers I noticed something strange.

Stockton, and it's county (San Joaquin) seemed lower than what I expected to see.

By City:

Antioch: 85
Bakersfield: 143
Elk Grove: 63
Fontana: 107
Hayward: 99
Modesto: 149
Oakland: 171
Sacramento: 326
Stockton: 110
Tracy: 50
Vallejo: 63

By County:Alameda: 460
Contra Costa: 339
Orange: 334
Sacramento: 512
San Joaquin: 212
Santa Clara: 174
Sonoma: 273
Stanislaus: 276

If the title wasn't bestowed upon them based on sheer numbers, maybe it was something else.

Was it Per Capita?
Per Capita would make perfect sense. The number of foreclosures per person? Maybe it was per household?

Stockton has an estimated 290,141 people (2006) according to CityData,
while Sacramento sits at 453,781 according to the same site.

Sacramento is slightly less than twice the size of Stockton, yet our state capital had 3 times the number of filings!

I realize this is only a one week sampling. I can pull a new list later today.

Is it just because the media thinks they are the proverbial Red Headed Step Child of the central valley? There is a finite number of homes that can be foreclosed on. That leads me to wonder...

Is Stockton actually running out of homes to foreclose on?

Just thinking.

Why Your Favorite Agent Won't List Your Short Sale

2008-02-11T08:07:00.001-08:00

So you've bought and sold ten houses in the last couple of decades. Every buy, every sale they were always there for you. They knew exactly what you liked and what you didn't like. They always returned your phone calls. You were much more than a team. They are and were your ONLY Real Estate Agent.

So why now, when you need to list your short sale property did they decline to list your home for you?

I can't speak for them personally, but I can give you a couple very good reasons why.

Language: In order for your Short Sale to close, there are some intense negotiations that need take place usually between the Listing Agent and the Lender's Loss Mitigation Department. For most Agents, the closest they have gotten to talking to a Lender was a Loan Officer and they are not even close to the same.

These Loss Mit people speak a very different language. It's vitally important to know what to say, when to say it, and what NOT to say. Chances are, your Agent doesn't feel confident they can perform this task.

Time: Short Sales are a lot of work. There is a tremendous amount of time spent on the phone. Much of that time is spent waiting on hold. When you are finally talking to a real live person, it's often times the wrong person. having the right phone number, the direct number, to the person you need to talk to is crucial. Besides , the last thing an Agent wants to do is be tied down to a desk and a phone.

Closing Ratio: Short Sales are notorious for using up all your time only to have the whole deal fall through at the last moment. At their office meetings they don't hear the story about how a Short Sale closed in a week, instead they hear how some poor fellow agent had the perfect deal, worked it hard for three long months, and at the very last minute the whole thing fell apart. That's the story they've all heard, that's the story they remember.

Commission: Let's be realistic. Your Agent works for money. They don't work for free. While they might be the nicest, sweetest person in the world, they might absolutely love what they do for work, but the bottom line is that every person works money. You do, I do, and they do.

You do remember that in a normal purchase transaction the commission is not set in stone, it's negotiable. But how often does that really happen? Very Rarely. I firmly believe the professional Real Estate Agent is worth every penny they make. In a Short Sale you can bet the Lender will try to negotiate the commissions down - each and every time! Your Agent has heard the same horror stories about commissions too. I've heard of Agents who will not show their clients a Short Sale because of this fuzzy commission structure.

Disclaimer: Once again. I cannot speak for your Agent personally. There are Agents that have specialized in short sales. These Agents have systems and procedures to properly address the above issues. They have aggressive marketing and action plans in place. Some of these Agents will use outside independent negotiators to make sure the process works as smoothly as possible. One Agent explained to me in terms of performing Surgery. While they might be the Surgeon, they bring in the experts of specific tasks, like the Anesthesiologist. You wouldn't want to be overly dosed or wake up during the operation would you?

These Specialist Agents are busy. You can bet they are busier than ever these days. Don't be surprised. They might even pick and choose the deals they know they have a higher success rate with.

If you need a Short Sale Specialist and need a referral to one - give me a call. I know some of the very best!

(925) 288-9977 Ext 104

HR 5140 - Step One (and two)

2008-01-30T08:44:00.001-08:00

Here's the skinny on the recently touted Stimulus Package.

It's been introduced and voted on in Congress.

"Jan 29, 2008: This bill passed in the House of Representatives by roll call vote. The vote was held under a suspension of the rules to cut debate short and pass the bill, needing a two-thirds majority. The totals were 385 Ayes, 35 Nays, 11 Present/Not Voting."

This bill hopes to send one-time rebates to 111 million families, provide tax breaks to businesses, and ease mortgage loan limits. (in this case easing means raising the Conforming Loan Limits. See: "They Raised The Conforming Limit!"

The bill now must be approved by the Senate. There is a looming deadline of Feb 15 and they are trying to speed things along with a minimum of debate.

There is some concern being voiced in the Senate about the increase in the conforming loan limit without a comprehensive set of new authority for OFHEO.

Remember it was OFHEO's director James Lockhart
(Office of Federal Housing Enterprise Oversight, the body that oversees Fannie and Freddie) who issued the statement saying,

"We are very disappointed in the proposal to increase the
conforming loan limit as we believe it is a mistake to do so
in the absence of comprehensive GSE regulatory reform."

Minnesota Foreclosures - Part 1

2008-01-29T09:46:00.000-08:00

Pre-foreclosure in Minnesota

Once a home owner begins to stop making payments and the bank is aware of the default, the home enters the state of pre-foreclosure. One thing that should always be done is keep in constant contact with the bank. From the second an owner knows they can no longer pay the loan, they should call or write the bank with an explanation of their problems. Banks are not the bad guy (yet) and are willing to work with customers and advise owners of possible solutions. If you choose to ignore their letters of inquiry, you are only making matters worse.

During this time period, it is also advisable to seek help through a Realtor to market the home for sale. Try contacting a local investment club for potential buyers. They might know someone looking for a deal. What ever you do, don't haggle too much. Your goal is to get out of this home without going into full foreclosure and ruining your credit for 10 years. Check your pride at the door and try to leave emotions out of negotiations. (I have first hand knowledge on the stress a possible foreclosure can cause to yourself and your family and will feature a post on the subject at the end of April).

Redemption Periods

There is hope should you find yourself able to reinstate payments or pay for the loan in full. After default, and up until the time of the sheriff's sale, the borrower can stop the foreclosure process by bringing past payment up to date and paying any penalties the bank has charged (usually lawyer fees and such).

Another plus is that Minnesota state law gives the borrower the right to redeem the property after the auction, too. To get your property back, the owner usually has to pay the bank the price bid at auction plus interest. Here are the Statutory Redemption Periods in Minnesota:

6 Months - Most mortgages allow only six months time to return home to owner

12 Months - in order to have a year, one of the following must be met:

the Mortgage is more than one-third paid off

the Property is more than 40 acres

the Property is more than 10 acres and is used for agricultural purposes

the Property is more than 10 acres and mortgage was originated before July 1, 1987

5 Weeks - if the property has been abandoned, is residential of 10 acres or less, and no more than four units, a home owner won't have much time to redeem the property

In the mean time, if you would like to know more about the foreclosure process in Minnesota, or have specific questions, please do not hesitate to contact me at www.FineHomesofMinneapolis.com or www.minneapolisluxuryrealestateblog.com. Foreclosure can be very stressful so please rest assured that any information you provide will be treated with the strictest confidence.

Definition: Forbearance

2008-01-24T12:47:00.001-08:00

One of the options you might have in avoiding foreclosure is sometimes called Forbearance. It's often spelled with an e (Forebearance) probably because of it's relation to Foreclosure.

Forbearance or more accurately, a Forbearance Agreement is exactly that. It's an agreement between you and the lender. It generally allows you to stop making payments now, (temporarily) and add those payments to the end of your loan. Some forbearance agreements allow a gradual payback .

Unlike other loans you might have, if you fall behind on your mortgage, in order to catch up you'll have to completely catch up. Your Visa card will gladly take any money you send them. Your mortgage servicer will actually return your incomplete payment.

Got Examples?

You bet! Here's two.

Joe vs. the Volcano

You probably know Joe. Maybe not by name but you remember him. He worked on a fancy cruise ship. Joe's job is to light the Baked Alaska. He's a highly trained and well respected person. It's a dangerous job. Very few can do what Joe does.

Unfortunately, Joe lost his job. Out of respect to Joe's privacy I can't go into details here.

He found a new company almost immediately. On another ship, with another cruise line that would hire him, but because of the nature of his job he would have to wait almost six months to set sail. He was out of work for almost six months!

Joe looked at Craigslist to no avail. Joe used all his savings and tried to keep up with his payments. He was more than 3 months behind. Now that he had his first paycheck in hand, it was time to make his mortgage payment. Joe called his Lender. His Lender said he needed to pay all the missed payments, plus all the penalties. Joe didn't have that kind of cash. Joe called his Lender again and this time they were very rude to him. They told him to just make his payments.

Joe was distraught. He was ready to walk away, to let his home go into foreclosure. He wanted his home, he had a job, and he had a mortgage he could pay, he just couldn't catch back up.

Joe was talking to the wrong people. He was talking to his lender's collection department. It wasn't his fault, it's where they sent him.

Enter the Forbearance Agreement. Joe finally got to the correct people (not the collections dept). Together they worked out a Forbearance Agreement. He would start making his payments again and, because he could, he would also start catching up on the amount he was behind. Joe was now back in good standing with his lender!

Don't Stand by Kathy

Kathy didn't lose her job. Poor Kathy was having the time of her life! She was enjoying yet another cruise off the Sicilian Coast.

Marvin and Melissa had never been on a cruise. They were a young couple honeymooning from Paducah, KY. They were seated at the table next to Kathy. Marvin wasn't feeling so good. Maybe it was the tequila shooters at lunch, maybe it was the seasickness. Whatever it was, just as the waiter started to Flambe their dessert Marvin's stomach decided to return it's contents to the dinner table. Remember the pie eating contest in "Stand By Me"? Keep that thought.

The unfortunate waiter, who was a highly trained professional and had thought up this moment that he had seen everything, suddenly realized he had not (seen everything). In his surprise, the dessert cart went flying!

Poor Kathy. She suddenly found herself an integral part of the Baked Alaska, lactose intolerant as she was. The caramelizing sugar, estimated to be at 320 degrees Fahrenheit, caused 3rd degree burns over much of Kathy's arms and legs.

Always proactive, she called her lender from the helicopter. Kathy faced a month in the hospital. It would be two months before she could return to her job as an exotic belly dancer in Vegas. She initially talked to many of the same people Joe did. She also got many of the same answers. Luckily she finally ended up talking to the right person. He arranged a Forbearance Agreement that put off her payments for the next two months and added them to the end of her loan. Kathy was back to being good with her Lender.

So there's two fine examples of how a Forbearance Agreement could help.

The key to your success is to talk to the right people. If you need help getting to those people, or don't know what to say when you do - give me a call.

(925) 288-9977 Ext 104

What a Short Sale is ...NOT!

2008-01-07T06:09:00.001-08:00

One of my favorite writers and all around great people is Rosemary Brooks. Understanding what constitutes a Short Sale is critical. Understanding what a Short Sale is NOT - equally critical!

Recently she offered up this excellent list of common misconceptions.

You can find her original article here on her Mother & Daughter Blog

If you need an agent, you simply can't find any better -
Give Rosemary a call at 866-750-8282

A Short Sale is NOT

A sale under market value

A Short Sale is NOT

Bank owned (foreclosed) house

A Short Sale is NOT

House being sold at public auction

A Short Sale is NOT

A home that is paid for and the being sold for under its Market Value

A Short Sale is NOT

House is sold on the county steps for the highest bidder - Trustee Sale

A Short Sale is NOT

When you turn your home back to the lender under the DIL process

A Short Sale is NOT

Lender does not grant approval for short payoff but you lose the house at the end of the foreclosure time-line

A short sale is when you owe more than your home is worth AND you list and receive a formal offer that is approved by the lender BUT it is for less than what you owe on the mortgage.

And contrary to popular belief you DO NOT HAVE to be in default to be considered for a short sale.

And BEWARE of verbal agreements. Get it in writing... the only was it is an agreement.

Want more tips? Give me a call at 866-750-8282 or visit our site at http://www.motheranddaughterrealty.com/

Blatant sabotage or bureaucratic B.S.?

2007-12-18T09:00:00.001-08:00

I was reading a post by Nick over at ForeclosureFish this morning that grabbed my attention.

In that article he illustrates an example of just how difficult it is to work with the lender's Loss Mitigation Departments. True story, Nick! I wrote about a possible paradigm shift that could happen if the lenders were a little less short sided, HERE. Don't hold your breath. Unfortunately they are not going to be changing anything soon.

But here's what Nick said that caught my attention. He proposes that some of the loss mitigation departments are intentionally doing things to force homeowners into foreclosure. Both tactics relate not to the payment of the loan itself but to the outside tangibles, Taxes and Insurance.

He cites two different ways:

Lender places a forced insurance policy on a property, and
Paying the property taxes late and charging the late fees to the homeowners' account.

Personally, I have not seen this in action. I wonder if it's more of a case of one department doing something that has a negative effect on the other. I'm not sure the Loss Mitigation people have the ability to place forced insurance or pay taxes. I encourage you to read his post. If this, or anything like this, has happened to you - I'd like to hear about it.

The Deed is the Key

2007-12-14T07:15:00.001-08:00

Here's a brand new video from Freddie Mac explaining just one version of the many different Foreclosure Rescue Scams.

If you read some of my other blogs you'll know I'm not overly optimistic on either the California / Schwarzenegger version or the Bush / Paulson version of Subprime Bail Out plans. However, no matter how lame the bail out plans are - it's far worse to throw everything away to a Foreclosure Rescue Fraudster.

The Key Point? Your DEED is the KEY. Keep your Deed, keep your Home.