A letter we recently received...

I'll just give it back to the bank....

 Courtesy of our friend and expert real estate attorney, Richard Zaretsky, comes this article that addresses a question that we get from everyone who is upside down or behind on their mortgage...(thanks Richard)

In the series of questions I get when interviewing a potential client who is upside down on his or her mortgage, one question always asked (especially after I quote my fee) is "What if I decide to do nothing?"

It is a legitimate question and with all the press (and misinformation) that abounds, it is hard for those in need of the facts to separate the reality from the imaginary.  For example, The New York Times reported on December 2, 2010 that Florida was a "non-recourse" state (meaning that the lender could not pursue a borrower on the promissory note).  That information was corrected but not until December 19th - and of the over 1 million print edition readers that saw the wrong information - how many saw the "correction"?  To many readers with Florida properties, walking away and doing nothing for their underwater Florida property became a reality - albeit a false reality the fallout from which many a homeowner has yet to realize.

FALSE INFORMATION - The reality is that in all recourse states (Florida being one) and in many non-recourse states to the extent the mortgage and note do not qualify as a non-recourse obligation, doing nothing has essentially the same outcome.

As I pointed out in several of my articles and interviews (see CNN, Banks Begin to Go After Deficiencies, Foreclosure Consequences) unless the borrower has in writing from the lender that they are releasing the borrower from the further liability of the deficiency, there remains a valuable right to collect that deficiency from the borrower.  That "valuable right" is just like a negotiable instrument - it can be sold for consideration (ie: $$$) and the lender does not even have to get a judgment first to be able to sell that right.

IT JUST DOESN'T MAKE SENSE - SO WHY BELIEVE IT?
So many people tell me "the banks are not going after deficiencies - because no one has money to pay them".  Get real!!! First, my office has seen, since the first of this year (just 7 weeks),  more people saying the bank is trying to collect the balance of the loan than ALL of last year! Why?  Let's look at the economics of this deal.  An accountant friend of mine created a sizable side business of buying defaulted credit card debt and uncollectable obligations like these deficiency rights.  He would typically pay 3 to 10 cents on the dollar.  Do you think he just wallpapered his office with these obligations he bought?  No way!  He had a machine of lawyers and collection companies that pursued these debtors and if necessary, sued them to collect.  If he got only 15% of them to pay even a portion of the debt, he was way ahead and made a nice profit.  He also had the luxury of waiting - since he had the statute of limitations to first even sue the debtor and then when he got a judgment, he could ride it out for years (20 in Florida).  He even would sell the judgments he got so he recouped his attorney fees and filing costs and made a profit - and then the new owner of the judgment would do the nasty things to collect the judgment, like garnishment, attachment of bank accounts, and dragging the debtor to a deposition or court to expose and explain his current finances.

FALSE SECURITY
And a word to those that say they are judgment proof.  That may be true, but that won't prevent a lender from being able to file an attachment or garnishment.  What then happens is the bank with the account that may indeed be exempt, must freeze the account until a judge decides that the money in the account is exempt from the attachment, or the pay is exempt from the garnishment.  In the meantime, the defaulted borrower has checks bouncing all over town!  So judgment proof is not aggravation proof.

Now you decide - Is it a good idea to do nothing?

Copyright 2011 Richard P. Zaretsky, Esq.
------------------------------------
Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make.  This article is for information purposes and is not specific advice to any one reader.
Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660 email: RPZ99@Florida-Counsel.com  - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW - We assist Brokers and Sellers with Short Sales and Modifications and Consult with Brokers and Sellers Nationwide!  Shortsales@Florida-Counsel.com    Website http://www.florida-counsel.com/.
See our easy to understand articles at:
TABLE OF CONTENTS - SHORT SALE AND LOAN MODIFICATION ARTICLES

We have a better option...Don't let the process be a unilateral one wherin the bank dictates everything...including how much you eventually owe! Call me directly to see how we can make the outcome shift in your favor with a bi-lateral negotiation. My direct line is 561-602-1258

Thanks for reading,

Steve Jackson

There's no free lunch; Too good to be true; pick your own cliche...

I have started to see this being promoted recently by mail and on the radio.

"If we don't sell your house in ___days...WE'LL BUY IT!"

Sounds great...especially in this market. Worth checking out? That's what the agent is hoping you'll think. Get their phone to ring...but they'll most likely never discuss the details over the phone..."much to complicated and need to see your home to see if it qualifies"...get the foot in the door.  But there is NEVER a free lunch; there is always a cost associated.

But, particularly in this type of market, it would be "good business" if the agent NEVER bought any homes, or if they did, that they were purchased at such a drastic discount that the seller could do better selling the home themselves. 

I have gone to several seminars where they promoted this (tactic/gimmick) and it starts out sounding something like this:
" Mr./Mrs. homeowner, a big dilemma when making your move is deciding whether to buy 1st or sell 1st. Either way is risky as you could end up with 2 homes (or no home). Our unique/innovative/etc Guaranteed Sale Program solves this dilemma...you get our personal guarantee that if we don't sell your home in 90/120/180 days, we will buy it at a price acceptable to you. Now, WE take all the risk from you and you can immediately place a confident offer on another home".

The hidden details usually follow some or all of these general guidelines:

• Must purchase one of the agents listings...or at least buy a 'full commission' home with them
• Seller must still pay a full commission on the 'guaranteed' sale
• Quite often an 'upfront' fee or guaranteed sale program fee of anywhere from $295 to fees in the thousands
• "Agreed upon" price well below appraisal/market value...could be as low as the 80% range, then subtract commissions, fees, closing costs etc.
• Original list price 5% below comparables
• Seller is REQUIRED to continually lower the asking price during the 90 day (or whatever the guarantee period is)...for example: 100%  for 1st 30 days, 90% day 30-60, 80% day 60-90, at which point they have reached their 'guarantee' point (but minus a full commission, etc.)
• Sign the listing agreement first...then the guaranteed purchase details come later
• May be a maximum allowable program price
• Restrictions on home condition
• Use the language "I'll buy it for 'list' price", but fail to say that the 'list' price is the 80% ENDING list price

If they'll buy it for the full price that they agree to list it for...then that's putting their money where their dog and pony show is.

Think about these few points:

• With as difficult as it is to get a mortgage now, COULD your agent actually perform on their guarantee? Ask to speak with their mortgage lender...do your due diligence as with any other buyer.
• If they don't need a mortgage and have a few $million sitting around to buy homes that don't sell in 90 days, why are they a real estate agent?
• Are they "flipping" the purchase option to an investor? Are they going to list the home for the investor once they buy it?
• Can they assign the guaranteed sale price (as in a wholesaler)?

Good, solid, cutting-edge marketing, a detailed understanding of the local and national economic factors affecting home values, subdivision level market knowledge, ability to analyze trends...trust and mutual respect...THIS is what is needed today.


Thanks for reading

Making your mortgage payments to BofA? GOTCHA!

 

Bank of America has recently (and quietly) redefined their “grace period”.

 

When is a grace period not really a grace period? When you have to pay a $6 fee for using it. In a nutshell, you’ll have 6 fewer days of the old grace period to make your payment without being charged additional fees.

Consumers who use the bank's online payment tool, Mortgage Pay, will be subject to a $6 fee if they fund payments using another bank's checking account and the payment falls during the final six days of the traditional 15-day grace period. Consumers who make payments from Bank of America accounts are not subject to the fee.

"Let me get this straight. They tell you that you have a grace period, (then) they say, 'Oops, you only have half of it if you don’t bank with us,'” said Gail Hillebrand, a lawyer for Consumers Union who specializes in banking issues.  "That doesn't seem fair. ... This looks like a new ‘gotcha,’ and we have enough of those already."

Some consumers who are being hit with the change didn't apply for a mortgage with Bank of America. Instead, the bank inherited their mortgage later by acquiring it as part of an investment portfolio purchase.

This is just another sneaky tactic form one of the TBTF banks that received billions of taxpayer dollars. basically, it’s either switch your account to a BofA account that has a bunch of garbage fees or pay us garbage fees directly for the privilege of  paying us! 

Nice.

 

Shadow inventory threatens housing recovery

 

NEW YORK (CNNMoney) -- There is a growing glut of foreclosed homes threatening to hit the market over the next couple of years, potentially delaying any recovery.

There were 1.7 million homes either owned by the bank or in some stage of foreclosure at the end of the third quarter of 2010, according to a recent report by Standard & Poor's. It would take 44 months, at the current rate of sales, to sell them off -- a 25% increase from the beginning of 2010. (S&P does not count home loans backed by Fannie Mae and Freddie Mac.)…

next, my commentary…

The paragraph above, in and of itself is troubling…but when you look at the statement within the parentheses, it becomes horrifying! The most recent statistic that I’ve read estimates in excess of 65% of all loans as being backed by Fannie or Freddie…and this S & P report just decides to leave that out? I have been telling my clients for a year or more that this distressed  inventory backlog will continue to drag home values down for several more years…coupled with no real plan or prospects for meaningful job  and income growth, and the market looks very, very soft to me.

The following is from the recent Mortgage Bankers Association Delinquency Report, and will be a real eye-opener:

• Number of properties that are 30 or more days delinquent or in foreclosure:  (A+B loans) 6,870,000 !

Big difference from the widely published news story in CNNMoney…over 5 million more at least 30 days past due or further along in the foreclosure process.

And Numero Uno on the list of states with highest percentage of non-current loans…you guessed it: FLORIDA

So, 44 months to sell off 1.7M (and this doesn’t count all of the “non-distressed” homes on the market)…so how many months to sell off 6.8M? Well, using my middle school math, I came up with 176 months of inventory…That’s over 14 years!

Not to beat a dead horse, but if you are thinking of selling, even (especially) if you owe more than your home is worth…lets talk about your options, market direction, etc.  Call me directly at 561-602-1258. If I don’t answer, please leave me a message

Florida is one of the eight-states-running-out-of-homebuyers

by Douglas A. McIntyre, Michael B. Sauter and Charles B. Stockdale
Tuesday, January 18, 2011

provided by

The single biggest problem in the U.S. real estate market is simple: There are very few homebuyers.

That seems obvious, but the "buyers' strike" has caused house prices to drop, along with an epidemic of foreclosures. What's worse, the long depression in real estate is probably not over. S&P has forecast that home prices will drop by 7% to 10% this year. The S&P Case-Shiller Index has dropped for most of the 20 largest real estate markets over the last several months. RealtyTrac recently reported that more than 1 million homes were foreclosed upon in 2010.

Many economists argue that the housing market may take four or five years to stabilize. Even if that's proven to be true, the all-time highs of 2006 may never be reached again.

24/7 Wall St. looked at a number of the standard measures to find the housing markets facing the biggest problems attracting buyers. After a detailed examination, six metrics were chosen: (1) vacancy rates for 2010; (2) foreclosure rates for 2010; (3) November 2010 unemployment rates; (4) change in building permits from 2006 to 2010; (5) change in population from 2005 to 2010; and (6) price reduction by major cities for 2010. Taken together, they create a strong statistical base to describe markets which buyers have largely abandoned.

The real estate crisis has gone on for four years. In the states 24/7 Wall St. has chosen here, the crisis will go on much longer:

1. Michigan
2. Nevada
3. Arizona
4. California
5. Illinois
6. Georgia
7. Oregon

And: #8. Florida

Vacancy Rate: 21.03% (2nd Worst)
2010 Foreclosures: 5.51% (3rd Worst)
Decrease in Building Permits 2006-2010: -81.37% (3rd Worst)

Unemployment in Florida is 12%, the fourth worst in the country. (The REAL unemployment and under-employment is much higher) Approximately 1.1 million residents are out of work. Statistics show that 21.03% of the state's housing units are vacant. Furthermore, 5.51% of homes have been foreclosed upon. Florida was among five states that had the largest real estate booms from 2000 to 2006. Residential prices in some  areas like…Palm Beach rose by much more than double during that period. New home and condominium construction soared. Many of those residences have never been occupied and are still part of the inventory of homes for sale.

If you are thinking about selling, now or in the near term, even if you owe much more than your home is worth, please call me directly at 561-602-1258. We just know how to sell homes, even in this market...This week, I put a home in under contract in about 5 days and had a closing yesterday for another seller for whom we applied a secret strategy that generated overwhelming property interest and a top price in about 2 weeks.

Top lenders set for foreclosure settlement: report | Reuters

 And so it has come to pass..even the state Attorneys General are in the pocket of the TBTF financial institutions. The  Attorneys General , on behalf of Fannie and Freddie, have ‘settled’ with the five biggest TBTF banks, for ‘future losses’ from the fraudulently written, fraudulently packaged, fraudulently rated and sold loans. Possibly the biggest fraud ever perpetrated will now, effectively, be swept under the rug in exchange for 1 or 2 cents on the dollar…I’d sure love a deal like that!

(Reuters) - The five largest mortgage loan servicers, including Bank of America Corp and JPMorgan Chase & Co, may be the first to settle with 50 state attorneys general who are investigating foreclosure practices, Bloomberg reported, citing Iowa Attorney General Tom Miller…

Ally Financial, Bank of America, Citigroup, JPMorgan and Wells Fargo could not be immediately reached for comment by Reuters outside regular U.S. business hours…

Here’s another report, below, from CnnMoney.com:

Is Fannie bailing out the banks?

Posted by Colin Barr January 3, 2011 10:11 pm

Financial stocks just caught fire. Someone must be getting bailed out, right?

Why yes, say critics of the giant banks. They charge that Monday's rally-stoking mortgage-putback deal between Bank of America (BAC) and Fannie Mae and Freddie Mac is nothing more than a backdoor bailout (QE4?) of the nation's largest lender (emphasis mine). It comes courtesy, they say, of an administration struggling to find a fix for the housing market while quaking at the prospect of another housing-fueled banking meltdown.

Monday's arrangement, according to this view, will keep the banks standing -- but leave taxpayers on the hook for an even bigger tab should a weak economic recovery falter. Sound familiar?…

And you don't need to be a conspiracy theorist to see that austerity talk in Congress means no more upfront support for financial firms. At a time of double-dipping house prices and nearly 10% unemployment, you can see where some people might find themselves devising new ways to prop up BofA and its housing-exposed rivals JPMorgan Chase (JPM), Wells Fargo (WFC) and Citi (C).

"This looks to me like a gift from Tim Geithner," said Chris Whalen of Institutional Risk Analytics. "There's politics all over this."…how sharp is Freddie if all it can do is squeeze a $1.28 billion payment out of a giant customer in exchange for relinquishing fraud claims on $117 billion worth of outstanding loans? The very best its million-dollar executives can do is claw back a penny on each bubbly subprime dollar?

…"How Freddie can justify this decision to settle 'all outstanding and potential' claims before any of the private-label putback lawsuits have been resolved is beyond comprehension," says Rebel Cole, a real estate and finance professor at DePaul University in Chicago. "This smells to high heaven and they should be called out."

 

Nice…

Palm Beach County Bar Association - Residential Mortgage Foreclosure Mediation Program

Below, from the Palm Beach County Bar Association website, are the details, forms and FAQ’s regarding the  Florida State Supreme Court mandated pre-summary judgment mediated meeting between the foreclosed-upon homeowner and their lenders representative…

What is foreclosure?
Foreclosure is a legal process by which the mortgage holder causes the judicial sale of the secured real estate to pay a defaulted loan. The mortgage on real estate acts as collateral for the repayment of the loan so when this loan is in default, the mortgage holder exercises its rights to take the collateral by selling the home.

What is the RMFM Program?
The RMFM Program is the Residential Mortgage Foreclosure Mediation Program that has been ordered by the Florida Supreme Court, and the Fifteenth Judicial Circuit Court. This program mandates that all homestead foreclosure lawsuits filed on or after July 12, 2010, be sent to mediation prior to any final order being issued.

How do I enter the RMFM Program?
All homestead foreclosure suits that are filed on or after July 12, 2010 will be automatically referred to the RMFM Program. The Program Manager will contact you based on information received from the lender. However, if you have been served with a foreclosure suit and/or your contact information has changed, please contact the RMFM Program directly at (866) 900-4254 (toll free)

I am a Homeowner who was served with a foreclosure lawsuit filed before July 12, 2010. Can I participate in the RMFM Program?
You may request a referral to this Program by filing a Borrower’s Request to Participate in the RMFM Program (download copy here). File this request with the Court and mail a copy of the request to the lawyer for the Lender.

Is there a cost to me to participate in the RMFM Program?
There is no cost to homeowners for this program. The Plaintiff (usually the bank) pays the required fees, which include financial counseling and the mediation session. In the event that you choose to have a second mediation session, you will have to pay $100, which is one-half of the fees for this session. The Program anticipates that one mediation session will be sufficient for most cases and this second mediation is optional.

What financial disclosure information will I need to provide to the lender to proceed to mediation?
Most borrowers will need to file the Foreclosure Mediation Financial Worksheet (click here for that document).
Homeowners must sign and then mail, hand-deliver or fax the Release (last page of the financial agreement) to the RMFM program before the Program can schedule mediation.
Mail or hand-deliver to: Palm Beach County Bar Association, RMFM Program, 1601 Belvedere Road, Suite 304E, West Palm Beach, FL 33406.
Fax to: (561) 828-3922
Email with Release as a pdf to mediations@palmbeachbar.org
Borrowers will need to file Fannie Mae Hardship Form 1021 if they are seeking a Short Sale or Deed in Lieu of Foreclosure. (click here for that form)
For short sales, borrowers also need to file a signed purchase contract for the residence or a listing agreement for the sale of the residence, a preliminary HUD -1 form, and written permission from the borrower authorizing the bank or the bank's representative to speak with the real estate agent about the borrower's loan.
For Deeds in Lieu of Foreclosure, a current title search for the residence should also be uploaded.

What is a short sale?
A short sale is a sale for less than you owe on the mortgage loan.

What is a Deed in Lieu of Foreclosure?
A Deed in Lieu of Foreclosure is when you voluntarily execute a deed that transfers the property to the lender in exchange for the lender canceling, in part or in whole, the debt owed on the property.

Do I have the right to consult with an attorney?
Yes. You have the right to consult with an attorney at any time during the mediation process and to bring an attorney with you to the mediation session. You do not have to have an attorney; you may represent yourself. If you cannot afford an attorney, you may call the Legal Aid Society of Palm Beach County and inquire about their pro bono foreclosure assistance program, Monday through Friday, 9:00 a.m. to 5:00 p.m., (561) 655-8944 ext. 325 or (toll free) 800-403-9353 ext. 325. You may also contact the Lawyer Referral Program at the Palm Beach County Bar Association by calling (561) 687-3266 or (561) 451-3256 (Boca/Delray). There is a $30 fee for a half-hour consultation with an attorney through the Lawyer Referral Service.

Do all Borrowers who signed the mortgage need to attend the mediation session?
Yes, all Borrowers must be present at the mediation session. If not all Borrowers can attend, the Borrower not attending should bring a completed Power of Attorney for the other Borrower.

What happens if we cannot settle during the mediation?
The parties can agree to continue to another mediation session. If that session cannot be scheduled for the same day, this session is optional and both parties have to pay one-half of the fee, or $100 each for this additional session. If the parties cannot agree at all, and reach an impasse, then the case is returned to the court.

What happens if I do not attend mediation?
The case is returned to the court.

Link to Frequently Asked Questions About Mediation

Homeowner Forms

Help for Homeowners in Foreclosure – FREE!
presented by the Palm Beach County Bar Association & The Legal Aid Society of Palm Beach CountyFind out how the Residential Mortgage Foreclosure Mediation Program Can Help You
Space is limited. To reserve your seat, call the Palm Beach County Bar Association at (561) 687-2800
or RSVP by email

StreetInsider.com - Schiff: Look Out Below! Home Prices to Fall Additional 20%

A ‘Happy New Year’ news story from Peter Schiff…one of the earliest predictors of the ‘pop’ of the housing bubble.

December 30, 2010 10:50 AM EST

According to Peter Schiff, the recent drop in home prices  is unnerving, but there is still another 20% drop to go before we reach a historical trend line. (emphasis mine)

Schiff notes that some economists anticipate a further correction, but most don't believe that the vicious correction of 2007 and 2008 could return. To counter, Schiff notes that many underestimate how distorted the market had become.

From the start of 1998 through the middle of 2006, arguably at the peak of the market, the Case-Shiller 10-City Index rose an astounding 173% at 19.2% per year. Schiff notes that we now know that the gains had little to do with fundamentals and more to do with "distortionary government policies that mandated  loans to marginal borrowers, and set off a national mania for real-estate wealth and a torrent of temporarily easy credit."

One of the co-founders of the Case-Shiller index, Robert Shiller, contends that home prices, from 1900 - 2000, followed a more muted 3.35% average growth rate, which included the Great Depression, post-war eras, and the boom of the 90's.

So, Schiff notes that in 1998, the Case-Shiller index was at 82.7. Following the 3.35% average annual price increase predicted by Shiller lands us at a point of 126.7 in October 2010. However, the Case-Shiller Index came in at 159.0, suggesting an additional 20.3% decline in the index to get it back to more normalized levels.

Schiff continues that no one is making a case that fundamentals have gained traction, and most point to government intervention as an artificial stop to the free fall. Programs like "the home buyer's tax credit, record low mortgage rates, government mortgage-assistance programs, and the increased presence of Fannie Mae, Freddie Mac and the Federal Housing Administration in the mortgage-buying business" have put the kibosh on falling prices for now.

But, contends Schiff, with "bloated inventories, 9.8% unemployment (and much higher REAL unemployment), a dysfunctional mortgage industry and shattered illusions of real-estate riches, does it makes sense that prices should simply fall back to the trend line?" He argues that they will overshoot to the downside.

So what's the outcome? A major market correction in the next year.
Schiff thinks not, rather that there may be potential for an additional 10% dip below the 100-year trendline in the next five years, especially if mortgage rates continue upwards to more historical rates of 6% or more. He notes that that would put the index at 114.02, or about 28.3% below where were at now. Even a 5% dip would put the index at 120.36, about 24.3% below current levels.

Concluding, Schiff comments that, "In trying to maintain artificial prices, government policies are keeping new buyers from entering the market, exposing taxpayers to untold trillions in liabilities and delaying a real recovery. We should recognize this reality and not pin our hopes on a return to price normalcy that never was that normal to begin with."

 

A little Christmas gift for my Smith Farm blog readers

I have put together a report...a quick read...with many interesting stories and details regarding the origins of contemporary Christmas Traditions. Click on the image and read or download the entire booklet if you like. Feel free to pass it along to others too!

Has anybody seen my $3.3 Trillion

Now, you and I might lose track of where we spent that $20 bill we had in our pocket...but Mr. Bernake can't seem to remember where he spent (our) $3.3 TRILLION! Courtesy of my friends, Brian and Frank, at Think Big, Work Small

A Thanksgiving greeting

Finally...one of the big guys admits what I've been telling people for years!

Thanks to the NotoriousROB blog for the heads-up on this video. Keep in mind while you watch this that this is a Keller Williams agent recruiting video...



And this is why I opened a small, personalized office long ago...I realized that it was me, my wife and our like-minded agents that our clients were hiring...not some company logo.

 I don't think many realty companies, large or small, make ANY promise to the consumer other than vague platitudes "we are the biggest/we sell the most etc., nothing like "we hire only the most highly skilled/we fire the bad agents...you know what I mean. And the ones that do make consumer based promises often do absolutely nothing to actually KEEP AND ENFORCE that promise, from recruiting, to rules, to marketing, to service standards.

But it is refreshing to finally see one of the big guys admit what the consumer already knows: It is the AGENTS, not the company.

All of the big franchises say that they have the best agents...etc, etc. But if you've ever gone on an interview as a real estate agent, you would know that there is never a competency test, ethics test or any kind of test for that matter. As a matter of fact, it is usually a 'reverse' interview...with the agent deciding whom THEY want to go work for. It's almost: If you have a license, you have a job.

There's no free lunch...

I have started to see this being promoted recently by mail and on the radio.

"If we don't sell your house in ___days...WE'LL BUY IT!"

Sounds great...especially in this market. Worth checking out? That's what the agent is hoping you'll think. Get their phone to ring...but they'll most likely never discuss the details over the phone..."much to complicated and need to see your home to see if it qualifies"...get the foot in the door.  But there is NEVER a free lunch; there is always a cost associated.

But, particularly in this type of market, it would be "good business" if the agent NEVER bought any homes, or if they did, that they were purchased at such a drastic discount that the seller could do better selling the home themselves. 

I have gone to several seminars where they promoted this (tactic/gimmick) and it starts out sounding something like this:
" Mr./Mrs. homeowner, a big dilemma when making your move is deciding whether to buy 1st or sell 1st. Either way is risky as you could end up with 2 homes (or no home). Our unique/innovative/etc., Guaranteed Sale Program solves this dilemma...you get our personal guarantee that if we don't sell your home in 90/120/180 days, we will buy it at a price acceptable to you. Now, WE take all the risk from you and you can immediately place a confident offer on another home".

The hidden details usually follow some or all of these general guidelines:

• Must purchase one of the agents listings...or at least buy a 'full commission' home with them
• Seller must still pay a full commission on the 'guaranteed' sale
• Quite often an 'upfront' fee or guaranteed sale program fee of anywhere from $295 to fees in the thousands
• "Agreed upon" price well below appraisal/market value...could be as low as the 80% range, then subtract commissions, fees, closing costs etc.
• Original list price 5% below comparables
• Seller is REQUIRED to continually lower the asking price during the 90 day (or whatever the guarantee period is)...for example: 100%  for 1st 30 days, 90% day 30-60, 80% day 60-90, at which point they have reached their 'guarantee' point (but minus a full commission, etc.)
• Sign the listing agreement first...then the guaranteed purchase details come later
• May be a maximum allowable program price
• Restrictions on home condition
• Use the language "I'll buy it for 'list' price", but fail to say that the 'list' price is the 80% ENDING list price

If they'll buy it for the full price that they agree to list it for...then that's putting their money where their dog and pony show is.

Think about these few points:

• With as difficult as it is to get a mortgage now, COULD your agent actually perform on their guarantee? Ask to speak with their mortgage lender...do your due diligence as with any other buyer.
• If they don't need a mortgage and have a few $million sitting around to buy homes that don't sell in 90 days, why are they a real estate agent?
• Are they "flipping" the purchase option to an investor? Are they going to list the home for the investor once they buy it?
• Can they assign the guaranteed sale price (as in a wholesaler)?

Good, solid, cutting-edge marketing, a detailed understanding of the local and national economic factors affecting home values, subdivision level market knowledge, ability to analyze trends...trust and mutual respect...THIS is what is needed today.


Thanks for reading

I hate to say I told you so...especially for this.

"GET READY FOR THE GREAT MERS WHITEWASH BILL"

"Wall Street money is pouring into the coffers of those who are receptive (i.e., almost everyone in Congress). The legislation is already being drafted under the interstate commerce clause to ratify MERS and everything it did retroactively. It appears that the Obama administration is ready to pardon all the securitization deviants by signing this bill into law. This information is corroborated by several people who are in sensitive positions — persons who would be the first to know such proposals. Fortunately, there are some people in Washington who have a conscience and do not want to see this happen."

John Carney, CNBC--"When Congress comes back into session next week, it may consider measures intended to bolster the legal status of a controversial bank owned electronic mortgage registration system that contains three out of every five mortgages in the country.

The system is known as MERS, the acronym for a private company called Mortgage Electronic Registry Systems. Set up by banks in the 1997, MERS is a system for tracking ownership of home loans as they move from mortgage originator through the financial pipeline to the trusts set up when mortgage securities are sold.

The system has come under scrutiny by critics who charge MERS with facilitating slipshod practices. Recently, lawyers have filed lawsuits claiming that banks owe states billions of dollars for mortgage recording fees they avoided by using MERS...

Now it appears that Congress may attempt to prevent any MERS' meltdown from occurring. MERS is owned by all the biggest banks, and they certainly do not want it to be sunk by huge fines...And be subject to court challenges on mortgage ownership by foreclosure defense attorneys.

Investors in mortgage-backed securities also do not want to see the value of their bonds sink because of doubts about the ownership of the underlying mortgages.

Remember, this is the SAME Congress that "almost" passed the "Notarization Act" by voice vote and it reached Obama's desk. We will never know who voted for it, as a voice vote is not recorded, and it flew threw BOTH House and Senate.

So it looks like the stage may be set for Congress to pass a bill that would limit MERS exposure on the recording fee issue and perhaps retroactively legitimize mortgage transfers conducted through MERS private database...."

Just look at my post of 10/26 on my Winston Trails blog at www.WinstonTrails.info ...this is EXACTLY what I feared would happen. Too big to fail also means too big to have to comply with the laws I guess. When was the last time you broke the law and then had legislation passed on your behalf?  I don't want to turn this into a politcal blog...but...

That one heck of a 5 o’clock shadow

Standard & Poor’s, known as a leader of financial market intelligence, has revised estimates for when we can expect this much-talked-about shadow inventory to clear up. S&P now estimates that it will take 41 months—or nearly three and a half years—to get through and sell off all that shadow inventory lurking in the national real estate market background.

This number is up drastically from it’s assessment a year ago when it estimated it would take 33 months to complete this process…(That’s 25% longer than their last estimate and these guys are the “leader in financial market intelligence”?) S&P’s report states that the growth in the nation’s shadow inventory is affecting the housing market in three ways.

First, low liquidation rates are artificially skewing the visible supply of these distressed properties on the market. Second, this ever-growing inventory is having a negative affect on existing home prices. And finally, home prices will only begin to stabilize once this shadow inventory backlogged is cleared out.

Check out our video tip blog...lots of helpful info

Just click on the image above

Foreclosures Gone Wild...the trilogy.

Rather than repeat the entirety of all three recent posts that attempt to explain this recent foreclosure mess/fraud...here are the links to the actual posts over on my Winston Trails blog.

Foreclosures Gone Wild 1

Foreclosures Gone Wild 2

Foreclosures Gone Wild 3

Finally, Jon Stewart clearly explains this mortgage foreclosure mess...

Be forewarned...this IS a Jon Stewart video...make sure no one easily offended is watching over your shoulder!

U.S. Home Prices Face 3-Year Drop as Inventory Surge Looms - Bloomberg

The slide in U.S. home prices may have another three years to go as sellers add as many as 12 million more properties to the market…

“Whether it’s the sidelined, shadow or current inventory, the issue is there’s more supply than demand,” said Oliver Chang, a U.S. housing strategist with Morgan Stanley in San Francisco. “Once you reach a bottom, it will take three or four years for prices to begin to rise 1 or 2 percent a year.”…

Fannie Mae Forecast

Fannie Mae, the largest U.S. mortgage finance company, today lowered its forecast for home sales this year, projecting a 7 percent decline from 2009. A drop in demand after the April 30 tax credit expiration “suggests weakening home prices” in the third quarter, according to Fannie Mae…

8 Million

Douglas Duncan, chief economist for Washington-based Fannie Mae, said in a Bloomberg Radio interview last week that 7 million U.S. homes are vacant or in the foreclosure process. Morgan Stanley’s Chang said the number of bank-owned and foreclosure-bound homes that have yet to hit the market is closer to 8 million…

In addition to the as many as 8 million properties vacant or in foreclosure, owners of another 3.8 million homes -- 5 percent of U.S. households -- said they are “very likely” to put their properties on the market within six months if there is improvement, according to a survey</a> by Seattle-based Zillow.

“This has the potential to create a sawtooth pattern along the bottom,” Stan Humphries, Zillow’s chief economist, said in a telephone interview. “Homes begin to sell and a few sidelined sellers rush into the marketplace and flood the marketplace.” …

The Obama administration’s effort to help mortgage holders, HAMP, is another source of future inventory as owners with new loan terms re- default, Ritholtz said. About half of the modifications done in 2009 were behind in payments by the first quarter of 2010, according to the Treasury Department…

 

Read the full article by clicking the link below…(if you dare)

U.S. Home Prices Face 3-Year Drop as Inventory Surge Looms - Bloomberg

WHY IS THE BANK FORECLOSING IF I AM DOING A SHORT SALE (OR LOAN MODIFICATION)?

A local attorney who counsels many of our clients, Richard Zaretsky, has just posted this excellent article on his blog. It answers the very common, but perplexing question posed above.

Do We All Have A Common Goal?  Do all short sellers cooperate with the short sale process?  The answer is a resounding NO.  The short seller is typically living in the house "for free" and is not all that interested in moving out and paying rent.  Therefore, short sellers are notoriously delay oriented. Banks believe this to be a fact.

I Want To Stay!  Loan Modification borrowers are in a somewhat different boat.  They don't have any plan to move out of the house as they want to modify the loan to something more affordable.

They Want WHAT!?!@?  Short Sellers and Loan Modification borrowers have something in common - they have to accept the lender's terms of the short sale or loan modification or face loss of the home through foreclosure.  The alternative of the loss of the house in foreclosure is usually not an desirable option.  The lender can never be sure that (a) the buyer in a short sale is not going to walk away from the sale at the last minute, (b) the seller will accept the demands the lender conditions the short sale approval upon, or (c) the borrower will accept the loan modification terms offered by the lender (if any are offered at all).

Hurry Up and Wait?  So knowing or believing all the above, if you were the lender and you knew that from start to finish the mortgage foreclosure process was going to take 300 to 700 days and the short sale or modification may or may not end up successful, would you wait 3 or 5 months for a short sale contract or for the borrower to submit complete loan modification information - BEFORE you started the clock on the foreclosure process?  OF COURSE NOT!  Therefore, even if you have a good faith intention to proceed with a short sale or loan modification, the lender will NOT stop a pending suit or delay filing an otherwise ripe suit for foreclosure.  The result is one hand of the lender pursues solutions with the borrower and the other hand of the lender pursues solutions against the borrower - all at the same time.

Remind Me To Stop Before I Drive Off the Cliff!   Even the HAFA and HAMP programs have guidelines for participating lenders that state that the lender will not have to stop the foreclosure process - but only that if a borrower is accepted into the processing of under HAFA or HAMP, the lender will not actually have the foreclosure sale!  But they can go all the way to getting a foreclosure sale date set!

So if you are trying a short sale or modification, don't be surprised when the Sheriff rings your doorbell at 6 a.m. with a subpoena and summons and complaint for foreclosure even though the nice people at the bank are helping you in your "solution".  If you are 90 days or more late (typically), you should expect that visit and introduction to your foreclosure complaint very very soon.  And once you get served BE SURE TO IMMEDIATELY CONTACT YOUR ATTORNEY TO DISCUSS THE FORECLOSURE AND WHAT SHOULD BE DONE ABOUT IT.

Read Richards entire article here: WHY IS THE BANK FORECLOSING IF I AM DOING A SHORT SALE (OR LOAN MODIFICATION)?

Freddie Mac estimates home sales to fall another 23% in 3Q

Below are a few of today’s housing industry headlines:

1. Freddie Mac expects 4 million new and existing home sales in the third quarter, a possible 20.7% decline from last year and 23% drop from the previous quarter.
2. Kondaur (distressed note buyer) chief executive Jon Daurio joined Moody's Investors Service analysts saying he expects prices to fall another 20%…Daurio said he expects the drop to occur over the next three years.

You can read the article here: Freddie Mac estimates home sales to fall another 23% in 3Q « HousingWire

Thinking about pursuing a loan modification? In the middle of a loan modification negotiation? Read this...

Working on the inside of this industry, it is easy to see through the smoke and mirrors being used by the TBTF (too big too fail) lenders when it comes to "extend and pretend". They will do what is in THEIR best interests regardless of public statements to the contrary.

I have seen too many borrowers taken advantage of when attempting to negotiate a forebearance or loan mod without professional and legal assistance. The banks are no better than low-life debt collectors that will say anything to get some more money out of someone. But now, people have had enough and it is getting some national press...consumers are suing the banks for not following through on loan mod committments.

Read the full article from today's USA today HERE

If you have ANY questions regarding your loan, please give me a call. I promise that if I don't know the answer or solution right away, I will find out or point you in the direction of the person who does know. My direct line is 561-602-1258.

Thanks for reading

FDLE Florida Sexual Offenders Search

You can search for sexual predators by zip code via the link below:

FDLE Florida Sexual Offenders and Predators - Offender Search

Schools by subdivision for the 2010-2011 school year, Palm Beach County

Buried DEEEP within the Palm Beach County School Board website was this gem of a useful document: The Elementary, Middle and High Schools assigned by Subdivision.

Anyone with school-age children considering a move to/within Palm Beach County will find this tremendously useful...just click on the photo and download the PDF