Beware of Foreclosure Scams!

May 5th, 2009 1:32 PM

Beware of Foreclosure Scams!

Via Robert Rauf (REMN The Real Estate Mortgage Network):

 

 Beware of Foreclosure Scams.

I was chatting with a few attorneys, mortgage guys and a Fraud investigator this morning and we have all noticed some scams floating around. One big issue is the news and the predators it creates. Most lenders do not have the home affordable guidelines in place. I spoke with 4 loan Officers from different companies today and none of them have the details yet for how Uncle Sam's plan will be implemented, but we all feel we should have details with in a week or two. In the mean time BE CAREFUL!  It is strongly advised that you only speak with some one that is referred to you that actually knows what can and can not be done.

Please read the following carefully and pass it along to anyone you know.

There are many "Foreclosure Rescue" scams beginning to surface in light of the government's moves to help prevent foreclosures.

Here are some things to remember:

1. There is never a fee to get assistance or information about the government's Making Home Affordable program.
2. Beware of anyone who says they can "save" your home if you sign or transfer over the deed to your house.
3. Never submit your mortgage payments to anyone other than your mortgage company without their approval.
4. Never let anyone talk you into purposely going delinquent on your mortgage, that is never a good idea.

For more information on how to get help please click:

www.makinghomeaffordable.gov  
Beware of Foreclosure Rescue Scams - Help Is Free

OR CALL 1.888.995.HOPE(4673)

• We should shortly have information on How to refinance your home if you owe more than 80% of the value, on up to 105% of the value. This plan should be able to help many people that closed in the past few years and may find themselves under water and not able to take advantage of todays record low rates.

Please call us with questions or for more information. As always I am  here to help.

 

Have a great week!

 Rob

Robert Rauf

Mortgage Banker

www.RobertRaufHomeLoans.com   or my blog: http://activerain.com/blogs/rrauf

(732)223-1630 x102

Since 1987 I have been helping my clients fulfill their dream of home ownership!

Real Estate Mortgage Network

 

 

 

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Avoid Foreclosure - Many Options Await You:

May 21st, 2009 12:49 PM

Avoid Foreclosure - Many Options Await You 

Via Janice Petteway (Exit Real Estate Results):

Let's clear up a misperception.  As we encourage troubled homeowners to "avoid foreclosure," we are not assuming that everyone will be able to keep their home.  Some people got in far too deep and bought homes far beyond what a person in their income bracket could really afford.  When ARMs adjusted or property values plummeted, these people and many others whose homes were more modest find themselves in need of a solution far bigger than anything out there to keep them in their homes.  Some borrowers lost their jobs or second income, got divorced, got sick, or ran into other problems.

Frankly, some people have had enough.  Big, pricey homes usually come with big, pricey utility and maintenance costs that will not change even if the mortgage is refinanced or the mortgage loan modified.  (Even moderate homes can be a burden if family circumstances have changed.)  Moving out of the home may be the best option for a family.

When put in proper perspective a house is a material possession that provides shelter.  Many of the intangible things tied up in the concept of "home" are transferable so long as the family stays together.  Yet, foreclosure can be a devastating event for many people which leaves them feeling powerless and trashes their credit.

So, what does "avoid foreclosure" mean?  It means putting people in a position where they have some control over their lives.   This might be accomplished in one of several ways:

Loan Modification - for people who want to keep their home and have enough income to do, changing the loan terms to lower the payment might do the trick.

Refinancing - for those who want to keep their home but get a better interest rate and better terms, refinancing might lower the payment over the long run.

Short Sale - when keeping the home is not an option, making the choice to sell for a price in line with the market but less than the amount of the loan is an appealing prospect.  This may negatively affect your credit but not as much as a foreclosure will.

Deed-in-lieu of foreclosure - giving the house back to the bank.

The recently-passed Making Home Affordable program enabled loan modification and refinancing for many who qualify but did not address many homeowners who are underwater or who have insufficient income.  New provisions announced last week expanded the program to offer lenders incentives to be more amenable to short sales and deed-in-lieu.

In all of these cases, lenders accept these alternatives because it is more cost effective for them to do so - not due to any altruistic motives.  But homeowners still benefit, even if part of the solution requires they give up the home and move on to the next phase of their lives.

Homeowners in trouble: Foreclosure does not have to be the end of the story.  There are alternatives best explored with a HUD-approved housing counselor.  Call Hope Now at (999) 995-HOPE to start planning.

 Janice Petteway and the Exit Real Estate Team would like to part of your solution. We do short sales in Central Florida. 

Mirela Monte and our Team of Professionals at Buyers' Choice Realty have a firm grasp on dealing with Short Sales and Foreclosure Scenarios for properties located in the Myrtle Beach Area.  For a confidential and free consultation, please call us!

 

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Economic Calendar, May 18, 2009: What's Moving Mortgage Rates This Week?

May 19th, 2009 12:11 AM

Economic Calendar, May 18,2009: What's Moving Mortgage Rates This Week?

Via Robert Rauf (REMN The Real Estate Mortgage Network):

 This Weeks Economic Calendar, and Rate Forecast:

 The Economic Calendar is a pretty light one this week.... But that doesn't mean it will not be a bumpy ride. This will be a holiday shortened week which always throws a wrench into the works... More on that below.

As far as the calendar goes, we have a few numbers, Some Fed Buying and Some Fed News, here is the week ahead:

• Monday May 18: The first of three days where the Fed will be buying Treasury obligations. It is always better for a market to have an extra buyer tossing money into the mix, so we should see some positive reaction in the markets today, But this afternoon we had somewhat of a sell off. We still have an hour left to see what happens.
• TuesdayMay 19: April Housing starts and Building permits expected up 1.9% and up 2.7%. These seem like good news that would be bad for rates-- BUT, Up from NOTHING is still a weak number. Housing starts are still near lows not seen since 1959. It is not likely to influence the markets today.
• Tuesday: More Fed buying by the end of the day.
• Wednesday May 20: Third day of Fed purchases winds up today. Prior to this week the Fed has spent $101 Billion of the $300 Billion they have in their piggy bank to make direct Treasury Security purchases. Buyers usually are good to keep a market happy.
• Wednesday: The Fed releases the minutes of the April Meeting. Seen as a boring bit of news, it will likely be a non event for the week.
• Thursday May 21: Initial Jobless Claims, expected down 7,000. This is the first decline in quite some time, a spark of good news, but not likely to move the market.
• Thursday: April Leading Indicators, expected up 0.8%. LEI is considered to show the economic path for the next 3 months or so, but in this case the upward surge in the number is likely caused by an improving stock market. If we see stock prices steady or lower by Thursday it is not likely to cause any move in the markets, If stocks rally and/or the LEI is higher than forecast we may see rates bump up.
• Friday May 22, Market closes at 2pm for the long weekend.
• Monday: MEMORIAL Day, Market is closed.  My Next report should be ready for Tuesday.

Stocks will be the driving force this week in the absence of any real data... As stocks improve we will see mortgages get hurt, but the reverse is true as well. If we see a sell off in stocks it is likely we will see a flight to quality driving the prices up in the credit markets and the yield down.  Luckily this week we have Uncle Sam in Buying Mode rather than selling mode. This should help keep things fairly steady.  The True "Biggie" of the Week is the shortened week.  Traditionally we see conservative trading at the end of a week like this. It is usually the Junior traders left to watch the shop while their bosses take advantage of the long weekend and no one seems willing to make any big moves since they don't want to be yelled at on Tuesday morning.  Light volume in the week is also more likely to cause a bumpy ride since lower volume can yield more volatile trading. Foreign markets are also open on Monday, that adds to the conservative behavior of our markets ahead of the holiday.

My gut says: CAUTION, but we may see slightly better rates this week.

HAPPY MEMORIAL DAY! 

Rob

Robert Rauf

Mortgage Banker

www.RobertRaufHomeLoans.com   or my blog: http://activerain.com/blogs/rrauf

(732)223-1630 x102

Since 1987 I have been helping my clients fulfill their dream of home ownership!

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The Buyer's Market: It's Over-Rated

May 8th, 2009 8:15 PM

The Buyer's Market: It's Over-Rated

Via Jeff Dowler ~ Carlsbad Real Estate ~ 760-840-1360 (RE/MAX Associates):

The media has been telling us it's a buyer market for some time. The real estate community talks about it too. Everyone seems to believe it.

I think the Buyer's Market is over-rated. 

Before you get your britches in a bunch, hear me out. 

• Saying it's a buyer's market, as a general rule, overlooks those markets, and niches, where this is clearly not the case.

 

• Calling it a buyer's market gives buyers a false sense of security. They think they are always in the driver's seat, calling all the shots, and can get homes for 10%, 20% or more off the market value. Not always so.

 

• It suggests that homes are sitting around waiting for buyers (yep there are plenty out there) to make any offer, and that sellers are desperate and will relinquish their homes for whatever the buyers are willing to pay. Buyers won't have to compete, and they can afford to take their time making a decision since inventory isn't moving until the buyers make it move. Again, not always so.

Granted, there are plenty of markets where the inventory is high and the demand low, where buyers can be pretty choosy, and prices are still falling. Some markets are pretty crappy right now. I remember being told that less than 6 months inventory was a seller's market, 6 months or so was a balanced market, and 8 or more months indicated a buyer's market - it was in a CRS class, and I think NAR also cites these numbers. Perhaps. But it ain't that simple. Not anymore. 

It seems that "Buyer's Market" just doesn't work all that well to classify our current market, perhaps the most difficult in decades, except in the most general sort of way. And it deludes buyers in some market areas and niches (e.g., the least expensive homes or REOs) into thinking they will get a great deal...easily, with little effort and on their terms.

Consider the REOs - we now see many offers (sometimes 15-20) on these, often within a day of the home coming on the market, and commonly many are over asking price (maybe not true in your area but becoming far more common here in SoCal). As someone with multiple buyers who have been through this drill several times and who are frustrated, and disappointed...is this niche a buyer's market? Nope, at least not in their minds. 

And how about non-distress homes we are seeing with multiple offers. I had one just a few weeks ago (within 24 hours there were well more than 10 offers, many over asking - fortunately my buyers lucked out, but the sellers had the luxury of picking which offer they wanted to pursue). And it's happening elsewhere...an article in the Los Angeles Times makes this point very clear. 

We need to truly understand our particularly markets and individual niches so we do not mislead buyers into a false sense of security or have them make decisions based on misinformation. If we can't communicate what is going on we lose credibility, and aren't providing any greater value to buyers than when they simply make decisions based on what they read in the papers. 

Calling it a buyer's market is the easy way out. Everyone "knows" what you mean, and you don't have to understand the realities of the market nor explain it when folks ask.

I still say the buyer's market is over-rated! I suspect some folks may agree.

Do You Qualify for a Short Sale?

May 3rd, 2009 6:56 PM

Do You Qualify for a Short Sale? 

Via Frank & Sharon Alters, ePRO, GRI Fleming Island FL Real Estate (Watson Realty ):

The original concept of a short sale is when a home sells for less than the mortgage(s) on it and the homeowner does not sign a promissory note or bring money to closing due to various hardships. Many homeowners in Orange Park and Fleming Island have not one, but two or three mortgages, including a home equity line of credit.  You may be considering a short sale, but the question is - Do You Qualify for a Short Sale? Not every Clay County homeowner does insofar as no financial penalty. Here's the thing:

The rules for short sales keep changing

If a home is not sold as a short sale and goes into foreclosure, all the mortgages may be wiped out except first mortgage, so any second or third mortgages may be a total loss to their respective bank.  Second and third mortgages are often held by different banks from the first mortgage. A year ago a second mortgage would accept from zero dollars up to $1000 payment and agree to a short sale. So would home equity lines of credit. Not now. 

Today, the second lien holder often demands $3000-5000 from the first mortgage bank to agree to a short sale, and they may demand sellers sign a note agreeing to pay back a portion of the loan. Banks have figured out a way to recoup some of their huge losses by demanding some cash now and a promise to pay later. Additionally, some homeowners are also required to bring money to the closing if the bank determines they are in a financial position to do so.

Please note that if a prior promissory note has been signed on any of the mortgages, the bank can still come after the parties and obtain a judgment after the sale. A breach of contract has a long time period, so it can be years after the short sale that the bank can still come after the borrower. This is important to negotiate at the time of the short sale to have this waived.

It is not part of this discussion, but one of the comments mentioned liens that survive a foreclosure. There are liens that do, such as Federal tax liens, child support liens and construction liens. Check with professional legal/financial counsel for others. The liens for the purpose of this discussion are the mortgage liens.

So who qualifies for a short sale?

Homeowners with a genuine hardship who owe more money than their home is worth due to: job loss, medical reasons, divorce, or relocation that deplete a home owner's assets are considered by banks to be genuine hardship. In this instance, a bank will typically agree to a short sale and not demand cash at closing or a promissory note (but that doesn't mean prior promissory notes signed at the time of the loan may not come up later - this has to be negotiated to be waived).

So who may not qualify for a penalty-free short sale?

1. Homeowners who realize their home is worth less than what they paid and they just don't want to make the payments anymore.

2. Homeowners who have significant assets and income.

3. Homeowners who have bought a second home.

4. Investors.

Please note that there are always exceptions and in some areas banks may be more lenient with negotiating due to the number of short sales and foreclosures in those markets. The observations here are what we are seeing in our market. There are situations where the borrower who can be in the investor, second home, significant assets, or just upside and wants out category walks away with little or no money out of pocket or without signing a promissory note, but in our market and our experience, this is an exception.

Homeowners who qualify for a short sale as of now will usually not be asked by the bank to execute promissory notes for any balance owed. Homeowners who do not qualify for a penalty-free short sale may be required to either sign promissory notes and/or bring cash to closing or the property will go into foreclosure.

What should you do if you are behind in your payments?

If you are behind in your payments, call your bank(s) and keep communications open. Ask to speak to someone in the Loss Mitigation Department. You may qualify for a loan modification or another program. Seek the advice of your financial adviser, accountant and attorney to give you all the information about your particular situation.

Contact an experienced short sale real estate professional to determine what your home may sell for. You may contact us for a consultation and for referrals to legal and financial professionals.

So should you do a short sale or not?

Short sales affect your credit for two years. After two years, you may buy a home again. Foreclosures impact your credit for five years. Bankruptcy has a more negative impact than a short sale also. Donna Bigda has written an excellent post covering this subject.

About 20% of homes on Fleming Island on the market are short sales or bank owned and 38% of homes in Orange Park are short sales or bank owned, so you're not alone in the decisions you are facing. Once you speak with the bank and other advisers, including an experienced short sale real estate agent, you will have enough information to make a good decision. Give us a call at 904-673-2308 if you want to get together to see if we can help you navigate a short sale.

Please note: The information in this article is the opinion of the author, based on her personal experience, the experience of colleagues,  research on the subject and courses attended by the author. As stated in the article, the rules are constantly changing. Any person considering a short sale is advised, as it says in the article, to seek professional counsel including legal advice and financial/tax advice. Every individual's situation is different and this article is no substitute for professional counsel.

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