Nick Johnson or Motiv8td Investments LLC has been helping homeowners through the process of Short Sales and successfully helping them from a foreclosures in the Phoenix, Arizona market. Make sure to download your FREE report on what options you have in stopping foreclosure in Phoenix, Arizona at Payment-Takeover.com
Archive for Foreclosure
Jan
17
Foreclosure or Short Sale?
Posted by: | CommentsSan Diego Foreclosures For Sale
In June 2009 there were over 16,000 new foreclosure filings with a total of over 101,000 for the first six months of 2009. This figure is continuing to rise because many homeowners are unable to meet their mortgage payments each month. In the majority of cases this problem is out of their control. In the current economic climate many people are losing their jobs making it impossible for them to meet their living expenses. In the US more than 535,000 jobs were lost in April of 2009 and although the rate of job losses is levelling off, there really doesn’t seem to be an end in sight. In Phoenix, Arizona nearly 75% of homes for sale in June 2009 were foreclosures. An increasing number of homeowners are using a short sale to extract themselves from the foreclosure procedure.
When a lender issues a foreclosure, there are certain steps he needs to complete, according to the laws of Arizona. The process begins when the lender files for foreclosure. Filed with the court are the actual debt and the amount of the default. The homeowner has to be notified either in person or by publication. If the homeowner does nothing, the court can rule against them in their absence. The court then directs that a sale of the property must occur for the lender to recover the amount owed. For court foreclosures, the sale is conducted about 45 days after the court directs the sale
As soon as a foreclosure notice is issued the homeowner must take steps to stop it from reaching a conclusion. One way to do this is to consider a short sale. This is a process that involves persuading the lender to accept less than is actually outstanding on the loan. This process is a very time consuming and complicated one but, if it can be successfully negotiated, in most cases the homeowner can walk away without any additional costs. However, if the amount of the sale at foreclosure does not meet the debt, the lender can sue for the difference. But, in the State of Arizona, this is not allowed on single one or two family homes of less than 2.5 acres.
For most homeowners the complex process of negotiating a short sale would not be an option. So the solution would be to find a reputable Short Sale Investor to negotiate on their behalf. A Short Sale Investor has all the necessary experience to negotiate with the lender in order for an agreement to be reached. His expertise in this field means that the bulk of the work in done by him. It will be necessary to provide him with a lot of information about your financial situation in order for him to put together the best possible argument so your lender will accept your application for a short sale.
You may have given up on the prospect of holding on to your home but negotiating a successful short sale means you can walk away from this with dignity and begin to look forward
Jan
02
Short Sale Hardship Letter: Tips For Writing A Letter Of Hardship To Your Bank
Posted by: | CommentsSan Diego Foreclosures For Sale
A short sale hardship letter must be provided to mortgage lenders when borrowers engage in short sale transactions. When banks enter into shorts sales they agree to accept less than the borrower owes, as long as the borrower can sell their home within a certain time period.
The short sale hardship letter is used to provide details of the events which caused the borrower to become delinquent on their mortgage. Lenders require borrowers to submit financial documentation proving they are unable to cure mortgage arrears and have no choice but to sell the house short or fall into foreclosure.
Short sale letters should include a timeline of events and explanation of actions the borrower has taken to resolve financial challenges. The letter of hardship should be thorough, yet concise. While lenders can be sympathetic to your plight, they aren’t interested in knowing every detail of your life.
The following is a fictional hardship story which provides an overview of the type of information to include in a letter of hardship.
John and Jane Jones purchased their home in June 2004. At the time John and Jane were employed fulltime, held financial portfolios and a well-stocked savings account. In May 2005, John was involved in a motorcycle accident and required multiple surgeries and months of physical therapy.
John was unable to return to work on a fulltime basis for three years. Although he received disability payments, the amount he received barely covered the private nurses John required the first year of his recovery. The couple had to tap into their savings account to meet their monthly obligations.
In July 2007, Jane’s employer of ten years suffered a fatal heart attack. Unable to continue operations on her own, his wife sold the business and Jane lost her job and their health insurance. In order to pay for John’s therapy, the couple liquidated their financial holdings.
In September 2007, Jane was diagnosed with breast cancer. Although it was caught early, the Jones’ did not have health insurance and the treatments quickly depleted their savings account. Fortunately, Jane only had to endure one round of chemotherapy and a relatively minor surgery. She was able to return to work within three months.
With years of financial setbacks, the Jones’ began falling behind on their mortgage payments. Within a matter of months they were forced into bankruptcy. They filed for Chapter 13 protection and reorganized their debt. They were able to adhere to their repayment plan and then the bottom fell out.
In November 2008, Jane’s cancer returned. Although they had health insurance, Jane’s treatments were much more aggressive and she was unable to work. The Jones’ missed two of their Chapter 13 payments and their lender petitioned the court to have their bankruptcy dismissed.
The lender’s attorney made a court appearance and after hearing their story, offered to allow them the option of a short sale. Although the Jones’ wouldn’t be able to stay in their home, they would be able to walk away owing nothing.
Every person facing foreclosure has a hardship story. Your story is just as important as the next person’s. Hardship letters are read by loss mitigator’s. Although loss mitigators do not make the final decision on a short sale they can have substantial influence and will root for those they believe are experiencing serious financial hardship.
Keep in mind loss mitigators are bombarded with short sale offers. When writing your short sale hardship letter stick to the facts and avoid portraying yourself as a ‘victim’. While you want bank mitigators to empathize with you, you don’t want them falling asleep while reading your letter of hardship.
Simon Volkov, author of “The Short Sale Hardship Letter eBook course” shares his knowledge, resources, and insider-secrets while teaching readers how to write the perfect hardship letter. This step-by-step guide is short, simple and easy-to-understand yet provides powerful techniques you won’t find anywhere else. Available for instant download at www.ShortSaleHardshipLetter.com.
Dec
30
The 3 Biggest Misconceptions That Real Estate Agents Have About Short Sale Listings
Posted by: | CommentsSan Diego Foreclosures For Sale
First of all, “yes” some short sales take long to sell and “yes” some short sale listings can be frustrating. But let me tell you this; not all are created equal! With a little patience and a little creativity you can overcome some of the shortcomings of listing pre-foreclosure/short sale properties and make a lot of money by helping homeowners get out from underneath the huge burden of debt and stress they are under.
Let’s deconstruct three of the biggest short sale myths:
Yes, it’s true when it comes to a short sale; the lender is in the driver’s seat. And since they hate to lose money they tend to reduce the amount of commissions by an average of 1%, meaning that if your area pays out 6%, they will only approve 5%, which will be split by both the agents involved in the transaction.
You know what I say to that? Who cares! Be creative! Did you know that there are 7 additional profit centers that can offset your 1% cut in commission? Let’s take a look at what they are:
The “Loss Mitigation Fee” is a fee that we collect only when we successfully negotiate a short sale and have the foreclosing lender pay for all of the closing costs (the realtor commissions, attorney/title company fees, conveyance taxes, etc.).
The average loss mitigator receives an average of 30 NEW files a day. Not a week, not a month but a DAY! That is part of the reason that short sales can take a while, but it isn’t the main reason. The primary reason is because the majority of real estate agents submit short sale packages that are less than adequate and professional! Meaning;
Those and many more reasons cause short sales to get hung up. Once again, take what the defense gives you. If loss mitigators are overwhelmed, then the key is to put together a professional and presentable short sale package guaranteed to get your short sale offer reviewed and approved.
With the right system they are not hard! Let’s take a look at how to overcome the two biggest reasons why short sales blow up right before the closing.
The key is not to have only one buyer but to have a pool of qualified buyers that are pre-approved. The best buyers to keep an eye out for are those that are already pre-approved and that have funds in place to make an actual purchase.
The two easiest ways to do that are: Start networking with every real estate agent that specializes in buyer’s representation. They are easy to find because it is in all of their advertisements. Start working closely with every single mortgage broker or direct lender that you know, or that one of your fellow agents knows.
In conclusion, listing pre-foreclosure/short sale properties can take some time to close. However; in this market everyone needs to stick together and help one another out. By building the right network of real estate professionals, we can all ensure that our listings (short sales or not) do not sit out there without a buyer!
For more real estate industry news and loss mitigation blogs and videos visit www.RealEstateBusinessMentors.com or visit www.AskBobLachance.com for any short sale bank negotiating questions.
Before joining North Shore Enterprises (NSE) in 2004, Bob Lachance was a 4-year-collegiate-scholarship athlete in ice hockey at Boston University where he won a National Championship in 1995. After leaving BU he enjoyed a successful 8 year career as a professional hockey player. Upon retirement from hockey, Bob completed several profitable real estate rehab projects for his own benefit. He then joined NSE as an associate responsible for property acquisitions and loss mitigation/lender negotiations. Bob brought the same determination and work ethic that lead to great success in his professional sports career and thus generated more acquisitions and short sale acceptance letters in a shorter time frame than any associate before or since. His outstanding performance led to a promotion to partner in 2005. Since that time, Bob has taken responsibility for all the day to day operations of NSE. As partner, he has overseen the acquisition of, the loss mitigation, and the disposition of over four hundred properties. Bob continues to be directly responsible for identifying good candidates for acquisition and for overseeing bank negotiations, and has been essential to the success and growth of NSE.
Dec
25
Navigating A Short Sale
Posted by: | CommentsSan Diego Foreclosures For Sale
A short sale represents a great opportunity for a homeowner who owes more than their home is worth. Ideally, it gives them a chance to sell their home without owing the difference to their lender. As home values continue to decline, short sales have become one of the most viable solutions for millions of underwater homeowners who are facing foreclosure. Unfortunately, it is very difficult to successfully negotiate a short sale with most lenders today.
A short sale can also benefit the community in which the home is located. Foreclosed homes often stay vacant for many months before they are finally sold. Lenders have a policy of not performing any maintenance or repairs on a foreclosed property. As a result, the home begins to deteriorate and causes the values of surrounding properties to drop. When a short sale is purchased by a buyer or investor, the property is often fixed up and inhabited rather quickly, as these individuals have some real stake in the property. They will not let the property fall apart over time. Thus, the surrounding homes’ values will not suffer.
A short sale is only for the patient, however. A typical short sale process can take months without any guarantee of even being approved by the lender. It’s not uncommon for a month or two to elapse without an update from your lender. It’s important to recognize that the banks are understaffed and overwhelmed with homeowners seeking assistance with their mortgage payments. Homeowners who have second mortgages on their property will have an especially difficult time negotiating a successful short sale. They usually negotiate each mortgage separately, so it becomes doubly long and difficult to accomplish a short sale. You must also prove to your lender that you are incapable of staying current on your payments or paying off your mortgage in full. Your lender will also demand to see the contract between seller and buyer to ensure they are receiving all of the proceeds from the sale. Another point to consider is whether you will have any tax implications after a short sale. The IRS may consider the debt forgiven as income and tax you accordingly. A good attorney or accountant can assist with this. Between foreclosures, short sales, and loan modifications, the banks are beyond their limits. The best way to ascertain if you will qualify for a short sale is to determine how much you will be “short” on the sale.
Here is a basic way to determine just how “short” you will be on your short sale.
1. Home Value/Worth: Determine the approximate value of your home. A good way of doing this is to enlist a real estate agent to perform a Comparative Market Analysis on your property. A Comparative Market Analysis (CMA) is an in-depth analysis of a home’s current value by comparing properties in its surrounding area that have been sold, current listings, expired listings, and pending sales. A real estate agent uses a combination of these tools to estimate the value of a home.
2. Cost of Sale: This is where you calculate the approximate cost of a short sale. A property sale can include expenses such as broker fees/commissions, advertising costs, legal fees, and closing costs.
3. Total Value of All Loans: Calculate how much you owe on your property (this can include second mortgages, home equity loans, etc. ).
Next, subtract the total amount owed on the property and the estimated cost of the sale from the expected sale revenue. The number remaining is how much you will owe after the sale. This number is a good indicator of your chances of having a short sale approved by the bank. An experienced real estate agent can assist with this.
Here is a brief example:
1. Estimated Current Value of Home = $175,000
2. Amount owed on first mortgage: $200,000
3. Amount owed on second mortgage: $50,000
4. Estimated Sale Cost: $5,000
- Add up values 2,3,and 4 = $255,000
- Subtract from expected sale revenue (#1)
- =$80,000. This is the amount you are “short” and will need your lender to forgive.
Anyone can negotiate a short sale on their own, but this could be detrimental to the outcome. Having a professional negotiate a short sale for you can significantly increase your chances of success. With so many fly-by-night companies cropping up, it’s becoming difficult to hire someone you can trust. A law firm is always the best option when seeking to hire someone to negotiate on your behalf. A law firm is familiar with your State and Federal laws, and is also bound by them. Most lawyers will not risk their license and livelihood to make a quick buck off a consumer. Your lender will also take requests from a law firm much more seriously, and your short sale can move along much more quickly. An important obstacle to avoid during a short sale negotiation is a Promissory Note. A promissory note is essentially a promise to pay the bank back the difference after a short sale. This is very bad for the homeowner trying to negotiate a short sale, because it leaves them responsible for the balance of their loan. An attorney can assist a homeowner with dealing with a Promissory Note, but there are no guarantees.
Fortunately, lenders are beginning to understand the benefits of a short sale. The Comptroller of the Currency showed that lenders completed three times the amount short sales in the 4th quarter of 2008 than in the first quarter of 2008. Now is the best time to try to negotiate a short sale with your lender. They have begun to realize that in many cases a short sale is a better alternative to foreclosure. After a foreclosed home sits and falls apart over time, it becomes extremely difficult for the lender to sell it at a competitive price. A short sale also gives the homeowner the responsibility of making their home “sale ready” to increase the chances of selling the home for a fair price. This helps the lender recoup more money than they would from attempting to sell a foreclosed property that has fallen apart over time.
If you would like more information or need assistance with a short sale, please contact the CreditLawGroup at (800) 508-0041
Smith & Gromann, P.A./CreditLawGroup is a national law firm concentrating on providing representation to consumers, including those affected by the current mortgage and debt crisis. We provide cost-effective and accountable representation on the matters of: Foreclosure Postponement, Loan Modification, Mortgage Document Audits, Refinance and Transaction Services, Shortsale/Payoffs, IRS Debt Negotiation, Real Estate Tax Appeals, Credit Repair, & Debt Settlement. We are a real law firm representing clients under federal and state law. Don’t trust your future to unlicensed “consultants” and generic companies. With a law firm you can assure that your interests are properly represented on what are critical legal matters.
The hiring of a lawyer is an important decision that should not be based solely on advertisements, Before you decide, ask us to send you free written information about our qualifications and experience. This blog subject to the terms and disclosures set forth at www.creditlawgroup.com
Dec
22
Are Foreclosure Homes a Smart Buy?
Posted by: | CommentsSan Diego Foreclosures For Sale
The number of homes facing foreclosure continues to grow in many parts of the country. The consensus among ordinary citizens seems to be that a fortune can be made buying foreclosure homes. Is that true or false? The truth is – it’s some of both.
Three and a Half Ways To Buy Foreclosure Properties
Buying real estate foreclosures only produces profits for those who have the knowledge required to recognize and negotiate profitable deals. With foreclosures that’s not as easy as it might seem.
Preforeclosure
The preforeclosure period offers the greatest opportunity for the novice investor. Preforeclosure can be divided into two periods. The first is where a financially distressed home owner realizes he or she will soon be unable to stay current with their mortgage payments.
If you can reach the owner during this period you have a chance to buy the home in the normal way. That is, make your deal with the home owner, get a mortgage loan and go to the close.
Ah, but how do you reach that owner. You target a housing development that first began selling new homes about three years ago. You do that because many adjustable rate mortgages reset to a much high interest rate after three years. As that date approaches many home owners begin to realize they have a problem.
You blanket that development with flyers every 30 to 60 days advertising yourself as a home buyer . Once a week you spend a Saturday afternoon going door to door and asking “Are you the folks that are planning on selling your home? No? Let me leave my card in case you change your mind.”
The second part of the preforeclosure period is at some point after the homeowner has stopped making mortgage payments and the lender has filed a notice of foreclosure (sometime called a notice of default). Now the clock is running and you must move quickly to make your deal before the lender takes the home.
The owner could be as much as six months behind in mortgage payments. You’ll need cash to bring those payments current and stop the foreclosure.
The catch is that many of these homes were purchased as real estate values peaked. Now home values are falling and the home is worth less than the amount due on the mortgage loan. The owner is “up side down” and there is no equity and no profit for you.
If there is equity you have a chance to make a good buy. There is seldom enough time to apply for and qualify for a mortgage loan. You will either need cash or the ability to strike a deal using a lease-option or to buy “subject to” the existing financing. You will need a thorough understanding of those tactics to use them profitably.
Foreclosure Auction
Your next chance to buy is at the foreclosure auction sale. Auctions are cash-on-the-spot sales. Yes, you will need cash, but even more important is the ability to research the property being sold to determine if it would truly be a profitable buy.
Many foreclosure homes have been trashed and stripped. What will the cost of rehab be? How’s the neighborhood? Is it safe to go in unarmed? Are there zoning or building permit issues attached to the property. Foreclosure auctions are not a game for the inexperienced investor.
Now we have listed the first two opportunities to buy foreclosure homes:
1. During just before a foreclosure.
2. At the foreclosure auction.
Bank Owned Homes
Opportunity number three is homes owned by the bank. These are often called REOs for real estate owned.
If there are no successful bidders at the foreclosure auction the home becomes the property of the bank. When there are many foreclosures banks end up owning thousands of homes they do not want. If you have the cash they will listen to offers. If the bank is eager to get those homes off of their books they may consider financing your purchase if you have a decent credit history. Often they want cash.
You can put together a group of investor who pool their funds to bid at foreclosure auctions or buy REOs.
Redemption
I promised three and a half ways to buy foreclosure homes, so here’s the half. In some states the owner has redemption rights. That means during a certain number of months after they have lost their home at the foreclosure auction they can regain ownership.
To redeem they must pay all money that was owed on the mortgage, pay all the costs of the foreclosure and pay any interest that accrued during the redemption period. It is sometimes possible to buy the redemption rights from the displaced owner, cover all the costs and own the home.
What about the investor who bought the home at the auction? He or she has our most sincere sympathy.
That’s it, three and a half ways to buy foreclosure homes. There’s money to be made, but you will earn every nickel!
Mark Walters is a third generation real estate investor and founder of CreatingWealthClub.com. For a limited time Mark is offering his big guide to finding hard money loans for real estate investing free. Free guide to private money loans. http://www.FindPrivateMoney.info