Venice Area Homes Blog

During the past few weeks we have been inundated with calls and e-mails from homeowners who were accepted for a loan modification agreement only to find their mortgage company pulling the plug on their agreement months later and now are facing foreclosure.  

Basically, the lender or servicer contacts the borrower (who is in default) offering to do a “loan mod” provided (a) the borrower submits certain paperwork, and (b) the borrower agrees to pay significant sums either toward the promised modification or in connection with a temporary forbearance while a more permanent modification is being processed. In reasonable reliance on these affirmative representations (since they are coming from an agent of the "alleged owner" of the original mortgage note) the borrower complies by making the payment(s) and by submitting the paperwork. Invariably, however, the lender or servicer replies by asking the borrower for more paperwork, then more paperwork, then more paperwork (and more money) until finally the “lender” or “servicer” denies the modification due to “inconsistencies in the paperwork”, without identifying what these purported “inconsistencies” are.

One example involved a borrower who submitted their paperwork five (5) times. Another involved a borrower who paid $12,000.00 toward the modified loan, only to be denied due to “inconsistencies in the paperwork”, followed by foreclosure of the property.

This makes the appearance that what is going on here is quite possibly a well thought out scam where the lender or servicer (knowing full well they ultimately intend to foreclose) but mindful that they have to make an “effort” to work with the borrower before doing so (either due to state laws, court rules or to appease some government entity) go through the motions and put the borrower through a lot of effort and then ultimately deny the modification and proceed to foreclose, using the borrower’s good-faith payments to fund the fees they need to foreclose so these fees do not come out of their own pocket. The frequency of this fact pattern with borrowers in all different types of financial situations all over the United States (and with the lender or servicer never putting the “promised” permanent loan modification in writing) leaves no other rational conclusion as to what is really going on.

Government programs have been a disaster thus far. In fact, the acceptance rate on HAMP modifications is roughly 2%. (Only 2 loans out of every one hundred)! The highest “permanent modification” rate of any lender or servicer is less than 10%. This is an outrage! Especially to the homeowners who have a legitimate need for such assistance. 

The bottom line is whatever the lender or servicer “promises” you, do not trust them. Know that in all likelihood their primary goal is to ultimately foreclose and string you (the borrower) along so that they can garner monies to fund their ultimate foreclosure. Moral of the story? Get your case together and have it reviewed by an attorney, so that if the time comes when you have to sue for breach of the “promised” loan mod contract or fraud for the lies told by the lender or servicer (or under any other theory) you have done your homework and are ahead of the game.

A homeowner has every right to file suit against their lender in order to challenge their lender’s legal rights to collect or foreclose in the first place. Many homeowners have a great chance of success by filing suit against their lender by challenging their legal right to collect or foreclose. Why, you may ask? Because many times the lender will not be able to produce the original mortgage note and therefore judges across the country have been deciding in favor of the homeowner by dismissing the lender’s pending foreclosure actions and granting the homeowner a indefinite stay of execution unless and until the lender can produce the original document.

This could be the best option for many homeowners as it could deliver the very best results for a homeowner seeking to keep their home. As a homeowner, you have every right to file law suite against your lender who is attempting to foreclose on your home in either Land Court or Superior Court (in order to challenge your lender’s actual legal rights and authority to collect and foreclose on you in the first place) by demanding your lender produce your original mortgage note.

Judges in Superior Courts across the country have been very reluctant to dismiss an alleged lender’s claim of debt in their entirety because of the “what if” factor (as in what if the alleged lender can eventually produce the original note). It is the court’s way of granting the alleged lender or investor the benefit of the doubt by giving the alleged mortgagee or servicer time to find the original note during the time of the stay of execution is granted to the homeowner.

However, more and more judges are now starting to realize the very importance of this issue and can now clearly see how these mortgage companies are simply trying to manipulate the system to their benefit. As a result, they are now discharging mortgage liens in their entirety because a mortgage without an original note becomes an invalid unsecured lien against the property and is therefore dischargeable under the law.      

And if the homeowner’s mortgage was part of an asset backed securities package (that was sold and re-assigned a number of times to other parties or entities) the servicer, lender or investor will have no clue as to who, what or where the original document is. It more then likely was lost or shredded or thrown away in a dumpster and is sitting in a landfill somewhere and will never be found. Many times in these situations the alleged lender will eventually approach the homeowner to see if they can come to a compromise. This is when the homeowner has the true advantage and can ask for a new mortgage note to be drafted under their own terms and conditions. This is when a homeowner can truly obtain a meaningful and realistic “Loan Modification” in their favor by asking that their note be re-written based on their home’s current market value (if they are upside-down), reduced interest rate (2%), longer re-payment term (40 years), etc. There have been many homeowners who have been able to live in their homes for years because of this challenge and have not had to pay a dime to anyone unless and until the alleged lender can produce the original document as proof of them being the rightful entity.

And (in light of a recent Bankruptcy Court decision in New York and accross the country) it might be now be more advantageous for a homeowner facing foreclosure to file such a claim in Bankruptcy Court vs. Superior Court as they might now be successful in not only getting the foreclosure complaint thrown out, but also have their entire mortgage debt discharged in its entirety (potentially allowing the homeowner to retain their home free and clear). Below is a link to an article regarding that decision.

 

http://www.nytimes.com/2009/10/25/business/economy/25gret.html?_r=2

 

I hope this information is helpful to those who may need it.

 

All the Best,

Rick D. Misitano, Senior Paralegal

Law Offices of James M. Bosco & Associates

Methuen Executive Park

240 Pleasant Street

Methuen, Massachusetts 01844

 

 

 

There is so much internet chatter going on about strategic defaults since 60 minutes aired and had a segment on homeowners just walking away from their homes.

Is it tempting for you to just leave the keys on the table and get out from underwater? Does the option of renting for the next 4 to 5 years look pretty appealing to you right now? 

 

• Have you discussed your situation open and honestly with your real estate attorney who really understands the mortgage default law in your state? 

• Have you discussed the ramifications of your decision to walk away with your certified accountant who understands the IRS code regarding foreclosures? 

• Have you discussed your goals of what you want to accomplish with your strategic default with your Realtor® who actually closes on short sales that are strategic defaults? 

 

If you have not looked at all your options- then please explore them before making a fast decision just because everyone else is doing it or just because you may have been sold some bad information. 

A strategic short sale may be an option for you.

You may be able to negotiate down the balance you owe to a very small amount on which you can then execute a small promissory note for. Some homeowners have been able to get strategic defaults approved by offering pennies on the dollar of what they owed. 

Strategic short sales on first loans are most often easy to get negotiated to approval. 

HELOCS are another story- that is when you took out a home equity line of credit after you bought your house and then you used that money to buy cars or trips or pay for college tuition or to buy other properties. HELOCs are held in secondary position and there is not much benefit for them to foreclose on you.

So they most often will charge your loan off after you don't make payments and then sell that debt to collection agencies who will seek to collect from you for a very long time. 

Different states have different rules but in general the credit reporting agencies will leave that charged off debt on your credit report for 7 to 10 years. But the kicker is that when the time is near to get it released the collection agency sells the debt to another collection agency who then starts the process all over again. 

How long can you hide from them? What state do you live in and how do your credit laws protect your assets or not in your state? Something to think about. 

But you can negotiate a settlement with your HELOC and then that will wipe out the major part and the only part you will be now paying on and be liable for is the part you negotiated the debt down to. You are going to be asked to do that very same thing when the collection agency takes you to court to get a judgment against you. Why not take care of it now to avoid all of that hassle and stress later on down the road? 

If you do a short sale and you are late on your payments only because your lender told you to be late in order to complete your short sale and you are doing the short sale because you are moving to another area for a job- FHA may allow you to buy a home right away. 

Most homeowners who go into foreclosure will be able to buy another home in about 5 to 7 years but FHA will not approve your loan until you take care of your judgments. Have you thought about that?

If you do a short sale you can get an FHA loan or a Fannie Mae loan within about 2 to 3 years conservatively speaking. There are a lot of other differences in getting a future home loan after a foreclosure and after a short sale. You may want to visit the Fannie Mae website to find out more. 

Nothing in this article is to be construed as legal advice. Please seek the advice of your attorney. We are not attorneys and we are not giving you legal advice. 

For more information about selling your home as a Florida short sale click here. 

 

Foreclosure Is NOT An Option! Call Nestor and Katerina Gasset today at 561-753-0135 for a confidential interview regarding your options. 

 

Don't Delay! Don't Wait Until The Sheriff Is Knocking On Your Door! Pick up your phone and call us to see if you can avoid foreclosure.

 

   

 

 

To  view Welington Florida Homes For Sale  Click here. We know  Wellington Florida Real Estate and Wellington Florida Short Sales and will help you get your home Sold if you need to Sell your home and help you buy your home in Palm Beach County Florida: Call us today.

 

   

 

 

        

 

 

Copyright © By Katerina Gasset 2010 * All Rights Reserved*Strategic Defaults-Homeowners! Choose Strategic Short Sale Instead of Walking Away!*

 

 

 

 

                              What Every Seller Needs To Know In Today's Real Estate Market

                                             

                                                

                                            The real estate agent is only the messenger

                                                   

Sellers please take several deep breaths before shutting down on any offer in today's real estate market.

• The agent YOU selected to represent you is doing the job you hired them to do with your best     interest at heart when presenting an offer.  You selected the agent based on a thoughtful process     now give them a chance to do their job and help you sell the house.
  

• The agent has a fiduciary responsibility to present all offers.  It is perfectly normal to be mad when  someone writes a low offer on your home.  Just remember NOT to take your anger out on the person trying to help you get the home sold.  Discuss the offer from a business like standpoint trying to come to a happy medium where both parties are agreeable with the outcome. 
  

• Please remember....it is not the agents fault that buyers are making a low offers.  The media is fueling the fire with economic status reports and human nature dictates people trying to get a "deal."  You are in charge of your hand so use it wisely to create and sign a counter proposal that all might live with.
  

• The market is what it is and the agent cannot change the current conditions.  Put your feet in the buyers shoes.  If you were purchasing a home in today's real estate economy, ask yourself what kind of offers would you make?

•  In today's market being creative with counter proposals could help complete your sale. Do you really need all the equity out of your home or are you in a position to carry back with the proper credit checks and legal advise.  Is there a possibility of the buyer renting before the completion of the sale.  Would renting the property help your cash flow situation?  Working with your agent to come up with alternatives to create a sale is why you hired them. Let them do their job in helping you.
  

•  Remember, your first offer is almost always your best offer. Try and put something together.
  

•  When you walk away from any offer, you just bought your own house back. The buyer did not complete the sale and you still own the property so you in effect bought your house again.
  

• Take the emotions out of the sale.  This is a business transaction and you are looking at a pile of assets.  You are looking to move the pile of money to another location.  Forget all the family memories and the blood, sweat and tears you put in the house.  When it comes to selling it should be all business.
  

 

Before kicking an offer to the curb think about how you can possibly CHANGE the offer, create a carrot for the potential buyer and create a win/win situation for all parties. Listen and work with your agent.

 

Try to take the drama out of the initial response to a low offer and turn it into a Donald Trump business transaction.  Think about what the buyer really wants and then how to change the terms to meet your needs.

 

Negotiating is a give and take situation.  One party cannot have it all one way or the deal will NOT go together.  Think about what you are willing to give up to get what you want. You win by getting the house sold and the buyer wins by getting the home you have to sell. 

Receiving a low offer with bizarre terms can make anyone mad at first.  It is understandable how you might be thinking about when you listed the property it was a fair price and now a buyer comes in and wants to rip your heart out which is not acceptable to you.  This is when you take DEEP breaths, watch the 60 minute video below. 

 

Watch CBS News Videos Online

Now really think about why you want to sell your house and project what could happen if it did not sell this year or even next year.  No one including your agent has a crystal ball. Only you can answer and analyse why you need to sell and what happens if you don't sell.  As a real estate consultant, I can strongly suggest you  READ, THINK and REASON about the current state of our economy, discuss your local market conditions with your agent and then you will get your answer. 

If you don't like an offer that comes in on your property PLEASE don't shoot the messenger.  The agent you selected is working hard to help you achieve your goals.  Be patient and business like in creating a counter offer that works for you and it may just very well work for the buyer if they want your property and you have GIVEN them something in return. This resolution can be a WIN/WIN situation for everyone involved.

 

       

Cosmic Cow Pie

Carra Riley

Advising Short Sale and Deed-in-Lieu Clients 2010. If you are working with a client who has had a short sale or a deed-in-lieu in their past…or you are listing a home and your sellers may have the same issues…Fannie announced new waiting periods, as of July 1, 2010, before being eligible for another loan. The waiting period is defined as “from the date of the pre-foreclosure to the date of application”.

•·         Fannie defines ALL Pre - foreclosure events as any one of the following:

•o        Deed-in-Lieu

•o        Preforeclosure Sale

•o        Short Sale

                                                                                                           

•·         Full Foreclosure retains a 5 yr waiting period

  New Waiting Period Requirements

Preforeclosure Event	Current Waiting Period Requirements	New Waiting Period Requirements
Deed-in-Lieu of Foreclosure	4 years Additional requirements apply after 4 years up to 7 years	•·         2 years - 80% maximum LTV ratios •·         4 years - 90% maximum LTV ratios •·         7 years - Standard LTV ratios
Preforeclosure Sale	2 years
Short Sale	No specific policy currently exists

 

 

For extenuating circumstances, for all 3 event scenarios, it's a 2-year waiting time and 90% LTV.

"

 

 

 

I just noticed a Tweet that came across my Tweetdeck that said: 

Lenders by and large are more desperate and insolvent than short sale borrowers. It's a balance sheet, not social services. 

First of all, I totally agree that banks are desperate but not for the same as the tweet opines. Banks are desperate for more control. We are living with our heads in the sand if we can not see the patterns that are developing and how that will one day impact our business in real estate and in life in general. 

I used to say: Follow the money. Well, now I say, Follow the power. It is about power and control. 

How does the author say the banks are insolvent when they are getting TARP money? They are barking up the wrong tree. 

And if anyone- agents, brokers, homeowners and buyers are acting like the banks are social services that is the banks' own doing. They are the ones who set up the "hardship" facade. What is that about? Do you think the banks really care about providing social programs to destitute homeowners? 

Of course not! That is ignorance at best to even believe such a statement. Let's go back to why the banks would even require any type of hardship- 

if it is all about the balance sheet- then they would not give one hoot about anyone's hardship. If it is all about the balance sheet- then the short sale seller should not even have to fill out a financial form or turn in his tax returns or pay stubs. If it truly is about the balance sheet- the banks would do what they have to do to approve short sales based on numbers and nets, not someone's financial, medical or job situation. 

Again, it is all about the power and control. 

And don't even start to kid yourself for one minute to think that the banks really want to work with Realtors®. This is not the case at all. 

Check your ears on the bank lobbies, talk to people in the know at NAR who will actually tell you the truth about what the banksters lobby groups circulate around about the NAR and Realtors®. 

Do you actually believe that the banks took kindly to losing their opportunity to get into the real estate business? Do you think they are fair players in the game of politics? Do you think that they just came out to shake hands and accept defeat? 

Keep your eyes open. Nothing is as it seems. The banks will be back. They lost because NAR is a strong lobby group also. They lost a battle but they still plan to win the war. They will be back through whatever door they can get through, more on that later on. 

Foreclosure Is NOT An Option! Call Nestor and Katerina Gasset today at 561-753-0135 for a confidential interview regarding your options. 

 

Don't Delay! Don't Wait Until The Sheriff Is Knocking On Your Door! Pick up your phone and call us to see if you can avoid foreclosure.

 

 

   

 

 

 

To  view Welington Florida Homes For Sale  Click here. We know  Wellington Florida Real Estate and Wellington Florida Short Sales and will help you get your home Sold if you need to Sell your home and help you buy your home in Palm Beach County Florida: Call us today.

 

   

 

 

        

 

 

Copyright © By Katerina Gasset 2010 * All Rights Reserved* Are Short Sales The New Social Services?*

 

 

 

 

Strategic Default - Walking Away from a Mortgage

Currently, in the United States, there are about 7 million homeowners behind on their mortgages.

Banks are working with homeowners who are behind due to lost jobs. What if you haven’t lost a job but your home value has dropped, in some places by as much as 50%? Don’t make a judgment, really think about it. What if you had paid, say $200,000 just 2 years ago and your home is now valued at under $100,000. Would you want to continue making those payments? Suppose you could rent a much larger, nicer home for less than the cost of your monthly mortgage payment. For many in the country, that is a reality.

In a 60 Minutes clip from Sunday night’s feature, Chris and Dana’s house was purchased for $262,000 and is now worth $142,000, if they could even sell it. More than one third of the houses on their block are vacant due to foreclosure. Their bank refused to negotiate with them because they can afford their current payments. Their dilemma; should they continue to “throw money away” on what is, at this time, a bad investment. What would you do? Would you walk away?

Estimates show that, in the past year, at least 1 million people who could afford their payments simply walked away.

The stigma of foreclosure is melting rapidly. It’s just too common. Credit ratings suffer, but for how long? That remains to be seen. Many borrowers believe their credit will be fine in as little as 3 years. Will that be the case?

What we’re seeing in our business is lenders turning down potential home buyers who have a previous foreclosure. Lenders believe that, if they did it once, they are far more likely to do it again. Foreclosure victims are seen as a very high lending risk by the banks.

Lenders have received billions from the government specifically to work with troubled homeowners. Commissioner of the FHA (Federal Housing Authority), David Stevens, agrees with banks that those who can pay should not be assisted. But, maybe the people who can afford to pay are exactly the ones to work with, people who can afford to both keep the house and maintain it.Why work with homeowners who have lost jobs and will probably end up losing it or neglecting it because they don’t have the finances to maintain it?

Citibank estimates that 1 in 5 who walk away are able to pay and, don’t forget, walking away is not illegal. Banks have made provisions in the loan documents that, if you cannot afford to pay, assigning your property to the lender is a payment option.

We need to stop the slide. Banks should work with anyone willing to work with the banks! Keep people in their homes. Keep homes out of foreclosure. Our economic stability remains at huge risk because of the housing market.

In Arizona, 50% of houses are underwater. In Nevada, 65% are. More than 11 million nationwide are upside down and estimates say that number could easily double in the next year. In 2011, at least half of all homeowners may owe more than their homes are worth.

The banks are being paid to help people stay in their homes. Walking away is becoming easier. How do we resolve the dilemma?

Karen Rittenhouse | www.karensperspective.com | 336-834-0614 | karen@karensperspective.com

This was sent to me via email and I thought it was worthy to share....

I drove myself and two co-workers to lunch Monday, 2/15/10. I chose a parking spot in the rear of the lot and backed into a space (no pull through available at location). This positioned my Chevy Avalanche with the passenger side doors facing away from the rest of the lot and to the end of the lot. I had a Sony digital camera lying on the console of my truck.. Upon returning from lunch and entering the vehicle we noticed nothing wrong or missing from the vehicle. 

   Tuesday around lunch time I needed the camera and could not locate it. My first thoughts were, "I moved it or it fell to the floor mat or I removed it from my truck." After searching feverishly for two days, questioning anyone who had been close to my truck, and exhausting every possible location I could have put it, I began to have that sinking feeling I lost it or someone stole it. My new Garmin GPS had been in the truck the whole time, so I felt as if someone had entered my vehicle they would have taken it also. 
   
 
  Fast forward to Wednesday, I approached my truck from the passenger side to place my computer bag (aka my man purse) in the front passenger seat. As I reached to open the door I noticed there was a hole right under my door handle. My first thought was, "someone has shot my truck!" I began to think about it and inspect it a little closer and the "light" slowly began to come on. I phoned my friend who owns a body shop and asked if he had any vehicles with damage to the doors that looked like a bullet hole. "Yes, I see it all the time. Thieves have a punch and place it right under the door handle, knock a hole through, reach in and unlock it, just as if they have a key. No alarms, broken glass or anything."   
 
  I then placed a call to my insurance agent, who is also a friend, and explained it to him. I proceeded to tell him the situation and how I was puzzled that they left my GPS and all other belongings. Here is where it gets scary! "Oh no, he said, they want the break-in to be so subtle that you don't even realize it. They look at your GPS to see where "home" is. Now they know what you drive, go to your home, and if your vehicle isn't there they assume you aren't and break in your home." He says they will even leave a purse or wallet and only take one or two credit cards. By the time you realize there has been a theft, they may have already had a couple days or more to use them. This is another reason they want the break-in to go unnoticed. I didn't realize my situation for two full days! They even give you the courtesy of re-locking your doors for you. I guess they don't want it to be broken into by other thieves! 
   Had they found your check book, they could have taken checks from the middle section so they wouldn't be noticed. 
 
   Please remove from your GPS unit your home address as "home" ASAP! Put in your local Wal-Mart address or somewhere else!  Park your vehicle in a highly visible place. I positioned mine perfectly for them and didn't realize it until it was too late. I hope this is beneficial to you and helps you keep your valuables in your possession and your vehicle from damage. Most importantly, it may keep the thieves from showing up at your home! 
 
   DO NOT LEAVE VALUABLES IN SIGHT INSIDE THE CAR. Periodically walk around your car, daily if you are in a shopping center or other parking area. Report thefts immediately....Bank w/missing check numbers, Credit card agencies, Police, and Insurance Companies. 
 

The Susan Racioppi Team

Susan Racioppi   Direct:  609-290-7800

Nancy Larson   Direct:  609-575-6162

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Greater Coastal Realty, Inc.

703 Mill Creek Road, Suite L

Manahawkin, New Jersey 08050

Office:  609-529-SOLD

Greater Coastal Realty is a full service Real Estate brokerage company, serving Monmouth, Ocean and Mercer counties, providing residential and commercial Real Estate services.